Why rail matters in today’s supply chain
Supply chains have faced unprecedented pressure in recent years, making transportation technology solutions more critical than ever. Railroads, shippers, logistics providers, and railcar lessors are turning to modern transportation management systems (TMS) to streamline operations. On any given day, over 40% of goods in North America move by freight rail, making it a vital component of a connected supply chain.
A single, multi-mode TMS within an end-to-end supply chain management (SCM) platform lowers barriers for shippers and logistics companies to work with rail carriers. Rail remains cost-efficient, environmentally friendly, and highly secure, making it an attractive option for long-haul freight.
E2open understands this reliance—our TMS manages over 80% of North American agriculture rail moves. Recent U.S. government intervention to prevent rail strikes underscores rail’s importance: a shutdown could have impacted 30% of the nation’s freight capacity.
So, when should you consider rail shipping? What are the benefits, limitations, and best practices? Let’s dive in.
Key advantages of rail transport
1. What are you shipping?
Rail is ideal for bulk commodities like plastic pellets, lumber, minerals, chemicals, and fuels such as gasoline or propane. Unlike trucking, rail has fewer size and weight restrictions, making it perfect for large loads.
But rail isn’t just for raw materials. It’s also a smart choice for:
- Parts and components for manufacturing
- Finished goods and vehicles
- Hazardous materials, thanks to mature safety processes
For temperature-sensitive goods, trucking usually wins, but rail offers unmatched security and theft prevention for high-value freight.
2. Geographic considerations
Rail excels for long-haul, intra-continental moves. North America and Europe have strong rail networks, but access may be limited if your destination isn’t near a major hub.
3. Cost benefits
Rail can cost one-third to one-fourth less than trucking for long-haul shipments. Prices per ton-mile average $0.04 for rail vs. $0.12 for truck, making rail highly competitive for bulk moves.
4. Environmental impact
Rail is three to four times more fuel-efficient than trucking, reducing carbon emissions significantly. With electric engines on the rise, rail’s sustainability advantage will only grow.
5. Visibility and technology
While rail carriers historically lagged in track-and-trace capabilities, technology vendors and networks are closing the gap. Modern TMS platforms like e2open’s Transportation Management provide visibility across all modes, including rail.
6. Intermodal flexibility
Rail and trucking often work best together. Use rail for the longest leg and trucks for the final mile. This intermodal approach improves efficiency and cost savings.
When rail makes sense
Consider rail when:
- You have high-volume shipments over long distances
- Moving bulk commodities
- Delivery timelines are flexible
- Security is a priority
- Intermodal strategies can optimize your network
How e2open helps
Knowing when to integrate rail into your transportation strategy is key. E2open’s Transportation Management solution covers all modes—rail, truck, ocean, air—helping shippers, freight forwarders, and logistics service providers optimize costs, improve resiliency, and gain end-to-end visibility.
Contact us to learn more about how e2open can make your supply chain more connected and efficient.
