Rail To Truck Transloading: 5 Proven Ways it Saves On Shipping Costs in 2024

Want to reduce your shipping expenses? 

Logistics costs can decrease or increase warehouse profits for your business. 

When your shipping expenses are very high, you’ll need to offload these expenses to your customers, potentially triggering a decline in purchases. 

A PARCEL survey revealed that 80% of shippers raised product prices due to high carrier rates. Many of them reported significantly lower sales afterward. 

If you’d like to make your shipping and logistics processes more cost effective, I recommend that you consider rail to truck transloading. This strategy can help you combine rail and truck shipping more economically. 

It can therefore speed up business growth by enabling you to offer customers excellent rates for commodities to increase the likelihood of repeat business and client loyalty. 

If you’d like to learn about shipping liquid bulk products cost-efficiently, check out this article I wrote on butane transload shipping for safe natural gas transportation.

In this article, we’ll discuss rail to truck transloading and proven ways it saves on shipping costs in 2024 to help increase your business’s profit margins. 

Let’s get started.  

How rail to truck transloading works 

So what is rail to truck transloading and how does it work? 

It entails the loading of freight onto rail and then moving the cargo from rail to trucks that in turn complete the journey. This type of transloading is essential because it enables you to move goods more affordably across long distances.

Additionally, rail to truck transloading is an excellent way to get around rigid logistics that relies on one form of transportation that’s very expensive.

It helps make your logistics more flexible and resilient by enabling the use of alternative transportation to combine shipping resources more efficiently.

Let’s demonstrate how rail to truck transloading works with an example. 

First, you’ll need to move your freight from the source by truck to a rail transload shipping facility. Your cargo will then be transloaded into rail cars, and shipped for the first part of the journey. 

Once it arrives, typically at another transload facility that’s close to your final destination, the freight will be transloaded from railcars to trucks for last-mile delivery. 

Depending on the nature of your cargo, transloaders will use various equipment.

For instance, they may turn to forklifts to reload palletized goods and cranes to move containerized cargo during transloading and intermodal shipping. They may even use  pumps and conveyors for dry and liquid bulk commodity transfers.

Rail to truck transloading requires well-coordinated logistics to improve success, which is why I recommend using a transload management software.

Click here to start your free trial of transloads.co to improve your rail to truck transloading planning and coordination processes.

With our software, you can track inventory in-transit as it moves between rail to truck or truck to rail accordingly so that you know where your shipment is. You can also digitize important shipping documents to facilitate seamless shipping across jurisdictions.

DOT requirements for transloading operations

The US Department of Transportation (DOT) has set rules.

These cover how your transload shipping process should work. They also describe guidelines for both loading and unloading operations from rail to truck. 

Failure to comply with the DOT’s transloading regulations may result in violations that attract huge consequences like fines, suspensions and even jail time.

For example, you can incur a fine of up to $99,756 for violating the DOT’s requirement for the handling of hazardous materials, going by a Federal Register study. Each violation attracts its own fine so the more you infringe, the bigger the repercussions. 

So what are the DOT’s rules regarding transloading operations? 

To begin with, it requires you maintain written safety procedures and make them available to your employees at all times.

One of the benefits of using transloading software is that you can digitize such reports, and provide mobile access to transload operators to improve compliance. 

But that’s not all.

The regulations also mandate that you need to perform an external visual inspection of tank cars before shipping to ensure they’re in proper and safe conditions. 

You’re also required to inspect inspection date markings to ensure proper test intervals were observed. This is also done to substantiate that equipment servicing, thickness tests and other types of period tests were carried out at the prescribed intervals. 

5 Ways rail to truck transloading lowers shipping costs

1. Improving fuel efficiency

Fuel prices are through the roof today.

The cost of diesel and gasoline has gone up tremendously, and this means that your business will incur higher costs when shipping its goods by truck. 

When you rely on an inefficient means of long-distance transportation for freight movement, you’ll massively increase your per-mile shipping expenses. 

In fact, cargo trains can be up to 5 times more fuel efficient than trucks, according to a ScienceDirect study. So moving cargo by truck will mean spending five times more on fuel compared to using rail over a similar distance.

It’s for this reason why rail to truck transloading proves the better and more cost-effective option, especially when you’re shipping freight across very long distances. 

