A Beginner’s Guide to Rail Shipping

In recent years, more and more businesses have explored the possibility of utilizing rail shipping. With the trucking industry dealing with driver shortages and high costs, it’s expected that more companies will consider rail freight as a viable alternative. Rail shipping offers several advantages such as cost savings, stability, and environmental and safety benefits.^{1, 2} We have created this blog post to provide those new to this shipping mode with a broad overview of shipping by rail.

Commodities

When it comes to shipping goods via rail, beginners should first consider the commodity they intend to move. The type of product being shipped is an important factor in determining the appropriate modes of shipping.

Distance of Move

Rail transportation is a cost-effective way to move goods over long distances. Trains are fuel-efficient and can move one ton of freight up to 492 miles on a single gallon of gas.³ This can make rail an ideal choice for both cost savings and environmental benefits when transporting goods over distances greater than 400 miles.³

However, the savings of shipping freight by rail decline with short distances involving multiple railroads. Even with short moves, railroads have base costs to move goods, and their ability to mitigate costs over many miles is reduced with shipments over shorter distances.

Origin and Destination

When planning a move, it is important to consider the distance between the starting and ending points. This is especially important for rail transportation, which uses fixed tracks that are not easily changed. Therefore, rail shipping is limited to certain routes. If your supply chain does not begin with direct rail access or end near a rail line, you will need to consider how to transport your goods to and from the railcars.

One option that many shippers use is transloading. This involves transferring goods from one mode of transportation to another. In the case of rail shipping, this usually means moving goods from a railcar to a truck or vice versa. For example, if your starting point is near a rail line but your endpoint is not, you can load your goods onto the railcars at the origin and use a transload facility near the destination to transfer the goods from the railcar to a truck for the final leg of the journey.

Railcars and Volume

If you’re considering rail shipping, you might be wondering about railcar types. The railcar that’s right for you depends on a few factors. Railcars can be purchased or leased from businesses like TrinityRail.

If you expect to have a consistent rail volume, you might prefer to lease or purchase your railcars rather than using railroad-provided railcars. However, if you anticipate infrequent movements via rail, it might be better to use railroad-provided railcars — also called system cars. These are one-time-use railcars that you typically pay for as part of the freight rate.

Railcars and Commodities

When businesses are looking to ship by rail for the first time, they should keep in mind the type of commodity they want to transport and then determine the type of railcar that best suits their needs. Here are some common examples:

• If you are moving any type of free-flowing liquid, you likely want to ship it in a tank car.
• If you are moving free-flowing dry bulk, you likely want a hopper car. However, if you are moving dry bulk that cannot be exposed to the elements, you likely want a covered hopper car.
• If you are moving palletized goods, you likely will want to use a box car.

If you choose to work with TrinityRail, we can help you determine the best option for your specific requirements.

Take Advantage of Rail Shipping

Rail transportation can be a great way to move a large amount of goods at once. One railcar can typically handle three to four times the amount of goods that a truck can handle.⁴

The process of determining freight rates in rail transportation is similar to that of truck transportation. Your volume of goods may affect the rate the railroads give you. If you have a significant amount of goods to transport, you may be able to negotiate a better rate with the railroad. If you are unable to negotiate a private freight rate, you likely will be required to ship freight at the public rate — also known as the tariff rate.

If you are considering a new location that will be served by rail transportation, it can be a good idea to choose a location with access to more rail lines than to one railroad. This will give you more options and leverage in negotiating rates because your location will be competitive, meaning you have more than one rail carrier to choose from.

Final Thoughts

If you’re a shipper who’s considering rail shipping for the first time, we welcome you and can help you with the rail shipping learning curve. The cost savings can be significant.⁵ Before you start, it’s important to consider the product you’re shipping, the distance of the move, rail access, rail infrastructure, and the railcar requirements. This will help ensure a smooth and successful rail shipping experience.

If you’re not sure where to start, don’t worry. TrinityRail is here to guide you through the process. Contact us today to start your journey.

¹ FreightConnections, Road Transport vs. Rail Transport – Head-to-Head Comparison, July 2023

² Association of American Railroads, The Positive Environmental Effects of Increased Freight by Rail Movements in America, June 2020

³ Association of American Railroads, Moving Miles Ahead on Sustainability, 2023

⁴ Union Pacific, 12 Train Facts You Might Not Know, March 2022

⁵ Association of American Railroads, The Cost Effectiveness of America’s Freight Railroads, June 2018