Fixing our Economy:
As these additional facilities are required it will create thousands of jobs across the country.
Mr. Anderson:
If there is an economic advantage in what you propose, why do you think it is not being exploited now?
The existing Intermodal system is unable to handle the volume of traffic and the Terminals need major revisions to expidite the traffic. This will take a major overhaul and should be handled like the Interstate construction was. We analyzed this years ago and one railroad cannot just revise their system, It will have to be universal.
So why doesn't the system just overhaul itself so it can make more profit and prosper?
Any "forced" switch from truck to rail would drive up logistics costs. This would hurt, not help, the economy. The logistics people routing the frieght are picking the low cost configuration for their operation now. Don't take that option away from them. They know more about what needs to be done than you do.
The US Government spent the better part of the 20th Century forcing freight off the rail system through incredibly stupid regulatory decisions. It's hard to beat "In the Mattter of Container Service" for stupidity. This regulatory madness was handed down in 1931. Along with other government imposed stupidity, it literally strangled intemodal development for the next 50 years. (These things don't go away anytime soon.)
A container based intermodal system, using trains for what they do best and trucks for what they do best, began to develop almost as soon as trucks that could carry a decent load of freight were developed; around 1923. This container intermodal system greatly reduced the cost of moving freight. (Which was good for the economy, unlike your idea.) Government put a stop to it, and greatly hurt the people of the United States through its action.
Just let the market work. Intermodal will assume its "proper" role in the world of freight. The result will be far better than what would be achieved through any government edict. The G could cut tax rates and get out of the way. That's something they could do to help. But it's not in their nature.
If you would please, explain who the "we" you cite are?
Andy-UP The existing Intermodal system is unable to handle the volume of traffic and the Terminals need major revisions to expidite the traffic. This will take a major overhaul and should be handled like the Interstate construction was. We analyzed this years ago and one railroad cannot just revise their system, It will have to be universal.
23 17 46 11
greyhoundsJust let the market work. Intermodal will assume its "proper" role in the world of freight.
You and Bucyrus assume the market is a perfectly functioning one, which is rather unlikely. In the situation referenced, the market does not account for negative externalities (external costs). A blind faith in even a free market (which this situation is not) is neither rational nor likely to lead to an efficient outcome.
C&NW, CA&E, MILW, CGW and IC fan
I am trying to place it all in perspective. 10K trucks daily consuming four times the mileage of a typical one-person-per-car commuter, of which there are millions (and climbing) is going to put how big a dent in the overall consumption of fuel, and it will have how much of a salutary effect on global warming? As a guess, I'd say....maybe 1/10 of 1%.
However, if you were to remove 10K single-person-per-car-commuters from each city over 1M, now yer talkin'! We'd be all the way up to about 0.5%.
[I'm pulling these numbers out of my hat, but the order of magnitutude should be close.]
-Crandell
If I went to my bosses tomorrow and said, "Working with the federal and state governments to capture our externalized benefits of intermodal transportation is wrong and I don't agree with it," I am pretty sure they would fire me.
If I went to my bosses tomorrow and said, "We should let the federal and state governments dictate the structure of our intermodal transportation business and I agree with that," I am pretty sure they would fire me.
The real world of railroading that I live in would not pass the ideological sniff tests of either Ayn Rand or Karl Marx. The market is clearly not now nor likely to ever capture and deliver to us our externalized public benefits of intermodal freight, without a mechanism placed upon it. The law is clearly not going to enable the government to create a command economy unless heavily rewritten. We seek to find a balance between the two extremes of ideology that enables a win for everyone.
I don't disagree, strongly, with any of the positions advanced by either Mr. Anderson or Mr. Greyhounds. I would be very grateful, however, if they would provide help to me by providing ideas that might help me to work with the government to capture our externalized benefits, and ideas on how we might work with the government to make sure that the laws that are written serve to enable people to make rational business decisions, not trap them into someone's backdoor method to get a good public outcome. My telling the governement to slag off, as I think many people think I ought to be telling them, is not going to be helpful.
RWM
schlimm greyhoundsJust let the market work. Intermodal will assume its "proper" role in the world of freight. You and Bucyrus assume the market is a perfectly functioning one, which is rather unlikely. In the situation referenced, the market does not account for negative externalities (external costs). A blind faith in even a free market (which this situation is not) is neither rational nor likely to lead to an efficient outcome.