Transloading enables you to switch conveniently between rail and truck. 

So you can enjoy the benefits of strategic railroad logistics such as greater fuel efficiency which greatly lowers your per ton, per mile cost of moving freight. When this happens, you can improve the profitability of your supply chain.

If you’d like to learn more about rail and truck transloading, I recommend that you consider our transloading consultancy services

Click here to get our premium support services that can help you set up your own transload yard and hit the ground running.

From recruiting and setting up staff for your operations to optimizing your workflow and marketing your facility to new clients, we can help you hit the ground running with a transload facility that’s built for maximum efficiency and success. 

2. Enhancing load density

So what is load density exactly? 

In shipping, it refers to the quantity of a commodity that you can load per unit volume. It’s an important metric that also affects the profitability of your shipping strategy. 

Trucks, for example, have a lower load density than rail, so they typically carry a lower quantity of freight per unit volume, thus decreasing shipment size.

A US DOT study revealed that a single railcar can carry four truckloads worth of freight. So moving freight by way of a 55-car train, means removing up to 220 truckroads from our highways that contribute to traffic congestion. 

Besides proving the more economical option, this also lowers the carbon footprint of your supply chain, resulting in improved eco-friendliness. 

So if you’re looking to move large amounts of cargo, I recommend rail shipping.

Rail to truck transloading enables you to switch from trucks to rail, with a single railcar able to accommodate freight you’d need to move in four, different truckloads. 

So if you compare rail transloading and through trailer shipping, for example, which requires the entire shipping of cargo exclusively by truck, this means that rail also reduces the number of shipments you’ll need to perform. 

Since you’ll make fewer trips to move the same amount of cargo, thanks to larger rail freight capacity, this further lowers logistical expenses for your businesses. In addition, this also goes a long way to simplify the logistics involved. 

It’s because you’ll only coordinate and manage one consignment rather than several smaller shipments.

3. Enabling carrier diversification

Single-carrier shipping isn’t always the best way to go.

While working with one carrier can simplify your logistics processes, it’s equivalent to putting all your eggs in one basket. You become more susceptible to risks such as incremental prices and bad weather. 

So a single-carrier shipping strategy tethers you to the services and prices of one service provider, leaving you powerless to sudden price hikes & surcharges. 

A survey by OneRail revealed that 69% of retail fulfillment leaders said using one carrier is a risk their business just can’t tolerate. In particular, they said it made them more vulnerable to sudden carrier price changes.

Relying on a single carrier can also make you more vulnerable to supply chain disruptions due to carrier unavailability, which can lead to lost revenue.

How does rail to truck transloading reduce this risk?

Well, it enables you to diversify your shipping partners to include both rail and trucking companies. When it comes to rail transload shipping, for instance, transloading can open up your options with regard to rail shippers. 

If you go with a rail transload facility served by multiple rail lines & companies, you’ll be exposed to more alternatives. This increases your negotiating power, enabling you to get the best carrier rates that increases the profitability of your shipping operations. 

But it goes way beyond lowering your shipping costs.

This type of transloading also enables you to put your eggs in different baskets by leveraging multi-carrier shipping networks to reduce the risk of supply chain disruptions. 

4. Allowing for freight consolidation

What is freight consolidation when it comes to shipping? 

It refers to the process of merging smaller shipments into one large consignment. Typically, the smaller shipments are usually heading to the same destination or will be traveling the same route for most of the journey. 

Without freight consolidation, you may have to foot the massive cost of an entire truckload even when you just need a small amount of trucking space.

A study by Tran-SET found out it’s possible to lower shipping costs by 23% through consolidation of freight. These cost-savings arise due to shared trucking expenses in terms of fuel, driver wages and even transloading charges. 

This is a significant sum that I’m certain you can channel toward other important areas of your business.

With rail to truck to transloading, you can leverage strategic freight consolidation. 

It allows you to essentially pool your small shipments with other shippers, garnering full truckloads with ease so that you can split the costs involved with these partners. 

Once the goods arrive at their destination, the transload facility can deconsolidate it, switching your freight onto trucks to complete the last-mile delivery of your freight. 

That said, freight consideration attracts key transloading challenges for your business. 

