Logistics Trends – Elimination of Railroads

Sep 10, 2015News

Transparency, customer satisfaction, being cost efficient and maintaining quick deliveries are essential aspects to any business and method of shipping. The railroad industry has had its share of struggles over the last decade as technology has advanced. These struggles have led to the decreased use of rail freight transportation and the beginning of the elimination of railroads.

One of the biggest disadvantages accompanying rail freight has been the lack of flexibility in comparison to the other methods of supply chain transportation. This lack of flexibility among rail transport has been one of the leading causes of lost business among the rail freight industry. The longer transportation times and decreased shipment flexibility caused many in the logistics industry to consider rail transport to be archaic and constricting.

The freight industry has made an effort to bounce back and become more flexible. In working with other methods of freight, flexibility is becoming less of an issue than it was in the past. Additionally, these efforts are aided by many governments attempting to encourage the use of rail freight due to the energy and environmental efficiencies that accompany rail freight transport. As supply chains become more sophisticated and are able to forecast demand, transportation time becomes less relevant as the logistics industry is meeting needs as, if not before they arise. Through these accommodations, the elimination of railroads has come to a halt and the rail freight industry is working with technology to improve and add sustainability to the supply chain industry.

A major benefit to the rail freight industry is the added cost efficiencies that accompany using rail freight over or in addition to other methods of freight transportation. The cost efficiency that accompanies the rail freight industry has significantly aided the return of railroads and has gained the interest of those in the supply chain and logistics industry. As managing costs while optimizing capacity are critical aspects of logistics and supply chains, the rail freight industry has been able to capitalize on their lower prices for space ability, despite having slightly longer lead times than other methods of freight transportation. Despite these longer lead times, they’re still significantly shorter than the standard lead-time, as most rail freight organizations can make cross-country trips over five days. These cost reductions and increased flexibility have led to benefits such as climate control, additional railways, comparable/reduced costs and improved shipment tracking that have made rail freight transportation competitive in the modern supply chain industry.

It is thanks to the resiliency of the rail freight industry, the flexibility of the logistics industry, and the desire to be sustainable of the supply chain industry that have led to the comeback of railroads. Although they may seem archaic and constrained to many, through efficient planning, communication, and use of supply chain software, the use of rail freight can allow for reduced costs with no negative impact on lead-time or product.

At TOC Logistics, we understand that what is best for our clients may change on a daily basis. This is why we focus on providing advanced supply chain software that can accommodate for us to use the best method or combination of freight transportation to meet each customer’s individual needs.


Our capable and experienced team is standing by to assist organizations and supply chains across the globe. Click the button to get in touch with our team.

Share via
Copy link
Powered by Social Snap