Comparing the Costs of Rail Shipping vs Truck - RSI Logistics (2024)

Companies that transport dry and liquid commodities utilize the modes of truck, rail, barge, ocean and pipeline. Some shippers are fortunate enough to be able to utilize barge, ocean and pipeline that can provide significant cost savings. However, most shippers rely on truck, rail, or a combination of the two. When comparing the costs of rail vs truck, rail offers significant advantages. Multimodal rail and truck shipping allows shippers to take advantage of cost savings even when receivers are not located on rail. Optimizing your shipping strategy to maximize the cost savings of rail transit can significantly reduce your logistics spend. We’ve updated this blog post in 2024 to help you compare the costs of rail shipping vs truck more easily.

Comparing Modes of Transportation

Where pipelines and waterways are available, shipping via these modes can significantly reduce costs. However, these two options are limited by infrastructure and geography. Rail and truck however provide more versatile shipping options, especially when combined in multimodal transport. Comparing costs per ton-mile of each mode, you can see the advantages of each. Though these differences are small at first, cost savings add up quickly over longer distances and volume.

Trucking is the universal mode of transportation; every shipper can load and receive materials by truck. Rail, on the other hand, requires that both the shipper and consignee have the ability to load and unload rail directly. By comparison, the differential in cost between the two modes is $ 0.105 per ton-mile. Reducing truck transit and choosing the optimal rail transload facility will help to maximize cost-savings through rail.

Comparing Truck vs Rail Shipping: Example

To compare the costs of rail vs truck shipping, consider the movement of a bulk commodity from Houston, TX to Cleveland, OH. The truck cost in this example lane is approximately $ 5,159 per load, whereas rail would be $ 6,676 per car. However, when comparing the costs of rail vs truck shipping, you must apply a ratio of 1:4, since one railcar equates to four truck loads.

Comparing the Costs of Rail Shipping vs Truck - RSI Logistics (1)

Utilizing Multi-Modal Shipping

Many shippers understand the savings potential in shipping rail versus truck, but, in many cases, receivers may only be able to receive material by truck. To take advantage of the economies of long-haul rail transportation and the speed and flexibility of local truck delivery, shippers rely on North America’s extensive bulk terminal network.

Many shippers understand the savings potential in shipping rail versus truck, but, in many cases, receivers may only be able to receive material by truck. To take advantage of the economies of long-haul rail transportation and the speed and flexibility of local truck delivery, shippers rely on North America’s extensive bulk terminal network. The cost to combine rail and truck using a bulk transfer terminal is approximately $95.54 per net ton. By comparison, rail direct is $70.27 per net ton, and over-the-road truck is $214.96 per net ton. Using multi-modal rail and truck transit compared to truck alone, you can cut transportation costs by more than half.

Railcar Equipment Costs

In addition to transit costs, it is also important to consider the cost of railcar equipment when using rail or multi-modal transit. This equipment cost adds about $900 per railcar shipment. However, these costs only slightly increase variable costs per net ton. Using multi-modal transit, the cost per net ton increases to $105.01. Compared to over-the-road trucking’s $214.96 per net ton, the savings for multi-modal transport remains significant.

Comparing Additional Costs

When comparing the costs of rail shipping vs truck, it’s also important to consider additional costs that might not be on your balance sheet. For example, the stability of rail networks can give shippers and customers more confidence, and make it easier to make long-term plans. By contrast, driver shortages, gas prices, weather events, and other issues can affect the prices and timelines for truck shipping. It’s also important to consider the environmental costs of each mode. Since railcars can ship a much greater volume of goods, railcars can reduce total carbon emissions substantially. In general, since rail cars and rail yards are monitored 24/7, rail cars are also a safer way to ship goods, and can help to reduce losses to theft or damage.

The easiest or most direct shipping route is not always the most efficient, nor the most cost-effective. You can take advantage of cost-savings via rail shipping even when receivers are not located directly on rail routes. Use multi-modal strategies to reduce shipping costs, and assess your transloading facilities carefully to optimize cost-savings. With this strategy, you can keep your shipments on-time and on-schedule, while dramatically reducing costs. Want to learn more about the differences between rail and truck shipping? Check out our blog on The Advantages of Rail Shipping vs Truck Shipping.

