Faced with soaring demand, rising fuel prices, and a fixed infrastructure of tracks and cars, the worldwide railway industry is investing heavily in wireless technology to make freight trains run more efficiently and productively.

The share prices for publicly held railway companies like Union Pacific Railroad and BNSF Railway are on a two-year roll, reported The Wall Street Journal this week, as demand continues to grow and railways have been able to institute their first major price increases since the industry was deregulated in 1980.

The good times, however, have created a dilemma: how to handle increasing loads -- particularly for "intermodal" container traffic that travels by ship, truck, and train -- without laying new track. Each mile of new track costs between $1 million and $2 million to build -- and there aren't that many places left to lay track.

"In North America, China, India, Russia -- just about everywhere, railroads are bottlenecked," says Prat Kumar, head of General Electric's Rail Solutions unit. "Laying down new track is a very expensive way of increasing capacity. So the core philosophy behind my business is unlocking railroad capacity with wireless technology and IT."

"Investment in our railway [data] network is increasing," adds Lynn Andrews, the senior assistant vice president for IT operations services and CTO of Union Pacific Railroad, the nation's largest railway. "We have to spend more because volumes are up so much."

Telcos within railways
Railways can be thought of as big telecom companies within even larger freight-hauling companies. Union Pacific, for example, has a 15,000-mile private microwave network, connecting towers along the rail lines. Much of that network is aging, which means that Andrews is faced with upgrading his existing system while installing new technology such as onboard cellular modems and 802.11 networks at large facilities like railyards.

At the moment, communications uplinks from trains in transit are handled by the microwave network and by satellite in remote areas where there's not other forms of coverage.

"I'd hoped by this time to be able to begin to retire some of our private stuff and go over to public networks," says Andrews, "but the coverage from the cell providers is just not there yet."

Wireless intra-train communications began to be critical for railroads in the early 1990s, when the advent of distributed locomotives (i.e., engines in the middle and at the rear of the train, not just at the head) "completely changed the physics and redefined the landscape of heavy hauling," as Kumar puts it. Over the last 10 years, he says, GE has invested nearly $200 million on developing technologies in IT and wireless systems to unlock capacity along the railways. Revenues for GE's railway technology business increased 60 percent in 2005 over '04.

Now, the railways are seeking to use improved data flow to manage traffic across rail networks thousands of miles long.

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