Abstract
The supply chain depends on the efficient management of logistics and resources to get raw materials and products from one place to another. This movement also called the transportation of goods, depends on various modes such as shipments by truck, ship, train and plane. This essay focused on rail transport and qualitatively reviewed secondary data about the role of rail transport and its impact on the supply chain. From the results, it was evident that trains are dependable than trucks, ships, and planes in terms of distance, cost and volume of goods being shipped. However, rail transport has delays and shippers cannot track their goods.
Introduction
The supply chain depends on the efficient management of logistics and resources to get raw materials and products from one place to another. This movement, also called the transportation of goods and services, is dependent on various modes such as shipments by truck, ship, train, and plane — also known as road, maritime, rail, and air shipments (“Blume Global,” 2019). While each of these modes of transportation has unique benefits, knowing which method is right for your business requires careful evaluation (“Blume Global,” 2019). This essay will focus on rail transportation and the logistics involved in moving raw materials and finished products from one business end to the other of the chain and using rail. Additionally, the essay will look at the impact rail transportation has on the supply whole supply chain.
Literature Review
A supply chain has three main components, namely purchasing, manufacturing and transportation. For companies to get raw materials to their manufacturing plants and for efficient distribution of products to the market so that customers can buy them, transportation is key (“Prologis,” 2021). It starts at the beginning of the supply chain when raw materials are moved to the warehouse and continue all the way to the end-user when consumers’ orders are delivered to their homes. Transport plays a significant role in overall operational costs incurred by companies (“Prologis,” 2021). Therefore, it is prudent that each and every firm should use the best mode of transportation, which is effective, and efficient, and delivers materials and products at a lower cost.
There are many modes of transportation in the logistics industry, each having its own advantages and limitations. The method you choose to use will depend on the cost involved, the weight of the materials or products, the availability of transport methods, and the time taken to deliver materials or products (Philpott, 2017). For example, industries that need to transport heavy products usually go for railway transportation along with road and Maritime transportation (Philpott, 2017). Among the three modes, rail is the most dependable because, unlike road and marine, rail is not affected by weather conditions (Philpott, 2017). The train has the capability to run in rain, fog, snow, and other climatic conditions that would likely delay or affect transportation using other methods. Besides, trains have fixed time schedules that run regularly, creating certainty to supply chain players compared to other shipment modes (Philpott, 2017). In addition, the rail method always has a huge capacity to carry more materials and products. Unlike other modes with fixed capacity, additional wagons can be added for trains if there is a growing need for more spaces.
Trains are more cost-effective when moving materials and products over long distances. For instance, when shipping goods over 1000 miles, where time is not a factor, rail is the best method to use (Aktan, 2019). Rail transport is normally 10% – 15% less expensive when compared with other modes of transport over long distances (Aktan, 2019). On the other hand, when compared to transporting materials and products by a barge on an inland waterway are more expensive but faster.
Railroads are also friendlier to the environment than other transportation methods because trains burn less fuel per ton-mile than trucks (Aktan, 2019). Studies elsewhere by the Association of American Railroads, according to Aktan (2019), revealed that rail shipments do reduce gas emissions by 75% compared to trucks. Rail transport is also a very convenient mode of shipment for those who intend to use an intermodal strategy. Using trains as part of an intermodal plan whereby companies use more than two modes of shipping freight, has significant benefits (“Barloworld Logistics,” 2017). Some of these benefits of trains in the intermodal transport solution are time-saving, which saves money, and reduction in delays caused by traffic congestion and driver fatigue (“Barloworld Logistics,” 2017). Further, rail transport is having commodity flexibility and safety mechanisms-all types of goods can be transported via rail, and it is safer than other modes of shipment.
However, there is a lot of variability between what rail transport envisions and what it actually delivers. Currently, it is difficult for shippers to fully rely on trains are the primary mode of transportation or of their choice because there is a huge variation in time before materials and products are delivered. This makes shippers and their customers invest in alternative safety stocks to keep their businesses running (Bowman, 2019). Rail transport, just like ocean transport, has a large community of service providers beyond the Class 1 carrier (Bowman, 2019). In the supply chain business, shippers require a one-stop-shop to get maximum visibility and tracking of their materials or products (Bowman, 2019). This is not possible with rail transportation due to too many cutouts and too many blind spots in the supply chain.
