Overcoming Challenges and Increasing Supply Chain Efficiency with Rail Transloading

Overcoming Challenges and Increasing Supply Chain Efficiency with Rail Transloading

Rail transload facilities allow shippers to realize supply chain benefits from a combination of rail and truck. Here’s how to choose the right one.

Rail transload facilities allow shippers to realize supply chain benefits from a combination of rail and truck. Here’s how to choose the right one.

Finding optimal shipping modes and routes can help you substantially reduce shipping costs and improve the efficiency of your supply chain. Rail and truck are the most common shipping modes across land; however, truck driver shortages are a growing problem, and experts predict this challenge will continue beyond 2022.

So how can supply chain managers adapt to these challenges? One option may be utilizing rail transloading. Rail transload facilities play a vital role in many companies’ shipping networks. These facilities allow shippers to realize benefits from a combination of rail and truck.

During transloading, the goods are often moved from railcar to truck or truck to railcar. Many different types of goods, including perishables, non-perishables, dry bulk, liquid bulk, chemicals, and more, can be accommodated. Transloading offers rail shippers access to customers who may not have rail delivery options.

Selecting a Rail Transload Facility

Choosing the right rail transload facility generally involves three major factors: distance to receivers, available rail carriers that serve the facility, and the transloading facility equipment.

Distance to receivers. When comparing costs per ton mile by truck and rail, rail has the potential to cut costs in half. This means minimizing transportation by truck can dramatically reduce costs.

A good rule of thumb is to choose a transloading facility as close as possible to your primary receiver, as this normally yields the lowest cost. However, if a transloading facility closest to your primary receiver brings you much farther away from your other receivers, more detailed calculations may be needed.

 


Serving rail carriers. Many transloading facilities are served by a single rail carrier. These facilities give shippers few options, which makes many shippers subject to captive rates. Other transload facilities offer shippers access to more than one line-haul rail carrier.

In some cases, it may be economical to move to an alternative transload facility, if it is possible to negotiate more competitive rail rates. Simply having alternative transloading location options may also serve as leverage when negotiating freight rates with your rail carriers.

As you consider transloading facilities in your area, take a closer look at rail carriers available. A relatively minor route shift can give you access to other rail carriers and more competitive rates, especially in congested areas.

Transloading facility materials and equipment. Bulk transfer terminals typically accommodate various dry and liquid commodities such as plastics, chemicals, fuels, food-grade products, minerals, aggregates, lumber, and municipal waste.

Safely and efficiently moving these materials to and from rail cars and trucks requires specialized equipment. It is important to ensure that your transloading facility can accommodate the products you’re shipping, especially when working with hazardous materials.

Selecting the right transloading facility is an essential component to a cost-effective overall freight transportation strategy. This can help you negotiate competitive rail rates, get closer to your largest receivers, and protect your shipments with top-quality equipment and safety measures.

To compare transloading facilities in your area and locate new potential routes, RSI Logistics offers a free Transloading Directory that has details for transloading locations throughout North America.