Freight rail moves 40% of long-distance goods in the U.S., but the industry&#x27;s biggest challenge isn&#x27;t infrastructure, it&#x27;s intelligence. In this episode of The Peggy Smedley Show, host Peggy Smedley sits down with V. Krishnan, industry advisor for Microsoft manufacturing &amp; mobility, to explore how AI agents and realtime decision tools are reshaping the future of rail. They discuss: Why railroads are drowning in data but struggling to act on it How CSX used AI to transform customer experience The Rumo case study: cutting lookup times from 4 minutes to 3 seconds Fuel optimization and how AI can cut costs 3–7% without new infrastructure Weather analytics, workforce challenges, and the retiring knowledge crisis Why the next 10% of performance won&#x27;t come from more track — it&#x27;ll come from smarter decisions Whether you&#x27;re in logistics, supply chain, or enterprise tech, this conversation is a must-listen. https://aka.ms/RumorailAI https://aka.ms/CSXrailAI

Reshaping Railroad with AI

Peggy Smedley Show

# Full Transcript

**Podcast:** Peggy Smedley Show

## Participants

- **Peggy Smedley** (Peggy Smedley Show)
- **Krishnan** (Microsoft Manufacturing and Mobility)

## Transcript

Welcome back to the Peggy Smedley Show, your voice for our connected world with your host, Peggy Smedley. Hello listeners and welcome to today's edition of the Peggy Smedley Show. I'm your host, Peggy Smedley. Today on the show, we're talking rail. Rail is the backbone of the U.S. economy in a sector facing real pressure as freight demand costs and complexity rise.

Railroads aren't struggling because they lack data. They're struggling because the systems running them weren't built for the speed, scale, or complexity of today's operations. At the same time, AI is beginning to reshape how railroads operate from customer interactions to frontline decisions. To break down where the industry is headed and how AI agents and real-time decision tools are changing rail,

I'm joined by Krishnan, who is the industry advisor for Microsoft Manufacturing and Mobility. Krishnan, welcome to the show. Hi Peggy, good to be here. I'm delighted to have you on the show because this is a great topic, one that we haven't really explored much with Microsoft and looking at rail. And I think our listeners would be really excited to talk about it because I think it's one we forget about. It just happens.

We go from one part of the country to the other and goods go there and we don't really give it much thought, but it's one we need to. So I thought maybe we could start our conversation by having you give us a little primer of the railroad industry and perhaps even the importance of the overall health of the economy. Sure, Peggy. So here's the thing most people don't realize.

Freight rail is kind of this invisible backbone of the whole economy. Railroads move around 40% of long-distance freight in the U.S. when you measure it by ton miles. That's everything from the grain that becomes your food to the chemicals that go into manufacturing to the cars and the consumer goods sitting in stores. So if rail stopped moving, you would feel it everywhere within days.

And it is incredibly efficient as what it does, the rail does. A train can move a ton of freight, something like 470 miles on a single gallon of diesel. Nothing else on land comes close. So it is not just big. It is the most cost-efficient, most fuel-efficient way to move heavy freight over long distances.

It is also a foundational layer underneath basically every other supply chain we deal with every day. Now it is growing or shrinking? I would say it is more transforming than either. Volumes have been relatively flat to modestly up depending on the segment and the year. It is a mature industry, but that's exactly why this moment matters.

When you cannot grow just by moving more stuff, the competitive question becomes how well do you run what you have already got? And that's really the whole story right now. The railroads have spent dec...

Reshaping Railroad with AI

Transcript

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Reshaping Railroad with AI

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.