Why should industrial shippers consider rail?

January 9, 2023

We have weighed the economic benefits and environmental effects of the shift to rail. We must also consider the evolving EU legal perspectives on industrialization and sustainability.

In the words of Robert Swan, "The greatest threat is the belief that someone else will do it", the European Union has come a long way in its efforts to promote sustainability on a global scale, incorporating initiatives fueled by the vision of a greener earth. Statistics clearly show that every industrial sector in the EU has significantly reduced its CO2 emissions in recent years. Thanks to cutting-edge innovation and the development of revolutionary alternatives for the most mundane industrial processes, looking at the last 30 years (1990-2020), carbon emissions have decreased by 32% in almost every industry. In the energy sector alone, greenhouse gas emissions have decreased by 46% over the same period. In the manufacturing and construction sectors, they decreased by 44%. Looking at these numbers, we can all believe that these initiatives are working. Right? Here's the twist!

The Twist

The transport sector in the EU is the only sector whose carbon emissions have increased by 7% between 1990 and 2020. Are you surprised? Well, we can't understand the developments that have allowed this figure for the transport sector to increase without understanding how the entire freight ecosystem works.  

It is obvious that since the beginning of civilization, transportation has been accompanied by dynamic developments, growth and connectivity. This is the reason why a dedicated logistics and transportation unit has always been an integral part of any business that has grown over the years. With the expansion of the ecosystem of industries and the increase in demand for products globally, the number of commodity manufacturers entering the game has increased significantly. As a result, the demand for freight services has grown exponentially. For decades, waterways have been regularly used for shipments around the world. But as we said, as demand increased and territories expanded, there was a constant need to move goods inland to locations far from ports. This is where the pre-eminence of land transport has emerged. The choice of the type of land transport has been a strategic decision for manufacturers: should they choose rail or road?

Why rail?

Reports indicate that the European road freight transport market is expected to reach USD 507 billion by 2028, up from USD 410 billion in 2022. Furthermore, trends in previous years suggest that about 75% of domestic transport in the EU region was road. As many manufacturers have opted for road transport, rail freight remains uncharted territory for many. The problem is that it is not easy to set up a rail freight operating unit and adapt it to current business objectives. It requires strategic planning to implement. In addition, not all goods can be transported by rail. As a result, fuel consumption is increasing daily in the EU, which explains the growth in carbon emissions in this sector .

Why should we consider rail? Let's try to assess the benefits of switching from road to rail freight for a bulk product manufacturer. Generally speaking, a freight train in the EU is about 700 meters long. In addition, it can be handled by one or at most two drivers in a given geographical area. So, starting from the basics, a train can efficiently transport goods equivalent to the amount transported by almost hundreds of trucks, handled by two people, at most, in the same amount of time. Sounds convincing, doesn't it? In terms of cost optimization, rails offer less resistance to trains than roads do to trucks, which significantly reduces fuel consumption, again over the same period. In addition, trains do not need to repeatedly speed up or slow down in small time intervals, unlike trucks that face uncertainty on roads. This steady-state pattern again suggests a reduction in the fuel consumption of trains for the same distance. In summary, it is clear that rail transport reduces greenhouse gas emissions by 75% and reduces congestion and road wear.

An additional advantage

In addition to being economically and environmentally efficient, rail provides a better set of confidence and performance for shippers. With best-in-class solutions like Everysens' TVMS, the Transportation Visibility Management System, rail freight offers shippers greater visibility into their shipments and provides reliable data points such as ETAs, railcar availability, platform availability and more. In addition to superior visibility, TVMS also automates all logistics operations, from the most mundane to the most complex. Given these benefits, leaders in various industries have adopted a rail freight method of moving their goods, partnering with Everysens for TVMS for the obvious benefits.

Is that all? No, that's where it starts. While we have weighed the economic benefits and environmental effects of switching to rail, we must also consider the EU's evolving legal perspectives on industrialization and sustainability. The EU has set itself the goal of becoming climate neutral by 2050. This is an important step in the initiative to make the earth greener than ever. To be more specific, the FQD, the Fuel Quality Directive, has set a standard for fuel suppliers to reduce the emissions intensity of their fuels by 6%, of which 5.6% has been achieved by 2020. This is a clear indication that EU members are collectively supportive of promoting sustainability at the industry base, part of which is logistics. It is high time for shippers around the world to turn to rail freight. When it comes to the reliability and efficiency of rail freight, Everysens, with its TVMS, helps shippers decipher logistics best practices.