Glosario Logístico What are the Differences? Rail Transportation vs Truck Transportation

There are two main ways to transport goods globally: ocean and inland transportation. Inland transportation is the oldest form of transportation and refers to all logistics transportation activities that take place over land. Inland transportation includes rail transportation and trucking, which can be used to quickly and safely transport goods from short to long distances to wherever the customer wishes. Trucking and rail transportation account for 80-90% of all transportation modes in domestic logistics, making them increasingly important. In this article, we'll focus on how trucking and railroads differ in terms of distance, scheduling, cost, and environment, which have become increasingly important in recent years.

Rail transportation is an inland mode of transportation using locomotives and freight trains on railroad tracks.
American Land Bridge (ALB), Mini Land Bridge (MLB), etc. are intermodal transportation routes that combine rail and maritime transportation across the North American continent, such as China, Russia, and the United States. Trans-Siberian Railway (TSR), Trans-Chinese Railway (TCR), etc., combine rail and maritime transportation across the Asian continent, and are commonly used in countries and continents with long transportation times. These transportation modes are ideal for transporting grain, coal, ore, etc. because of their low freight rates for bulk, medium, and long-distance shipments.

Rail transportation is less affected by weather conditions and traffic congestion, which are the most concerning factors in transportation, and can be reliably transported over long distances. It can also carry a considerable amount of weight, which makes it suitable for large-scale transportation, making it ideal for intermodal use in combination with road freight.
Rail transportation moves one ton of cargo 500 miles per gallon of fuel, meaning that about one ton of cargo can travel about 804 kilometers on about four liters of fuel. It's about four times more fuel efficient than trucks, making it an environmentally friendly option.

It is the most commonly used mode of transportation for the movement of goods and is ideal for short-distance transportation, allowing for the continuous delivery of everyday items across countries and continents.
It is less expensive than other transportation systems such as sea and air, and it is the only mode of transportation that can reach areas that are not accessible by other transportation systems. It is also possible to transport goods internationally through cross-border trucking, which is trucking across borders.
Trucks can cross borders at designated points between two countries or in special lanes for international drivers, and this process allows for efficient transportation of goods.

Trucking offers flexibility in terms of duration, final destination, and volume of goods transported.
It can transport large and small shipments at a low cost, and the duration can be adjusted according to the situation. In addition, it can be adapted to the transportation of special products where the freshness of the product is important, such as frozen and refrigerated transportation.
In trucking, diesel can go 134 miles per gallon, which is about 215 kilometers per liter.

1) Distance
Trucking tends to be more frequent transportation of small loads, so it covers relatively short to moderate distances. On the other hand, railroad transportation is used to send large amounts of cargo over long distances. Therefore, rail transportation is more advantageous for long-distance transportation of large amounts of cargo, while truck transportation is more advantageous for short-distance transportation of parcels within a short time and door-to-door delivery.

2) Schedule (Lead Time)
Lead time is the time between production and delivery of goods to the customer. It is the most important factor in freight transportation because it gives customers confidence and improves the quality of the goods.
Trucking is much more favorable than rail transportation when it comes to lead time. This is because trucking enables door-to-door transportation. Trucking can be involved in the entire process of transporting raw materials, producing products, and delivering them to customers. As a result, it can deliver cargo to customers much more quickly and shorten delivery times compared to rail transportation.
On the other hand, rail transportation is less affected by weather conditions and traffic congestion because it follows a fixed route and transports large volumes of cargo. However, it takes a lot of time compared to trucking. Moreover, to deliver the cargo transported by rail transportation to the customer, intermodal transportation using freight cars is required. Therefore, it has a longer lead time compared to trucking, which directly delivers goods.
In addition, rail transportation requires dwell time, which is the time spent waiting at the terminal to move to the next destination, for reasons such as clearing traffic in front of the train and idling.

3) Road Cost
Freight cars are mainly used for trucking. The transportation cost for freight cars is divided into distance-based and demand-based rate, and the distance-based rate is divided into four: uniform freight rate, regional freight rate, pro-rata freight rate, and tapering rate.

Uniform Freight Rate
Rate that applies regardless of the region and transportation distance.

Regional Freight Rate
Rate developed by carriers to cope with competitors' rates and simplify rate publication and management. It is applied to transportation from the origin to a specific region.

Pro-Rata Freight Rate
A per-distance rate where the rate is paid in proportion to the distance traveled.

Tapering Freight Rate
Rate where the unit price decreases as the distance traveled increases.