So just what is it about the free market that is not working here? The first poster thinks the problem is that WE as a society are spending too much on fuel. So he wants to get many of the truck trailers onto rail where the fuel economy is higher. If his objective on this idea is that this traffic can be converted to rail with no sacrifice in service and speed, then he is on the same page with several other deep thinkers to which I have posted links to in several recent threads about the national sustainable transportation system vision for the U.S. The only problem is that this vision requires a completely new rail system with a new role for both trains and trucks. It requires new track, newly designed trains built for special purposes, new types of truck service, new terminal and sorting systems, electrified railroads, new types of traffic control, and new labor agreements.
Is it doable? I suppose it is, but at what cost? Not everything is worth doing just because it is possible and there is some payback. There would be some payback in building special manufacturing facilities on the moon.
Perhaps the original poster is not talking about this revolutionary rail system. Maybe he is simply suggesting that WE need to save fuel by shifting truck freight to rail as the industry exists today. WE could do that today and save a lot fuel as has been indicated. But then the question needs to be asked, why are WE not doing this today? If transportation was only about moving something from point A to point B, then nothing would move by truck if rail were cheaper. But transportation is also about time, and some shippers are willing to pay more for speed.
So how do you get truck freight to shift to rail when the shipper prefers truck even though it does cost more and use more fuel?
No, I don't assume anything functions perfectly. What I said, as opposed to what you selected for quotation, was that the market would produce a "far better" result than a government edict. And it will.
Nothing is going to produce a "perfect" solution. I studied and researched government regulation of railroads as a grad student and I worked in pricing/marketing for a railroad under both a strictly regulated system and under a "pretty much" free market system. The public is better served by the latter. Been there, done that, went to school on it. Have you?
How about you expaining why you insist that market forces will not produce "an efficient" outcome. They do that on a regular ongoing basis. What do you believe is so special about freight transportation that creates a situation where market forces won't create efficiency?
selectorI am trying to place it all in perspective. 10K trucks daily consuming four times the mileage of a typical one-person-per-car commuter, of which there are millions (and climbing) is going to put how big a dent in the overall consumption of fuel, and it will have how much of a salutary effect on global warming? As a guess, I'd say....maybe 1/10 of 1%. However, if you were to remove 10K single-person-per-car-commuters from each city over 1M, now yer talkin'! We'd be all the way up to about 0.5%. [I'm pulling these numbers out of my hat, but the order of magnitutude should be close.] -Crandell
Why pull out of your hat when there's real numbers!
Per the Transportation Data Book for the U.S. for 2007, in trillions of BTUs:
Suppose you did something that transferred freight from truck to rail that decreased fuel consumption by trucks by 10%. That would subtract 527 trillion BTU. Converting that freight to rail would add back about 132 billion BTU (see note below). Net change, subtract 395 trillion BTU. Compared to 28,002, that's a 1.41% improvement. I guess it doesn't move the needle a lot, but if was an easy move that did not disrupt people's lives and lifestyles and the general economic health of the nation, you would still not like it?
(Note: The relative efficiency of rail and truck is a subject of intense argument. I am in the thick of it professionally. The usual claim is that rail is 4x as fuel efficient as truck per ton-mile. This comparison is based on an all-in fuel use by rail, but a selective fuel use by truck. For a head-to-head rail to truck-move for the same service criteria for the same route, plus adding in any dray fuel use to the rail side of the equation, the actual rail to truck comparison has been variously calculated as little as 1.5:1 and as much as 14:1.)
This article explains the concept fairly well.
