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Rail Freight Transport: The Right Track To Cost Savings

Resources > Rail Freight Transport: The Right Track To Cost Savings
Don’t know what shipping method to use for your long-haul freight? Find out how rail transport can help and why you should combine it with truckload services.
Rail Freight Transport Explained   |   Rail Shipping Rates   |   Train Rates vs Other Transportation   |   Types of Rail Freight Transport   |   Rail Car Models   |   Types of Train Cargo   |   Pros and Cons of Rail   |   Pros   |   Cons   |   Road vs Rail Freight   |   When To Ship By Road   |   When To Ship By Rail   |   Rail and Road Combined   |   Our Services
Published: October 23, 2023
Last Modified: February 21, 2024
Author: Jacob Lee

The Association of American Railroads regards rail freight transport as a system where products are moved in bulk over great distances using trains cars. It’s considered one of the safest and most cost-efficient method of transportation in the United States. 

Rail freight transport plays a pivotal role in the logistics industry. It’s frequently used in combination with other modes of transport, and without this method of moving goods, businesses would face higher shipping costs and other challenges.

Transporting freight by rail is a great shipping method to incorporate into your supply chain. Learn more about this useful strategy and how it can enhance your business. 

What Is Rail Freight Transportation?

Simply put, rail freight transportation is the process of moving commercial goods with a train. It’s an integral part of the supply chain that moves large quantities of products efficiently, all across the country.

Unlike roadways, train lines are owned and maintained by private organizations. Railroads are interconnected, allowing goods to travel across the country and through major cities. To show the significance of the U.S. freight rail network, we’ve included some important data. 

Number of Railroads In the U.S.

Type of Railroad Amount
Class 1 7
Class 2/Regional22
Class 3/Local/Short Line584

Provided by the Federal Railroad Administration

As these numbers show, railroads of varying sizes cover a large amount of the U.S. landscape. Lines are differentiated by the annual operating revenue they earn. We’ve included some more data showing the different earnings each make.

Operating Revenue of Each Freight Class

Railroad ClassOperating Revenue
I$489.9 Million or more
IIBetween $489.9 Million and $39.2 Million
IIILess than $39.2 Million

Provided by FreightWaves

Depending on how well rail lines perform, these numbers may fluctuate over time. Regardless of the one used, shippers can expect fast and efficient transport when their freight is transported by train. 

Learn about how rail drayage can reduce shipping costs and improve the efficiency of your logistics operations. 

Rail freight transport often starts in a train yard

How Much Are Rail Shipping Rates?

According to the American Association of Railroads, rail lines use a method called differential pricing to determine how much to charge shippers. Since train companies are responsible for maintaining their tracks, they assume numerous fixed and variable costs. Differential pricing allows rail companies to charge shippers the lowest possible rate, while covering their expenses.  

If train carriers charged a fixed rate, customers who could not afford the expenses would end up using other transportation options. This would raise costs for the other shippers that have no choice but to use a train to move their cargo. 

With differential pricing, shippers are offered rail freight rates that match the market of their business. This ensures customers pay an amount they can afford. Since differential rail freight transport costs will vary from shipper to shipper, it’s nearly impossible to give an exact amount. Many train carriers keep these prices confidential with their customers as well.   

Power only trucking is a good shipping option to use when using your own trailer. Read our article to find out more.

Comparing Train Freight Rates To Other Transportation Costs

Relative to other modes of shipping, rail freight transportation is much cheaper when it comes to moving large quantities of cargo over long distances. The ability of trains to ship a high volume of cargo lowers the cost-per-ton-mile. Rail transport is also more fuel efficient, which helps to drive down costs. 

Alternatives to rail shipping include:

  • Air 
  • Truck

Air transport is significantly faster, but also much pricier. This method is best suited for time-sensitive cargo or high-value items, where the added cost ensures rapid delivery. Trucking can be more expensive when it comes to long-haul shipments. 

That said, using this shipping option is an affordable solution for shorter journeys. For most rail loads, truck transport is used to move cargo from the train yard to the final destination. 

If you do want to use road shipping instead of train, read our article on dry van rates. 

Shipping solutions for businesses of all sizes. See for yourself why so many businesses trust us by getting a free quote!

What Are the Types of Rail Freight Transportation?

Thanks to the many designs of rail cars, train companies are able to offer a variety of transportation services. This gives business the flexibility to send just about any cargo they have to another destination.  

