Why Savvy Executives Are Quietly Adding Rail to Cut Costs and Futureproof Their Supply Chains

U.S. CEOs are reworking their shipping plans this year, and for many, what looks like environmental consciousness is actually about protecting margins. With trucking costs averaging $2.05 per mile for dry vans and freight volumes creating capacity crunches, executives are discovering that rail offers a practical path to slash emissions whilst tightening operational budgets.

Rail is about four times more fuel-efficient than trucking. The efficiency gains become even more striking when you consider capacity: a single rail car can hold as much as 3–4 truckloads of cargo, whilst a single freight train can haul as much cargo as 300 trucks carry.

The Hard Economics Behind the Rail Revival

Brian Gorton, President and CEO of Conrail Corporation, puts it bluntly: ‘Prioritising sustainability goals through transportation strategy has the potential to improve the bottom line, whilst improving the environment and providing a competitive advantage.’ His company, the nation’s largest switching and terminal rail service provider, is seeing firsthand how sustainability can be sound business.

The fuel efficiency differential is difficult to ignore. A freight train can move one ton of goods over 470 miles per gallon of diesel fuel, compared to a truck moving that same ton only 134 miles. For companies watching every penny on fuel costs, that’s a 251% efficiency improvement. Rail emits 75% fewer greenhouse gas emissions than truck shipping, which matters less for virtue signalling and more because EPA compliance pressures are mounting for this year and beyond.

There’s also the infrastructure angle that finance teams appreciate: rail doesn’t use highways and therefore requires no public expenditure on road wear and maintenance. Like smart property infrastructure that cuts long-term costs, rail represents one less regulatory squeeze to worry about as public infrastructure spending faces scrutiny.

Five Steps to Rethink Your Freight Strategy

Gorton recommends five practical steps that focus on logistics efficiency rather than ESG box-ticking. Each connects directly to cost control or regulatory cushioning:

First, review logistics planning from ground zero. Logistics plans become embedded in operations, but factors change over time. Taking a fresh look at this year’s plans can reveal meaningful cost and sustainability advantages that weren’t visible when the original plans were locked in.

Second, consider inter-modal shipping options. The old single-mode approach is giving way to combined train and truck shipping that maximises both savings and environmental benefits. Recent market analysis shows inland rail terminals have ample capacity, encouraging more shippers to adopt intermodal solutions for improved cost savings and reliability.

Third, work with vendors to explore their alternative options. Shipping isn’t only outbound. Working with leading vendors to explore rail alternatives can reduce inbound shipping costs without additional expense to either customer or vendor.

Fourth, upgrade shipping technology. Transportation Management Systems, AI and machine learning enable more effective predictive routing and cost forecasting. Modern technology helps plan routes and modes designed to improve efficiency alongside sustainability.

Fifth, reexamine load consolidation strategies. What has changed in your shipping requirements over recent years – needs, costs, routes, customer demands, load opportunities? Review alternative shipping methods that take advantage of those changes.

Onshoring Creates New Rail Opportunities

The current U.S. economic trend towards onshoring creates opportunities for updated supply chain approaches. More products manufactured in North America can be shipped via rail, or rail combined with other transportation modes. Companies like General Mills report increased logistics network costs due to high demand and the need to secure capacity from expensive spot markets.

Manufacturing reshoring from Mexico and other nearshore locations is creating freight patterns that favour rail over traditional trucking routes. Companies are using this supply chain pivot to renegotiate rates and rethink contracts whilst protecting supply reliability. The timing works well, as railroad earnings reports show capacity constraints due to increased U.S.–Mexico trade, but also investment in technology and sustainability improvements.

Similar to how strategic resource investments optimise efficiency through modern tools, rail adoption benefits from technological advances that make multimodal shipping more practical than ever.

Fast Facts for Decision-Makers

The key numbers warrant attention from any executive reviewing freight strategy:

• Rail emits 75% fewer greenhouse gas emissions than truck shipping
• Single rail car capacity equals 3–4 truckloads
• Single freight train capacity equals 300 trucks
• Rail moves freight 470 miles per gallon vs truck’s 134 miles per gallon
• Rail requires zero public highway maintenance expenditure

These aren’t sustainability talking points – they’re efficiency metrics that translate directly to operational costs and regulatory compliance positioning.

Results Not Grandstanding

Gorton’s recommendation focuses on efficiency and scale rather than price increases: ‘Instead of focusing on raising prices due to increased shipping costs, companies can focus on reducing costs by discovering and implementing greater efficiencies and economies of scale. Rail’s competitive potential can be amplified under this scenario and support easier plans for achieving corporate goals of profitability and sustainability.’

The approach works because it addresses multiple pressure points simultaneously. Regulatory pressure from EPA for stricter emissions standards creates compliance costs, but rail’s inherent efficiency provides a buffer. Rising trucking costs and capacity constraints make rail’s economies of scale increasingly attractive.

For executives facing margin pressure and regulatory uncertainty, rail offers a practical hedge. It’s not about environmental virtue – it’s about operational intelligence. Companies that recognise this dynamic early are positioning themselves to outperform rivals who remain locked into traditional trucking-heavy logistics models.

Given current trade volatility and freight market conditions, executives should review their logistics plans now. The economic and regulatory winds favour those who can adapt their freight mix before competitors catch on.