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photo: Archive RAILTARGET/“If We Create Something Like an Artificial Green Banana and Put It in the System, We Can't Be Surprised if the System Collapses,” Says Jens Engelmann about DAC
In a world racing towards digitalisation, change is not just an option but a requirement for survival. RAILTARGET presents you with an exclusive interview with Jens Engelmann, Co-Head of the European DAC Delivery Programme, Europe's Rail. Tasked with the strategic oversight and implementation of the ambitious Digital Automatic Coupling (DAC) project, Mr Engelmann imparts his profound understanding of the industry's trajectory. This exclusive interview delves into the challenges, potential advantages, and transformative impact of DAC on the freight rail landscape.
Mr Engelmann, the Digital Automatic Coupling (DAC) development and deployment programme is a kind of PPP project between the European Commission and railway companies that have come together to deploy DAC. It is one of the biggest projects of the decade, perhaps even the century, in which DAC is to be the centrepiece of the digitalisation of rail freight transport. Could you briefly explain to RAILTARGET's readers and listeners, particularly those in Central Europe, why and what the goal of transforming freight rail as we know it today is?
Thank you for the invitation. I consider the readers and listeners of RAILTARGET to be a very important audience that is part of the formation of a pan-European opinion, not just the opinion here at the fair, where there are mainly Germans or Austrians. The DAC is indeed a pan-European project aiming to create a new pan-European system. Why do we need a system based on automation and digitisation? We all need it. We had an event here at the fair where we invited the big customers of the rail carriers, and they told us that with the current level of rail freight transport, we would one day reach a point where it will not be flexible and fast enough, it will not provide information on the movement of goods to customers. The current rail transport is simply not part of the logistics chain, which is otherwise already digitised. The central element of the new system will indeed be the DAC, but this is only a sub-element in a system that will be reformed as a whole. And when the big rail customers and we could reach out to others we have not invited to Munich today, say, "You have to do better." If we can't do that, there will be electric trucks that will overtake us. Sure, there is still a debate about whether we have enough space on the motorways, but, all in all, without reform, we will gradually become irrelevant. We have technology that is over a hundred years old, so we have to move forward. We have reached a consensus in Europe on this major transformation of rail transport towards digitalisation, and it is crucial for all countries and all (national) railways. After all, we are all working in one common railway system. Supposing in certain areas someone can operate separately, e.g. in integrated trains or intermodal, where otherwise there is not so much interconnection with the whole railway system. But everyone else has to move forward in development, or it won't work. It has never been clearer than today that this is necessary. At least, that's how I see it.
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The large customers who order transport and whom you have invited for the first time ever to discuss DAC at a trade fair are not only in the position of ordering transportation from A to B but are also interested in its efficiency and productivity. So, I would like to ask you what the DAC benefits are and if you could also elaborate on that it was mentioned in the discussion that all participants in the logistics chain have to share the costs and benefits of DAC. It is not very clear from the discussions so far.
These are two different things. One is what we get the benefits of DAC in, and there are different views on that as well. For example, in the rail companies that operate in freight, some say, "DAC will not help us. If we gain half an hour through it, we have to wait another half hour for a slot between two passenger trains." We have to partially accept this view. But it is also clear that all rail market participants should be faster. And then we come to the question of whether we even have enough staff to be able to do train building, to run trains at all, and, that is, to produce trains at all in industrial enterprises. Everyone has to answer that for themselves, none of us is going to get any younger, our children will not want to become shunters, they will want something digital. It brings me to the next element of benefits. We can all shop on Amazon and track the progress of our shipments. Two years ago, the system said the package would arrive tomorrow. Today, it says it will arrive at 9:00-10:00. With rail shipping, you can't track the shipment. Here we are, the customer benefits, the carrier benefits, but the owner of the locomotives and cars has to pay for the technology. We've discussed this, it is nothing new. If we want to change the whole system, we need to ensure there is a reasonable and proper contribution or cost-sharing for this investment. Finally, if possible, make the system as simple as possible, where all participants can share the economic benefits of the new technology. However, we must not fall into administrative madness. I would not do this. I would simply pay the cost of the new system, and that would be the end of the discussion.
So it is by changing the system that we can achieve real interoperability. You, Mr Engelmann, are actually working on a system that will not be treated specifically on a country-by-country basis like other elements of the railway, but you are creating one new system for all. The chance of implementing it is linked to different models of initial financing. However, the sequencing of the steps in the implementation of DAC is also important. There is a concern that if the sequencing of the steps is not right, for example, by 'forcing' DAC on the sector through TSI standards, someone will simply be left sitting on the costs. It is, therefore, important that everyone is informed of the progress of this process. So, we approach the question of costs, transformation costs. I would liken it to the process of the Central and Eastern European countries joining the EU. We had to meet an infinite number of norms and standards, which is a cost, and so we spread something out on the timeline through transition periods. It was then more manageable for both sides. Similarly, are you thinking about breaking down the cost of DAC into steps over time, particularly for retrofits? After all, we have 500,000 rail cars in Europe.
