Bacon's Rebellion

Democracy Thrives in Sunlight

All We Are Saying… Is Give Freight Rail a Chance

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by

James A. Bacon
in

Writing for North Carolina’s John Locke Institute, John Hood argues that expanding freight rail should be part of any broader transportation solution. Freight trains are more energy efficient per ton-mile than trucks for moving goods long distances, which reduces the cost of goods in the store, and it takes trucks off the highways, which ameliorates traffic congestion.

But government policies favor trucking over rail.

  • Taxes. While trucks do pay higher taxes than automobiles, they don’t pay the full cost of the wear and tear they put on the roads. In effect, motorists are subsidizing the trucking industry. By contrast, railroads are responsible for maintaining their own track.
  • Passenger trains. Money-losing Amtrak trains enjoy preference over freight trains for access to limited track. The federal government should divest Amtrak and allow it to negotiate for trackage rights, says Hood. “There should be a clear recognition that freight is the paying customer and deserves as least as much consideration as passenger service running at a substantial loss.:
  • Municipal bonds. Trucks use government infrastructure paid for with tax-exempt bonds. Railroads don’t have access to tax-free capital investment.

As in Virginia, North Carolina policymakers have been talking a lot lately about rail as an element of a “multi-modal” transportation system. “But their priorities are all out of whack,” says Hood. “Instead of spending scarce time and money pursuing intercity passenger-rail service and other relative trivialities, they ought to take the step necessary to free railroads to serve their paying freight customers more effectively. “

Maybe the rail lines need to create a catchy acronym to drum up support. Hood playfully suggests TOOT — Taxpayer-Optimal Option for Transportation!

(Hat tip to Danny Newton.)

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6 responses to “All We Are Saying… Is Give Freight Rail a Chance”

  1. Anonymous Avatar
    Anonymous

    Energy efficient is not the same as business efficient. Trains can’t keep the same schedule as trucks.

  2. Jim Bacon Avatar
    Jim Bacon

    Correct, There is a natural division of labor between trucks and trains. Trains are more competitive in long hauls and situations where split-second timing isn’t critical. Furthermore, when it comes to containers, trains and trucks work in tandem: Trains haul containers the long distances, and trucks make the delivery to the ultimate destination.

    The point is this: If we let the two modes compete on an even playing field, the transportation system will evolve towards the optimum energy and economic mix.

  3. Darrell -- Chesapeake Avatar
    Darrell — Chesapeake

    Ever hear of the Heartland corridor? That pretty well addresses this entire thread.

    Taxpayers are paying for rail upgrades so NS can haul more stuff from Virginia’s ports.

    Here we are in the 21st century still running rail systems like we did in the 19th. While trucking companies are free to travel about the country, rail companies maintain a monopolistic stranglehold on territory.

  4. Larry Gross Avatar
    Larry Gross

    Aren’t we already using freight rail quite heavily to move goods?

    As part of the I-81 Environmental Study, some of the data included what is known as origin-destination data for the trucks.

    They wanted to understand the percentage of truly “long haul” trucking – where the goods are moved from where they are produced to where they are delivered to the consumer of the the goods.

    If not mistaken, what was determined was that quite a few trucks were actually moving goods from distribution centers to retail outlets – “round robin” style.

    Much like a beer or a bread truck making it’s daily “rounds” – except in this case the goods might be anything from razor blades to dog food – broken down into modules for “just-in-time” stock replenishment for each store.

    So a truck leaves.. say a CVS distribution center loaded with just-in-time stock replenishment for a series of stores it will visit that day.. then the next day.. a different set of stores and so forth and so on.

    So… WHERE are those distribution centers and WHERE do they get their goods?

    Well… whether its’ Waverly Va or Spotsylvania, Virginia, guess what – most are on a RAIL SPUR.

    Everyday, a train delivers cars of goods direct from each manufacturer where it is unloaded in the warehouse and then nibbled on to build the store-by-store stock replenishment done by trucks.

    No, not all trucks do this but you can get an idea of how many by merely observing how many trucks say Walmart or Food Lion on them and also by observing the name of the delivery truck unloading at the 7-11s and K-marts, etc.

    So my point is that the market has already determined that the most efficient way to move bulk goods from manufacturer to distribution warehouses IS.. , in fact, rail… in many if not most cases –

    so Freight Rail is ALREADY very much a part of the equation.

    So then we need to better understand what it would take to get those same goods distributed by rail rather than truck.

    In other words… what is it about the current manufacture to distribution warehouse (via rail) to stores (via truck)that favors trucks?

    Try as I might.. I cannot see how the current business model could be done better or more efficiently by rail… well nigh impossible in fact because there is absolutely no way that rail is going to resupply … 7-11s or Kohls…

    There WILL BE a wheeled conveyance of goods to the store outlets simply because that is the only realistic way to deliver goods to those stores.

    You could charge trucks twice as much if you felt they were being subsidized (and perhaps they are) but it would not change the delivery mode – only add to the cost the customers pay – which I admit would generate more funding for more/wider roads … but then we’d all know that people will pay for the roads… not the trucking companies…. they’ll just pass the charges on….

    Someone much smarter than me can probably explain this more correctly if I’ve got it wrong but my little brain cannot see how this would work much differently…than it is right now.

    It appears to me than most major manufacturers deliver via rail to distribution centers which then break down the shipments into truck-sized loads for the final trip to the retail outlet…

    How about some of you deeper thinkers of there get into this game and explain how we move more goods by freight rail.

  5. Anonymous Avatar
    Anonymous

    Jim,
    It isn’t necessarily so that rail can’t be timely. Back in the 90s when the economy and the car industry were booming, Conrail, NS and CSX all handled nearly just-in-time automobile parts shipments very swiftly. Ford, for instance, had an engine block plant near Cleveland that made engines for Taurus models. Train rushed semi-finished engines to Kansas City for next-day delivery at a Taurus assembly plant. Once the scourge of delays, Conrail actually achieved a really good on-time record of over 90 percent for rush-parts, right up to the diastrous takeeover by Norfolk Southern and CSX.

    When I lived in the Midwest, I’ll never forget those freight trains roaring down the lines at 70 plus m.p.h. There were a lot of them, too, sometimes 100 per day.

    Woo-woo!

    Peter Galuszka

  6. Larry Gross Avatar
    Larry Gross

    freight rail can be efficient and timely .. when it delivers via it’s rails…

    The issue is… could what is being carried by trucks be carried by rail utilizing it’s existing network (perhaps expanding capacity on the existing network)?

    OR.. would rail have to EXPAND it’s NETWORK to places now served by truck because there is no rail alternative?

    And this goes back to what KIND of truck traffic there is on I-81. (for example).

    If a truck is doing a long haul from Point A – where there is no rail to Point B – where there is no rail – then yes.. we could expand rail to Points A and B and then, at least in theory have two ways to ship – and competition would ensue and perhaps rail would win.

    But if Point B does not have rail and realistically never will…say 100 7-11 scattered throughout a region… then talking about a rail alternative.. is silly.. right?

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