The North American rail freight market is gearing up for a significant expansion, projected at a robust 7.45% CAGR through 2028. With cost structures becoming more optimized, rail freight shipping presents an increasingly attractive proposition, especially compared to the expenses associated with long-haul trucking. Key sectors like oil and gas, mining, and chemicals are stoking the engines of growth, driving forward a rail shipping industry that’s more responsive to today’s needs and ready for tomorrow’s demands. In this article, we’ll explore the benefits of shipping freight by rail and offer some practical tips for businesses looking to utilize this transportation method.
What is rail freight?
Rail freight is the process of transporting goods across land using trains specifically designed for cargo. This type of freight is pivotal in the logistics and shipping industry, offering a reliable and efficient method for moving large quantities of goods over long distances. By leveraging the extensive rail network, businesses can optimize their supply chain, reduce transportation costs, and minimize their environmental impact.
What types of freight can be shipped by rail?
Rail freight is versatile, accommodating a wide range of goods, including bulk commodities, intermodal containers, automotive vehicles, and more. Whether it’s agricultural produce, industrial materials, or consumer goods, rail freight provides a solution that is both scalable and secure, ensuring that different types of cargo reach their destination safely.
Here’s a closer look at the types of freight suitable for rail shipment:
Bulk Commodities: These include items like coal, grain, and minerals, which are transported in large, loose quantities and benefit from the high-capacity conveyance rail offers.
Intermodal Containers: Rail is key for moving these standardized shipping containers, which can be transferred seamlessly between ships, trains, and trucks, optimizing global trade logistics.
Automotive Vehicles: Trains equipped with specialized car carriers transport vehicles efficiently, reducing wear and tear and exposure to the elements during transit. Freight railroads don’t typically ship personal vehicles.
Chemicals and Hazardous Materials: Railroads are equipped to handle the safe transport of chemicals and hazardous materials, governed by strict regulations to ensure safety and environmental protection.
Forest Products: Including lumber, paper products, and other wood-based materials, which are often shipped in bulk using rail due to their volume and weight.
Construction Materials: Rail freight is ideal for moving large quantities of building materials like steel, cement, and aggregates, crucial for infrastructure projects.
Food and Beverages: Railways can transport perishable goods quickly over long distances, with refrigerated cars ensuring that food and beverages arrive fresh.
Consumer Goods and Electronics: Rail freight offers a secure and efficient method for distributing consumer products nationwide, from household items to high-tech electronics.
What are the benefits of rail freight shipping?
Rail freight shipping offers numerous advantages, such as cost-efficiency, especially for long-distance shipments, environmental friendliness due to lower carbon emissions compared to road transport, and high capacity, making it ideal for large-scale shipments. Additionally, its reliability and safety record make it a preferred choice for businesses looking to minimize risks in their supply chain.
Rail transportation offers a range of benefits tailored to both large enterprises and small-to-medium-sized businesses (SMBs), enhancing their logistics strategies and operational efficiency:
Cost-Effectiveness: Rail freight is often more affordable for long-haul shipments, allowing businesses of all sizes to reduce transportation costs.
Sustainability: With fewer greenhouse gas emissions per ton-mile than road transport, rail freight aligns with the environmental goals of companies committed to sustainability.
Scalability: Rail can handle large cargo volumes, offering scalability for enterprise-level logistics operations and allowing SMBs to manage peak shipping periods efficiently.
Reliability: Railways have scheduled routes and are less affected by traffic conditions, providing dependable transit times that benefit planning and inventory management for both large and small businesses.
Safety: Rail transport offers enhanced safety for certain goods, particularly hazardous materials, reducing the risk of accidents and associated liabilities.
Network Reach: Railways connect to major ports and urban centers, offering broad market access that supports the expansion goals of enterprises and the growth aspirations of SMBs.
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How much does it cost to ship freight by rail?
The cost of shipping by rail varies depending on factors such as the type of goods, distance, and specific service requirements. Generally, contract rail freight is 26% more cost-effective for long-haul shipments and large volumes of cargo than OTR, providing businesses with a competitive edge in managing their logistics costs.
Rail freight vs. road transportation (OTR)
When deciding whether to use rail freight or intermodal transportation, various factors, including cost, speed, delivery requirements, and environmental impact, must be considered. Each mode has distinct advantages depending on the specific needs of the shipment.
Road trucking (Over-The-Road)
Over-The-Road (OTR) trucking is a crucial component of the transportation industry, offering door-to-door delivery and the flexibility to reach locations not directly accessible by rail. Some key advantages of OTR trucking include:
Flexibility: Trucks can deliver goods to virtually any location, making them ideal for shipments requiring door-to-door service.
Speed: For shorter distances, trucking often provides faster delivery times compared to rail, as it eliminates the need for intermodal transfers.
