Freight Rail’s Digital Future Is Just Around the Bend
Telematics can ease pain points and enable more shippers to capture rail transport’s advantages. To make it happen, collaboration is essential.
As rail operators face falling demand in the post-pandemic era, many report that their rolling stock maintenance costs have continued to rise. US transit and commuter rail operators saw those costs increase by approximately 4% per year from 2010 through 2019, according to Federal Transit Authority data, outpacing the recent significant increases in inflation. Labor shortages, supply chain disruptions, and antiquated fleets are largely to blame. Moreover, rail operators lag other industries in embedding data and the latest digital technology into their maintenance and support functions.
Operators can combat escalating costs by better employing existing data to plan and execute maintenance, or by utilizing new technologies to generate new data sources in support of predictive maintenance.
Simply deploying existing data can have an outsized impact on costs, particularly since it entails low, if any, upfront technology expenditures. For example, a US transit agency used its existing data to develop failure curves for key systems. It applied the insights to improve schedule accuracy and parts availability, resulting in a 10% decline in rolling stock maintenance costs.
Operators can also experiment with the latest technologies to facilitate the collection and analysis of data from new sources, such as sensors and digital maintenance records. They can utilize such sensor data and analyses to preemptively diagnose potential failures and assess the potential to scale these solutions across fleets. An Asian rail operator used digitally enabled predictive maintenance to ensure the availability of all necessary parts when equipment arrived for scheduled maintenance. This allowed it to reduce the time its rolling stock spent in maintenance depots by 20% to 30%.
Success, however, requires a pragmatic approach. This begins with an assessment of the data, sensors, and other technologies currently used by an operator’s rolling stock maintenance functions. The maturity assessment outlined below can help operators lay the foundation for capturing more value from existing resources before planning investments in new capabilities.
Most rolling stock maintenance efforts focus on five major train systems: brakes; chassis (including the wheels, axles, and truck); propulsion; doors; and heating, ventilation, and air-conditioning (HVAC) systems. To improve each system’s reliability and efficiency, operators can capture data from existing sensors and also install new sensors to gather additional types of data. (See “Sensors Support Maintenance Across Five Systems.”) For instance, infrared sensors and thermal cameras can detect when brakes start to overheat and require maintenance to reduce the risk of “sticking.” Similarly, accelerometers and inclinometers can monitor the stress on a train’s propulsion systems from continuous vibrations, accelerations, and decelerations.
By utilizing existing data and creating new, high-value data feeds (via sensors) as part of a comprehensive digital maintenance program, rail operators can realize five key benefits:
Fully realizing these benefits is not easy, however. For one, maintenance organizations must have the technical and data infrastructure (including clean data) in place to access and analyze sensor inputs effectively. But more often, it’s nontechnical issues such as the following that prevent operators from achieving the expected benefits:
The starting point for addressing these challenges is a holistic assessment of a rail operator’s current digital maintenance maturity. The assessment identifies how the operator can best deploy its existing data, sensors, and other technology, as well as where it may benefit from deploying additional sensors and other technology.
Several questions can help operators determine where they sit on the digital maintenance maturity curve:
Rail operators can assess their digital maintenance maturity using a common multilevel scale:
Operators should apply this scale to assess the sensors and other technologies used across the four core functions of the maintenance organization:
By systematically assessing digital maintenance maturity across these four functions, operators can pinpoint specific gaps. In many cases, they can create value without necessarily advancing to higher levels of maturity. For example, a level 1 operator might already have an effective maintenance strategy if it tailors the overhaul intervals for each fleet based on failure curves constructed from historical data and conducts its running repair diagnostics using automated tools instead of manual inspections. However, the same organization might face challenges in its supply chain and materials management function if diagnostic tools for running repairs are not connected to the material management systems. Such a gap could result in downtime to allow mechanics to conduct repairs. Connecting the tools and systems would increase mechanics' “wrench time” without requiring major rolling stock upgrades.
Rail operators can apply the insights from the assessment to develop a prioritized roadmap for increasing their digital maintenance maturity. This roadmap should address resource availability, the optimization of essential maintenance processes, and targeted training programs. An effective roadmap identifies quick wins to create value. Operators can then apply the savings to fund medium-term investments in new technology to structurally transform their operations.
To take these actions effectively, operators must be willing to put aside traditional practices, such as scheduled maintenance, as well as adopt new tools and approaches. For example, digital maintenance is a key consideration in a total-cost-of-ownership approach to rolling stock procurement. By embracing a more proactive, digitally empowered approach to maintenance, operators can usher in a new era of fleet management—with more uptime, greater efficiency, and lower costs.
ABOUT BOSTON CONSULTING GROUP
Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholders—empowering organizations to grow, build sustainable competitive advantage, and drive positive societal impact.
Our diverse, global teams bring deep industry and functional expertise and a range of perspectives that question the status quo and spark change. BCG delivers solutions through leading-edge management consulting, technology and design, and corporate and digital ventures. We work in a uniquely collaborative model across the firm and throughout all levels of the client organization, fueled by the goal of helping our clients thrive and enabling them to make the world a better place.
© Boston Consulting Group 2023. All rights reserved.
For information or permission to reprint, please contact BCG at firstname.lastname@example.org. To find the latest BCG content and register to receive e-alerts on this topic or others, please visit bcg.com. Follow Boston Consulting Group on Facebook and X (formerly Twitter).