Transportation strategies are built around assumptions about fuel, rates, service, volume, inventory and available infrastructure. When those assumptions change, some freight lanes deserve another look.
In January, we published How Manufacturers Can Reduce Freight Costs in 2026 Without Adding Risk . One of the central ideas was that transportation should be reviewed as part of the broader production and supply-chain strategy—not treated as a decision that gets made once and left unchanged.
Eight months later, the market provides a useful example of why.
U.S. average on-highway diesel retail price. Source: U.S. Energy Information Administration .
Fuel is only one part of freight economics, and a higher diesel price does not automatically make rail the right answer.
But when a major transportation input changes this much, it is reasonable to revisit decisions made under very different conditions.
Norfolk Southern is seeing the freight equation change
This week, Norfolk Southern provided a timely real-world example.
Speaking at the Morgan Stanley Laguna Conference on September 15, Norfolk Southern Executive Vice President and Chief Commercial Officer Ed Elkins said higher trucking costs are helping the railroad gain freight share in domestic intermodal and merchandise markets.
The categories he identified included coiled steel, paper products, consumer goods and lumber.
Some freight is being reconsidered now—not theoretically.
Norfolk Southern's comments are notable because they move the discussion beyond the general idea that rail can be fuel-efficient. The railroad is reporting actual freight-share gains from trucking in several commodity groups as transportation economics change.
Read the Trains report on Norfolk Southern's comments .
There is an important counterpoint: higher fuel prices affect railroads too. Norfolk Southern Chief Financial Officer Jason Zampi said the current fuel environment is expected to create roughly a 2.5-percentage-point headwind to the railroad's operating ratio during the third quarter.
So the takeaway is not “diesel is high, therefore use rail.”
The useful question is whether today's rates, fuel environment, distance, payload, service requirements and handling costs produce the same answer as the last time a lane was evaluated.
Which freight lanes are worth another look?
Not every shipment needs a modal review.
Short-haul freight, highly time-sensitive shipments, irregular movements and small volumes may remain obvious truck moves.
The opportunities are more likely to appear where freight has characteristics such as:
- Meaningful annual tonnage
- Repeat origins and destinations
- Longer line-haul distances
- Heavy or dense products
- Predictable replenishment patterns
- Rail-compatible loading, unloading or transload options
Even then, transportation cost is only part of the analysis.
Service requirements, inventory, railcar availability, handling, local trucking, facility constraints and production schedules all matter.
The objective should not be to prove that rail is cheaper. The objective should be to determine which transportation plan produces the best overall result for the operation.
Two things can change the calculation
1. A facility does not always need its own siding
A rail-to-truck transload facility can allow the long-haul portion of a movement to travel by rail while trucks handle the local connection to a plant, warehouse or customer without direct rail access.
Transloading adds another handling step and must be evaluated as part of the total cost, but it can create an option for companies that previously dismissed rail because track does not reach their property.
2. Rail visibility is better than many shippers remember
Inventory planning is another concern companies often raise when evaluating rail.
LA&L family railroad customers can use RVP and RVP+ rail visibility and planning tools to monitor inbound and on-hand railcars, review shipment information, manage railroad requests and, where available, connect expected railcar supply with future demand.
Better visibility does not make rail appropriate for every lane, but it can make railcars easier to manage as part of inventory and production planning.
Steel is a good example of why this matters
Norfolk Southern specifically identified coiled steel among the merchandise categories where it is seeing freight shift from trucking.
That connects directly with a topic we examined recently on the Western New York & Pennsylvania Railroad in Steel, Metals & Scope 3: Why Transportation Mode Matters .
Steel makes the freight equation easy to see. The material is heavy, payload matters, annual tonnage can become significant quickly, and origins and destinations often repeat.
That article approached the issue partly through Scope 3 emissions, but the underlying transportation question is the same:
How much material is moving, how far is it moving, and does the current transportation plan still make sense?
The same question can apply to paper, lumber, food ingredients, aggregates, chemicals, plastics and other industrial products.
Cost and Scope 3 can be part of the same review
A manufacturer should not move freight to rail simply to create a sustainability talking point.
But if a company is already reviewing a lane because fuel prices, freight rates or volume have changed, the same basic shipment information can also support a Scope 3 transportation analysis.
Commodity, origin, destination, distance, payload, annual tonnage and mode are relevant to both conversations.
That makes transportation review useful even when cost—not sustainability—is what starts the discussion.
Do not redesign a supply chain around one fuel-price spike.
Transportation networks should not be rebuilt every time diesel moves. Facilities, equipment, inventory systems and customer commitments require longer-term thinking.
But a major market change can be a useful trigger to test old assumptions.
The result may confirm that the current transportation plan is still the right one—or identify an alternative that deserves a closer look.
Start with one lane
Manufacturers do not need to model an entire supply chain to find out whether an opportunity exists.
Pick one recurring movement and gather the basics: commodity, origin, destination, annual volume, current truck payload, service requirements and handling needs.
Then compare the practical alternatives.
Does the origin have rail access? Does the destination? Could transloading bridge an off-rail endpoint? What railcar fits the product? What would local trucking look like? How would inventory and railcar cycles affect the plant?
The answer may be to leave the freight exactly where it is.
Or changing market conditions may reveal an option that did not make sense the last time the lane was evaluated.
A freight lane does not need to be broken before it deserves another look.
If the assumptions behind the original transportation decision have changed, rerunning the numbers can confirm the current strategy or identify another option.
Start with one repeat lane, use current information and let the actual freight determine the answer.
Have a freight lane that may be worth reevaluating?
Start with the commodity, origin, destination, annual volume and current transportation pattern. The LA&L business development team can help determine whether direct rail, transloading or the existing transportation plan is the most practical fit.
Start a Freight ReviewSources & Further Reading
- U.S. Energy Information Administration — Weekly U.S. No. 2 Diesel Retail Prices
- Norfolk Southern — Morgan Stanley 14th Annual Laguna Conference
- Trains — High diesel fuel prices continue to send freight to rail, Norfolk Southern executives say
- Reuters — Norfolk Southern sees fuel prices weighing on third quarter despite freight share gains
- LA&L — How Manufacturers Can Reduce Freight Costs in 2026 Without Adding Risk
- WNYP — Steel, Metals & Scope 3: Why Transportation Mode Matters
- LA&L — Transload Locations
- LA&L — RVP+ Rail Visibility & Planning
Transportation rates, fuel prices, fuel surcharges, service, routing, equipment availability, railcar cycles, truck capacity, handling costs and operating requirements vary by lane and customer. This article discusses general freight-planning considerations and current market observations and is not a rate quote, service commitment or representation that rail or transloading will produce a specific cost, service or emissions result. Potential transportation alternatives should be evaluated using project-specific information.
