Tracsis: Railcomm US Yard Automation & Dispatching
Former Railcomm Director
inpractise.com/articles/tracsis-railcomm-us-yard-automation-and-dispatching
Former Railcomm Director
Interview Transcript
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Yes
Yard automation was one of the first markets that formed the basis of RailComm's founding, dating back to the early 2000s. In the US freight industry, 82% of the mileage is controlled by the six major freight railroads, and revenue-wise, it's probably even higher. In the east, there's CSX and Norfolk Southern. In the Midwest, you have Union Pacific and BNSF. Including Canada, Canadian Pacific and Canadian National are the two others. Canadian Pacific recently acquired a major portion of Kansas City Southern, which was part of the US. However, over the decades, Canadian National and Canadian Pacific have acquired most of their rail infrastructure in the US.
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Yes
If you think about it, it's like a disaggregating and reassembly process. To do that, things have to move, and it's called cutting. You basically have to cut and reassemble. RailComm provided a solution that included both hardware and software. The software is the unique part of it.
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How much was software versus hardware?
We priced it as a solution because that's how people wanted to buy it. Let's say it's a million dollars for a yard installation, and we automated 15 switch lines and provided the software. We'd probably have a blended gross margin of about 60%, and we would get maintenance on it. The cost of the software was close to zero, as software mostly is. The hardware piece was significant because we had controllers, switch connectors, and manufacturing capabilities in our facility. We provided communications, radio devices, and infrastructure for yards that lacked it. Most of the cost was in the hardware, but we made money. For example, we had a spares and replacement hardware business generating millions with healthy margins. We often provided on-site facilities to ensure immediate availability of devices when something failed. We considered how to reach second-tier yards, even with a big railroad like CSX.
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