The U. S. freight rail network has 140,000 route miles and is considered the largest, safest, and most cost-efficient freight system in the world. Because of technological advancement and innovation, rail continues to be unrivaled by other modes for fuel-efficiency. Trains are four times more efficient than trucks, moving one ton of freight 470 miles on just a single gallon of diesel fuel. Rail’s lower fuel consumption also leads to lower carbon emissions overall. Despite handling a third of all intercity freight volume, rail accounts for 2.0% of all transportation-related emissions.
Rail is a cost-effective and efficient way to move almost any freight in the United States, which benefits both producers and consumers. Each American requires the movement of approximately 54 tons of freight per year. Goods people use or components of the goods people use are largely shipped by rail. The nearly $80-billion freight rail industry provides more than 167,000 jobs across the United States and offers ancillary benefits that other modes of transportation cannot, including reductions in road congestion, highway fatalities, fuel consumption, greenhouse gases, cost of logistics, and public infrastructure maintenance costs.
The Association of American Railroads
The Association of American Railroads recently published an interesting article that summarized the competitive marketplace that the freight railroad industry faces. It is interesting to us because, perhaps unintentionally, the article provides some insight into how shippers can position themselves to leverage their ability to get better rates. Namely, how the railroads face competition in the marketplace. Examples that are given in the article include:
- Underscoring that rail shippers are not captive to the railroads; there are options;
- To the extent you have located your facility to provide access to multiple railroads, they can be brought to compete for your business;
- Trucks are rail freight’s biggest competitor, with barges and pipelines lagging behind for obvious reasons;
- The ability to change raw material types or geographic sources to produce a product;
- The ability to relocate a plant to a site where the railroad is more competitive; and,
- New and emerging technologies may make rail transport less competitive.
It makes sense to use every opportunity you may have to work with your rail freight carrier to get the best rates for your business.
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