Cheaper freight rates for longer distance -- does that still happen?

[timz]

Halfway down the left column

https://babel.hathitrust.org/cgi/pt?id=mdp.39015010881822&seq=1045

Utah wool shippers were saving 23 cents a pound in 1908 by sending their wool to Boston all-rail via Los Angeles. It seems that was some sort of temporary fluke, but it wasn't a fluke for the rail rate from Utah to Boston to be more than the rail rate from LA to Boston. That's how important the sea competition was, even before the Panama Canal.

How long did that continue? Or does it continue now?

[Falcon48]

I've been retired from the industry for awhile.  But I would imagine that that there are plenty of cases where rates for a commodity over a shorter distance are higher than rates over a longer distance for the same commodity.  There's no legal requirement that rates for a shorter distance be lower than rates for a longer distance, even over the same route (there used to be such a requirement - often called the "4th section" after a provision in the Interstate Commerce Act - but it was repealed many years ago).  It all depends on the market.

[BaltACD]

Back in the day - coal to industrial customers at a rate of X.  American Sugar got coal for their sugar making process.  American Sugar had their coal shipped to the B&O Locust Point Coal Pier where it was loaded on a barge that a tug boat shoved 100 yards to the American Sugar dock for them to unload.  The rate to the Coal Pier was X-y (I have no idea of the actual numbers) where 'y' was more than  sufficient to allow for the operation of the barge, tug boat and their own dock.

The B&O handled coal to Curtis Bay Coal pier destined to a BG&E generating plant on the Marley Neck Peninsula, which the B&O also served all rail.  The barge trip was about 5 miles on the water.  Again, I don't know what the actual number were - but the rate difference made it more profitable for BG&E to go through the barge transloading step.

[Gramp]

To base pricing on cost plus is to travel the road to ruin.