Markets are sensitive only to benefits or costs that can be translated into willingness to pay on the part of buyers, or into costs incurred by sellers. An economic choice or action by one economic actor that affects the welfare of others who are not involved in that choice or action is called an externality. In defining these we focus on effects that impinge on third parties through non-market channels. More specifically:
When a market transaction affects the welfare of third parties who are not involved in the transaction, the market behavior of the economic actors will not reflect all the preferences of, or all the costs to, everyone affected. This is because the costs or benefits affecting the particular actors differ from the costs or benefits to society as a whole. For example:
Railway Man If I went to my bosses tomorrow and said, "Working with the federal and state governments to capture our externalized benefits of intermodal transportation is wrong and I don't agree with it," I am pretty sure they would fire me. If I went to my bosses tomorrow and said, "We should let the federal and state governments dictate the structure of our intermodal transportation business and I agree with that," I am pretty sure they would fire me. The real world of railroading that I live in would not pass the ideological sniff tests of either Ayn Rand or Karl Marx. The market is clearly not now nor likely to ever capture and deliver to us our externalized public benefits of intermodal freight, without a mechanism placed upon it. The law is clearly not going to enable the government to create a command economy unless heavily rewritten. We seek to find a balance between the two extremes of ideology that enables a win for everyone. I don't disagree, strongly, with any of the positions advanced by either Mr. Anderson or Mr. Greyhounds. I would be very grateful, however, if they would provide help to me by providing ideas that might help me to work with the government to capture our externalized benefits, and ideas on how we might work with the government to make sure that the laws that are written serve to enable people to make rational business decisions, not trap them into someone's backdoor method to get a good public outcome. My telling the governement to slag off, as I think many people think I ought to be telling them, is not going to be helpful. RWM
Well, I don't want you to get fired.
But I don't see significant externalities affecting the rail freight market. The vast majority of truck freight movement is short haul and totally unsuited for rail movment. I mean you can't deliver carpet to a carpet store or to a home by rail. Niether can you deliver gas to a gas station, or food to a grocery store by rail. And it's generally impractical to move a product 25 miles across the Chicago area by rail. Doing such movements by rail on a large scale would drive logistics costs through the roof. That's why short hauls, the majority of truck freight, are truck freight.
When you get into longer hauls, where rail can come in to play, the externalities, such as congestion, go quickly away. Where the externalities are trivial there is no reason to mess with market forces.
There are some stretches of Interstate that suffer from "truck congestion". So put a toll on the road. Increase the cost of using it and there will be less use of it. The freight will shift to other sources, go away completly, or shift to rail. The Interstate System should have been toll financed. It wasn't, but we can correct this error. Toll financing would assign costs to the people getting the benifits in proportion to their receipt of benifits. It's a market solution and it will work well.
As a final note, I've made it very clear that I think it's absolutely nuts that an average 100 loads of apples per day move from Washington State to points east of the Mississippi River by truck. (To cite just one example.) I know that these apples shifted from rail to road movement because of government interference in the market. The G held the rail rates constant while it allowed truck charges to vary with market demand. It doesn't take a genius to figure out that that would divert the freight. Now the whole apple distribution system is set up for truck movement and it's a fairly large task to change it back. (An intermodal terminal in Yakima and train service to it will need to be established for starters. And while we're at it, we'll need to find some backhauls.)
The solution to this government imposed abberation is not more government involvement. What the G could do is establish an investment tax credit for rail capacity expansion. That would reduce the cost of adding rail capacity and we'd get more of it. Where and when it's needed. Like I said, just reduce taxes and get out of the way.
schlimm This article explains the concept fairly well. Markets are sensitive only to benefits or costs that can be translated into willingness to pay on the part of buyers, or into costs incurred by sellers. An economic choice or action by one economic actor that affects the welfare of others who are not involved in that choice or action is called an externality. In defining these we focus on effects that impinge on third parties through non-market channels. More specifically: A negative externality (sometimes referred to as an “external cost”) exists when an economic actor produces an economic cost but does not fully pay that cost. A well-known example is the manufacturing firm that dumps pollutants in a river, decreasing water quality downstream. A positive externality (sometimes referred to as an “external benefit”) exists when an economic actor produces an economic benefit but does not reap the full reward from that benefit. Positive externalities are less well-known, but can be vitally important to individual and societal well-being. Examples include parents who, out of love for their children, raise them to become decent people (rather than violent criminals). In so doing they also create benefits for society at large. Similarly, when one person gets vaccinated against a communicable disease, she not only protects herself, but also others around her, from the disease’s spread. In both cases there are social benefits from individual actions: Well-educated, productive citizens are an asset to the community as well as to their own families; and disease control reduces risks for everyone. When a market transaction affects the welfare of third parties who are not involved in the transaction, the market behavior of the economic actors will not reflect all the preferences of, or all the costs to, everyone affected. This is because the costs or benefits affecting the particular actors differ from the costs or benefits to society as a whole. For example: If the cost of polluting is not borne by the polluters, they will not feel an economic motivation to reduce their creation and discharge of wastes. If employers do not benefit in full from the cost of providing training to their employees, they are likely to provide less of that training than is socially desirable. If the price of water or of petroleum is set below the true cost to society of using these resources, this will produce an incentive to use too much of them. Goodwin, Neva (Lead Author); Global Development and Environment Institute (Content Partner); Cutler J. Cleveland (Topic Editor). 2007. "Limitations of markets." http://www.eoearth.org/article/Limitations_of_markets
Goodwin, Neva (Lead Author); Global Development and Environment Institute (Content Partner); Cutler J. Cleveland (Topic Editor). 2007. "Limitations of markets." http://www.eoearth.org/article/Limitations_of_markets
I don't need an explinaiton of the concept. I understand the concept of "externalities".