It’s not always smooth sailing because it increases the risk of cargo damage since there’s increased material handling. What’s more, there can also be a trade-off between cost and time as you wait to attain a particular quota, so shipping delays are possible. 

5. Enabling route optimization

Your business may have several route options.

While being able to ship your goods across several shipping lanes means excellent flexibility and supply chain decentralization, it can also have a negative effect on costs.

For example, non-optimal shipping routes can increase shipping mileage, which leads to lower supply chain efficiency and higher transportation expenses. 

A study by Elogii revealed that 80.7% of logistics companies leverage efficient route planning strategies every day. These help them to reduce shipping distances and choose more suitable routes depending on real-time factors like weather conditions.

This shows just why proactive route planning is ideal, particularly at a time when road and rail conditions can change at any time leading to shipment delays for your business. 

So how does transloading lead to route optimization? 

Rail to truck transloading enables you to plan out and switch shipping lines accordingly, depending on factors such as weather, traffic congestion and more. 

When paired with the best transload management tools and route optimization software solutions, your transload shipping partners can help you find the most efficient shipping networks for moving your freight. 

This results in a reduction in unnecessary mileage, which in turns means lower fuel costs, reduced carrier charges and increased cost-efficiency of your shipping process.

Click here to start your free trial of transloads.co to improve shipment tracking. 

With our software, you can monitor inbound and outbound rail cars more efficiently, giving you the data you need to make cost-effective decisions about your shipping lines. 

Products that are great for rail to truck transloading

a) Dry bulk goods

What are the challenges of dry bulk shipping? 

Instead of shipping them as bagged, boxed or palletized goods, you may need to first move dry bulk cargo like grains and soda ash in their raw form to a processing facility. 

However, transporting dry bulk by truck alone can be extremely costly because of their limited carrying capacity in addition to applicable weight restriction laws. 

Rail to truck transload freight shipping services get around this by offering high-capacity rail cars, which, like I mentioned earlier, can carry up to four times the quantities of a single truckload per railcar. 

So this makes it an ideal shipping strategy when you want to move unprocessed dry bulk goods like iron ore and coal more cost-efficiently over long distances.

b) Liquid bulk commodities 

Liquid bulk and transloading are also a great fit. 

This is because your transloading partner has specialized equipment that enables the efficient transfer of liquid bulk cargo, including liquefied gas, chemicals, crude oil and petroleum products, into packaged products

By efficiently moving your cargo and enabling its storage and packaging close to distribution hubs, transloading helps avoid centralizing your production. 

For example, with effective railroad switching during butane transloading, you can move bulk quantities between trucks and rail tankers or even pipelines for efficient transmission.

Your transload facility may even go the extra mile to provide butane transloading, blending and repackaging services as well. These enable you to bottle and package the product near your target markets to ensure excellent availability. 

c) ISO containers

 Looking to move ISO containers efficiently? 

The International Organization for Standardization (ISO) has set rules regarding how your business should ship, secure, mark and generally handle ISO containers across your supply chain.

With the expertise of rail to truck transloaders, you can ship and handle containers according to ISO standards even if you’re inexperienced in this area.

If you work with the best transload service companies, you’ll liaise with shipping partners who are aware of ISO rules and best practices for container handling across international markets and states as well. 

From appropriate classification and ratings to providing appropriate fittings and reinforcements, truck to rail transloading service providers can help you observe ISO rules, making this form of transloading ideal for moving ISO containers. 

Conclusions

Shipping zones also affect your shipping costs.

This is because various carriers offer different rates across the same geographical area.

If you don’t combine your choice of carriers strategically based on their shipping zone rates, this can create unnecessary shipping expenses for your business.

An Inbound Logistics survey showed that 84% of shippers admitted reducing transportation costs is their biggest struggle. This proves the need for transloading, which enables you to transfer cargo to the best-priced carrier for each zone.

Transloading also enables you to reduce the number of shipping zones carriers have to move through to lower your shipping costs. Another strategy that will also help you minimize shipping expenses is using a transload management software.

Click here to start your free transloads.co trial to attain cost-efficient shipping.

With our software, you can reduce inventory errors, boost worker productivity and optimize logistics processes, all of which result in huge cost-savings for your business.