In today’s global marketplace, efficient and reliable logistics solutions are vital for you to succeed. When it comes to shipping goods over long distances, rail is a method of transportation that offers you several advantages. In this blog, we’ll explore the benefits of rail shipping and why it remains a top choice for businesses throughout North America (and the world!). We’ll compare it to other modes of transportation, like planes and trucks, to highlight its unique advantages.
Here’s the seven key benefits that we’ll look at:
- Lower Costs over Further Distances (Fuel Efficiency)
- Ability to Ship Higher Volume (Economies of Scale)
- No Required Manpower During Shipping (Reduced Labor Costs)
- Environmentally Friendly (Environmental Sustainability)
- Safer Mode for Products (Product Safety)
- Resilience to Market Variabilities and Price Fluctuations
- Lower Infrastructure Costs
As we embark on this journey through the world of rail shipping, we’ll explore each of these benefits in detail, providing breakdowns and insights into how you can leverage rail transport to optimize your logistics strategies. And if, after reading our blog, you’d like to get started in rail shipping but don’t know where to start, we can help!
Join us as we explore the benefits of rail transportation and discover why it continues to be a viable and advantageous option in the modern era of global trade and commerce.
Lower Costs over Further Distances (Fuel Efficiency)
The fuel efficiency of rail shipping plays an important role in its ability to save money over longer distances. On average, one ton of freight can be hauled 480 miles on just one gallon of fuel! By decreasing energy consumption, employing streamlined designs, and taking advantage of advanced technologies, railways offer a highly efficient mode of transportation that significantly reduces fuel consumption, which translates to lower costs for you.
If you want to get an inside look at the fuel surcharges that the railroads charge, you can check it out through our Fuel Surcharge Rate database.
Trains are designed to carry large amounts of cargo with the use of multiple freight cars pulled by a single locomotive. This setup allows for the distribution of weight across a larger number of axles, reducing the strain on individual wheels and minimizing rolling resistance. As a result, less energy is required to move the same amount of freight compared to trucks carrying the equivalent load.
Trains have a streamlined design that offers better aerodynamics compared to trucks. The reduced air resistance allows trains to move more efficiently, minimizing the amount of energy required to overcome wind resistance. In contrast, trucks, with their box-shaped bodies and less streamlined profiles, experience higher air drag, leading to increased fuel consumption over long distances.
Electric and Diesel-Electric Locomotives
Railways are increasingly utilizing diesel-electric locomotives, which are highly efficient at converting fuel into mechanical energy. Diesel-electric locomotives use diesel engines to generate electricity, which then powers the electric motors that drive the wheels. This setup allows for optimal fuel usage, as the engines can run at their most efficient levels while the electric motors provide the necessary power.
Rail systems often incorporate regenerative braking technology, which converts the energy generated during braking into electrical energy. This energy can be stored and reused within the engine, and that free energy reduces the overall energy demand. By capturing and reusing energy that would otherwise be wasted in traditional braking systems, rail maximizes fuel efficiency and reduces operating costs.
Once a train reaches its optimal speed, it can maintain a constant velocity over long distances without the need for frequent stops and starts. This uninterrupted motion is particularly helpful for long-haul journeys, as it eliminates the energy costs associated with accelerating heavy loads from a standstill. In contrast, trucks must contend with traffic signals, intersections, and frequent stops, leading to greater fuel spend due to cycles of stopping and starting.
Ability to Ship Higher Volumes (Economies of Scale)
One of benefits of rail is economies of scale – cost savings for you when shipping or production becomes efficient. This means that since rail can hold a large amount of freight in one train, it becomes an efficient option for transporting your goods over extended distances. By leveraging large volume loads, reducing handling requirements, optimizing warehousing, and offering scalability, rail transport provides you with an efficient and cost-effective solution for large-scale transportation needs.
Railways have the capability to hold a substantial amount of cargo in a single train journey. The use of long trains consisting of multiple freight cars allows for efficient consolidation and transportation of goods in large quantities. This consolidation reduces the overall transportation cost per unit of goods, as the fixed costs associated with operating a train are distributed across a greater volume of cargo. The ability to transport a higher payload per trip enables you to achieve significant cost savings over long distances.