What I'm saying is that they're not applicable to any significant degree with regards to rail freight.
Rail freight is not a viable option where such externalities could exist. The externalities do not significantly exist where rail freight is a viable option.
Railway Man...you would still not like it?
I dunno...I'm neither in trucking nor in the rail business. I suppose a business in today's climate might relish that advantage (climate meaning two things...). I know people, though, and I don't think the benefit has enough salience, not even with the global warming card played. Whatever it turns to to actually be, taking your figure and the OP's $4B, it isn't chump change...nor is it especially grand in terms of the GDP.
All I thought that Intermodal would be able to do is to take SOME of the truck traffic off the road. That was probably only going to be some of the long distance ones.
Interesting reading---
Any argument carried far enough will end up in Semantics--Hartz's law of rhetoric Emerald. Leemer and Southern The route of the Sceptre Express Barry
I just started my blog site...more stuff to come...
http://modeltrainswithmusic.blogspot.ca/
I've been interested in this solving dilemma for 35 years now - since the first energy crisis in the Fall of 1973 - Winter of 1974, along with a lot of industry professionals, consultants, equipment maunfacturers, academics, government officials, and railfans (if I left anyone out, it was unintentional - please add yourself in ). The challenge and market is so huge and complex that there's no easy, quick, simple, or cheap answer or 'fix' - if there was, it would've been implemented by now. There was at least 1, and possibly several demonstration projects of this kind of thing in the 1970's - my memory is hazy, but I'm thinking MILW, Rock Island, IC, etc. But a major challenge is getting such an operation to a 'critical mass' or 'functional network' level with frequent, fast, dependable schedules, close connections, quick and seamless terminal operations, etc.
Which is not at all to say that no one is trying today. Look at Norfolk Southern's 'Crescent Corridor' initiative to take trucks off I-81, and the associated lobbying group, which was mentioned a few times in other threads here around a month ago. They're having to jump through all kinds of hurdles to get the several states to agree on what to do, and then fund it. And Pacer Intermodal - among others - has several services that are designed to serve such a market, but with only moderate success so far. Look also at CP Rail's Exxpressway/ Iron Highway service, or the NS RoadRailer operation, both of which are clearly targeted at the over-the-road truck market.
Some observations and quibbles on the Original Post and some of the numbers therein:
- 10,000 trucks per day - even in just 1 direction - isn't all that many. That is only an average of 417 trucks per hour = 7 per minute or 1 every 8 to 9 seconds - at 60 MPH, they'd be about 760 ft. or 0.15 mile apart from nose to nose = around 700 ft. between them, or 7 per mile of highway in each direction = over 1/4 mile between them if evenly distributed over 2 lanes. I've written before how I usually count that many on I-78 eastbound from Harrisburg towards Allentown, even on non-peak hours, and its' not that impressive or scary.
- 5.8 MPG for trucks strikes me as too low for Over The Road operations - as I write this, I can hear heavy trucks grinding over the Mack Truck's test track about 1/4 mile behind me. I don't have enough expertise to say what the figure ought to be, but would not be surpprised by something in the 8 to 10 MPG range. Ed Benton - what say you ?