Rail Car Models

To accommodate the various needs of shippers, there are several rail car models that serve a unique purpose. 

Common rail cars include:

  • Boxcars
  • Flatcars
  • Tank cars
  • Hopper cars
  • Refrigerated cars

Boxcars are the most recognizable type of rail car and are extremely versatile. The enclosed design protects goods from weather and the elements. Doors are located on the sides, which allow the loading and unloading of freight. 

As the name suggests, flatcars have a level and open deck. Due to this design, goods might need a tarp for protection against weather during transport. Cargo is typically loaded and unloaded from above using a crane.

A tank car has a cylindrical design and comes with many built in safety systems to keep liquids from spilling out. Anywhere between 6,500 to 31,000 gallons can be held in these kinds of equipment. This allows shippers to transport a considerable amount of liquid materials.

A hopper car has an open-top for loading, and bottom compartments that allows for the rapid unloading of materials. Covered hopper cars are practically the same, except for having a fixed roof. 

Refrigerated cars, also known as reefers, are equipped with temperature control mechanisms. They are essential for transporting perishable goods that can go bad if not kept in the right temperatures.  

If you’re shipping by truck, then you may want to learn about the different types of dry van trailers. 

Types of Train Cargo

Cargo can come in different sizes and require different considerations to be transported from one location to another. Fortunately, the rail industry is able to move almost anything a business needs to ship. 

Common types of commodities transported by trains include:

  • Bulk commodities
  • Intermodal freight
  • Perishable goods
  • Crated and palletized cargo
  • Oversized cargo
  • Hazardous materials
  • Liquid goods

Bulk commodities are usually poured or dumped with a shovel, scoop, or bucket. Open and closed hopper cars can carry these products. 

Bulk commodities include:

  • Grains 
  • Minerals
  • Rock
  • Fibers
  • Soda ash

Intermodal transport is used to move containers or trailers. This is a versatile shipping method, allowing goods to switch between trucks, trains, or ships.

Intermodal freight can include the following:

  • Electronics
  • Clothing 
  • Manufactured products

Another type of cargo frequently transported by train are perishable items. These commodities require the temperature controlled environment offered by refrigerated rail cars. 

Perishable cargo can include:

  • Fruits
  • Vegetables 
  • Meats
  • Dairy products

Crated or palletized rail freight is another common type of cargo transported by train. Boxcars are the equipment of choice when moving this kind of cargo. Forklifts are used to move these items on and off the equipment. 

Oversized cargo refers to a wide variety of freight that can’t travel in the confines of a box or hopper car. As a result, flatcars are typically used to move the commodities instead.

Types of specialized cargo include:

  • Pipes
  • Steel plates
  • Machinery tractors
  • Lumber
  • Poles  

Hazardous materials are goods that can pose risks to the safety of people or the environment. The rail industry follows specific safety regulations when transporting hazardous materials. These dangerous goods are usually transported in large quantities using a tank car.  Other liquid commodities can be moved by a train using this kind of equipment as well.    

A train hauling freight along the coastline

Pros and Cons of Rail Transport

Like any method of transportation, rail freight shipping has advantages and disadvantages.

Before deciding on this option, it’s essential to weigh both the positive aspects and the limitations of this service. 


When it comes to moving goods across vast distances, rail transport stands out for a myriad of reasons. As a result, businesses around the country rely on railways to ship their products because of the reliability it offers.

Benefits of using rail freight include:

  • Cost-effective for bulk shipments
  • Speed
  • Safety
  • Reach 

Trains are designed to haul large quantities of goods. When shipping in bulk, the cost per ton-mile for rail transport is often lower than other methods. A train will use less energy when carrying freight that’s equivalent to 300 trucks. This means less fuel is used, which saves costs for shippers. 

Shipping freight by rail is faster than truck, but only if traveling over long distances. Unlike semis, trains aren’t constrained by road traffic, construction delays, or weather events. Long-haul truck shipments are more likely to run into delays. 

Railway transport is one of the safest ways to move cargo. While train accidents capture the headlines of news agencies, these occurrences are low compared to road shipping. Rail shipments are also less likely to be stolen or damaged while in transit. 

Trains can reach all corners of the country. In the U.S., there are 140,000 miles of track. Shippers have the flexibility to send their cargo to anywhere in the country thanks to these extensive rail lines. 


