A look at shipping by rail vs. truck in the United States
Putting it plainly, it is more economical to ship goods by rail than by truck. It is also more economical to use combined rail to truck service than to just ship by truck. Rail is most economical when you are shipping long distance. Although, transport by truck is a more direct shipping route, as discussed above, it is not the most cost effective. "The cost to combine rail and truck using a bulk transfer terminal is approximately $95.54 per net ton. By comparison, rail direct is $70.27 per net ton, and over-the-road truck is $214.96 per net ton." (RSI Logistics) Plus, a single railcar can move up to four times the amount of product compared to a single truck.
The key question that a shipper must ask is whether they are positioned near a good transload or intermodal facility. "Transloading is the process of moving a product from one mode of transportation to another." (Commtrex) This could be from a truck to rail, rail to truck, truck to vessel, etc. Rail and truck transport both have their benefits. While, it may seem because of its benefits that rail could displace trucking, that is unlikely because many shippers need trucking for its first and last mile services. Trucks are used to get goods to and from rail yards and ship terminals, and that is not likely to change.
Current Facility Capacity
The current facilities are sufficient and the number of operators are enough to deal with the number of shipments to different parts of the country. There are several rail companies in the United States. Their coverage seems to dominate certain geographic areas, with some overlap. BNSF Railway, for example, dominates the western half of the country.
Railroad Regulatory Schemes
The Department of Transportation's Federal Railroad Administration regulates the safety aspect of rail transport. The Rail Safety Improvement Act of 2008 was passed in response to a series of fatal rail accidents in the early 2000s. These regulations deal with different areas related to railroad safety, such as hours of service requirements for railroad workers, positive train control implementation, standards for track inspections, certification of locomotive conductors, and safety at highway-rail grade crossings.
"Intermodal vs. Transloading." April 23, 2019. UP. Retrieved from: https://www.up.com/customers/track-record/tr181120_intermodal_transloading.htm
"Lesson 1: Introduction to Transloading." 2021. Commtrex. Retrieved from: https://www.commtrex.com/resources/knowledge-center/transloading-101/lesson-1-introduction-to-transloading
"Rail Safety Improvement Act of 2008." U.S. Department of Transportation. Retrieved from: https://railroads.dot.gov/legislation-regulations/legislation/rail-safety-improvement-act-2008-rsia
"Comparing the Costs of Rail Shipping vs Truck." April 20, 2020. RSI Logistics. Retrieved from: https://www.rsilogistics.com/blog/comparing-the-costs-of-rail-shipping-vs-truck/.
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