The first point is that we are introducing one technology that will be interoperable across Europe. But we have had very productive conversations with the Czech and Polish rail sectors. They told us not to rush anything. Sometimes, in the West of the EU, we are too fast and too euphoric, and that is why we need correction from time to time. Personally, I do not believe that one day we will have a super plan in which we will have to redo everything, literally everything. It won't work. It would mean an economic loss if we had to redo fairly new vehicles right away or give others away because DAC is not technically feasible to retrofit. Let them keep on running, maybe on the shunting, and let them live on the railroad. We need to stagger the steps so we don't stress the whole system. Currently, our biggest challenge is to define the part of the transportation market where DAC will be mandatory. And around here, let it go on. We are not going to invest €1 million in a 35-year-old locomotive. We have to listen and learn. It is pure nonsense to redo everything tomorrow. It can't work, and nobody will want to be involved.
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Now you're speaking from the heart of most Central European carriers.
But it's not just Central Europe. Even Western rail companies can't afford to do that. The rail freight market is not like the narcotics market, margins are low. That is why we don't have such a large volume of investment. We have to look carefully at where they go.
The largest marshalling yard in the country is about half the size of the largest German one in Mannheim. I would love to ask, have you finished the testing phase of the DAC prototype? At the same time, a discussion has started where the rail sector does not just want to see how the DAC works but wants to test it in real rail traffic. For example, to test the control of marshalling yards with DAC trains. The industry is now saying, "We need our own benefit-cost analyses at the enterprise level, which will have their origins in the data obtained from testing in real operation." Do you think this stage has now arrived?
Yes, of course. But if we create something like an artificial green banana and put it in the system, we can't be surprised if the system collapses. It wouldn't be a good idea. After intensive discussions, including with the Czech rail sector, we have defined six preconditions that would make the introduction of DAC possible – above all, uniform technology. Then, reliability is needed, and this will be obtained by a higher testing intensity. We need 50 to 100 trains that will run for two or three years to be able to say that only a very low risk of non-functionality can be accepted. Then we need a DAC transition plan (the so-called migration plan) and funding. We cannot come out of the laboratory with a prototype and declare, "This is DAC." Even the automotive industry wouldn't do that or may do that, but the customer will run away.
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You're referring to electric mobility now, aren't you?
Yes, but also to the qualitative changes in cars in the seventies and eighties.
So all the innovation and qualitative changes. I sometimes liken it to the journey from the telephone box to the mobile phone. Everybody knew there would be a mobile phone at the end, but everything progressed in stages.
That's a nice example. For mobile phones, I need an infrastructure of terrestrial transmitters. Sometimes we had to start investing in that infrastructure. We couldn't say, "No, we have these phone boxes, so what do we need." That's my vital message to listeners and readers. We need money for the DAC. Transportation customers are telling us, be faster, we need you (with DAC). If we tell the European Union now, and hopefully the member states that we're joining with in hopes of funding DAC, that we need ten years to test, then 15 years to validate the tests, 20 years to read those test reports, we'll be amen. That is, if somebody now starts to organise an event to get money, we have to tell them that we can implement DAC in 5, 6 or 8 years. It's a kind of shaking hands. We have a window of opportunity, but if we say we have to do that first, we fall out of that window.
So should the processes important to the DAC run in parallel?
Yes. Otherwise, in ten years, here in Munich, we will be discussing e-freight mobility, not rail.
The right-hand lane of the motorways will be declared an e-highway...
Sure, with traction and all that.
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If I were to conclude, your DAC team's communication strategy is carried by a vision of the future rail. What will be possible on such a digital freight railway besides DAC?
We can not only know online everything about the train but about the shipment, for example, the moisture of the iron ore for the steel mills, and the temperature, but it goes beyond that. The car's owner will know all the data about the vehicle's condition, the condition of the wheelsets and the brake shoes. We won't need a wagonmaster one day. We are the only transport modem where we can afford to check every few kilometres whether the wagon is still there and what condition it is in. It's nice and safe, but someday, we won't have these people. If we get all the information from the video gateway and involve artificial intelligence in controlling the system, we will create an attractive new job on the railway.
Then logistics and transport will merge into something that will be a phenomenon in itself, which may be interesting for the capital markets because it will actually be a controlled warehouse on rails.
In the end, the customer will decide what they need. There used to be a chancellor in Germany, Gerhard Schröder, and he used to say that either we shape the world or the world shapes us. And that's it. Either we are capable, or we become a victim. I prefer to be operational.
Thank you, Mr Engelmann, for the interview. We know from diplomacy that we are either at the table, on the plate, or we find ourselves on the menu.
The interview was conducted by Jan Sechter, Chairman of the Transport Section of the Chamber of Commerce as part of the partnership with the RAILTARGET interview studio at the transport logistic trade fair in Munich.