Cost Per Unit Decrease
As the volume of goods transported by rail increases, the cost per unit decreases. Rail transport’s cost structure is characterized by high fixed costs (such as infrastructure and locomotives) and relatively lower variable costs (such as labor and fuel). When a larger quantity of goods is shipped, these fixed costs are spread out over more units, resulting in a lower average cost per unit. This cost advantage becomes more pronounced when compared to other modes of transport, like trucks, which have higher variable costs per unit of cargo.
No Required Manpower During Shipping (Reduced Labor Costs)
Rail transportation typically requires fewer personnel to operate thanks to advanced automation, which translates to lower labor costs. By requiring fewer personnel and minimizing labor-intensive tasks, rail provides a more cost-effective option for shipping goods over extended distances compared to other modes.
Train Crew Efficiency
Trains can transport a significant volume of cargo with a relatively small crew. A single train crew, consisting of a locomotive engineer and a conductor, can operate a long train consisting of multiple freight cars by themselves. These crew members are responsible for overseeing the safe movement of the train, managing switches and signals, and ensuring adherence to schedules and safety protocols. The ability to handle a substantial amount of cargo with a small crew significantly reduces labor costs compared to trucking, where each truck requires a driver to operate.
Economies of Scale
As mentioned earlier, rail transport benefits from economies of scale. When larger quantities of goods are shipped by rail, the fixed labor costs associated with operating a train are spread out over more units of cargo. This distribution of fixed costs contributes to lower labor costs per unit of goods transported, as the costs are divided among a greater volume of cargo.
Automation and Technological Advancements
Rail transport has also benefited from technological advancements and automation, further reducing labor costs. For example, modern rail terminals are equipped with advanced machinery and automated systems for tasks such yard operations and maintenance. These technologies streamline operations, improve efficiency, and require fewer manual laborers, leading to significant cost savings.
Regulatory and Compliance Efficiency
Rail is subject to specific regulations and safety standards, which, once established, provide consistent guidelines for operations. This regulatory consistency allows railroads to streamline compliance procedures, reducing administrative overhead and associated labor costs. In contrast, the trucking industry often faces varying regulations across different jurisdictions, which can increase administrative burdens and labor requirements for compliance.
Environmentally Friendly (Environmental Sustainability)
Rail transport is widely recognized as a more environmentally friendly mode of transportation compared to other options such as trucks and planes, contributing only 0.5% of greenhouse gas emissions. By reducing greenhouse gas emissions and being energy efficient, rail transport offers a greener alternative for long-distance shipping. It aligns with the global efforts to combat climate change, reduce carbon footprints, and promote a more sustainable future.
Reduced Greenhouse Gas Emissions
Trains emit fewer greenhouse gas emissions per ton-mile of cargo transported compared to trucks, planes, and even ships. Trains have better fuel efficiency, as discussed earlier, which leads to lower fuel usage and consequently reduced carbon dioxide (CO2) emissions. Furthermore, some trains even run on electric or hybrid engines, which further decrease emissions by making use of cleaner energy sources.
Rail transport is highly energy-efficient due to its ability to move large volumes of goods with little energy consumption; the streamlined design of trains lessens air resistance, and the optimized weight distribution reduces drag. Compared to trucks, which have a lower payload capacity and higher energy requirements per unit of cargo, rail significantly reduces energy consumption, which translates to a lower environmental impact.
Road congestion is a challenge that rail helps alleviate by diverting a significant portion of freight shipping from highways to rail lines. When fewer trucks are on the road, there is smoother traffic flow, which minimizes congestion-related delays, decreasing overall vehicle emissions. This benefit becomes more pronounced over longer distances where truck congestion can be a significant issue.
Preservation of Natural Resources
Rail transport helps preserve natural resources by reducing the need for additional roads. Expanding road networks to accommodate growing freight volumes can have significant ecological effects, including deforestation, habitat destruction, and increased pollution. By maximizing the use of existing rail infrastructure, we protect forests, wildlife habitats, and reduce pollution from road construction.
