Costs of shipping by rail vs. truck?

Hopefully I am posting this in the correct forum. I am a newbie, so my apologies for asking something previously addressed or for ignorance. What is the cost savings for shipping via rail versus shipping via truck? I'm not talking about long-haul class 1 railroads, I can see how they are cost effective. I live in CT an am thinking of Providence and Worcester, Connecticut Southern, and New England Central, among others. For example, I work for a food distributor, and part of our warehouse dates to the 1940s to 50s. There is a rail siding to this portion, but I can't imagine any of our inbound freight arriving via nothing but truck. Concerning short-line local railroads, is the cost of shipping via rail as competitive as truck?

To help understand the rail freight system thing of runners in a relay race, where the baton is handed off from one to another. Thing of rail cars being that baton, and different railroads as the runners. A car of widgets is loaded in California, and BNSF takes it to Chicago. They hand it off to CSX who then hands it off to P&W for final delivery to you in CT.

Think of all the millions of combinations to and from all the sidings in the nation. It's impossible to make a blanket statement of what is cost-effective or not. In general rail is more cost effective on long hauls of many hundred miles while trucks generally are better on short hauls. *BUT* there are quite a few examples where very short rail moves ARE working, sometimes as short a a couple miles. There are so many variables.

So your question re a short lines railroad being competitive should probably be viewed in the context of it being only one of those runners in the relay race. Yes, there ARE cases where a shortline has intraline traffic but it's not common. Shortlines handle a considerable amount of traffic, and in many cases give a far better level of service to small customers than a Class I rr does. But there also occasionally is a case where the shortline's portion is reasonable but the rate quoted by the larger carriers makes the move unworkable.

To summarize - you have to look at the economics of the entire move, and the shortline is usually only one small part of it. Hope this helps.

Thank you for your response.

CNW (later UP) was able to make profit on cement in a 120 mile lane. Short units (35 cars) of soybeans from an elevator to a processor 115 miles away. CNW (later UP) made a decent wage hauling grain 325 miles to ADM for years. Same went with 75 car trains to Cargill less than 200 miles away.

Some of the finest analyses on the costs of shipping by rail vs truck were produced by Dr. Ann Friedlander of MIT back in the 1960's. Dr Friedlander's later studies also added the possibility of using intermodal (TOFC) service as a two-ended "trade-off pont " between the two.

https://www.appam.org/conferences/fall/ ... rogram.pdf

http://ntl.bts.gov/lib/5000/5500/5583/783.pdf

But of course, in the academic world, everything is theory, without all the special situations and "rough edges" that determine how things actually get done. Suffice it to say that while energy cost is still the dominant factor, any number of considerations, such as the reliability/predictability of the service, can cloud the picture.

Dressed meat traffic by rail, for example, dried up in the 1950's-60's because the midwestern roads and the eastern tunk lines (New York Central/Pennsylvania/Erie) could no longer co-ordinate their efforts to guarantee reliable delivery deadlines. When I worked for a short time at a major grocery warehouse in southern California (c.1980), the only items coming in directly by rail were sanitary paper and dry pet food.

There's a fairly active discussion going on right now in another thread.

http://www.railroad.net/forums/viewtopi ... 36&t=63287

2nd trick op wrote: Dressed meat traffic by rail, for example, dried up in the 1950's-60's because the midwestern roads and the eastern tunk lines (New York Central/Pennsylvania/Erie) could no longer co-ordinate their efforts to guarantee reliable delivery deadlines. When I worked for a short time at a major grocery warehouse in southern California (c.1980), the only items coming in directly by rail were sanitary paper and dry pet food.

Roads like IC and the Louie were still running meat trains well into the late 60's, in competition to suppliers at Chicago's Union Stock Yards. On the Louie, it was about the hottest thing running. That was as you said, the beginning of the end. Even the Union Stock Yards were feeling the pressure from rural processors and their lower wages. Traffic dried up on the IHB, GTW, and Chicago Junction as this happened. These smaller processing plants were not tailored for rail service. But today, we see a growing number of companies who consolidate products from those plants, and do rely upon rail to transport, especially for export via Seattle, Tacoma, and East Oakland.

Yet today canned goods are still moving on rails. For example, 12 boxes of corn/veggies departed for Geneva, NY in the last week from our terminal alone, four more released today. I suspect peas from Minnesota are about at their peak of shipping as well, destinations unknown.


And Perishable is seeing a good increase towards the east coast. Railex is doing a good business with their perishable out of Washington and California. Also dedicated service bringing frozen fish from Alaska bound for Everett, MA; wine for Worcester, Mansfield, Kearny, Baltimore, Nashua, Jessup, Readville, Philadelphia, and Liverpool; frozen veggies, potatoes, and carrots, all heading to markets all over the east coast. Tank cars of juices. All moving on a daily basis from the West coast via rail. This is just what I see moving on today's trains.

West to east is not the only market I see with foodstuffs. There is a steadily growing trade of frozen veggies from Canada to Texas moving on a daily basis.

In all, these customers pay for good handling of their products to market. Which has to prove some advantage over carriage by truck. So long as the product the railroads provide remains reliable, one can only see an increase in the business.

It's amazing how much food and food raw materials are handled via rail. The heavier stuff, like canned goods, wine and beer (dependant upon the brewer and their logistics) still moving via carload, the "heavier", less-perishable fresh food moving via reefer (and its variations). On the east coast, besides the canned goods and beverages, we also see packaged flour and sugar coming in via carload. Supposedly, Railex is attempting to make a dent in those fresh fruits/veggies that converted to truck during the '70's/80's, that are "lighter" and require expedited service like grapes, lettuce, etc. etc. (IIRC, Trains did an interesting article on the subject within the past few years and identified, with proper terminology the breakdown in the different fruits/veggies). Besides carload, I'm sure there is both fresh products and the heavier canned goods and wine moving to the east coast via intermodal, too. With potential energy and driver issues facing trucking, seems the transcon perishable biz. moving via highway offers plenty of possibility for rail...heck, I'd even think that transcon intermodal service wouldn't be too far behind the transit time a team of drivers could do cross country and would certainly beat a single driver....but, there's plenty of other barriers to re-capturing the business, which I think Trains did a good job explaining in that article. Then, of course, plenty of raw material like wheat for milling into flour, corn syrup for a whole host of foods/beverages, and the feeds used to feed the dairy cows, chickens and locally-grown beef moving via rail. Overall, fairly recession-proof traffic, too!

QB 52.32 wrote: Then, of course, plenty of raw material like wheat for milling into flour, corn syrup for a whole host of foods/beverages, and the feeds used to feed the dairy cows, chickens and locally-grown beef moving via rail. Overall, fairly recession-proof traffic, too!

I wish that were true. Several grinders of Bean Meal have had tough times of late. A lot of this is owing to customers failing financially, leaving the grinder with unpaid bills. Also collapse in small grain prices make the production in some feed products less profitable, as well as oils, as producers return to milled grains for feed instead of meals. I have no idea the numbers of feeder cattle, poultry, hogs, and dairy compared to last year, but I suspect it is lower. Cars shipped 2009 versus 2008 is far reduced.

Whole grain and meal exports are also down over last year. Not a good feeling from producers, and CBOT, which tends to reflect in futures prices. I am seeing however, with some reduction in energy, fertilizer products moving in better numbers than last year. Not like 2007, but better.

Time for work.

Food products volume is down about 11% on a year-over-year basis, but considering overall freight volume is off ~20%, it does show as far less susceptible to recessionary periods.