Rail-based Logistics: Thriving or Dying?

One of the oldest forms of transportation and logistics is the railway. The development of the steam locomotive engine by the British back in the 18th and 19th centuries was a key piece of the industrial revolution. Fast forward to 2015, and rail continues to be one of the widest uses for transportation and logistics in our modern supply chain.

rail car logisticsSo why has rail logistics continued to advance and maintain its dominance? Commodities that are heavy and needed in large volumes need to be effectively moved from the source location, to that of the customers in order to make it cost effective inputs for the purchaser, and profitable outputs for the manufacturer.

In the North American production of oil in remote regions like North and South Dakota, Texas, and Northern Alberta, transporting the significant amounts of oil being pulled out of the ground can be a challenge. The amount of trucks needed on the road to move the products safely would be so significant, and the volume that each truck could transport, that trucks pinch the ability to move the product through the supply chain quickly.

Pipelines have become increasingly popular in heated debates about safety, cost, and environmental concerns. Trains have long acted as an alternative to pipelines as a relatively safe, and effective way to transport these goods above ground. Existing infrastructure remains across most of the world, and especially through North America’s industrial hubs and into ports from Fort Lauderdale in the Southeast to Vancouver in the Northwest.

Advancements in Rail Systems & Technology

Rail cars have had advancements in the safety of cars to hold dangerous goods from crude oil to other chemicals, allowing safe transport across the country. Unlike treacherous road conditions that trucks can experience driving across the country, trains are able to easily and safely navigate through mountainous snow regions, without the risk of losing their loads.

Rail continues to be a huge piece of the coal and mining industry as well. In 2010, Wyoming was home to the 10 largest coalmines in the United States, including the countries largest producer at the Black Thunder surface mine owned by Arch Coal. This mine alone produced over 115 Million short tons of coal in 2010, an increase from 86 Million in 2007. This coal all needs to get moved somehow, and it can’t be pushed through a pipeline, and would be far too expensive to move by trucks. Trains allow for the goods to be easily moved into port regions like Vancouver, where the coal gets loaded onto ships, and transported to major international manufacturing hubs like China.

4 of the worlds 5 largest coal consumers are overseas: China, Japan, India and Russia. Getting this product out of the ground in the United States and Canada, and transported to the coastal shipping vessels wouldn’t be possible without the continued use and growth in rail logistics and distribution.

A Thriving System for Logistics & Distribution

Rail is versatile, requires very little manpower relative to the amount of weight being hauled, and can easily connect from big cities and manufacturing towns alike. Look no further than the boom in the equity value of railway companies like Canadian Pacific Railway, which has seen a 400% increase in it’s company value since 2005, largely thanks to the boom in Canada’s exports of forestry, oil, potash and even agriculture products like wheat.

The advancements in rail logistics include better traction, braking abilities, power, and assistance in managing the weighing of these massive cars has allowed for incredible efficiency. Companies that have a high degree of specialization, such as the rail scale system offered by Walz Scale have prompted a momentous shift in these systems as a whole.

As a result, these mechanisms have become on of the most effective forms of transportation for anyone looking for effective supply chain solutions and logistic management services. Rail has been the beneficiary of advances in technology from it’s origins in Steam to coal to diesel, and it shows no signs of embracing more changes and continuing it’s dominance as one of the most effective forms of logistics.

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