America’s freight railroads have made major investments – more than $635 billion since 1980 – leading to massive expansion and tangible benefits for shippers. Through maintenance, upgrades, and new technology, the rail network is projected for continual expansion through 2020, at least.
Union Pacific explains that, “Maintaining a healthy railroad is the foundation of our ability to serve customers and communities.”
Reliability
In the past, delivery variance and adherence to projected timelines has been a concern for rail customers. Today, intermodal lane transit times continue to improve with infrastructure development. Today transit times are far more reliable, consistent and competitive than they were in the past.
Since trains run on a set schedule and with fixed routes, there is less variability in pick-up and delivery times as compared to truckload. Rail is also not as easily influenced by weather conditions and can typically keep moving through heavy rain, fog, and snow.
Services Are Easier to Attain
Intermodal opens up other avenues of transportation that are more readily available so trucking services can be kept to a minimum. While trucking is still part of the intermodal system, it’s easier to find a truck driver to do a short day run versus one who will provide long-haul services.
Intermodal transportation is convenient. Not only is capacity available when it is needed, and shippers find a 10 to 30 percent over trucking, but technological advances in the industry have made shipping intermodal just as efficient and reliable as shipping OTR. Containers now have track and trace capabilities. Shippers no longer have a 3-day span for delivery time and kept in the dark hoping their shipment made it. Visibility into shipment status is the same as shipping OTR, making intermodal service selection easier and mode comparison more accurate.
Safety and Security
Containers moving on solid blocks of flatcars rarely sustain damage, especially if the freight is blocked and braced correctly. Technology and big data investments are also helping to lower incident rates. While there is added vibration with rail, there is less handling when compared to LTL transit, and the risks associated with weather and road construction are all reduced.
Railyards are also constantly monitored and no one can go in or out without documentation. Cars can be locked, have monitoring technology, and require a pick-up number for access. This makes rail a great option for high-value freight such as beauty or food products.
Rail vs Truck Cost Variance
An intermodal transportation strategy can help reduce cost variances. Unlike trucking, capacity and pricing stay relatively flat with rail. Capacity constraints for truckload can mean 35-40% price variation during peak seasons, but with rail, the variance is only 10-15%.
Using intermodal transportation can save money, especially for long-haul loads. One ton of freight can be transported 400 miles on one gallon of fuel; far more miles than trucks, which translates to lower rates for shippers.
The below image is representative of savings for a frozen load traveling 2,000 miles between Southern California and the Midwest.
Environmental Benefits of Rail
Moving freight by rail instead of trucks gets vehicles off the road and reduces greenhouse gas emissions by 75 percent, according to the AAR. Additionally, railroads move one ton of freight an average of 470 miles on a single gallon of gasoline.
Shippers who are concerned with the environmental impact of their supply chain are attracted to intermodal as well. It produces significantly less carbon dioxide per 100 ton-miles than trucking. In fact, trains are more than ten times energy-efficient as trucks per ton/mile.
Reduced emissions
- Railroads account for just nine percent of total transportation-related nitrogen oxide emissions while reducing highway congestion.
- Rail produces three to four times fewer emissions and is three times more fuel-efficient.
- Trains emit only about 5.4 pounds of carbon dioxide per 100 ton-miles, compared with approximately 19.8 pounds for trucks.
- A freight train emits two-thirds less greenhouse gas emissions for every ton-mile than a typical truck.
Efficiency
Leveraging intermodal transportation means you can use double-stacked containers, bringing maximum efficiency to high-volume shipments. Additionally, it takes less labor to operate a train than the equivalent number of trucks needed to haul the same freight.
Going intermodal saves time, and this saves money. With other methods, you can face delays from traffic, disruptive weight situations, and other issues. With intermodal transport, they get the goods from A to B with fewer delays and distractions. There is no need to repack your goods from one truck to another. They only need packing and unpacking once which is a huge time saver.
Improved fuel use
- Railroads use a single gallon of fuel to move one ton of freight an average of 450 miles. That’s close to 250 miles to the gallon.
- More than 1 billion gallons of fuel would be saved each year if 10 percent of the highway freight were moved by rail.
- One intermodal train could save 5.2 million gallons of fuel per year
Consistent Capacity
Intermodal transportation, especially truck and rail, provides reliable capacity. There is less competition to secure freight for intermodal transport, which further lowers cost, but more importantly, offers capacity when and where it’s needed.
With the driver shortage and increased shipping activity, intermodal transport is increasingly appealing to shippers. Rather than paying high rates to guarantee capacity, or bending over backward to accommodate carriers, companies can ship via intermodal any time, at a reasonable price. This is a good way to overcome current problems in the trucking industry, where carriers are cranking up prices and slowing down service.
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