Freight rail is booming primarily because of the 3:1 fuel efficiency superiority of rail over trucks. Ryan Avent notes that "This boom is all the more impressive given that the railroad companies will pay for about 65 percent of the network expansion" while trucking companies do not, of course, pay for the roads. Clearly trucks have a massive inherent advantage as a method of doing the last-mile of shipping, but for long-haul stuff a more rational federal policy environment in terms of carbon pricing and road/rail funding balance would give further momentum to this boom.What I'm told by my father, the transportation authority, is that the rail companies actually don't want traffic that goes less than 1,000 miles; they lose money on it. Obviously, carbon pricing might change that equation, but I doubt it would enough to work those trips down to, say, 500 miles; the whole problem is that the costs are all fixed. Also, rail hub-and-spoke may not be more energy efficient than truck point-to-point if the rail cars have to travel far out of their way to hook up with a train. My understanding is that the shorter the haul, the more likely it actually is that the car will need to take a circuitous route. Rail companies are not interested in jobs that require constant coupling and uncoupling of single car loads. Demand for freight rail is still booming, and I hope we'll see the network much expanded over the next ten years. But I don't think we're in for the demise of the long-haul truck trip just yet.
This article available online at:
http://www.theatlantic.com/business/archive/2008/04/trucks-not-just-for-the-last-mile-any-more/3295/