Comparing the Costs of Rail Shipping vs Truck - RSI Logistics (2)

Comparing the Costs of Rail Shipping vs Truck - RSI Logistics (2024)


Is shipping by rail cheaper than truck? ›

Cost: Advantage for Rail Shipping

Rail shipping is much more cost-effective than truck shipping for several reasons. Rail is a much more fuel-efficient mode of transportation. Railcars can also carry much more volume than trucks.

Is it cheaper to transport by rail? ›

Rail is one of the most efficient and cost effective transportation modes, especially when it comes to shipping very large volumes over long distances.

What is an advantage of truck freight over rail freight? ›

COST. If you're hauling goods crosstown or even intrastate, trucking may be the better bargain. It's also a good consideration if your volume doesn't even fill one rail car. However, for longer journeys—especially those over 600 miles—shipping by rail is the far more cost-effective option.

How much does rail shipping cost per ton? ›

The annual rate of increase for the initial period was $0.126 per ton-mile in 2020 compared to $0.196 per ton-mile in 2023. This is a more than 5X year-over-year increase to move freight for the 500-mile distance with costs rising from $57 per ton in 2018 to $98 per ton. Figure 1.

What is the cheapest form of freight transportation? ›

In general, the higher the cargo's density, the cheaper the rate. Mode of freight also matters — road and rail tend to be cheapest while air is most expensive. In addition, not all freight brokers have access to the best rates. FreightCenter can help you find the cheapest way to ship freight.

What is the disadvantage of rail transport? ›

There are risks and disadvantages of transporting your goods by rail including: routes and timetables available can be inflexible, especially in remote regions. rail transport can be more expensive than road transport. mechanical failure or industrial action can disrupt services.

How much freight is moved by rail vs truck? ›

Trucks moved 61.1 percent of the tonnage and 64.9 percent of the value of these shipments. The average shipment by truck was 63 miles compared to an average of 640 miles by rail.

What is the cheapest way of transportation? ›

Public Buses: Public buses are a cost-effective way to get around most cities and towns in the US. Trains: Trains, such as Amtrak and regional commuter trains, can be a cheap and convenient way to travel longer distances. Carpooling: Carpooling with coworkers or friends can help you save money on gas and parking.

What is the average cost per mile of rail? ›

rule of thumb for new track construction is between $1 Million - $2 Million per mile, depending on who is constructing the track. Some rail clients need alot of track space to handle unit trains over a mile long.

Why isn't more freight shipped by rail? ›

Shipping by truck saves money

It also helps to drive up the cost of this transportation. So, even if it was feasible to ship more items by rail, companies would not do it because they're looking for the cheapest way to move their goods. Another potential issue is the fact that rail systems are very limited.

What is the most efficient freight transport? ›

Freight Trains

Trains are the most fuel-efficient method of transporting goods across land.

Is rail more efficient than trucks? ›

Using rail is the most environmentally friendly way to move freight over land. Railroads are roughly four times more fuel efficient than trucks. Shipping freight via rail limits greenhouse gas emissions and increases fuel efficiency, reducing the transportation carbon footprint.

What are the pros and cons of railroad transportation? ›

As a result, although rail transport has advantages such as high carrying capacity, economy, reliability and environmental impact, it also has some disadvantages such as limited flexibility, operating costs, necessity of intermodal connections and delivery time.

Does Fedex freight use rail? ›

Freight forwarding is available via air, sea, road, and rail.

What are the benefits of rail freight? ›

Rail is sustainable – compared with trucks, it produces only about one-fifth of the emissions per kilometer traveled and ton transported. At the same time, due to its largeer cargo capacity, it is efficient, mostly punctual, and ideal for intermodal use in combination with road freight.

What is the cheapest mode of cargo transportation? ›

Waterways are the cheapest modes of transport.

What is the cheapest way to ship heavy freight? ›

Consolidated freight is typically the cheapest way to ship heavy packages. Compare shipping rates for heavy items using the most common shipping methods: USPS. Parcel shipping (such as FedEx or UPS)

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