Comparison of Trucking and Rail as freight modes

Table of Contents
1.0 Introduction ................................................................................................................................. 2
1.1 Truck Freight .......................................................................................................................... 2
1.2 Rail Freight ............................................................................................................................. 2
2.0 Costs............................................................................................................................................ 2
2.1 Private Costs ........................................................................................................................... 3
a. Truck private costs .................................................................................................................. 3
b. Rail Private Costs .................................................................................................................... 3
2.2 External Costs ......................................................................................................................... 3
a. Truck External Costs............................................................................................................... 3
b. Rail External Costs ................................................................................................................. 4
2.3 Public Costs ............................................................................................................................ 4
a. Truck Public Costs .................................................................................................................. 4
b. Rail Public Costs ..................................................................................................................... 4
2.4 Comparison of Costs ............................................................................................................... 4
3.0 Environmental Effects................................................................................................................. 5
4.0 Conclusion .................................................................................................................................. 6
5.0 References ................................................................................................................................... 7

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1.0 Introduction
Freight transport is the process of transporting supplies, merchandise goods and cargo from
one point to another. Major objective of all freight transport is to accomplish economic
efficiency in the movement of goods therefore, may that be with the help of trucking and or
rail as freight modes, transportation sector and its magnates always aim towards creating
conditions that support economically efficient movement of goods [1]. Freight transportation
is vital to economies across the globe. Companies across the world look for low cost
dependable movement of freight, which can effectively move goods around the country and
world in a quick span of time. This research paper studies trucking and rail as freight modes.
Environmental effects and benefits and numerous costs incurred by freight transport will be
considered to state the pros and cons of trucking and rail as freight modes.
While selecting the most appropriate freight mode, companies more often than not consider
freight cost and transport duration. Hence, time efficiency of the freight mode is very important
for any business to consider that particular mode of freight transport.

1.1 Truck Freight

Truck transportation is one of the most extensively used freight mode around the globe. Truck
transportation is the process or business that involves transportation of goods using “motored,
wheeled, non-rail vehicles” known as trucks [2]. Truck transportation is virtually found in all
industries, ranging in size from a single truck to hundreds of tractors and trailers.

1.2 Rail Freight

Rail Freight which is the “green” option in freight industry, as it burns less fuel per ton mile
than road vehicles and a train. Heavy industries are conventionally linked with rail transport
systems, although containerization has enhanced the elasticity of rail transportation by
connecting it with road and maritime modes. Railways are composed of a traced path on which
wheeled vehicles are bound. Moreover, railway freight is the most reliable mode of transport
as it has minimal expanse of adverse effects due to weather conditions such as rains, fogs
etcetera, in contrast to other modes of transport.

2.0 Costs
When selecting a suitable freight mode to transport goods and supplies over land routes, there
is often the choice of shipping by either a truck or rail. Many factors are considered while
selecting the most appropriate and viable mode of freight (that is either truck or rail) for a
shipment, but most of these factors can be accumulated and examined statistically with a cost
as its instigator. There are various types of costs correlated with good transportation, which
will be further characterized as private, public and external costs. In transportation industry
cost ultimately initiates demand and modal split. Per se if rates go up for one mode, technically
less demand for that mode will be seen subsequently, demand will shift to other modes [3]. In
the freight industry demand and modal splits have noteworthy impacts over planning and
operation of transport facilities [3].

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 2.1 Private Costs
In financial terms, private costs are the direct costs incurred by providers/users of freight
transportation. These expenditures include internal operational costs such as rent, labour, fuel,
maintenance, as well as investments in capital facilities [4]. Private costs commonly drive the
behaviour in a market; in the case of trucking and rail as freight modes, the price of transporting
goods by either freight mode is the primary factor influencing demand for these two modes.

