I recently completed a consulting project that illustrates what the rail industry faces when pondering true growth and market share increases in the critical carload market.
The party I was consulting with was looking at how to dramatically increase rail shipments to and from several publicly owned facilities. They were primarily interested in warehousing markets and focused on lanes where data indicated a lot of truck volumes were moving.
As we worked our way through the lanes, common issues like route, the number of carriers and thus interchanges, and transit time were analyzed. My client had little knowledge of rail and viewed rail through the only comparable lens that they had: highways and air.
As my client began to comprehend how the rail network functions and how it creates value, they were at first confused and then a bit frustrated that rail did not fit their norms. The idea that just because there is a rail line between two points does not mean rail will be competitive with truck seemed like an especially tough concept to grasp. As rail professionals and present shippers know, there are many, many places where truck to rail conversion is quite possible, but not every lane works due to distance, interchanges, capacity, etc.
It was fascinating to work with this client through rail economics, service tailoring, the network and ultimately a much better understanding of where they should focus for successful rail movements. I am hopeful that the client will also use its position to advocate for improvements and changes in important lanes where rail could work, but presently cannot.
I continue to be overwhelmed with the demand for rail services based on the well-known value of what the network can deliver. There is literally opportunity everywhere. This project illustrates that true growth and market share increases for rail carload demands a great deal of understanding beyond that required for other modes to grow.
I encourage companies, especially those that are not currently shipping by rail, to consider this effective mode. It is different than trucking and does not always fit the need, but the value in labor efficiency, capital avoidance and price is often worth the learning curve.
If you need help understanding rail, please reach out to the many people that can help, including Summit Rail Advisors. We are here to serve.
