- February 7, 2015
- 8:18 pm
- John Caltagirone
- no comments
Railway Systems Rule the Logistics Landscape
From roads to tracks to waterway to airports, all are major players in the logistics landscape, it is no surprise that US has the world’s largest freight transportation system. Among these tracks and railroads are the most active players.1
According to the U.S. Department of Transportation’s Federal Railroad Administration, the U.S. freight rail network is valued at around $60 billion industry, covering about 140,000 rail miles all across the nation. In terms of percentages, it is estimated by the Federal Railroad Administration, in 2010, that almost 40% of the freight network was dominated by the railway industry. The bulk of good transported are commodities such as agriculture and energy products, chemicals, coal, food, construction materials etc.2
Goods tend to move from ports, manufacturing hubs, and areas of high economic activity nationally and internationally, these railways connect to Canada and Mexico and function along the borders for trade. And this trade is only increasing.3
Georgia Ports Authority (GPA) serves as an example of growth and sustainability of one of the country’s oldest form of transportation. In 2014, they moved 340,000 containers by rail a 5% increase from 2013. GPA continues to improve relationships with CSX and Norfolk Southern freight powerhouses to improve efficiency of rail connections and even speed. CSX Transportation and GPA have both testified that their collaboration has been only positive, allowing them to provide efficient services and grow immensely.4
The rail industry is especially attractive because unlike other modes of transportation like trucks or air carriers, they are rather inexpensive and, in the long run, sustainable models. For example more freight can be moved over a longer distance on a single gallon of gas in comparison to its other options. Also, the fact that the freight is not being carried on roads, it eliminates wear and tear of the roads.
The future of railways will be heavily depend on the growing and urbanizing landscapes of the U.S. It is forecasted that by 2050, almost three-fourths of the U.S. population will live in urbanized settings and majority of growth will occur there. This will directly affect the movement and establishment of freight, likely creating more traffic and congestion. Thus in order to continue to be competitive in the marketplace, proper investments must be made in regards to U.S. transportation by creating public-private partnerships between governments and private companies and further collaborating on fuel consumption, road congestion, logistics costs, and public infrastructure planning. With these improvements and partnerships, perhaps the future of railways will be able to compete with other freight moving options.
– Riti Patel, Assistant, Supply and Value Chain Center
Sources:
1. http://www.inc.com/articles/201101/supply-chain-optimization-reduce-logistics-costs.html
2. https://www.fra.dot.gov/Page/P0362
3. Association of American Railroads, Class I Railroad Statistics, May 2012
4. http://www.supplychain247.com/article/rail_still_dominates_the_logistics_landscape/c.h._robinson