Demand-based Freight Rate
Rate that is set based on the value of the transportation service, with the rate for a particular transportation service being determined by the demand of the shipper or carrier.

4) Rail Cost
Rail freight is typically calculated by multiplying the per-ton fare for each distance category by the number of tons being transported, based on the base rail rate.
General cargo rate is calculated by multiplying the transportation distance by the unit fare and the cargo weight. When calculating the rate, distances less than 1 km and general cargo less than 1 ton are rounded up.
For general cargo, cargo loaded in a car is calculated on the basis of one car, and containerized cargo is calculated on the basis of one unit per specification.

5) Cost
In terms of cost, trucking has an advantage over rail transportation. This is because the common criterion for both is the distance of transportation, which is shorter for trucking compared to rail transportation. In addition, since rail transportation carries large amounts of cargo, while trucking carries relatively light cargo, trucking is also more favorable in terms of freight rates based on weight.
Due to the high volume of transportation and the high freight rates for rail freight, the cost of using the tracks is higher than the tolls on the roads.
However, for long-distance, bulk cargo transportation, rail is more economical than road. This is because the amount of fuel used by trucks increases dramatically over long distances.


6) Environment (Carbon Emissions)

The above pie graph shows the distribution of carbon dioxide emissions by mode of transportation in 2022, and in the graph, the percentage of trucks used for trucking is about 25% compared to 1% for rail. This shows that nearly 25 times more carbon dioxide is emitted by trucks than by rail. The reason for this result is that railroads emit less carbon dioxide because they run on electricity, compared to freight cars that use coal and refined petroleum as their main fuel source, which has led to a revolutionary reduction in carbon emissions. From this point of view, rail transportation is much more favorable than truck transportation from an environmental point of view. Therefore, the world is on the path to carbon neutrality through the modal shift policy, which is a move to replace trucking with rail transportation, an environmentally friendly mode of transportation.

1) Rail Transportation

Slowing greenhouse gas emissions and increasing sustainability
Rail transportation uses significantly less energy per ton than trucking and produces less carbon dioxide emissions than trucking, making it a greener option.

Efficiency
Rail transportation is economically efficient for long-distance transportation because it can transport more goods than trucking.

Safety
Reliable transportation over long distances, less affected by weather conditions and traffic jams. As a result, there is a low failure rate of deliveries and a very low risk of theft.

Plannability
There are no sudden traffic jams, signal breakdowns, or other unexpected problems, so delays are rare and deliveries are within the expected time frame.

2) Truck Transportation

Low transportation cost
Trucking is one of the cheapest forms of freight transportation. It also does not require complex packaging compared to other forms of freight transportation, which makes it cheaper to pack.

Ideal for short-haul transportation
Perishable goods or goods where freshness is important are best suited for short-distance transportation.

Increased flexibility
It is possible to adjust the transportation route and timing to suit the goods, ensuring delivery to the destination on time. Additionally, transportation can be carried out to almost all regions.

1) Rail Transportation

Low Flexibility
There is less flexibility at any given time because the transportation is done according to the train's timetable and can only be done on fixed routes.

Infrastructure shortage
Outdated railroad infrastructure and lack of network capacity. Unforeseen events rarely cause extended transit times, but if they do, they can result in lengthy delays and canceled trips.

2) Truck Transportation

Traffic obstacles
Trucking relies heavily on roads, so when traffic jams start, goods can be delayed, and due to the vagaries of weather, accident rates are higher than other modes of transportation.

Unsuitable for long distances
It is difficult to transport a heavily loaded truck over long distances. Also, there are many unexpected things that happen on the road, making them unsuitable for long-distance transportation.

Rail transportation can transport approximately 1 ton of cargo about 804 kilometers with about 4 liters of fuel. It is about 4 times more fuel-efficient than a truck, making environmentally friendly transportation possible. In Europe, approximately 80% of all rail transportation kilometers are covered by electricity, resulting in almost no direct greenhouse gas emissions.

Due to unexpected traffic congestion and weather conditions on the roads, truck transportation is vulnerable to accidents. However, rail transportation operates on fixed routes, eliminating the risk of accidents caused by traffic congestion and weather conditions, making it a safer mode of transportation.

The minimum freight rate is not calculated in the same way as in truck transportation but rather in the manner used for air transportation. For it to be an answer, it should be a demand-based rate. The minimum rate refers to the lowest possible rate that can be applied to a single cargo shipment in air transportation.