INFORMS Conference – Phoenix October 2012

1. Potential Synergies from Positive Train ControlBruce PattyVice President – Transportation AnalyticsVeritec Solutions INFORMS Conference – Phoenix October 2012

2. Outline • Opportunities to Leverage Information to Generate Benefits • Assessment of Potential Benefits from PTC from 6 Areas • Assumptions and Caveats • Linkages or Synergies between PTC and other systems for some areas • Integration Needs • Conclusions

3. Thanks • My sincere appreciation to our Session Chair, Carl Van Dyke, for providing me with much of the background material used to develop this presentation

4. Opportunities to Leverage Information • Line Capacity • Theory: PTC could increase capacity by allowing trains to operate on shorter headways • Assumes PTC would use moving blocks or dynamic headways • Current PTC implementation plans do not support this • Should see line capacity improvements on over-capacitated “dark territory” • Diversion of funds to PTC implementation could actually reduce amount of capital available for capacity expansion • Service Reliability • Theory: PTC could improve reliability by reducing delays and increasing average train speeds • Improved service quality and reliability would allow shippers to reduce supply chain costs and make rail service more attractive, especially for intermodal • However, independent implementations of Precision Dispatching do not rely on PTC to achieve this goal • Potential benefits here are not nearly as large as they were before railroads became so much more reliable

5. Opportunities to Leverage Information • Efficient use of cars and locomotives • Theory: Real time location information provided by PTC will enable railroad managers to increase asset productivity through improved decisions • Dynamic car scheduling systems could use location information to re-trip cars as needed based on updated arrival times into terminals • Locomotive scheduling systems could use location information to update locomotive assignments based on real time information • However, GPS systems on locomotives can already provide this information without PTC, assuming that consists are linked to locomotive information • Fuel savings • Theory: Real time information will allow dispatchers to “pace” trains between scheduled meet points, permitting fuel savings • Trains would not always operate at top speeds in order to reduce delays • However, this can already be accomplished using Precision Dispatching approaches that are not reliant upon PTC

6. Opportunities to Leverage Information • Reduction in locomotive failures • Theory: Digital communications provided via PTC can be used to report diagnostic data on locomotives in real time • This would allow pre-planning of maintenance activities and warnings of impending problems • However, “health” monitoring systems have already been installed in many modern, digital locomotives, so this is not PTC-dependent • Improved track maintenance windows • Theory: Real-time accurate information on train location should increase the productivity of track crews • This is needed because increased traffic density has made scheduling of maintenance more and more difficult • However, six of the seven Class I railroads have developed technology so that maintenance crews have visibility to train location information through a web application

7. Integration of Approaches can Add More Value • Many of the benefits that were originally identified with PTC or other communication-based train control system have been realized through the deployment of other business systems • Cellular networks • GPS systems mounted on locomotives • Precision dispatching • AEI • Web-based communication systems for track crews • It would appear that these approaches have been implemented in a “piecemeal” manner to address the needs of individual railroad departments • Technologies need to be unified at the enterprise network so that more can be achieved for less

8. Integration of Approaches can Add More Value • What could the integration of all these approaches allow? • One example -- Unifying the movement planner, PTC communications system, PTC onboard computer and display, and Train Energy Management System would allow for the development of “dynamic trip plans” • For each train • For each car • For each terminal • For each customer • Think about what this would mean for the demand for real-time OR tools and models to manage the railroad?

9. Conclusion • Initial assumptions about the benefits of PTC used theories that did not take into account the proliferation of other technologies • These technologies, in general, however have not been well-integrated into a unified structure • Linking these together provides an environment that is “target rich” for opportunities for real-time OR tools and would take advantage of the synergies between these various technologies