Rails engines can help organize large Rails applications by extracting specific functionality into reusable components. The document discusses creating several engines - one for the presentation layer, one for the domain layer, and potentially others. It demonstrates building out a cargo shipping feature by first creating an integration test, then generating a cargo_shipping engine for the presentation layer and a customers engine in the domain layer to encapsulate customer model code. The engines are tested and integrated with the main application to successfully pass the initial test. Engines allow breaking up a monolithic Rails app into modular components to help manage complexity as an application grows.