a. Truck private costs

In accordance with the U.S trucking industry cost of labour represents the highest cost,
representing 35% of total operating costs. Furthermore, fuel costs amass 15% of the operating
cost, hence, fuel is quantified as the second largest private cost incurred in the U.S trucking
industry. Likewise, to operate a truck freight, bearing in mind all private costs, as analysed by
Forkenbrock in his research ‘Comparison of external costs’, and it quotes, ‘’it varies with
distance travelled, ranging from 21.17 cents per ton-mile for shipments of less than 250 mile
to 7.69 cents per ton-mile for shipments of over 500 miles” [Forkenbrock, Truck] [5]

b. Rail Private Costs

Operating costs for rail majorly depend on the product shipped and type of train used. Initial
costs of rail freight are stated to be high, per se, construction of rail facilities is a capital-
intensive process [3]. Eventually, when rail facilities are upgraded or built, rail can transport
freight at a considerably lower cost than truck freights. Conversely, most important factor in
rail freight is maintaining a schedule for departure and arrival of goods to and forth a location.
Moreover, it is an arduous and labour-intensive process to switch trains and operate
locomotives.

2.2 External Costs

External costs are costs incurred due to environmental expenses on non-users due to air
pollution, noise and the cost to society of accidents. Inclusive of all these factors is categorized
as external costs. External costs are quantified to be highly arduous and subjective, as it is
difficult to value external impacts in terms of currency. Very few of environmental impacts can
be assigned to dollar amounts that are expected to be extensively embraced, largely due to the
scope of understanding, we have over the effects of various transportation modes on the
environment, health and safety [4]. Most common external costs accounted are through
accidents, emissions and noise impacts.

a. Truck External Costs

A study conducted by Forkenbrock concluded that most categories that comprises external
costs for truck freight are accidents, air pollution and greenhouse gas emission [5]. Pollution
costs were assessed keeping in mind, medical expenses, impact to human health and the
damage to animals and crops which is a direct consequence of pollution emitted by trucks.
Additionally, accident costs were accounted by generalizing the amount of money people will
pay to reduce risk versus the amount they are willing to pay for other goods. Eventually, prices

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are applied to previous truck accidents occurred to determine a total truck accident cost to
society.
Noise impacts and greenhouse gas emission are also accounted under external costs. These
costs when accounted together, result in an average external cost of 1.11 cents per ton mile.

b. Rail External Costs

Forkenbrock similarly analysed the external costs directly related to rail freight. Cost of noise
and air pollution, greenhouse gas emission, and accidents are quantified in a similar fashion to
the truck external cost analysis. Various train scenarios were analysed in order to justify
external costs generated by rail freight. Ultimately, an averaged and competitive external cost
after selecting the most critical scenario, 0.25 cents per ton-mile is accounted as an average
external cost for train freights.

2.3 Public Costs

These costs indirect costs that are borne by the public through fixed rate fees and taxes.
Generally, public costs do not alter with the quantity of goods or services consumed, hence,
individuals and or companies more often than not pay the same public costs.

a. Truck Public Costs

When we contemplate truck public costs, most important factor considered is the pavement
rehabilitation and maintenance. In accordance with Washington state department of
transportation, heavy trucks usually 18,000pounds or greater cause most of all the pavement
damage on national highways [6]. Moreover, across most countries, for trucks operating on
state and national highways, road user fees are charged as an income to maintain and refurbish
the highways for safe and smooth usage.

b. Rail Public Costs

Conversely, rail freights are considered to incur very low sums of public costs in comparison
to the public costs incurred by truck freights. In most of the countries, railroads operate on
tracks mostly owned by them and are responsible for maintenance and annual upgrades of these
tracks. Hence, construction, track improvements and maintenance would be considered private
costs.

2.4 Comparison of Costs

Due to the different types of freight, operating environments and the wide variability of
vehicles a direct accountability and comparison of public and external costs is considered
difficult. When costs were analysed separately different considerations were made largely
dependent on the data used for investigation. In accordance with, with a study conducted by
Owen Kehoe, similar methodologies were employed to enumerate both truck and rail costs for
a valid evaluation [1].

