Understanding the Role of Utilities in Industrial Production and Transportation

During the Q&A session of our recent State of Freight: 2025 Outlook webinar, a great question arose about the role of utilities in industrial production and how they intersect with transportation. This topic often gets overlooked but plays a crucial part in understanding the broader dynamics of energy and freight.  Here is a highlight of the answer.

Utilities within industrial production focus on the generation and distribution of electricity and natural gas. This includes producing electricity through coal, natural gas, nuclear, and renewables, then distributing it via power grids, and transporting natural gas from extraction to end-users through pipelines.

Impact on Transportation

While utilities themselves are not heavily tied to transportation in the same way as goods like consumer products or raw materials, there are still key overlaps worth noting:

• Coal Transportation: For electricity generation, coal remains a significant input in many regions. Transporting coal from mines to power plants relies heavily on rail and barge networks, which are critical components of the freight industry.
• Petroleum Products: The natural gas supply chain involves mining petroleum products, which are transported via pipelines, rail, and trucks to refineries and distribution centers.
• Equipment and Infrastructure: Building and maintaining utility infrastructure requires the transportation of heavy machinery, parts, and construction materials.

When we zoom in on utilities within the industrial production framework, their direct impact on transportation is relatively limited compared to other sectors like manufacturing or agriculture. However, the indirect connections—such as transporting coal, petroleum products, or infrastructure materials—still play a role in freight demand.