Intermodal

Transporting Freight By Rail

A brief overview of rail freight.

To listen to media reports and pundits speak about the US rail system, one would not be out of line in believing that it is some antiquated, crumbling system in disrepair.  The way they make it sound, US rail systems are almost backwards in operation as compared to European or Asian rail systems.  Nothing could be further from the truth!  Although the US does less passenger service by rail, the freight rail system is way ahead of the curve.

The United States freight rail system moves more freight per year than any other system in the world today.  The system is a dynamic network of public and private rail lines that crisscross the US to the tune of 144,000 miles of track and produce an industry gross of over $60 Billion!

The freight rail system is operated and maintained by seven class 1 railroads, twenty one regional railroads, and five hundred and ten local railroads.  This system provides more than 221,000 direct jobs and countless other jobs that support the system in different ways.

Of all the goods that are transported in the United States, rail freight is the number one method with 39.50% of all goods being transported by rail.  Truck freight is in the number two spot at 28.60%.  The remaining is broken down to Pipeline – 19.60%, Water – 12.00%, Air – 0.30%.

One of the greatest changes to the rail industry was the passage of the Staggers Rail Act of 1980.  This act essentially deregulated much of the rail industry and put it into private management.  It was strong proof that government oversight in private industry chokes growth and drives prices up.  Since the act passed, rail rates have significantly lowered, profits have significantly improved, and reliability has improved tremendously.

To take advantage of the savings to our customers that can be offered by intermodal door to door rail service, PKI has close relationships with several of the largest intermodal brokerages in the country and through these personal relationships; we are often able to move freight cheaper than most brokers in the country.  We’ve worked very hard to become proficient in the rail freight end of transportation and we intend to grow as rail transportation continues to grow and evolve in the coming years.  As government clean air standards and EPA regulations will soon require more strict emissions policies for trucking companies, the rates to move freight by truck will continue to grow.  Rail is a much cleaner alternative for long distance freight transportation and is not affected by the recent ELD mandates.

Recently, we have started moving more and more freight by rail, or Intermodal Freight as it is called.  Practically anything that can be moved by truck can now be moved by rail.  But there are some differences in shipping by rail versus truck.  We will discuss those now.

 

Cost.

 

Generally speaking, shipping by rail is cheaper; sometimes dramatically cheaper.  Most intermodal shipments can be treated just as a truck load.  They generally offer door to door service on freight and can be treated almost like road freight, although their additional fees for things like detention or overweight loads can add up quickly if an accurate description of the customers needs isn’t collected up front.

 

Efficiency curve.

 

Like most things in life, in order to get one thing, you usually have to give up something else.  This is no different with intermodal shipments.  While the customer can potentially save hundreds and sometimes thousands of dollars per load, they generally have to wait much longer to receive the product at the consignee.

Transit times for rail versus truck is generally 2-2.5 times longer.  For instance, a load from Toledo OH to Los Angeles CA by truck will typically take four days, but by rail it will be 8 to ten days.  Outlook WA to El Paso TX can be done by truck in 1.5-2 days, but by rail, it is a 6 to 8 day transit.

The transit times are longer due to the layout of our rail networks in the US.  There are several large main terminals across the country, and 99% of freight moved intermodal has to pass through one of these.  In the terminals, trains loaded with freight come in, unhook, and the cars are connected to engines going in the direction of various yards around the country where they are offloaded and hooked to trucks and delivered to various addresses.  It can get confusing, but somehow they manage to figure it out and the freight will be delivered to the consignee, but all this switching takes time.

 

Give us a call today and let us start your intermodal freight quote! 844-391-8819