Shock Control
Dave, I didn't know about this. Did those railroads develop an early version of intermodal shipping that did not catch on?
It wasn't that it did not catch on. It "Caught On" quite well. It was shut down and blocked by the US Government's Interstate Commerce Commission. For no discernable rational reason.
Lead by the New York Central, railroads began to develop intermodal container services in the early 1920s. This was about as soon as highway trucks that could carry a decent load of freight became available. This rail container system greatly reduced the cost of moving freight. The container system also improved service quality by speeding shipments and significantly reducing loss and damage.
Due to competitive pressures the railroads passed most of the cost savings through to the customers, but they were able to hang on to about 1/3rd of the savings.
So, the customers were getting a higher quality service at a lower charge while the railroads made more money. Sounds great to me. A real win-win situation.
The development of a new technology, such as motor freight in the 1920s, will commonly produce something economists call "Creative Destruction". In creative destruction an old economic/business order is replaced (destroyed) by a newly created, more efficient, system. Such change is painful to those being replaced, but it is totally necessary if our economy is to grow and our living standards increased. (Think of typewriters being replaced by word processors. For the typewriter people, it sucked.)
The government can't really do anything to stop these changes without destroying the economy. They really shouldn't even try. (They can mitigate the pain, but not by stopping change and progress.)
But all that was beyond the Interstate Commerce Commission in 1931 when it ordered the railroads to increase their container rates to non competitive levels. This killed the development of the nascent COFC system and hindered rail intermodal for ever. (There was a 50 year black hole in US intermodal development. We don't know where we'd be if it wasn't for those lost 50 years of development.)
The old order of rail freight rates was being destroyed by motor freight and the competing rail container system. At the time, the ICC had no authority over motor freight rates so they couldn't order them increased. But they did kill intermodal development.
I'm glad Dave Klepper mentioned WWII. A significant impediment to the US was a lack of shipping capacity. One great advantage of containerization is the more efficient use of ships. They can be loaded/unloaded much faster with containers and can, as a result, make more voyages. If containers would have been allowed to develop it might have shortened the war and saved some lives.
I hope I kept this short enough.
"By many measures, the U.S. freight rail system is the safest, most efficient and cost effective in the world." - Federal Railroad Administration, October, 2009.
I'm just your average, everyday, uncivilized howling "anti-government" critic of mass government expenditures for "High Speed Rail" in the US. And I'm gosh darn proud of that.