According to U.S. railroads' advertising, shifting freight from highway to rail through government incentives will result in a "greener" transportation system. However, a new report says the railroads' claim isn't true.
"When all factors are considered, most freight currently moving by truck would consume more energy if converted to a 100 percent rail move," said FTR Associates' Noel Perry, who authors a report titled Transportation Fundamentals.
By design, the trucking and railroad industries serve very different markets. While railroads excel at carrying heavier, bulk commodities such as coal and stone, America relies on trucks to deliver lower density, higher value goods, like food, clothing, medicine and electronics. "Existing market forces have already done an excellent job of maximizing fuel efficiency by allowing rail and truck to do what they do best," said Perry.
Virtually all freight reaches its final destination by truck and 80 percent of communities rely solely on trucks for freight transportation. Generally, moving goods by railroad isn't even a financially sensible option unless the destination is greater than 750 miles. Given their cost, speed and reliability, trucks are the moving force behind today's supply chains and deliver nearly 70 percent of all U.S. freight tonnage.
In addition to touting the environmental benefits of maintaining our nation's modal mix, Perry said the system does have room for improvement. "Modifying existing truck size and weight standards, which have been frozen in the U.S. for over 20 years, would also improve transport's environmental footprint substantially. Both energy efficiency and safety would be improved by the operation of larger, but fewer trucks."
There is evidence that the pro-railroad advertising tsunami is failing in another way. There's still no indication that "green" is a selling point for America's shippers. The railroads are spending millions on lobbying efforts and advertising campaigns in an attempt to overshadow the environmental advances and cost-effectiveness of trucking, but have yet to prompt a sizable freight shift from trucks to trains. According to Purchasing Magazine, very few shippers say green considerations play a major role in their modal decisions. They simply haven't bought into the hype and continue to base modal decisions on cost first.
"Being green is more of an interesting fact than a decision point," says Tom Jones, senior vice president of supply chain solutions at third-party logistics provider Ryder System in Miami. "It would be fair to say that shippers - especially those in retail and consumer packaged goods industries that are more sensitive to consumer perceptions - are probably considering the environment now more than they did a few years ago, but that it is not yet a driving factor in supply chain decisions."
Jones told Purchasing that shipping companies in the current economy are under such cost pressure they have to select the most cost-effective shipping method. He also said that more logistics providers - especially third-party logistics providers - have developed capabilities to analyze and measure the green benefits of various options and help shippers make the most cost-effective and environmentally friendly choices. "It really isn't about which mode is greener, rail vs. truck," said Jones.
The trucking industry recognizes the value of railroads as part of the freight network. Trucking companies are among the railroads' best customers, placing freight on railroads whenever the distance of travel and nature of the cargo make an intermodal rail-truck freight movement economically viable. However, these opportunities are extremely limited and make up less than 2 percent of the freight market. Each 'shipping need' must be looked at holistically to determine the best mode of transportation, or combinations of modes, depending on what is best suited to the specific task.