Less Handling: Direct truck shipments involve less handling of goods, reducing the risk of damage or loss.
However, OTR trucking also has some drawbacks:
Higher Cost: Trucking is generally more expensive per ton-mile than rail, particularly for long-distance and heavy shipments.
Environmental Impact: Trucks emit more greenhouse gasses per ton-mile than trains, making them less environmentally friendly.
Capacity Limitations: Trucks have smaller load capacities compared to trains, which can limit their efficiency for larger shipments.
Rail freight transportation
Rail freight is most effective for transporting large, bulk shipments over long distances. It is particularly cost-efficient for businesses that have direct rail access at both the shipping and receiving points and where delivery speed is not the highest priority. The key benefits of rail freight include:
Cost-Effectiveness: Typically less expensive per ton-mile than OTR trucking, especially for heavy and bulk shipments.
Environmental Benefits: Trains have a much lower carbon footprint compared to trucks, making rail a good choice for companies looking to reduce their environmental impact.
Ideal for Bulky Goods: Perfect for items like coal, agricultural products, and other heavy commodities.
Like OTR, rail freight also has its disadvantages:
Limited Flexibility: Rail freight is less flexible than road trucking, as it relies on a fixed network of rail lines and terminals. This can make it challenging to provide door-to-door service, especially for locations not directly served by rail.
Longer Transit Times: Due to the need for intermodal transfers and the lower priority given to freight trains compared to passenger trains, rail freight often has longer transit times than road trucking, especially for shorter distances.
Higher Infrastructure Costs: Building and maintaining rail infrastructure, such as tracks, terminals, and loading facilities, is more expensive than road infrastructure, which can impact the overall cost of rail freight transportation.
Intermodal transportation
Intermodal transportation, which combines the flexibility of trucks with the economic and environmental benefits of trains, is increasingly becoming a viable alternative to Over-The-Road (OTR) trucking alone. This method is excellent for shipments that require door-to-door delivery and faster transit times than what rail freight alone can offer. It is particularly advantageous in the following scenarios:
Enhanced Flexibility: Useful for navigating areas without direct rail access by incorporating OTR trucking to complete the first and last legs of the journey.
Speed and Efficiency: It offers quicker transit times than rail alone, as goods can be transferred swiftly between trains and trucks.
Cost and Environmental Efficiency: This option provides a balance between cost-efficiency and reduced environmental impact, suitable for mid-range distances where direct rail access is not available. It is generally 4x more efficient than OTR with up to 75% greenhouse gas emissions reduction. Â
Rail freight solutions with Uber Freight
Uber Freight’s rail and intermodal services span North America and are rooted in exceptional customer service and expertise. With access to 90,000 containers and strong relationships with all class 1 rail providers, we can arrange transport of your freight with the best combination of rates and routes, regardless of the railroad or container. Â
Leveraging Uber Freight’s advanced tracking systems and predictive analytics, our rail freight solutions are designed to drive efficiency and visibility across your supply chain. With comprehensive coverage of North American RFID scanners, direct integrations with Class I and Class II/III railroads, and sophisticated telematics, we provide unparalleled tracking that keeps you in the know at every stage. Our dynamic ETAs, informed by real-time rail leg data and traffic congestion analysis, improve accuracy significantly. Â
Connect with an expert for your rail shipping needs. Choose a partner committed to modernizing the rail freight experience with cutting-edge technology, ensuring your cargo is always on the fastest track to its destination.
FAQs
Is it cheaper to ship by rail or truck?
Shipping by rail is generally more cost-effective for long-distance and high-volume shipments due to lower fuel costs and the ability to move large amounts of cargo in a single trip. However, the best option depends on specific shipment details and logistical requirements.
Can I ship a container by rail?
Yes, containers can be shipped by rail, leveraging the efficiency and scalability of intermodal transportation. This method combines the flexibility of road transport with the long-distance efficiency of rail freight, offering a comprehensive solution for containerized goods.
How can I ship by rail if I don’t have access to tracks?
Intermodal cargo transport and transloading bridge the gap between roadways and railways, providing seamless transitions for your shipments. Leveraging rail lines and direct rail access, these processes ensure that your goods smoothly shift from trucks to trains, enhancing connectivity and efficiency. Whether your cargo is rolling onto a train or transitioning at intermodal terminals, the combination of rail lines and direct rail access guarantees that your products are always en route to their destination seamlessly and efficiently, regardless of their path.
What is transloading?
Transloading is the process of transferring cargo between different types of freight vehicles, such as from rail cars to trucks, efficiently enabling goods to reach destinations not directly accessible by rail. This method leverages the strengths of different transportation modes, optimizing logistics, expanding access, and potentially reducing costs by combining the long-haul capabilities of rail with the flexibility of truck transport.
