Originally Posted By: eljefino
Transportation is plenty cheap, as evidenced by Chinese Apple juice replacing locally made stuff. If over-the-road trucking were too expensive, they'd figure out the logistics of container rails carrying more of the load, except for the last 20-100 miles to the store/warehouse.
It always sounds good, in theory, to put more on the rail. That is, until you realize that 80% of goods moving around are done by truck. It is a logistics nightmare just to transfer a quarter of that over to rail. And when you figure that businesses are just like consumers.... they want things they order to be delivered yesterday. Putting products on rail will extend delivery times considerably. Switching cars in a rail yard is not like a drop and hook deal for trucks. And a major portion of manufacturing in this country is done by the "just in time" method. Straight from the truck to the build floor. And on the front end, many products need shipped within hours of being readied. Rail cannot even compete with that, even with containers. To transfer a significantly larger portion of freight to rail would cause a lot of disruption in the economy. Some could be transferred, for sure. But not on the level some think.
And there is the regional stuff, like I generally stay involved in. It is not practical to put commodities on rail in Sioux City, IA that goes to a bakery in Kentwood, MI. Times are just too critical. If Rail were to "lose" a car or container in their system (happens more than some think), the consignee is going to have to have another load overnighted to them at a substantially higher freight cost. Just better to go with the truck to begin with.
International and cross nation, yes, rail is not a bad thing for a lot of stuff. But anything in between, especially regional, can be a real logistics nightmare. And any perceived cost savings would not materialize. I am not sure that a lot of people, even those involved in trucking, have a firm grasp on the logistics involved to make the economy work. The reason we do a lot of what we do in transporting goods, is that it is the most cost effective way to do it to meet production schedules and other issues.