Railcar 54, where are you?

When polyester manufacturer Kosa needed a way to locate the railcars in its 1,500-vehicle fleet, it did what every modern manufacturer does: It went to the Web.

By -- Logistics Management, 11/1/2000

Do you know where your railcars are right now? Polyester manufacturer Kosa can tell you where its are. Two years ago, the company worked with its car-location management service to develop a Web-based tracking system that reports on the railcars' location every 15 minutes. "It gives us the ability to take a look at where our cars are and how they're being utilized," says Chris Fernandes, order-fulfillment manager for the company's Intermediates/Polymer and Packaging Resins groups, which oversee most of the company's rail shipments.

Kosa, headquartered in Houston, manufactures commodity and specialty polyester products. The privately held company, which does not release annual revenues, operates five global business units: Textile Fibers, Technical Filament, Tirecord, Intermediates/Polymer, and Packaging Resins.

The polyester maker ships about four billion pounds of product each year and relies on railroads to haul about two-thirds of that volume. It maintains a fleet of up to 1,500 leased railcars to serve such customers as 3M, General Electric, and DuPont.

To monitor railcar shipments, the manufacturer had been using a service provided by Union Pacific Technologies (UPT) that sent it data on its railcars' whereabouts. Before transmitting the data, UPT first screened the information and checked its accuracy-a process called scrubbing. "It's the only company in the industry that scrubs the data," says Fernandes.

Once Kosa received the scrubbed data, employees would enter the information into spreadsheets. This procedure, which proved perfectly adequate for routine operations, turned out to have some drawbacks in times of crisis. When the company faced an emergency and had to track a shipment for a customer, its employees had to pore through all of the spreadsheets to obtain the necessary information on the car's whereabouts.

Excellent Visibility

Two years ago, Kosa decided to make some improvements to its supply chain management procedures-one of which was to find a way to get more up-to-date information on its railcars' locations. To that end, it worked with UPT to develop a Web-based solution for railcar monitoring. Today, Kosa employees can go to a Web site to obtain instant information on railcar locations. Under the arrangement, the company pays a combination of periodic and transaction fees to UPT's successor, Shipment Management Solutions, a division of Transentric. (St. Louis-based UPT changed its name to Transentric this past summer.)

The enhanced visibility of its railcars has allowed Kosa to manage its fleet better. In the system's first year of operation, Fernandes says, his company has been able to take about 120 leased railcars out of service because of improved fleet utilization. As a result, Fernandes estimates that Kosa saved some $800,000 through a combination of reduced inventory and the elimination of leasing charges for the cars.

Although the company has since boosted its fleet back up to 1,500 cars due to the booming economy, enhanced visibility has allowed Kosa to add those cars effectively. In addition, Fernandes says, other departments besides traffic can now view railcar locations on the Internet. "We can disseminate information [via the Web] to shipping departments and customer-service departments at multiple plants," he says. "It gives us the visibility we need when a shipment gets delayed so we can react before it becomes a crisis."

Furthermore, the ability to monitor its railcar fleet throughout North America has given Kosa more flexibility in its shipment management. "As the market cycles, we're not going to sit around with excess cars," says Fernandes. "[The new tracking system] gives you the ability to react now without putting your career on the line."