Determining rail fleet sizes for shipping automobiles

Automobile manufacturers (shippers) provide railroad companies with annual forecasts of their monthly shipping volumes from various origins to different destinations. The railroad companies (carriers) jointly operate pools of railcars to transport automobiles. Each pool comprises equipment of a particular type and serves one or more shippers. RELOAD, a fleet management group within TTX (an independent company), manages the repositioning of empty railcars of each type for the carriers. The problem is to determine the smallest fleet size that will provide adequate service. The parties involved have settled on a coordinated use of static and dynamic fleet-sizing models along with appropriate correction factors to recommend the number of railcars of each type that should be acquired for any year. The approach incorporates such operating realities as queue times, forecast accuracy, and daily demand variability. By using this process, the railroad companies have reduced equipment commitments, saving over half a billion dollars annually.