There are times when a growing company has to invest in new equipment, which can be a massive investment. And yet, many times that company can achieve better results simply by deploying smarter logistics solutions.
RSI Logistics has been helping its customers improve their efficiency since 1984 through a multipronged approach. The company has four distinct areas of expertise to help companies improve their rail transportation management and reduce freight and handling costs: RSInet rail transportation management software; rail logistics management services; door-to-door bulk liquid shipping via intermodal ISO tanks; and rail terminal operations.
Betting on Technology
Bob Tuchek and Kelley Minnehan bought out the original owner of Rail Services Inc. in 2001 and renamed the company RSI Logistics Inc. They refocused the company on technology and expanded their logistics service offerings.
The two owners divided the work and Minnehan, as senior vice president, focused on the bulk terminal operations.
“To have successful operations that are managed safely, you have to stay on top of their operations,” Tuchek explains. “Kelley travels constantly and visits each location regularly to ensure proper, safe operation of each one of our terminals.” Tuchek adds that he has a broader focus, with an emphasis on the third-party logistics and technology side of the business.
Minnehan and Tuchek turned to technology solutions to deliver RSI’s services more effectively. “We realized that we were performing a lot of services for companies in our rail and logistics group: rail management, tracking and tracing, fleet management, equipment procurement, equipment maintenance and railroad maintenance,” Tuchek says. “We needed a tool that would give our customers greater visibility and better coordinate our work efforts.”
RSI developed its own railroad management application that would provide its clients visibility and access. “We created a new technology group within our company, and that group came up with a product we called RSInet, which is a railroad management application that takes care of services from A to Z,” Tuchek explains.
The new system enables customers to track where their rail cars are at all times and determine the estimated time of arrival to any point.
“This solution also maintains the customers’ rate information, equipment information, mechanical specifications and equipment maintenance activity,” Tuchek explains. “It’s an end-to-end solution for rail.”
More than 100 customers use the RSInet application. “Most of those clients are companies that use rail and have their own internal competencies from a railroad standpoint, but they need a better tool to manage their business,” Tuchek explains. “Some companies don’t have the backroom or staff to manage and support their railroad activities, so in those cases we’re playing service roles as it relates to rates, tracking and tracing management.”
The services the company offers to its clients have also propelled its growth. In 2001, when Tuchek and Minnehan took over the business, RSI had 5 terminals; today it has 18, with plans to keep growing throughout the United States. “One of the benefits we offer to our terminal customers is shipping visibility of their cars – inbound and outbound – as well as inventory system at each location,” Tuchek explains.
The fact that RSI is a rail-centric company is an advantage when helping clients set up new terminal locations. “We understand the railroad component better than other companies,” Tuchek says.
When industries that are seeing big growth need new ways to distribute their products – as is the case with frac sand producers – they go to RSI in search of solutions. “We have these [frac sand] companies that come to us and say, ‘These are 20 destinations in the United States where we’d like to make deliveries and we want to go through a bulk terminal, or we want you to set up a terminal,’” Tuchek explains.
RSI looks at the product’s point of origin and at the different destinations desired, and identifies the railroad that will yield the lowest freight cost for its client. Depending on the commodity transported – for instance, whether it’s a hazardous material or not – a new terminal can be up and running in 60 to 90 days, according to Tuchek.
Saving in Technology
New terminals and new transportation systems can save companies money in a variety of ways. “This year, we started working with a company that felt they were tight on railroad equipment and thought they needed to purchase additional rail cars,” Tuchek recalls. “This equipment is in high demand and its availability is extremely tight.”
RSI studied its client’s fleet and how its rail cars were moving. “We looked at transit and at how long their cars were sitting at the customers’ locations,” Tuchek says. “We made some changes within the clients’ fleet and implemented a program where they would provide their clients three free days to unload the cars and return them. After the three-day period, there would be a charge.” The program incentivizes the client’s customers to return the cars faster.
“We were able to take a situation where they were ready to order new cars to, after making some improvements, they found that they had enough equipment to meet their needs,” Tuchek continues.
RSI has seen 18 to 20 percent annual growth in revenue for the past three years and expects to continue to expand its market reach through organic growth, acquisitions and an increase in its customer base. The company plans to reach 30 terminals in the next five years, according to Tuchek.