Today, rail accounts for just 40% of ton miles moved in the United States. From a revenue perspective the number is more stark – domestic rail freight revenues are just 10% of trucking revenues – about 70B compared with 700B. Since the 1910s when rail accounted for 12.5% of the S&P 500, rail has slowly lost market share to truck. Though passenger rail is more successful in Europe, the picture from a freight perspective in Europe more dire.
Truck is more convenient and expensive for shippers because it is less complicated to manage, but takes a larger toll on the environment and its workers. Rail uses about one quarter of the emissions as truck to move one ton of freight one mile. Additionally, there are a number of other costs from the widespread adoption of the trucking industry:
· The US highway system requires billions in continued investment that could be diverted to sustainability initiatives. 99% of damage to highways are caused by freight traffic
· The US trucking industry kills over 4,000 people per year due to the mixing of freight with civilian traffic
· Long haul trucking takes a serious toll on its workers, with below average life spans and long hours spent away from home
The UnitedStates has what many consider to be one of the most advanced rail freight networks on the planet, and it is capable of handling more traffic. However, freight rail is very complicated – with interchanges, multiple handlings, and a chess puzzle of freight moves to solve. That’s because rail mixes the traffic for multiple customers on the same train – a type of rail service called manifest– which creates lots of logistical puzzles and challenges.
Cedar AI was founded with the mission to solve rail’s logistical challenges through better technology, enabling rail to take a larger percentage of market share and only using truck where it makes sense. We believe most long-haul trucking can shiftto rail, and that technology is the key to unlock that transformation.
We at Cedar believe our effort can play a major role in aggregate emissions reductions by decreasing shipments that move over trucking long-haul. According to the EPA, 29% of emissions are caused by transportation. Of that transportation pie, rail contributes2%, while trucking contributes 23%. If Cedar can help shift 10% of trucking to rail by improving the technology rail uses, that is a roughly 31.275 Tg CO2Equivalent reduction opportunity. That implies that Cedar has the potential to facilitate a 0.45% reduction in aggregate domestic emissions.
Cedar is deeply invested in this mission and it drives what we work on and what we do. For example, in 2022 we spent significant R&D to roll out a transloading solution, which helps thousands of small business through the country manage and increase their transloading offerings. Transload is one of the fastest growing categories of rail freight, and is the process by which rail can reach addresses that are not served by rail. Transloading involves having a transload company shift the load from truck to rail and vice versa for the last mile, but doing the majority of the trip over rail.
As another example, our AI based switching product allows railroads to process more cars with less overall handling, reducing the per car emissions while simultaneously increasing overall traffic that the railroads can handle.
In addition to having a company focused completely on that mission, we are also invested in being a sustainable business ourselves. Cedar’s actions towards better environmental stewardship are comprised of both individual/daily and strategic/corporate tracks.
The individual or daily steps use corporate policy to reduce our carbon footprint through actions in the day to day operations of the company. This includes:
· Instead of having our own physical servers, Cedar leverages a cloud provider. The cloud aggregates workloads from different customers, allowing packing of workloads to run with fewer overall resources. Cedar’s cloud usage occurs during the work day, which is when network traffic overall is lower.
· Having a hybrid work schedule where possible – 2/3of Cedar’s employees work from home at least a few days a week or walk/bike/use transit to the office.
· Reducing unnecessary travel – Reduction of air and auto trips is the biggest change individuals at Cedar can make. When possible, we use teleconferencing instead of business travel.
· Travel by rail – When travel is required, if practical we make business travel by rail.
· Reduce or eliminate printing – Cedar limits printing to only as required for official documents or for test printing.
· Turn off computers at the end of the day.
· Provide recycling receptacles throughout the office