- But at 5.8 MPG, for diesel fuel at $3.00 per gallon - the Original Post didn't say, but usung the $4.28 billion / 1.87 billion gallons = around $2.29 per gallon, which is too low - the fuel cost only per mile would be around $0.52 per mile, or $520 per thousand miles. I know that's only a fraction of the true total cost of running a truck - but for many owner-operators, the immediate out-of-pocket 'gas money' decision is a major factor in what they do - or not.
- The fuel economy for trains is understated. At 436 miles per ton per gallon - per the CSX ads and AAR data, and that is a valid figure because it includes the fuel used to haul the tare and allocates it over the net payload - to haul a ton for 1,000 miles would be 2.30 gallons. So, for 60 trailers at 20 tons each = 1,200 tons x 2.30 gallons = 2,760 gallons, not 6,000 gallons.
- The train lengths are way too short. A double-stack - the most economical - with only 60 containers would be 30 'wells' or about 1,800 ft. long; most 'stacks' are around 5 times that long and capacity. Even a solid piggy-back/ TOFC train woudl run 150 to 200 trailers. That's one reason that the estimated 80 trains per day/ 40 each way in the Original Post is troublesome - it would lead to serious capacity problems on almost all lines, essentially almost using up an entire set of double-tracks just to handle a the trucks from a moderately busy Interstate - see above. The industry can and does do much better than that on aroutine basis.
Which is not to say that all is perfect and nirvana, and that nothing better can be achieved. There's a lot of room for improvement. Better terminals are undoubtedly a major one. I happen to think that a more up-to-date 'demonstration project' kind of operation for - say, 1 year - would go a long ways towards proving, publicizing, and 'de-bugging' the concept - set up a service along a selected corridor, give it a decent budget to cover any operating losses and a reasonable profit to the railroad(s) involved, and some additional capital and subsidy money to adjust operations as experience dictates and to deal with the back-haul and other short-term and temporary traffic, directional, and routing challenges or issues, etc.
- Paul North.
The standard that everyone in the emissions, fuel consumption analysis, and highway business uses is the EPA MOBILE6 model:
http://www.epa.gov/OMS/m6.htm
It states average MPG for heavy trucks at highway speeds is 6.42
Other people say other things. But everyone at FRA, EPA, FHWA, AASTHO, and AAR refers to this one.
Andy-UPHowever we have done nothing to try and alter the amount of trucks on our interstates that are getting 5.8MPG hauling our merchandise.
What is your evidence that we have done nothing?
I submit that your statement is untrue, and that there is a great concern and R&D effort in the engine development and transportation industry seeking to find ways to get the highest fuel economy from trucks. Every thinker out there will be handsomely rewarded by the market receptivity to any viable way of increasing fuel economy, so there is enormous incentive. All of the best talent in the world is being applied to solving the problem. It is fallacious to assume that just because a problem has not been solved, nobody is trying to solve it.
Other than your repetitive use of the term, we, you have not been clear about exactly how the objectives you wish for should be accomplished. You speak of mandates, priorities, and requirements. I hear this line of thinking all the time insisting that the greater good can only be served by some central planning government bureaucracy directing the collective public effort.
You refer to this philosophy when you begin by basing your objective on the same principles being currently used to solve the employment problem in this country, which happens to be one of the boldest economic experiments in world history. We will soon know the results, which will either support or repudiate the Keynesian economic theory and its relationship with the philosophy of central planning. I think we should wait for those results before we revolutionize the transportation industry as a public, collective effort.
Railway Manhttp://www.epa.gov/OMS/m6.htm It states average MPG for heavy trucks at highway speeds is 6.42 Other people say other things. But everyone at FRA, EPA, FHWA, AASTHO, and AAR refers to this one. RWM
Thanks for the authoritative info!!
greyhoundsI understand the concept of "externalities". What I'm saying is that they're not applicable to any significant degree with regards to rail freight. Rail freight is not a viable option where such externalities could exist. The externalities do not significantly exist where rail freight is a viable option.
I understand the concept of "externalities".
