Making decisions for your growing company can feel intimidating when you don’t have all the information regarding options.
One choice every retail business has to make is how they want to distribute their products. And there are a lot of factors that come into play when making that decision.
To help you make that choice, in today’s article, we are breaking down the benefits of truck and rail distribution. You will find out which is more cost-effective, how quickly they operate, and if both transport models are an option for your company.
Which is More Cost-Effective?
Cost is a huge proponent in making good business decisions, and it’s no different when it comes to distribution. If minimal costs are what you’re looking to achieve, the following will demonstrate which option will work best for your company. The exact costs for each of these modes of distribution will vary depending on the company you choose.
A truck is shown to be cheaper per load but offers less space than a rail car. One report shows that per load, a truck shipment can cost in the $5,000 range.
The same report shows that rail distribution was over $1,000 more than their truck counterpart. Although, a rail car can carry four times the load of your typical truck shipment.
As you can see, at first glance, truck distribution is cheaper, but if we take a closer look, rail is by far more cost-effective. And it is all due to the sheer amount each model can carry.
Is Speed Important?
Next, you will want to consider time efficiency and how crucial that is for your company. There is no defining answer on which method is faster or slower; it all depends on the distance your shipment needs to go.
Using rail for your distribution is a preferable time-saver when your shipment is going long distances, such as cross-country. Although, they can significantly slow down the distribution process when used for shorter-distance shipments. Freight trains often travel approximately 50 miles per hour. They also never have to stop for red lights and often don’t get obstructed by accidents. Freight trains can just keep moving.
The shorter the distance your shipment has to go, the more likely a truck will be a better option. That can also be the case for journeys with multiple obstructions. They can often reach higher speeds than freight trains (depending on the location) but will come into contact with traffic.
As you can see, due to all the variables, it is a case-by-case basis on which will work better. First and foremost, you need to determine the distance of your shipments when making a decision.
Do The Shipper and Consignee Have Access?
Despite rail seeming like a fantastic option, there is one thing that often leads companies to choose to distribute by truck. And that is the consignee not having access to the rail.
The consignee is the person or company your products are shipping to. They need rail access to receive and unload the shipment, many consignees do not have this option.
If this inhibits your ability to use rail solely, consider looking into a multimodal mode of distribution. That may allow you to utilize both freight and truck.
Choose What’s Best For Your Company!
Every company is different and requires different modes of transport for their products. Choose what’s best for your company – choose Overflo!
You can get a free rate quote today by filling out our contact form.