CSX Railway Uses OR to Cash In on Optimized Equipment Distribution

Authors:
Michael F. Gorman;Dharma Acharya;David Sellers
Affiliations:
Department of Management Information Systems, Operations Management, and Decision Sciences, School of Business, University of Dayton, Dayton, Ohio 45419;CSX Transportation, Jacksonville, Florida 32202;CSX Transportation, Jacksonville, Florida 32202
Venue:
Interfaces
Year:
2010

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Abstract

Each day, CSX Railway allocates hundreds of empty railcars among hundreds of customer car orders. In 1997, it implemented the US rail industry's first real-time, fully integrated equipment-distribution optimization system, the dynamic car-planning system (DCP). DCP seamlessly integrates operations research modeling into CSX's process that assigns empty cars to customer car orders. CSX estimates that the DCP system saves the company more than $51 million annually and has saved $561 million since its implementation. DCP has also provided $1.4 billion in capital-expenditure avoidance because of more efficient car allocation. Fewer railcars yield improved return on assets and reduced congestion on the CSX rail network. Customer satisfaction has also increased because of improved empty-car delivery. Public benefits include improved highway safety; reductions in congestion, pollution, and greenhouse gases; and reduced tax-supported road maintenance, thus saving an estimated $600 million.