If you follow the logistics industry, you know that ocean shippers are dealing with rising rates, container shortages, and backed up seaports. Companies that ship over the road are dealing with a similar capacity crunch and rising rates.
Rail transportation, on the other hand, is going strong and serves as a reliable alternative – or complement – to trucking services in the U.S. In this article, we’ll explore why companies that wish to take advantage of rail would do well to partner with a 3PL provider that has a rail transload facility.
Rail freight volumes are rising
According to a recent article in Freight Waves, rail volumes for May 2021 were up 28% from May 2020. May 2021’s volumes totaled approximately 2.12 million carloads and intermodal units.
Other interesting stats about the current rail landscape:
- May had the highest number of total carloads since October 2019 (on a weekly average basis)
- According to Association of American Railroads (AAR) Senior Vice President John T. Gray, “intermodal volumes between January and May of 2021 represented the best period ever for U.S. railroads for that time frame.”
- For the first five months of 2021, U.S. carload volumes were up 7.3% and intermodal traffic was up 19.2%, year-over-year.
Advantages of rail shipping vs OTR
With rail getting stronger since its COVID-related challenges in early 2020, many shippers are taking advantage of the stability that rail brings to supply chains. Following are additional rail advantages for your operation.
First and foremost, rail freight shipping is significantly less expensive than OTR, especially during a tight capacity market where trucks are hard to come by and rates can be sky high. Rail also reduces your reliance on a scarce supply of truck drivers.
Rail allows you to diversify your supply chain so that you’re not too heavily reliant on a single mode of transportation. And, for big projects, you can consolidate large amounts of product in a single location at a relatively low cost with (e.g., consolidating construction materials in advance of a building project).
The main downside to rail is that it is a slower mode of transportation than OTR trucking. It is also not immune from delays or interruptions of its own.
The rail transload facility
While some companies will ship freight via rail for the entire distribution journey, others will use rail for part of the trip and handle the final mile with a truck, reducing reliance on OTR and reducing costs in the process. Either shipper will benefit from partnering with a 3PL provider that operates a rail transload facility.
Simply put, such a facility can unload railcars and store the product in the warehouse or put the goods onto a trailer or flatbed for immediate distribution. The process can also be reversed for outbound shipments.
For example, Kanban Logistics’ distribution campus in Rocky Mount, NC is served by CSX rail. We’re able to support incoming rail freight from the CSX railway in one of two ways:
- Boxcars can be brought up to one of our warehouse’s four rail-siding doors. They can then be unloaded directly into the warehouse before heading back out to the rail.
- Center-beam cars are brought to our transload yard. The products can then be transported inside the warehouse or loaded onto trucks for delivery.
Additionally, this facility will be able to service shipments that utilize the new CSX Carolina Connector intermodal terminal.
Looking for an East Coast rail transload facility?
Kanban’s Rocky Mount distribution campus is located minutes from I-95 and served by CSX rail – for whom Kanban is a TransFLO premier partner. Kanban’s 175,000-sq-ft Rocky Mount warehouse offers temp-controlled and FTZ services. The Rocky Mount campus is also home to a shovel-ready site – with a pad already in place – that could serve as the home of your next distribution center. To learn more about this opportunity as well as Kanban’s many logistics capabilities, contact us today.