Clearing Some Hot Air

An economist with lots of experience in freight transportation has some interesting things to say that directly challenge the railroad industry’s extensive advertising blitz apparently aimed at convincing Americans that their way is the green way. (Click here for story from p. 3 of this week’s issue.)

The commercials, which portray railroads as three times more fuel-efficient than trucks and less polluting than trucks, have been running for months on various television and radio stations.

But Noel Perry, an economist who has worked for Schneider National Inc., CSX and Cummins Inc., said, “Where trucks haul freight, in almost every case they are more efficient on a door-to-door basis” than railroads.

Perry, in a new report, said that rail carriers do have their strengths. “Railroads are very good at moving heavy commodities over long distances,” he said.

He said that public debate over the efficiency of the nation’s freight delivery system “should be based on more accuracy” than is being shown in the commercials.

Perry added that the railroad industry is mistaken if it thinks it can gobble large market share gains through its claims.

“Although rail has significant fuel-economy advantage in the longhaul, high-volume moves, it has no advantage in the medium-haul moves where market-share gains must occur,” he said.

By his calculations, Perry said, the best railroads could hope for would be to gain 10% of freight from trucks, or about $5 billion worth. That amount would represent just 0.8% of the current U.S. truck freight market.

He said that potential loss of freight isn’t large enough “to warrant truck management attention.”

While railroads may gain some more business through their intermodal services, for most other freight, Perry said, “Existing market forces have already done an excellent job of maximizing fuel efficiency by allowing rail and truck to do what they do best.”

He said the railroads’ commercials fail to note the fuel the carriers burn moving empty freight cars back to customers and don’t consider that most freight that moves by rail also finds its way onto trucks at least twice in every move.

Perry said truck fuel efficiency could be boosted immediately if federal truck weight limits were raised, which would improve results.

Thanks, Mr. Perry. At the very least, he has helped the environment by clearing the air.