How can organizations make the most out of rail freight services?

A goods train or freight train is a group of goods wagons or freight cars hauled by a locomotive on a railway. This enables the transportation of cargo between two places as a part of logistics chain. The trains might haul intermodal containers, bulk material, specialized freight or general freight in purpose-designed cars.

If we consider in terms of ton-miles hauled per unit of energy consumed, rail transport is more efficient as compared to other means of transportation. Economies of scale are often realized when bulk commodities are hauled over a long distance. However, rail freight is subject to transshipment expenses. At times, transshipment expenses exceed the operating cost of a train. Therefore, practices like containerization try to minimize these expenses. Moreover, bulk shipments are less affected by transshipment expenses.

Under suitable circumstances, transportation of freight through trains is more cost-effective than transportation of freight by road. You can make the most out of rail freight services when bulk freight is carried over longer distances. However, it is less suitable for shipments of small loads over shorter distances.

The increase in shipping, trucking and air freight services has forced rail freight companies to change their methods of operation. This would help them compete with other forms of freight services. In the present scenario, majority of companies utilize a combination of transportation methods for shipping their goods that includes the use of freight trains. This makes sure that products are shipped as well as received in a more quick and efficient manner.

The increasing concern about climate changes has made businesses realize that transportation by train is an energy efficient method for shipment of goods. Therefore, the governments of many nations are encouraging the transportation of freight through trains. Not only is rail transport energy efficient, but would also bring environmental benefits.

Despite a lot of benefits, rail freight suffers from a disadvantage. Rail transport lacks the required flexibility. This is the reason why it has lost a major part of its freight business to road transport. Moreover, the shipment by rail is not as flexible as by highways. Therefore, majority of freight is being hauled by trucks, even over long distances.