Kansas City Southern Railroad official says a version of automated railroading is on its way to North America

Railroading will become advanced but not autonomous, KCS railroader says, explicitly saying people still have role in moving cargo
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The potential arrival of autonomous trucks will not wipe out the railroad industry, Kansas City Southern’s chief innovation officer says.

“You have to assume railroads are not going to sit still,” KCS Executive Vice President Brian Hancock told an investor conference earlier this month.

The path to automation is far easier for railroads than trucks, Hancock says, and KCS aims to automate its operations over the next seven years using a combination of positive train control and advanced train control technology.

And Hancock says autonomous trucks may help railroads’ intermodal networks become bigger players in e-commerce by hauling containers between terminals and nearby distribution centers.

Hancock, in a chat with Morgan Stanley analyst Ravi Shanker, outlined the role railroads play in supply chains. Railroads, intermodal, and trucks all participate in the inbound supply chain that links suppliers, manufacturers, and warehouses. Trucks dominate the outbound supply chain linking warehouses with brick-and-mortar retailers as well as directly with consumers through e-commerce deliveries.

These roles won’t change, even as supply chains get tighter and faster, with smaller shipments moving shorter distances from warehouses that are ever closer to consumers.

“When you think about supply chain design and how it’s evolved, it really is creating an environment where rail, intermodal, and truck can play an enormous part,” Hancock says.

In coming years technological advancements — including platooning, electric rigs, and driverless trucks — will reduce trucking costs below the current $1.56 per mile of a typical diesel rig, Hancock says.

Although trucking costs would become lower than intermodal’s $1.27 per mile costs with single-driver platooning, it would not be until full autonomy arrives that trucking costs would fall below carload’s costs of 91 cents per mile, he says.

No matter what the cost advantage, trucks would not be able to siphon away too much rail traffic because there would not be enough capacity on a highway system that’s already gridlocked much of the day in major urban areas, Hancock contends.

If all 4,600 carloads of grain that are waybilled daily were diverted to highways, for example, it would take 16,000 trucks. That’s enough trucks, Hancock says, to stretch for 205 miles on already crowded roads that would need massive taxpayer-financed investment in new capacity.

Railroads, on the other hand, fund their own infrastructure and can more readily expand capacity through technology, Hancock says.

So how do railroads compete?

“We move the railroads toward what we call advanced train control,” Hancock says. “Not autonomous, because autonomous means there’s nobody engaged. We always see there will be someone in the cab of a train.”

PTC is the backbone of an automated railroad. Layered on top: Advanced train control systems that automatically start and stop trains, coordinate meets and passes, and permit much tighter train spacing than is possible today with fixed signal blocks.

Hancock says KCS will have advanced train control systems in place within the next three or four years. But changes to regulation and labor contracts would be required to take full advantage of the technology, Hancock says.

Once those are in place, railroads would be in a position to more reliably move larger volumes of intermodal traffic to terminals near warehouses and fulfillment centers, Hancock says.

Autonomous trucks could deliver containers to warehouses at off-peak hours between 10:30 p.m. and 5 a.m. when highways are least congested.

“We think there’s a big opportunity for most communities,” Hancock says.

He spoke on Jan. 7 at the Morgan Stanley Sixth Annual Auto 2.0 Conference.

You can listen to a replay of the conference online.

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