In 2019, Lithuania's railway market companies moved to liberalization by implementing the European Union's Fourth Railway Package requirements. As a result, the most significant railway group in the Baltic region, Lietuvos Geležinkeliai, reorganized its activities. Lithuania's second-largest rail freight company, shunting operator Gargždų Geležinkelis, then in its 20th year of operations, got an opportunity to go beyond just shunting. As soon as the changes began, Gargždų Geležinkelis started seeking ways to turn them into a chance. The goal was to digitize processes, stay profitable in a profoundly altered competitive environment, and prepare itself for a business leap.
The answer to many challenges proved to be technologies and fundamental digitization of processes. Gargždų Geležinkelis managed, in under a year, to become the first shunting service provider in Lithuania to fully digitize its operating procedures. That was only possible with the help of the next-generation railway freight software system - CargoRail.
Started collecting critical data from scratch
Gargždų Geležinkelis operates at several important cargo hubs: at the Draugystė railway station, the biggest in Lithuania, through which 15 million tonnes of freight is carried each year; at the Rimkai railway station, where it serves more than ten different types of freight clients; and at the Mockava railway station on the Lithuanian-Polish border.
At the start of 2020, Gargždų Geležinkelis did not have a system for gathering all the information it needed for its activities. But after structural changes to obtain a competitive advantage, having a robust and autonomous system like that become essential.
"We needed a system where we could:
process data on operations
perform accounting for services
verify data received from the infrastructure manager
issue invoices to clients
handle other critical administrative tasks.
We wanted the new tool to optimize our activities without requiring significant IT or staff investments. We plan to take advantage of the opportunity created by the European Union requirements and start operating on main lines. In short, we were looking for a robust system that could meet all these needs," says Gintautas Lukauskas, the Commerce Director at Gargždų Geležinkelis.
The use of intelligent devices essentially altered some operating processes.
The head of commerce notes that they formulated several specific requirements to search for a system to meet those needs.
First, the system's developer should already have experience working with the railway industry.
Second, the developer should not be far away and should provide advice and technical support in the Lithuanian language.
And third, the new system should help perform shunting tasks on both broad- and narrow-gauge tracks.
The best fit for all those requirements was the CargoRail next-generation software for railway transport developed by the Lithuanian team "Blue Bridge Code". This system adapts processes at every station, enabling real-time completion of documents on intelligent devices, centralized accounting for services, and automatic preparation of critical documents. Besides, it is the first system that supports operations on both narrow- and broad-gauge tracks. It has the carrier's mandatory integrations - infrastructure manager, customs, seaport, and other entities.
In starting to use the system from the beginning of 2020, Mr. Lukauskas recalls that the entire team of 67 employees felt the change. So the system's acquisition can boldly be called the start of full-scale digitization. Where previously one person worked with data processing and documents, on starting to use CargoRail, the whole team got involved in that process. First of all, drivers and conductors got intelligent devices – phones and tablets – to enter operations in the system in real-time. For example, they were inspecting railcars, attaching or detaching cars, and letting them perform service accounting with the click of a button and just as quickly issue an invoice.
"I'd say it was precisely the ability to perform so many actions in real-time that was the key change. In addition, the team needed time to acquire the new habit and not fear assuming responsibility. That process was more comfortable because it's easy to trace data and quickly fix any mistakes on the new system. So we were not surprised that soon the whole team valued the new system's convenience," Gargždų Geležinkelis's commerce director says.
Much smoother data collection was also made possible by performing much more accurate accounting for services provided by third parties, starting with the infrastructure manager. "Summing up the digitization of processes with this system, we can say that it has helped us, as a company, achieve greater efficiency and transparency. Accounting with precise data makes it possible to avoid human errors, charge for additional services, and have full data traceability and accountability. As a result, we have grounds to expect that soon the collected data will help us optimize our operations and improve the quality of services," the manager explains.
A tool helps plan an ambitious business future.
CargoRail and the digitization process have also emboldened Gargždų Geležinkelis to plan for a future as an international carrier, Mr. Lukauskas acknowledges.
"We now have and are learning to use a powerful digital tool. Its functions will be necessary for us when we enter the carrier market. As a result, we see good chances to compete successfully in the new market. Our belief in the future and the growing role of technologies in the railway business is also inspired by the fact that we've managed to adapt to changes and maintain our clients' trust," the company's head of commerce says.
Gargždų Geležinkelis's success story and business transformation have not gone unnoticed in Lithuania's railway market. "We say jokingly that we're the first shunter whose drivers and conductors use smart devices at work. But we feel that our example encourages other market players to start working on digitization," Mr. Lukauskas says.
According to one of CargoRail's developers, Jolanta Skeivelienė, carriers' problems in the Baltic and Eastern European regions motivated the creation of the solution.
"Real operating hindrances preventing the region's carriers from doing their work faster and better dictated CargoRail's most important features. Working with Gargždų Geležinkelis, we've seen with our own eyes how system features and abilities that are already standard in other business sectors make the work of railway companies significantly easier and, in some cases, cheaper as well. We're also just as happy that we've managed to build a system that can fundamentally transform operating processes while remaining very user friendly," Ms. Skeivelienė says.
She notes that the CargoRail core idea is the simplicity of the user interface, with many actions that can be performed at the click of a button and automatically prepare critical documents. "Thanks to the universality of these features, CargoRail can give railway companies of any type greater flexibility without increasing the number of staff, making it possible to serve more clients and offer them individualized pricing, and reducing the chance of human errors in accounting and documentation," Ms. Skeivelienė says, adding that the future vision of CargoRail's creators is a Lithuanian railway industry united in one common electronic space, where all the parties involved in transporting freight can more easily and more quickly interact with each other and more effectively conduct their activities: not just carriers, shunters, and infrastructure managers, but also customs, veterinary and agricultural services, and the state border guard.