Is the current increase in fuel prices a good reason to invest in freight rail?
While us Metro-commuting urbanites are thanking our lucky stars that soaring gas prices haven’t taken a direct chunk out of our wallets, it’s still the case that many of the goods we buy arrive courtesy of long-haul truckers, who fuel their rigs with diesel. This provides a direct inflation pathway from fuel to goods, either through increases in trucking rates for companies that can demand them, or from reduced goods supply as high fuel costs shave margins and drive freelancers out of business.
This is an absurd state of affairs. Long-haul cross-country shipping should be done via rail, and it no doubt would be (especially now) were we not so terrible about investing in our rail resources. Even diesel powered locomotives are far cleaner and cheaper to fuel than the trucks they replace. Were our railways entirely electrified, the efficiency gains would be greater still, and freight emissions would decline as electrical generation shifted toward renewables. And obviously, there would be significant gains from getting trucks off the roads, both from reduced congestion and from a safety perspective.
And really, the cost per capacity of rails versus roads should make this a no-brainer. I can’t imagine there’s much–or any–cost advantage to paving three new lanes along a right of way as opposed to laying three new rail lines. The capacity difference, however, is enormous. Isn’t value for money invested an important consideration anymore?
Our freight rail network desperately needs upgrading, but it isn't as easy as laying some new rail lines. The limiting factor on rail freight right now is less the bands of steel than the capacity of the freight yards. We need yards that are both bigger, and use updated technology. The problem is, freight yards are often located in places like Chicago, where expansion competes with urban development. Until then, rail will remain a slower, if cheaper, method of getting your products from point A to point B.
Actually, even then it will. A hub and spoke system is more time consuming than going point to point, which is why all of us prefer direct flights. So there's a limit to how much rail will come to replace trucking. An even firmer limit is set by the fact that places like New York don't have any room for a new freight yard.
That said, there clearly is a great deal of demand for rail capacity. It's not clear to me why rail companies aren't at least trying to provide more than they are.