Modal Shift Potential
Rail transport offers the potential for modal shift, which means that goods transported by less environmentally friendly methods, such as trucks or planes, can be moved over to rail. Encouraging modal shift to rail can make a big difference in reducing carbon emissions and protecting the environment. Governments and organizations are increasingly recognizing the importance of this shift to create a more sustainable future.
Safer Mode for Products (Product Safety)
Compared to other modes of freight transportation, rail is considered a safer mode for shipping your products, offering several advantages in terms of product safety. With reduced accident risks, stable handling, weather protection, lower theft and pilferage rates, proper handling of hazardous materials, and compliance with safety regulations, rail transport can provide you with the confidence in the safety and integrity of their shipped goods.
Reduced Accident Risks
Rail transport has a strong safety record, with lower accident rates compared to other modes such as road transport. Trains operate on dedicated tracks, separated from other vehicles and pedestrians, reducing the risk of collisions and accidents. The controlled setting of rail lines, along with advanced signaling systems and safety protocols, minimizes the chances of accidents and the associated damage or loss of your goods. In fact, freight rail is the safest way to move goods over land, and more than 99.9% of all hazmat moved by rail reaches its destination without a release caused by a train accident.
Stability and Handling
Railcars are designed to handle various types of cargo, offering secure loading, and fastening mechanisms to prevent shifting or movement of goods. These measures provide a stable platform for shipping goods, minimizing the risk of product damage during transit. The fixed position and secure attachment within railcars ensure that products experience less jostling and vibration compared to other modes, such as trucks or ships, which can result in potential damage or breakage.
Weather and Climate Protection
Rail transport provides better protection against adverse weather conditions compared to other modes. Goods transported by rail are sheltered within enclosed railcars, shielding them from direct exposure to rain, snow, wind, or extreme temperatures. This protection minimizes the risk of weather-related damage or deterioration of products, ensuring they stay safe during transit.
Reduced Theft and Pilferage
Enhanced security measures are a major component of rail, reducing the risk of theft and pilferage. Railcars are typically sealed and monitored throughout the journey, making it more challenging for unauthorized access or tampering with the cargo. The controlled nature of rail and intermodal terminals further enhances security and reduces the likelihood of theft or unauthorized handling of goods.
Rail transport is subject to strict regulatory requirements and safety standards. Rail operators must comply with rules and regulations regarding equipment maintenance, crew training, cargo handling, and emergency response preparedness. This regulatory oversight ensures a higher level of safety and reduces the likelihood of incidents that could impact product safety during transit.
Resilience to Market Variabilities and Price Fluctuations
Compared to other modes of transportation, rail is more resilient to economic and market changes which translates to a better ability to maintain stable transportation costs, and keep operations running smoothly, even during challenging times. This means you can manage costs better, reduce risks from market ups and downs, and have a reliable supply chain.
Rail transport often involves long-term contractual agreements between shippers and rail operators. These contracts provide stability in pricing and capacity, even during periods of economic fluctuations or market volatility. Through long-term contracts, you can protect your business from the impact of short-term market uncertainties, while also making sure you have consistent transportation rates and uninterrupted access to rail services.
Rail shipping helps you to diversify your market reach and reduce dependence on specific regions or markets. Rail networks offer extensive coverage, connecting you to many markets and regions. This diversification helps lower the risks associated with economic downturns or market disruptions in one specific market. By using rail shipping to reach different markets, you can adapt your shipping strategies and maintain a more stable customer base, even when the economy is uncertain.
Flexibility in Capacity
Rail transport provides flexibility when it comes to managing shipping volumes. Unlike trucking, which may require individual trucks for specific shipments, rail transport can handle a wide range of cargo volumes within a single train journey. This scalability allows you to adjust your shipping volumes up or down based on market demands, optimize your supply chain operations, and adapt to changing economic conditions.
