What are AEI Tags and How Do They Help the Freight Shipping Industry?

If you’ve ever had to stop in order to let a train and rail cars go by, then you may know that the shipping industry is large… but not how large it actually is.

The United States has the longest railway system, tailgated by China and India, and consists of about 140,000 miles. Among this system, about 80% is utilized for freight shipping. Reports are even circulating that say millions of tons in freight shipments are transported in a single year.


To put it even more into perspective, BNSF Railway (the leading U.S. Class I freight company) generated more than $23.5 billion in operating revenue in 2019 alone. In combination with its competitors, the freight industry brought in $71.3 billion. Freight shipping via railways is the primary source of shipping transportation for many businesses and growing more popular every year.

Railyard managers, shipping companies and owners realized they were having trouble tracking their freights and, in return, was costing them an incredible amount of headache – higher costs, angry clients, missing freights, and demurrage fees.

The use of AEI tags has been shown to increase tracking accuracy by 99.9% in most cases. See how your business could improve its accuracy, decrease costs, and save time with AEI tags.

What are AEI tags?

AEI tags are computer chips placed in a plastic covering that are about 30” long. They are placed 3-4 ft. above the railhead, on both sides of the freight. When the tags roll past one of the tag readers, their specific information is sent to the owner, logistics manager, of whoever is programmed to receive the information via radio frequencies. The AEI tags hold pertinent information like what’s inside the freight, how much it weighs, serial numbers, who owns it, and dates and times of the freight’s check-in points. The tag readers are usually placed at the entry and exit points of a railyard and can grab this information when the railcars go their normal speeds of up to 80 mph.

History of AEI Tags

For the freight and railroad industry, the task of finding a good tracking system was one that began in the 1960s. The first iteration of a railcar tracking system was used with color-coded labels. This system was a good start to finding a tracking resolution, but it was not ideal. The color-coded labels would get dirty and destroyed by the natural elements, which made them obsolete and resulting in them needing to be replaced, which was an unneeded hassle.

AEI tags are a small device that threw the freight industry by storm in the 1980s. Still, a similar system was used in the maritime industry beforehand through an RF-based identification system. When the shipping industry leaders saw how well it was working for maritime companies, they worked with those companies to develop a strategy for the shipping industry.

How do AEI Tags Help the Freight Industry?

AEI tags keep decrease costs, mitigate the chance of human error, improves accuracy, and saves time.

Removes the Chance of Human Error

There is a great chance of human error for businesses that aren’t utilizing an AEI tag system yet. Before these systems, a human would use a pen and paper to document all the information regarding a specific freight manually and walk up and down miles of railroad to document each car.

A “9” can easily become an “8” when handwriting is involved and before you know it, your shipment of $3 million is nowhere to be found. Errors inevitably happen when humans are involved, but with AEI tags, the chance of error is mitigated.

Keeps up with Preventative Maintenance

The more technologically advanced AEI systems that are new to the market can also monitor the maintenance of railcars and suggest preventative issues to check out.

An example of this is monitoring the temperature of the freight wheels to make sure they aren’t getting overheated. When these wheels are exposed to higher temperatures, they can melt which results in delayed shipments, angry customers, and high-stress situations.

These monitors will set off an alarm, letting you know that there is an issue with a specific railcar that needs to be inspected by a professional. Knowing about problems before they truly arise and nipping them in the bud before it’s a setback will set your company apart from others.

Decreases Costs

Along with mitigating the chance of human error with documentation and reporting, an AEI tag system will also decrease your costs. You won’t need to hire or have as many employees working on writing reports and inspecting freight, saving you money.

Plus, most AEI tags will last around 15 years, which means you won’t be replacing them regularly, and it’s one less thing to keep track of on your neverending list of to-dos.

The money you save with AEI tags can be used to invest in other platforms to further support the efficiency of other parts of your business which is another bonus to implementing AEI tags.

Real-Time Updates

Just like a tracking system works for packages for the UPS, AEI tags do the same for freight shipments. You will be able to see the last location the railcar was checked into, the estimated time of arrival, if there are weather delays, and much more.

Companies that are on tight timelines to send and receive items depend on an accurate tracking system. All parties would benefit from an AEI tag system from railcar repair shops, logistics managers, and company owners.

If a client calls you asking for an update for the repairs on their rail car, you can easily pull up your tag system and see the status instead of taking an hour or more plus way more energy to figure out the information.

Customizable Software

Every business has a different set of specifications and criteria they need to track and meet. With the majority of AEI tracking systems, you’re able to customize it to meet your needs. If knowing the contents inside your railcar isn’t important to your business, but the ETA of a shipment is something you watch religiously, you can customize your system to report only the necessary specs to you.

Won’t Slow Down Your Usual Processes

Incorporating a new system to your business can be daunting and throw a wrench into your processes especially if it’s already “working” for you – but AEI tags are an incredible addition to your current processes and will expedite them. There may be a learning curve for your team to use new software but when you’re all set, AEI tags will make you and your employee’s lives so much easier!

Keeping Your Reputation Intact

No matter the industry, an accurate tracking system will keep your reputation intact. We are currently living in a cancel culture where one minor error can repel customers and clients from working with you so you should be doing everything in your power to uphold a respected, always-on-top-of-it business and AEI tags can help you do this.