Britain’s RAIL Operations Group, a train operations company, wants to start offering its clients the ability to ship parcels by train.
Porterbrook, which leases train cars, will rent two Flex bi-mode trains to the RAIL Operations Group beginning in early 2020, the company says. Instead of carrying passengers, they will solely move packages.
According to Porterbrook, roads in the United Kingdom are getting more and more congested. Further, like the U.S., the U.K. is experiencing a shortage of truck drivers. That pushes labor costs up and could result in package delivery delays.
But the U.K. has the benefit of an expansive, well-connected rail system. If railcar manufacturers and operators can figure out how to design parcel delivery vehicles, rail shipping may become a viable alternative to traditional ground shipping — and an option that shippers in the U.K. should explore.
The Porterbrook-RAIL Operations Group deal
The RAIL Operations Group has ordered two trains from Porterbrook, the largest owner of passenger trains in the U.K. But these trains are for parcels, not people.
According to the International Railway Journal, the company “intends to offer the trains to single users where one customer fills an entire train, or to multiple users.”
“We are excited to be breaking new ground with ROG as we both move into light parcel logistics for the first time,” Porterbrook CEO Mary Grant told the International Railway Journal.
“Porterbrook is particularly pleased that ROG has recognised the potential for non-passenger use of our innovative Flex trains and over the coming months we will be exploring further opportunities to support the successful UK rail freight sector.”
“The time is right for a modal shift from road to rail for logistics and express parcels services,” ROG CEO Karl Watts added. “There is huge opportunity to re-establish a comprehensive network of express-parcel trains and help reduce the number of commercial vehicles on UK roads which will, in turn, help to drive improvements in the UK economy.”
A comprehensive network of express parcel trains would be hugely important for the U.K.’s parcel delivery landscape. The nation has a well-connected passenger rail network. Trains can move far more volume than trucks can, with great reliability and less pollution. For shippers as well as customers, adding trains to delivery networks could make things much easier.
How will this parcel delivery process work?
Parcelbrook’s new parcel-oriented trains are converted passenger trains. They will operate on both electrified and non-electrified routes, on existing tracks which connect most of the U.K.’s large and mid-size cities. The RAIL Operations Group has said it can rent an entire train to a single shipper or lease space on one train to several shippers.
Shipping via train differs in a few important ways from shipping via truck. First, trains can carry a lot more weight than trucks can without the commensurate increase in fuel spending. Second, while freight rail shipments may encounter some traffic on the tracks, rail service is generally more down-to-the-minute predictable than road shipping is. And third, rail requires a lot less labor — shippers can attach a large number of cars to a train and still only need one operator, rather than requiring an individual driver for each truck.
In the past, freight rail typically moved raw goods, like coal or lumber. Today, freight shipments usually include mass quantities of the same product, often sold to manufacturers or assembly plants rather than end users. In the U.S. and U.K., trains have seldom been used to carry fully produced goods to their buyers.
Most shippers have adjusted to the idea that, sometime in the not-too-distant future, many shipments will be completed by autonomous trucks. Amazon is building its own air fleet as it develops an end-to-end shipping service. But few organizations in the U.S. and U.K. have considered trains or other alternative forms of transit in their growth strategies.
In the U.S., it may be challenging for the parcel shipping industry to integrate rail. Passenger rail in the U.S. is limited in most regions. Large freight shippers like Union Pacific and BNSF control access to the tracks they own, giving them great control over which shipments arrive on time and which are delayed.
But in the U.K., wide adoption of rail as part of a parcel shipping strategy may be possible. Two trains is a small start, of course. But these railcars won’t take long to produce — Parcelbrook estimates that they will be operating in about a year. And this service will offer a framework for what a comprehensive freight rail network for small parcels could look like. In the next several years, we will be able to review data on reliability, speed and customer satisfaction.
If the RAIL Operations Group’s experiment is successful, international and U.K.-based shippers may need to talk to their carriers about whether rail makes sense for their shipping strategy — and American shippers may want to keep an eye on similar conversations here.
The Reveel App uses AI and machine learning to provide an unparalleled look into what’s impacting your bottom line. Through invoice audits, peer benchmarking, and rate modeling/simulations, you can see the health of your operation and assess pricing changes from parcel carriers like FedEx and UPS. Sign up for a free Reveel account today to see how you can leverage automation to synthesize your data, ship more for less, and reduce the time needed to identify issues and action items.