Trucking or Rail: What's More Practical for Shippers in 2016?

Rail transport played a large role in the development of the U.S. during the industrial revolution. But, with the introduction of the gas-powered combustion engine in 1910 and construction of the Interstate Highway System several decades later, the trucking industry flourished as the main mode of freight transportation. These days, while it’s a viable option for many shippers, less than 20 percent of freight is moved by rail.

So, what makes rail and trucking so different?  Freight transportation by rail is obviously limited to routes that include railroads, which are far fewer in numbers than routes that are accessible by trucks. Intermodal freight services are used to bridge the gap between rail and truck routes. In rail transportation this is called drayage: the transportation of freight from its starting destination to the rail station and from the rail station to its final destination using a truck.

In 2015, intermodal volumes and prices dropped drastically due to lower fuel costs that helped competing truck carriers. Now that oil prices have climbed 70 percent since February 2016 when it hit a 13-year low, intermodal rail is regaining popularity as a more cost-effective freight transportation solution when compared to trucking alone – at least for long-haul truckload shipments.

“For truckload shipments that are moving over 1,000 miles (especially if it’s from East to West or vice-versa), are less than 150 miles from a rail head and weigh less than 4,250 pounds, rail is a viable option,” says FreightCenter truckload expert, Allen Shifflet. 

“That’s assuming it’s not a time-sensitive shipment considering it usually takes 2-3 days longer to ship by rail than truck.”

Shifflet also explains that “a rail ride is a rough ride;” therefore, it is not a viable option for moving household goods, objects with wheels or other fragile freight.

When contemplating whether or not your company can benefit from transitioning from 100 percent truck transportation to a combination of intermodal rail and truck it’s best to talk to an expert.

Third-party logistics providers partner with various carriers across all modes of transportation and are often a great place to start when you have questions. FreightCenter works with rail companies like CSX and Streamline and can easily compare trucking versus rail rates online using Cirrus TMS, our transportation management system.

For example, when Conquest Manufacturing contacted Allen Shifflet in 2012 they were working on a large multi-year project that required shipping their HVAC materials from their manufacturing plant in Michigan to California and Florida. Shifflet was able to provide them with quotes for both truck and rail transportation. Conquest Manufacturing saved $1,760 by choosing rail to transport their freight over 2,500 miles from Michigan to California and was similar savings in the 21 rail shipments they organized with FreightCenter over the following two years..