What Can Rail Shippers Expect?

What Can Rail Shippers Expect?

The rail industry finds itself at a critical juncture, poised for transformative progress that extends well beyond individual companies. Building on the progress freight rail companies made in 2023, this year holds the promise of a secure future marked by reliability, resilience, and commitment to sustainability.

To keep up with the demand of commerce, the rail industry relies on its ability to move goods to market efficiently and effectively.

The health of the supply chain is shaped by technological advancements, environmental commitments, and economic pressures. This will be a pivotal year for freight railroads as the industry works toward investing further in safety, enhancing the customer experience, increasing long-term sustainability, and revolutionizing the movement of goods on a global scale.

Key Priorities

Total U.S. freight movements will rise from 19.3 billion tons in 2020 to 25.1 billion tons in 2040—a 30% increase, predicts the Federal Railroad Administration (FRA). The rail industry is forging ahead to meet this increased demand while facing pressure to prioritize new environmentally conscious objectives and advance technologically.

Aware of these external and internal pressures, as well as the impact of cyclical service disruptions, the industry is prioritizing efforts around three key pillars to continue to evolve and advance: reliable and resilient service, continuous productivity gains, and safe, sustainable growth.

Safety stats

Class I railroads have reduced the mainline accident rate by 48% since 2000, and track-related accidents are down 55%, according to the FRA. Over that same period, hazmat accident rates have dropped 73%, and now, more than 99.9% of all hazmat materials moved by rail reach their destination without incident.

The injury rate for Class I railroad employees has reduced by 59% since 2000. Additionally, Class I railroads have spent more than $250 billion over the past decade on infrastructure and equipment as well as laid around six million tons of new rail.

The industry is also assuming a leadership role in advocating for sustainable practices and fostering partnerships with shippers for a better future. Today’s shippers are under intense constraints and pressure to meet sustainability goals and rail is expected to be an increasingly attractive solution to achieve those goals.

Intermodal Advantage

Coming out of a challenging freight market in 2023, railroads are maintaining a cautiously optimistic stance. The prolonged supply chain recession in the trucking sector is stabilizing, prompting railroads to compete on service to ensure that reliability and efficiency remain a priority.

The persistent rise of e-commerce abroad highlights rail’s ability to leverage its intermodal advantage to provide seamless service from seaport to end destination. The key to that seamless service lies in unlocking the value of each carload, such as enhancing tonnage capacity in locomotive fleets to accommodate more freight. The result is predictable service for shippers and the development of new logistical solutions that make rail more accessible.

The success of the rail industry revolves around understanding shippers’ needs, and identifying opportunities for mutual growth. The goal of freight railroads is to deliver a valuable service while creating opportunities for smart and sustainable growth for individuals, companies, and the economy.