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Riding the Rails

The first several months of 2017 was busy for U.S. railroads with a reported 12,045,206 carloads and intermodal units shipped via rail for the first 27 weeks of the year – an increase of 4.4 percent compared to the same period in 2016.

An increasing amount of construction material is included in these shipments, according to the American Association of Railroads (AAR). Approximately 1.5 million carloads of lumber, steel and aggregates travel via rail each year, with volume increasing as the construction industry recovers from the Great Recession of 2007 to 2009.

AAR reports the following 2015 statistics:

  • Railroads moves 36 million tons of lumber and wood products
  • There is an 89 percent correlation between rail carloads of lumber and housing starts
  • Freight railroads deliver 43.6 million tons of steel
  • Although most steel is used to manufacture products, 20 percent of all steel goes into construction
  •  One rail car can carry the same amount of aggregates such as sand, gravel and crushed stone as four truck-trailers, which accounts for the increase in aggregate shipping by rail

Although aggregates do not usually travel across multiple states, the reduction in the number of trucks required to carry the material translates into multiple benefits, especially in a state like Texas, which has a growing population and a high demand for aggregate materials.

“Rail transportation is more efficient to transport a bulk commodity like aggregate, especially in large volumes,” explains Geno Carrier IV, supply chain director for rail and aggregates at East Texas Asphalt Company in Lufkin, Texas, an AGC of Texas Highway, Heavy, Utilities & Industrial Branch member. Working with railroads Union Pacific and BNSF to transport aggregates from East Texas’ plants and railyards to customers enables the company to deliver material more quickly and to reduce truck traffic on highways, he points out.

“We can ship 10,000 tons of material on one train, which would require 400 trucks to transport,” says Carrier. “Even when we offload to trucks for delivery to the jobsite, we’ve reduced the distance trucks must travel.” Reducing that distance reduces costs, time and negative impact on the environment, he explains. “Even if the construction project is smaller and does not require an entire train, there are cost and time benefits,” he adds.

Railroad companies are paying close attention to contractors’ shipping needs to make sure services that support timely, cost-effective delivery are available. At Union Pacific Railroad, annual customer surveys along with individual feedback from potential and existing customers are used to evaluate the railroad’s services, says Kenny Rocker, vice president and general manager for industrial products at Union Pacific. “In addition to enhancing technology to make the process more user-friendly for customers, we offer other value-added services.”

Union Pacific ships all of the main materials used for commercial construction projects – everything from lumber, rebar, cement and aggregates all the way to pre-fabricated components, points out Rocker. “Last year, Union Pacific shipped approximately 175,000 carloads of lumber and wood products, and nearly 430,000 carloads of aggregates,” he says. “We can ship product filling a single rail car all the way up to a 100-rail car train of product, allowing us to meet customer needs whether they are large or small.”

Even if direct rail access is not provided by Union Pacific, the rail company’s service includes working with other North American rail partners to create “thru-rates,” which are transportation plans and one price for the entire rail move, even if Union Pacific has to hand off or take possession of a shipment from another railroad, explains Rocker. “This allows us to seamlessly complete shipments across the country.”

Seamless completion of the shipping process is also enabled by Union Pacific Distribution Services (UPDS), a wholly-owned subsidiary of the railway, explains Rocker. “UPDS helps customers find rail loading and unloading locations that best fit the requirements of the products shipped and the end location where it is needed,” he says. “UPDS allows us to not only land rail shipments near construction project destinations, but also to provide trucking directly from the rail unloading location to the jobsite.”

Although many people think of trucking as a faster mode of transportation, that is not always the case, says Carrier. Weather, road construction, traffic volume and distance may all affect timeliness of deliveries by truck.

“Rail allows for economies of scale, which means customers can ship more product at once usually at a lower cost than trucking – allowing completion of construction jobs in a more cost effective and timely manner,” says Rocker. Use of a service like UPDS provides the additional advantage of a dedicated logistics representative who tracks shipments to destination. “The additional logistical support enables contractors to take advantage of forward-staging, which is a process in which an unloading location is used to receive products shipped via rail ahead of the start of a project and then truckload quantities are shipped to the jobsite as they are needed throughout construction,” he explains. This is especially beneficial when a jobsite has limited space to store materials that are not immediately needed.

There are several safety benefits to using rail to transport construction materials. Not only is road safety improved with the reduction in truck traffic, but  railway safety has improved as investment in rail infrastructure has increased. According to March 2017 Federal Railroad Administration data based on per million train miles, since 2000:

  • Train accident rate is down 44 percent
  • Equipment-caused accident rate is down 34 percent
  • Track-caused accident rate is down 53 percent
  • Derailment rate is down 44 percent

More importantly for contractors shipping material, rail is increasingly safe for products from a damage standpoint, says Rocker. “We have resources in place to customize loading and off-loading processes to optimize efficiency and safety for each shipment,” he says.

Although there are many benefits to rail transportation, Carrier does point out that there are factors contractors must consider. For example, rail does not allow for “just in time” delivery of materials, so contractors must plan ahead, he says. “Realistically, we need a couple weeks of notice to make sure we have the material in the railyard, ready to ship when needed,” he says. “The advantage for contractors working on large projects is that we can ship more per day via rail than by truck, which means more material on-site at one time and less downtime as a contractor waits for a shipment.”

Contractors should not discount the environmental benefits of rail, suggests Rocker. As more companies commit to green or environmentally conscious business practices, rail provides an important eco-friendly alternative to trucking. “On average, one rail car moves the equivalent of four lumber truckloads, reducing transportation costs and highway congestion,” he says. “With one ton of freight moved 452 miles on a single gallon of diesel fuel, rail transportation aligns well with construction industry efforts to maintain a smaller carbon footprint.”