January 19, 2021
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.
Please contact us if you are looking to add to your railcar fleet, or if you have surplus cars you no longer need.
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