New Partnership Opens the Way for Rail Freight KYC (Know Your Cargo) Technology

Governments and private freight rail operators have long recognized the need for cargo and freight wagon trackability and security, particularly when goods move across borders. Until now, a major impediment has been finding a common and secure rolling stock identification system that rail operators, asset managers and investors can agree on. A major step towards solving this challenge has now been taken by the Rail Working Group and Nexxiot.

The Rail Working Group (RWG) is the international nonprofit charged with global implementation of the Luxembourg Rail Protocol, a uniform system for identifying, recognizing and enforcing security for creditors financing railway rolling stock. Now the RWG and Swiss supply chain digitization pioneer Nexxiot are joining forces to implement the forthcoming Unique Rail Vehicle Identification System (or URVIS) which will become available for the first time under the Protocol, to enable complete worldwide cargo rail digitization. This will use Nexxiot’s proprietary cloud-based technology, which has the flexibility and scalability to encourage uniform acceptance by shippers, operators and governments, to place URVIS numbers on all rolling stock supported by Nexxiot as soon as these numbers are available.

Investors financing rail assets take on significant risk. However, this risk is often assumed without the technology to give investors certainty that the assets will remain with the designated carrier, in agreed countries, and safeguarded against piracy and fraud. Although unique identification numbers have been standard for goods from electronics to automobiles for decades, until now this has not been the case for railcars – even though they are multimillion dollar assets. The URVIS number, facilitated by the Luxembourg Rail Protocol, changes this for the rail sector by introducing a single, global, unique identifier for all rolling stock.

Howard Rosen, chairman of the Rail Working Group, said: “The Luxembourg Rail Protocol creates a new global legal system to facilitate the recognition and prioritization of security interests held by creditors in this equipment. These interests will be registered in a new international registry, which is searchable by the public 24/7. A critical element of this system will be the unique identification of all railway equipment under a common structure with numbers issued by a neutral, trusted source, the international rolling stock asset registry, based in Luxembourg and established under the Protocol. This makes it possible, for the first time, for all interested parties to easily learn of a creditor’s security interest, and for that creditor to enforce its security in cases of debtor default or insolvency. With Spain’s recent announcement that it will adopt the Protocol, we expect it to come into force in all ratifying states in 2022.”

Since the adoption of the Luxembourg Rail Protocol in 2007, the RWG has engaged intensively with governments and the private sector to create a secure and reliable system that guarantees every rail asset in the world through a unique identifier. Now Nexxiot will combine its solar-powered mobile sensor and gateway technology with the URVIS numbering to achieve complete rail cargo and rolling stock transparency and accountability.

Although the rail industry is moving quickly to equip its mobile assets with devices like Nexxiot’s Globehopper sensor gateway, there is increasing pressure from cargo owners and shippers for rail operators to provide full cargo transparency throughout the entire journey. This “Know Your Cargo” (KYC) initiative is a major trend driven by Nexxiot. Similar to the way Fintech transparency measures have transformed the financial sector, it is equally important for operators to assume responsibility not just for the assets themselves, but for the goods they contain. This is important for risk reduction, safety and security, and to streamline business processes to drive up efficiency and customer satisfaction.

Assigning each railcar across the globe with a unique, independently registered number maintained in a global repository is essential to providing the next level of accountability and security for the cargo rail industry, its financial investors, and the governments that secure them. As an innovator in the TradeTech space, Nexxiot’s technology provides both the hardware and Intelligent IoT Cloud software platform that will enable the unique identification of every railcar in the world while offering shippers, carriers and governments the flexibility to track assets utilizing their own networks and systems.

Based in Switzerland and adhering to proven Swiss precision and quality standards, the RWG and Nexxiot share a common vision and approach to cargo rail digitization. “Bringing together our two organizations in this project is a critical enabler that opens the door to diverse new services and quality standards needed all along the supply chain, as well as by the recipients of all created value – the consumer at the end of the line.” Stefan Kalmund added. “We are very excited by this collaboration with Nexxiot and we encourage other rail manufacturers and service providers to work with us to adopt this ground-breaking initiative” added Howard Rosen.

Nexxiot has been leading the RWG delegation at the UN Economic Commission for Europe Inland Transport Committee Group of Experts on the Permanent Identification of Railway Rolling Stock working to create a standard set of global guidelines for marking rolling stock.

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