Rail transport infrastructure is often subject to long-term investment plans and government support; there is approximately 740 billion dollars of private investment in rail infrastructure. Governments recognize the importance of rail networks to supply chains and tend to invest in maintaining and expanding rail infrastructure, even during challenging economic times. This commitment to infrastructure development ensures the continued availability and reliability of rail transport services, meaning you don’t have to worry about degrading infrastructure causing problems with your rail access.
Supply Chain Resilience
Rail shipping contributes to your supply chain’s resilience by providing an alternative mode of transportation; particularly one that is less vulnerable to economic fluctuations. You can reduce reliance on a single mode of transportation and diversify your supply chain by using rail to ship over longer distances. This diversification enhances resilience, allowing you to navigate market fluctuations and disruptions, ensuring your supply chains keep running, even during challenging economic periods.
Fuel Cost Management
Rail is less affected by immediate fuel price fluctuations compared to road transport, where fuel costs can have a more immediate and direct impact on prices. Rail operators often have long-term contracts with fuel suppliers or use more stable pricing strategies, such as hedging strategies. This enables them to reduce the impact of short-term fuel price fluctuations on their shipping rates.
Lower Infrastructure Costs
Rail transport offers advantages in terms of infrastructure development and maintenance. Rail shipping offers lower infrastructure costs due to the utilization of existing networks, shared infrastructure, scale efficiency, reduced land acquisition needs, maintenance efficiency, and government investment. These factors contribute to the overall cost advantage of rail transport, making it an economically viable and sustainable mode of transportation for you.
Rail utilizes existing rail networks and infrastructure, which have been developed over many years. These networks span vast distances and connect various regions, making use of established tracks, terminals, and intermodal facilities. By leveraging existing infrastructure, rail transport minimizes the need for extensive new construction, resulting in lower infrastructure costs compared to developing new road networks or airport facilities.
Rail networks are designed to accommodate multiple railroads and shippers, allowing for shared use of infrastructure. Different railroads can sometimes utilize the same tracks, terminals, and rail yards, optimizing resource utilization and reducing the need for individualized infrastructure investments. This shared infrastructure model enables businesses to access rail transport services without shouldering the full burden of constructing and maintaining dedicated transportation facilities.
Lower Land Acquisition Costs
Rail transport generally requires less land acquisition compared to other modes of transportation. Rail lines typically follow existing rights-of-way, which are designated for railway use. This avoids the need for extensive land acquisition and associated costs, which are often required for road construction or airport expansion projects. The lower land acquisition requirements of rail transport contribute to reduced infrastructure costs.
Rail infrastructure is designed for long-term durability and requires relatively less maintenance compared to roadways or airport facilities. Rails and track systems have longer lifespans and lower maintenance requirements, reducing ongoing operational expenses. This efficiency in maintenance translates to cost savings in the long run and contributes to the lower overall infrastructure costs of rail transport.
Rail transport often receives government investment and support for infrastructure development and maintenance. Governments recognize the importance of rail networks for economic growth, trade, and sustainable transportation. The availability of government funding and public-private partnerships helps offset infrastructure costs, making rail transport a more cost-effective option for businesses.
Rail transportation has always been a great choice for anyone involved in shipping freight. From its cost efficiency over long distances to its environmental friendliness, the benefits of rail shipping extend beyond just saving money (although it can help you do that too). With enhanced capacity, safety records, and the ability to avoid congested roadways, you can streamline your supply chain and ensure timely and less expensive delivery of goods. Moreover, the stability of rail shipping prices, coupled with its ability to weather market changes, brings predictability and financial security to you.
As we conclude our study of rail shipping’s benefits, it’s clear that this mode of transportation offers a reliable, cost-effective, and sustainable solution. By incorporating rail transport into your supply chain operations, you can unlock new opportunities for growth, reduce your carbon footprint, and achieve greater operational efficiency.
In the dynamic and interconnected world of modern trade, rail shipping stands tall as a reliable and future-oriented option, providing you with the tools you need to thrive in a competitive marketplace. So, embrace the power of rail and embark on a journey towards enhanced efficiency, profitability, and sustainability in your logistics endeavors.