How much hype, how much hope? - development of the Interline Service Management program - includes a related article on the Railroad Industry Service Council

Railway Age, May, 1995 by Gus Welty

Yes, those are storm clouds moving in, and if a cloudburst should result, it could wash away gains in intermodal traffic which railroads have enjoyed, without a break, for a dozen years.

The sky gets dark, and ominous, when top officers of two major customers - K Line and United Parcel Service - go public with complaints about deterioration in rail service.

The complaints come at a time when the rail industry is still working on development of an Interline Service Management program, along with all the needed support. And they come at a time when industry watchers are wondering why it's taking so long to make interline operations seamless, when so much premium long-haul traffic today may have just one interchange to go through.

The problem is not a technology one, although it may be related in terms of an individual railroad's ability to install the hardware and software and implement the technology. The problem, still, seems to be one of individual railroads' priorities and interests.

The problem may also hang on ego, on the not-invented-here syndrome that has bedeviled the industry on other, and perhaps less-important issues. Missouri Pacific "invented" car scheduling, the trip plan for every car idea that is at the heart of scheduled railroading and ISM. Car scheduling was implemented by Union Pacific after merger of UP, MoPac, and Western Pacific.

Other railroads, in the meantime or later, were developing their own systems, even though the one developed by MoPac many years ago worked well when it was fully implemented (not without problems, admittedly, post-merger).

Jim Shattuck, executive vice president-marketing and sales, UP, is the chairman of the current ISM steering committee. Dick Davidson, UP chairman and CEO, was the point man when this all began a couple of years ago. Shattuck was a key player in the original Mopac car scheduling program. So, there's hope that something will actually be accomplished, and that interline service will be improved.

Meanwhile, railroads (through the Association of American Railroads) are making progress with ISS, the Interline Settlements System, and with REN, the Rate EDI Network. A number of major carriers are online, and more are coming.

Actually, critics of what is seen as slow progress towards ISM may be somewhat off base. These are complex systems, and they do take time to develop and test.

ISS is farthest along at this point, with more than 60 bilateral ISS pairs on the system. In March, participating railroads broke the 100,000 mark in terms of bills settled on the system, and the number of settlements is growing at a rate of 15% to 20% per month.

In the meantime, developmental work on the Rate EDI Network has been completed and it's undergoing testing on six railroads.

Work on the series of Industry Reference Files is less far along, but progress is being made. Of 10 files on the original list, five are in production, four will be in production by midyear, and work has been deferred on the 10th file, a standard mileage file.

Probably the most ambitious part of the IRF program involves construction of the CIF, the Customer Identification File, a database in which each railroad customer will have a standard number and name. Well over 200,000 customer records have been built, and implementation is expected to begin soon.

As for the broad ISM program itself, the design process has been a lengthy one, stretching over 1993 and much of 1994. ISM Business Process Guidelines were published last December, and the ISM steering committee has been meeting regularly to kick-start implementation (even as several ISM pilot projects are under way to demonstrate that the process really will work).

Currently, work is ongoing in four basic areas, three at the individual carrier level and one, the development of central programs, at the AAR level.

At the individual railroad level, the projects involve:

- Formalization of ISAs, Interline Service Agreements. The key group here is the Railroad Industry Service Council (see sidebar, above), with involvement by the ISM steering committee and a group representing the National Industrial Transportation League. Here, it's a matter of prioritizing interchange improvement projects, starting with the ones that promise the greatest benefits.

- Business Process Re-engineering. The December report delved into the "here's how it should work" aspects of ISM, and each railroad now has an ISM implementation coordinator to work on this phase of development.

- Systems improvements. In order for ISM to work, good car scheduling and equipment management systems are vital. Some railroads have them today and some don't. But all carriers are making substantial investments to develop systems and to upgrade the effective ones that are already in place.

A couple of related projects are also worth a mention. One is the Industry PC Project, designed to make life easier for customers in that, on interline movements, they will have to deal with only one PC package. A contract was awarded in February for software development, with the AAR handling the central systems part of the job. Here, there will be a core package, but the architecture will be such that individual railroads can add modules to it; the basic package is expected to be completed by the end of this year. And the second related project, of course, is AEI.