Why should industrial shippers consider rail?

March 8, 2024

We weighed the economic benefits and the environmental effects of switching to rail transport. We must also take into account the evolution of the EU's legal perspectives on industrialization and sustainability.

In the words of Robert Swan,”The biggest threat is the belief that someone else will“, the European Union has come a long way in its efforts to promote sustainability globally, by incorporating initiatives fuelled by the vision of a greener earth. The statistics clearly show that every industrial sector in the EU has significantly reduced its CO2 emissions in recent years. Thanks to cutting-edge innovation and the development of revolutionary alternatives for the most mundane industrial processes, if we consider the last 30 years (1990-2020), carbon emissions declined by 32% in almost all industries. In the energy sector alone, greenhouse gas emissions fell by 46% over the same period. In the manufacturing and construction sectors, they fell by 44%. Looking at these numbers, we are all ready to believe that these initiatives have delivered the expected results. Isn't that right? Here is the twist!

The Twist

The transport sector in the EU is the only sector whose carbon emissions increased by 7% between 1990 and 2020. Are you surprised? Well, we cannot understand the developments that have increased this figure for the transport sector without understanding how the entire freight ecosystem works.

It is obvious that since the beginning of civilizations, transport has been accompanied by dynamic developments, growth and connectivity. This is why a unit dedicated to logistics and transport has always been an integral part of any business that has developed over the years. With the expansion of the ecosystem of industries and the increase in demand for products globally, the number of commodity manufacturers entering the game has increased significantly. As a result, the demand for freight services has grown exponentially. For decades, waterways have been regularly used for expeditions around the world. But as we said, with the increase in demand and the expansion of territories, there is a constant need to transport goods inland, to places far from ports. This is where the preeminence of land transport emerged. Choosing the type of land transport was a strategic decision for manufacturers: Should we choose rail or road?

Why rail?

Reports indicate that the European road freight transport market is expected to reach 507 billion USD by 2028, compared to 410 billion USD in 2022. Furthermore, trends in previous years suggest that around 75% of inland transport in the EU region was road. As many manufacturers have opted for road transport, rail freight remains unexplored territory by many. The problem is that setting up a rail freight business unit and adapting it to current business goals is not easy. It requires strategic planning to implement it. In addition, not all goods can be transported by rail. Fuel consumption is therefore increasing every day in the EU, which explains the growth in carbon emissions in this sector.

Why should we consider rail? Let's try to assess the advantages of switching from road transport to rail freight transport for a manufacturer of bulk products. Generally speaking, a freight train in the EU is around 700 meters long. In addition, it can be manipulated by a single pilot or a maximum of two pilots in a given geographical area. Thus, starting from the essentials, a train can efficiently transport goods equivalent to the quantity carried by nearly hundreds of trucks, handled by a maximum of two people, in the same period of time. Sounds convincing, right? In terms of cost optimization, rails offer less resistance to trains than roads to trucks, which significantly reduces fuel consumption, always over the same period of time. In addition, trains do not need to accelerate or slow down repeatedly in small intervals of time, unlike trucks that face uncertainty on the roads. This regular regime again suggests a reduction in train fuel consumption for the same distance. In summary, it is obvious that rail transport reduces greenhouse gas emissions by 75% and reduces congestion and road wear.

An additional advantage

In addition to being efficient economically and environmentally, rails offer a better combination of confidence and performance for shippers. With top-notch solutions like TVMS d'Everysens, the transport and visibility management system, rail freight offers shippers better visibility of their shipments and provides reliable data points like ETAs, wagon availability, platform availability, and much more. In addition to greater visibility, TVMS also automates all logistics operations, from the most mundane to the most complex. Given these advantages, leaders from various sectors have adopted a rail freight transport method to move their goods, partnering with Everysens for TVMS for the obvious benefits.

Is that all? No, that's where it starts. While we have weighed the economic benefits and environmental effects of switching to rail transport, we must also take into account the evolution of the EU's legal perspectives on industrialization and sustainability. The EU has set itself the goal of becoming climate neutral by 2050. This is an important step in the effort to make the earth greener than ever. To be more specific, the FQD, the fuel quality directive, established a standard for fuel suppliers to reduce the emission intensity of their fuels by 6%, of which 5.6% were achieved by 2020. This is a clear sign that EU members are collectively in favor of promoting sustainability at the base of industries, some of which comes from logistics. It is high time for shippers around the world to turn to rail freight. With regard to the reliability and efficiency of rail freight, Everysens, with its TVMS, helps shippers decode best logistics practices.