There are a number of cases pointing to this problem globally. For example, in North America, their 600 or more individual railway companies, with only seven Class 1s, and an awful lot of Class 2s and 3s (Bowman, 2019). These groups tend to be the face of the industry to many shippers because they’re the ones that pick up and deliver (Bowman, 2019). The challenge is, once the short line hands the traffic over to a Class 1 for a transcontinental haul, they lose all control and visibility, just like the shipper, because the information is not shared with them.
Methodology
The qualitative techniques of data collection, including review of literature, reports, articles, and relevant online materials, and analysis of case studies, were appropriately used to analyze and evaluate this topic and draw a conclusion. Therefore, data gathering purely relied on secondary information already available and published on other media, libraries, journals, or websites elsewhere. Lastly, the analysis involved reading through the secondary data and extracting information relevant to the topic.
Results
Rail transport is the longest mode for shipping cargo, materials, or products and it was there before the advent of highways and flights. Today the once more vibrant rail transport is faced with an array of issues that negatively impact the supply chain. Since the begging of 2019, the downward trend of challenges has continued to pain the rail transport system leading to declining in its dependency by the industry players. For example, a recent report of rail traffic by the Association of American Railroad (AAR), indicates a 7% drop in rail carloads, a figure which represents a drop of 74, 172 carloads (“Nvision Global,” 2019). The commodity categories tracked by AAR revealed a huge decrease (“Nvision Global,” 2019). This could be attributed to the increased tendency of shippers to control more of their supply chains resulting in them relying on none rail transport modes.
Nonetheless, the economic growth of any country is dependent on its freight transportation capabilities. Rail transport is still and will continue to play an important role in the supply chain. The advancement of technology has seen tremendous improvement in freight rail networks globally. Railroads are and will continue to keep trains moving, providing critical services to manufacturers, retailers, and customers, and meeting the anticipated 30% increase in future freight demand (“Association of American Railroads,” 2019). For example, in the first half of 2021, rail transport carried the largest volume of intermodal traffic in the United States (“Association of American Railroads,” 2019). Rail transport plays a key role in the supply chain in that it reduces traffic on the roads, as more people and goods move from one place to another using train (Mei & Afli, 2017). This ensures that goods, products, and raw materials reach their destinations on time (Mei & Afli, 2017). Likewise, people get to work on time, and various supply chain systems flow efficiently without breaking into many countries with world-class train networks, including the U.S., China, and Europe.
Conclusion
Rail transport in dependable than road, marine, and air because it is not affected by weather conditions. Trains also have fixed time schedules which creates certainty in the supply chain, and they have the capacity to carry large tones and volumes of materials and products. Further, trains are cost-effective over long distances, the best in terms of intermodal transport solutions. However, rail transportation has a serious weakness: there are delays in the delivery of materials and products to suppliers, manufacturers, and customers. The shippers also lack the mechanism to track their goods in transit.
References
Mei, J., & Afli, E. M. K. (2017). The impact of transportation management system on the supply chain management: the effectiveness of Chinese online shopping delivery – the “kuaidi” system. European Journal of Logistics, Purchasing and Supply Chain Management, 5 (2), 1-9.
Association of American Railroads. (2019). Freight railroads: A 24/7 link in the U.S. supply chain. Blume Global. Web.
Nvision Global. (2019). Supply Chain. Web.
Bowman, R. J. (2019). Railroads need to step up their game, a new report says. Supply Chain Brain. Web.
Barloworld Logistics. (2017). Supply Chain Solution. Web.
Aktan, I. (2019). An overview of railroads in logistics and transportation. Web.
Philpott, M. (2017). What are the different modes of transportation in logistics? Philburn.
Prologis. (2021). The role of transportation in supply chain management. Web.
Blume Global. (2019). Railroads’ role in the U.S. supply chain.
Blume Global. (2019). Mode of Transportation in the Global Supply Chain.