Despite the advantages of rail freight, it’s essential to be aware of the limitations that come with the service. Train shipping might not always be the optimal solution for every scenario due to a few downsides.

Negatives of using train transport include: 

  • Limited flexibility
  • Not suitable for small shipments
  • Infrastructure dependencies
  • Not realistic for short distances 

Unlike trucks that can reach various destinations through the road network, trains are bound to rail tracks. This means they can’t deliver to locations without the right infrastructure. Scheduling can be less flexible, with shipments often adhering to predetermined train timetables.

Shipping freight by rail is great for bulk shipments, but not for smaller ones. Shippers will waste money by sending a low volume shipment using this method. Efficient rail freight shipping relies on well-maintained tracks, bridges, and terminals. In areas where train infrastructure is lacking or not modernized, businesses might face disruptions or inefficiencies.

Rail freight isn’t viable for shorter distances. While trains can cover longer distances more efficiently, trucks are much better for closer destinations. Sending freight by rail a short distance is also more expensive than it would be with a semi. 

Multicolored containers at a rail yard

Road vs Rail Freight Transport

In the U.S., cargo is typically moved using a combination of road and rail transportation. For shippers, it can be hard to know which to use. We’ll explain the best scenarios for truck and train transport. 

When To Use Road Shipping

Trucks are the workhorses of the freight industry, often seen zipping along highways or navigating city streets. While rail freight offers a set of advantages, there are distinct situations where road shipping is the better choice. 

The best times to use truck transport include:

  • Direct door-to-door-deliveries
  • Short to medium shipment distances
  • Urgent shipments

One of the standout benefits of truckload shipping is the ability it gives businesses to send freight directly to the customer. Unlike rail, which requires terminals, trucks can reach factories, stores, and even residences with ease. 

For shorter routes, trucks provide faster and more efficient transportation. This form of shipping requires fewer preparations and is able to travel short distances faster than a train. 

Truck transport services offer adaptability when it comes to scheduling. If businesses need expedited freight services to move their cargo, carriers can accommodate with quick turnarounds and real-time adjustments.

When To Use Rail Shipping

Despite not being seen as regularly as trucks, trains are frequently used to move cargo all over the country. Like road transport, rail shipping is extremely useful in certain scenarios.

These include:

  • Long-haul shipments
  • Bulk loads
  • When time isn’t of the essence 

If a shipment needs to cross large sections of the country, trains can do so with lower costs and fewer emissions compared to long-haul trucking. This transportation option is ideal for bulk commodities due to the immense amount of space rail cars offer. 

While trucks are faster for short and medium journeys, trains can move cargo long distances faster than a truck. That said, long-haul shipments still take a considerable amount of time. Therefore, rail is a good option when shippers aren’t in a hurry to move their products. 

Combining Road and Rail Transport

Typically, trains won’t be able to transport freight the entire distance a shipment needs to travel. Therefore, trucks will have to be used to fill in the gaps. When faced with a long haul shipment, businesses should use road transport to deliver freight to the rail yard. 

From here, trains will handle most of the journey. Once the load reaches the destination terminal, trucks take over again to deliver the goods to the final recipient, whether it’s a warehouse, store, or even a home.

Planning is essential when combining each transportation methods. Coordinating schedules between trucking and train carriers will ensure timely transfers and deliveries.

If you want to know more about these two transportation methods, read our article on shipping by rail vs truck. 

Rail Freight Services with USA Truckload Shipping

It’s clear that rail freight transportation offers significant advantages for businesses looking to optimize their logistics. However, the journey doesn’t end at the railroad. At USA Truckload, we have a vast network of carriers that can transport your freight to and from the rail yard. If you’ve determined rail isn’t viable for you, then have no fear! We excel at moving freight various distances. 

We also offer: 

  • Truckload Shipping: Efficient, reliable, and tailored to meet your specific needs.
  • Expedited Delivery: For those moments when time is of the essence, we ensure your cargo reaches its destination promptly.
  • Hazmat Transport: Expertise in handling hazardous materials with the utmost safety and compliance.

Whether you’re trying to combine transportation modes or just want to use trucking for your shipments, we’ve got you covered. Contact us about our rail freight services, or fill out a Request for Proposal today. You can also reach our team at (866) 353-7178 for more information. 

We work quickly to find a shipping solution for your urgent needs. Get a personalized, fast, and free quote to discover a wide range of shipping options.

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