Freight Rail’s Big Boost to American Business

How do American businesses reach new customers, create new jobs and grow their bottom line? By always innovating and finding more efficient, more affordable ways to sell their products to customers across the country and around the world.

Increasing the speed and reducing the cost of transportation is a big part of this puzzle. And it is a big reason why businesses increasingly call on freight rail. Here are just five industries that benefit from America’s world-class freight rail network.

 

Building a “new” New York

In 2011, the opening of Brookhaven Rail Terminal (BRT) supercharged the homebuilding industry on New York’s Long Island. LBM Advantage, a not-for-profit cooperative that supplies lumberyards, and Home Depot were two companies that immediately benefitted from the opening of the freight rail terminal. Together, they now ship millions of dollars’ worth of lumber into BRT each year. In the process, they’ve reduced transportation costs and shipping time by avoiding the delays and expenses that come with navigating New York City’s crowded toll roads.

“We treat BRT as an extension of all we do,” said Andy Polbos of LBM Advantage. “We’re looking to expand and transport drywall, roofing shingles and more. I can’t emphasize enough how important the facility has been for us.”

Business has been so brisk at the terminal that just five years after opening, Brookhaven began adding new track and expanding overall capacity to meet growing demand. In addition to erecting additional buildings for storing and cutting lumber, there is talk of building a large food distributorship at the terminal, which would create hundreds of permanent jobs.

The Seeds of Economic Growth

In Tuscola, Illinois, American fertilizer manufacturer Cronus Chemical is building a new $1.5 billion facility to produce fertilizers for local farmers. Though the facility seemingly sprung from the fertile farmland upon which it sits, this high-tech facility is really only possible because of freight rail.

Long before Cronus Chemical considered building a new facility in Tuscola, the freight railroad CSX Transportation began the process of identifying a location suitable for large-scale economic development. After identifying 240 acres just outside of downtown, CSX began the permitting process with Tuscola officials in order to clear some of the hurdles that would face a future business wanting to build on the site.

Today, Cronus has started building its new fertilizer plant on the site first identified by CSX. When complete, freight rail will deliver raw materials directly to the facility via a dedicated rail spur. And inside the building, 175 employees will take those raw materials and create a new generation of fertilizers made in the USA.

Putting the Pedal to the Metal

Freight rail provides swift and safe service to an automotive industry that stretches across North America. Railroads start by transporting the iron ore and coke needed to produce the high-quality steel that make up modern cars. After steel mills convert these raw materials into steel slabs, ingots and billets, railroads transport them to rolling and finishing mills. Here, they are transformed into semi-finished products and put back on trains headed to auto part manufacturers. After the parts are made, it’s onto auto manufacturing plants (again, via train) where new vehicles are finally assembled. And once a new car emerges from the assembly line? It’s back onto a train to be delivered to a dealership near you.

You might also likeDesigned to Drive a NationFreight rail has played a crucial role in the American auto industry since the earliest Model T rolled off the assembly line.

Each year, nearly three-quarters of the new cars and light trucks purchased in the U.S.—approximately 17.6 million in 2016—are moved by freight rail. Transported in specially designed “autoracks,” freight railroads can move approximately 750 automobiles at once, while ensuring that yours arrives to you without a scratch—and with the perfect new car smell.

Grain Gains

Among the low-slung warehouses of Kokomo, Indiana, a series of white and silver silos rise towards the sky. Running alongside these iconic Midwest landmarks are railroad tracks—the connective tissue that allows Kokomo Grain to quickly load an entire train with grain, and send that grain, non-stop, directly to its final destination. This seamless and uninterrupted service has given the company a major competitive advantage and allowed it to grow into a regional operation with 10 grain elevators in two states and sales in excess of $425 million.

You might also likeMoving Waves of GrainThe U.S. is the world’s top grain producer, but getting it all to market is no easy task.

Freight rail has also allowed Kokomo Grain to better serve American farmers. According to CEO Scot Ortman, “The economies from volume shipping have allowed us to give farmers a better price for their grain. It’s money in their pockets and local communities’ and delivers real savings for millions of consumers who buy food, feed or fuel derived from our grains.”

Everyday Freight

The furniture, fresh food and countless goods and commodities you use every day? Freight rail delivers that too. Thanks to massive investments over many decades, freight rail has built an intermodal freight rail network that—together with trucks and cargo ships—delivers 54 tons of goods and commodities for every American, every year.

Schneider Transportation and Logistics is one of the many freight rail partners who rely on the unique economies of scale and fuel savings achieved by railroads. While freight moves long-distance on trains, Schneider uses a finite supply of trucks to handle more local deliveries. This cooperative approach helps Schneider handle more cargo with a limited supply of trucks. Freight rail also helps ease an ongoing shortage of truck drivers by allowing Schneider’s truck drivers to stay near home, an advantage for driver retention and recruiting for the company.

You might also likeMilestones in the Growth of IntermodalContinued innovation in the U.S. intermodal rail network reduces shipping costs, delivery time & congestion on our nation’s roadways.

According to Jason Howe, regional vice president with Schneider, railroads’ continued investment in intermodal infrastructure ultimately benefits the businesses that call upon railroads and trucks alike. “This is about a multiplier effect,” he said, “allowing us to do more by moving more cargo with the same number of trucks on the road.”

Further Reading

Four Rail Cars. Loads of Possibilities.

The foundation of modern American cities and towns — and the infrastructure we use to travel between them — wouldn’t exist without freight rail.

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3 Ways Freight Rail Moves More

The improvements freight railroads are making today ensure world-class service for industry customers, tomorrow.

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