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 Mode Private Costs Public Costs External Costs Total non- %
private costs
Truck 7.69 0.25 0.86 1.11 14.4 %
Rail 2.68 0.00 0.25 0.25 9.3 %
Table 1: Cost Comparison
In accordance with the study conducted by Owen Kehoe and the results achieved in the table
1, it is explicit that truck freight imposes a higher cost in comparison to rail freight.

3.0 Environmental Effects

In recent years, trucking freight have been worrisome due to the negative environmental
impacts especially in comparison to the impacts of rail freight. Trucking freight over the years
have possessed greater threat through air pollution and noise. In accordance with a journal
published by Dr Joy Hecht, on air pollution and emission factors accounted from various
sources across the globe is summarised in the table below. Table 2 showcases the emission
factors and air pollution caused by various trucking freights [7].

Table 1: Truck Air Pollution Emission Factors, in grams/tonne-km

Conversely, Rail Freight is largely highlighted to be the ‘green’ option in freight transport
industry as it is a less environmentally damaging freight mode. In a research conducted by
Association of American Railroads in 2011, it is itemised that rail freight possess greater
environmental benefits in contrast to trucking freight. Association of American railroads in
their detailed study stated, “U.S freight railroads moved a ton of freight at an average of 469
miles per gallon of fuel – up from 235 miles in 1980 showing an improve of 99%” [8]. In recent
years, an independent study conducted by Federal Railroad Administration states that railroads
are averagely four times more fuel efficient than trucks. Hence, as we know that greenhouse
gas emissions are directly proportional to fuel consumption, therefore, rail freight emit lower
greenhouse gas in comparison to truck freights.
Equally, the noise created by rail is significantly lower than that postured by trucks. Trucks
tend to generate high amplitudes of noise through highway noise and trucks themselves

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constantly throughout the travel distance, whereas rail freight generate considerably lower
noise pollution [7]. As railway noise is intermittent, hence, the noise generated by rail is
comparatively lower than that postured by trucks.

4.0 Conclusion
Rail is one of the most versatile freight mode. As it is capable of moving heavy and bulky items
across destinations, additionally, if necessary extra cars can be added to accommodate extra
supplies or cargo. Furthermore, rail freight can be considered most punctual in comparison to
truck freights. As rail freights are better organised in terms of routes and schedule. Truck
freights can have many hiccups along the route may that be traffic on the selected route or
weather conditions. Rain and Fog affect the route and travel time of trucks, conversely, rail is
least affected by weather conditions.
Contrarywise, truck transportation is still the most widely used freight mode in many parts of
the globe. Although truck freights cause more pollution when compared to rail freight, but,
truck freights still remain the most apt mode of transport for short distance and direct routes.
Additionally, loading goods onto a truck is still considered easy when compared to railway
transportation. Major benefit of truck freight is that it is still the most direct solution for moving
goods from point A to point B without demanding any change in transportation approaches.

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5.0 References

[1] Republic of South Africa, Department of Transport. 2014. Freight Transport. 7th ed. Durban:
Department of Transport, Republic of South Africa.

[2] Transportation, Advantages. 2015. "Advantages And Disadvantages Of Truck Transportation".

http://whitenies.blogspot.my/2013/06/advantages-and-disadvantages-of-truck.html.

[3] Kehoe, Owen. 2003. "Economics of Truck and Rail Freight Transportation ." A look at public and
external costs and the truck-rail modal split 1-3.

[4] Forkenbrock, David J. 1999. "Comparison of external costs of rail and truck freight transportation."
(Public Policy Center, The University of Iowa, Iowa City, IA.).

[5] Forkenbrock, David J. 1999. "External costs of intercity truck freight transportation."

[6] Transportation, Washington State Department of. 1995. "WSDOT Pavement Guide, Volume 2."

[7] Transportation, Washington State Department of. 1995. "WSDOT Pavement Guide, Volume 2."

[8] Railroads, Association of American. 2012. "The Environmental Benefits of Moving Freight by
Rail."