Short-Haul Rail Intermodal: Can It Compete with Trucks?

Abstract

Intermodal traffic, that is, truck trailers or ocean containers handled on special rail equipment, is the fastest-growing segment of rail traffic. Between 1990 and 2000, rail intermodal grew at an annual rate of 4.6%—much faster than rail carload freight, which grew at an annual rate of only 1.4%. However, during the same period, truck tonnage grew at an annual rate of 6.9%, and air cargo at a rate of 17.9%. The growing rail intermodal is expected to overtake coal as the single largest source of revenue for freight railroads in the year 2004. But railroad intermodal tonnage is not growing as fast as truck traffic, and market share is consequently falling. This is a problem: with total freight traffic projected to grow 57% by the year 2020, all the increased traffic will have to be accommodated on the highway network. The introduction of double-stack rail cars in the 1980s dramatically reduced rail haul costs, and it made intermodal traffic competitive at distances of 500 mi or so, whereas previously rail could compete with trucks only at distances of about 750 mi or more. Still, most rail intermodal traffic remains long haul. Three-quarters of all truck tonnage moves distances of less than 500 mi, and rail does not compete in this market. Rail haul costs are developed for a number of short corridors, and it is demonstrated that although double-stack usage has lowered line haul costs, terminal and drayage costs remain high. If these costs can be reduced, rail intermodal can be competitive even in short-distance corridors. Several ways to lower these costs, both by industry initiatives and by public investment, are proposed. Without some action by the public sector, short-haul rail intermodal will continue to be noncompetitive, and highway truck traffic will continue to grow.

The relative importance of factors that influence the break-even distance of intermodal freight transport systems

“…It is notable that the share of drayage costs in the total costs is 30-40% (Spasovic and Morlok, 1993;FHWA, 1994;EC, 2000bEC, , 2001a. Resor and Blaze (2004) reported that drayage costs around a port region in the US account for more than 70% of the total costs when the transport distance is about 300 km. Barton et al (1999) surveyed experts and practitioners about the long-distance truck rate (b) in Minnesota, in the United States.…”

“…UIRR (2000) distinguishes domestic and international intermodal transport: 550 km for domestic intermodal systems and 760 km for international intermodal systems (Bärthel and Woxenius, 2004). In North America, researchers estimate the break-even distance to be about 500 miles (800 km) (Transport Canada, 1996;Resor and Blaze, 2004;Lim and Thill, 2008) by using market observation. This survey/interview approach is simple, but the applicability of its results to other corridors/markets is limited.…”

“…The break-even distance is improved from 1100 km (for the conventional intermodal freight train with a length of 500-600 m) to 600-700 km (for the long intermodal freight train, 800-1000 m long). Resor and Blaze (2004) examine the introduction of doublestack technology in the United States. The break-even is reduced from 1500 km to either 645 km (the effect of introducing double deck rail operation) or even to 200 km (for the effect of double deck operation as well as central drayage operation).…”

Intermodal containerized shipping in foreign trade and regional accessibility advantages

“…As expected, gains are minimal along the Atlantic Seaboard and through most of the Southeast, over a depth from the coast line of 500-750 miles. This should not be a surprise since intermodal solutions are seldom competitive with trucking over shorter distances (Brown and Hatch, 2002;Resor and Blaze, 2004). Through the rest of the country, we observe a patchwork of medium to high accessibility gain areas.…”

Port Investment and Container Shipping Markets

“…The road: rail trade-off in terms of cost efficiency is between 500 and 750 kms according to Resor et al (2004); in Canada, the distance is considered to be one-half day's driving distance by truck.…”