1. In this particular case, I was referring to the trucking industry compared to the railroads. Trucks (and air) are able to utilize the external benefits provided incidentally to them (and rightly so) by governments - maintained and operated roads and airways/airports for the general public. Similar benefits are not provided to the railroads. In addition, ROW's are taxed by local/state governments. These benefits create a distortion of the market equation in terms of cost. *
2. In this case, again, the external costs of pollution and the like, are not fully borne by any of the polluters. But trucks are so much less efficient in ton-miles per gallon and produce more pollution per ton-mile compared to the rails, but this very real cost is not (naturally not) reflected in the freight costs the truck lines would calculate and thus not in the true costs to the public.
* The truck companies and airfreight haulers do make a contribution to roads and airways in the form of various taxed and user fees. However, that amount pales when compared to the total cost of building and maintaining/operating the pertinent infrastructure. Some will argue that the appropriate comparison would be a pro ration of the total cost based on some percentage of usage (miles, ton-miles , etc.) which on one level is true. But many of the more complex constructions are there to meet the specialized needs of trucks and commercial airline. I would speculate that the total cost would be less if roads, etc. were for only the general public.
Paul;
Plan that the Interstate was constructed under. I think this is a great idea however with the operation of this system there will lots of profit in both the trucking and Rail industries that could pay for the system. I do believe that the FRA and FHWA have the connections with the railroads and trucking companies to come together and develop a plan with the revisions that are required to make an efficient intermodal system. Traffic studies would determine where and how the intermodal terminals are built. The system should definitely handle all trailers moving over 1,000 miles and in many cases those moving over 500 miles.
Merrill Anderson (edited to add some artificial paragraph indentions to make it easier to read. -Norris)
Great reading. The 10 benefits makes the case even better.
Excellent discussion. Thanks to all who've contributed their thoughts so far. Although it may go without saying for the "pros" in the group, some folks with less detailed knowledge of the business side of railroading may not be aware how much freight railroads have already taken off the highway in the last 20 years or so. If not for things like the Pacer Stacktrain national network and the Santa Fe/J.B. Hunt partnership, you'd have thousands more trucks per day on the highway. The Hunt/Santa Fe partnership, for example, drove some truckers who specialized in Midwest- California traffic out of business, while others survived only by finding new traffic lanes which didn't have such strong intermodal competition. Hopefully the NS Crescent Corridor project will also be successful. Also note that many truck shippers switched to intermodal during the recent spike in fuel prices. They were willing to pay some premium for truck, but only up to a certain point.
That's not to say that more highway freight still couldn't be shifted to rail. There's a lot left that could economically move rail today if the railroads wanted it. The reason they don't want it is usually because they lack the capacity. By the mid-90's at Santa Fe, so much freight was moving between California and the eastern end of the railroad that they began to back out of other markets, such as Midwest-Texas, because it was all they could do to keep up with the growth of the longer-haul traffic. The Texas traffic was profitable, but less so, and with limited capacity at Kansas City and Chicago, they had to pick and choose. Also note that the lion's share of traffic to/from Mexico (even the not-insubstantial Canada-Mexico business) moves via highway because the U.S. rail system was primarily designed to go east-west rather than north-south.
If governments want railroads to shift more traffic off the highway at a faster pace than is currently happening, they should start by rebalancing the market. They could do this by providing tax incentives for investment, creating new taxes to pay for externalities such as carbon emissions, or both. But if they need to target a particular stretch of highway, they'll have to first confirm that it's realistic for a railroad to profitably haul the traffic, then sit down with the railroad(s) and work out a deal to help pay for the necessary expansion in return for guarantees the railroad will use the capacity as the government intended. This can be tricky and isn't "pure" capitalism, but can be the right approach in certain cases - the Alameda rail corridor in L.A. is a good example.
Andy-UP I developed a design to pivot the rail car 24 degrees so the adjacent terrain could be constructed at rail car height and then you could drive on and drive off to load and unload all the trailers on a 60 car train at the same time.
Merrill,
Have you done any prototyping or model making to illustrate and explain your concept? Do you have any drawings or illustrations that you could post here?
Andy-UP- You seem to be saying, that this needs to be implemented across the whole North American rail system, accross all Class 1's. Wouldn't a better plan be to start with a major traffic lane, like LA> Chicago, get that up and rolling, and expand from there?
Thanks to Chris / CopCarSS for my avatar.
Murphy Siding Andy-UP- You seem to be saying, that this needs to be implemented across the whole North American rail system, accross all Class 1's. Wouldn't a better plan be to start with a major traffic lane, like LA> Chicago, get that up and rolling, and expand from there?
Market penetration intermodal for truckload-type freight in lanes such as Chicago-LA is already greater than 80%.
schlimm greyhounds I understand the concept of "externalities". What I'm saying is that they're not applicable to any significant degree with regards to rail freight. Rail freight is not a viable option where such externalities could exist. The externalities do not significantly exist where rail freight is a viable option. 1. In this particular case, I was referring to the trucking industry compared to the railroads. Trucks (and air) are able to utilize the external benefits provided incidentally to them (and rightly so) by governments - maintained and operated roads and airways/airports for the general public. Similar benefits are not provided to the railroads. In addition, ROW's are taxed by local/state governments. These benefits create a distortion of the market equation in terms of cost. * 2. In this case, again, the external costs of pollution and the like, are not fully borne by any of the polluters. But trucks are so much less efficient in ton-miles per gallon and produce more pollution per ton-mile compared to the rails, but this very real cost is not (naturally not) reflected in the freight costs the truck lines would calculate and thus not in the true costs to the public. * The truck companies and airfreight haulers do make a contribution to roads and airways in the form of various taxed and user fees. However, that amount pales when compared to the total cost of building and maintaining/operating the pertinent infrastructure. Some will argue that the appropriate comparison would be a pro ration of the total cost based on some percentage of usage (miles, ton-miles , etc.) which on one level is true. But many of the more complex constructions are there to meet the specialized needs of trucks and commercial airline. I would speculate that the total cost would be less if roads, etc. were for only the general public.
greyhounds I understand the concept of "externalities". What I'm saying is that they're not applicable to any significant degree with regards to rail freight. Rail freight is not a viable option where such externalities could exist. The externalities do not significantly exist where rail freight is a viable option.
OK, so you're saying we have yet another government screw up in transportation that is adversly affecting the people of the United Sates. They're not charging enough for the use of their roads. Who'd a thunk it? These undercharges are actually subsidies that increase polution because they shift freight to a less fuel efficient mode. Who would have ever thought that the US Government would do such a thing?
Actually, Adam Smith did deal with this issue. He wrote that "Intercity" improved roads should be paid for from tolls based on the weight of the vehicle. That Mr. Smith, he certainly was a clever, insightful man.
The solution to this government screw up is not more government involvement in rail transportation. The solution is to make the Interstate System self supporting by imposing tolls on the vehicles that use it.
I accept the premis that there is some level of subsidy given to motor freight. It would be more than foolish to extend any form of subsidy to rail freight as a "Make Even" effort. Then people would use both modes in wasteful manners since niether mode would have to cover its cost. If the problem is, as you maintain, that highway use is underpriced -- then fix that.
I think you are not dealing with an important reality. The US logistics system is overly truck oriented because of past government interference in the transportation market. This interference was though economic regulation of the railroads. The government diverted far more freight to the highway than would have been the case absent their involvement. We're still paying the price today. It's my considered opinion that the regulatory decisions had far more adverse impact than the highway use undercharges. Having said that, it still would be a good thing to toll the Interstate Highways.
I've cited what I regard as the worst example, "In the Matter of Container Service" handed down in 1931. This decision helped strangle intermodal development for 50 years. Once the logistics system was established with a truck oriented transportation base, it became very difficult to change it back. I'll go through other regulatory foolishness if you want. As I said, I went to school on it.
Railway Man Murphy Siding Andy-UP- You seem to be saying, that this needs to be implemented across the whole North American rail system, accross all Class 1's. Wouldn't a better plan be to start with a major traffic lane, like LA> Chicago, get that up and rolling, and expand from there? Market penetration intermodal for truckload-type freight in lanes such as Chicago-LA is already greater than 80%. RWM
Yes, Andy-UP is not going to beat double stack ecnomics. I ran the numbers on double stack vs TOFC and RoadRailer when I worked for RoadRailer. You really have to pick your spots to beat double stack economics.
I think there are some niche markets for carless technology. My beloved Washington apples are one such niche. But, in general, double stack efficiencies are overwhelming. A national TOFC based system using "Swivel Cars" won't be competitive.
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