Report Challenges Claims of Rail’s Fuel Efficiency

This story appears in the Jan. 18 print edition of Transport Topics.

A new economist’s report challenges claims that trains are more fuel efficient than trucks and questions whether hauling more freight by rail actually improves air quality.

The report by Noel Perry, an economist and former trucking, rail and engine manufacturing executive, assesses what he termed the “supposition” by unnamed parties that rails can make major market-share gains through policy changes to encourage more freight on fuel efficient trains to reduce traffic congestion.

Perry’s report follows a yearlong railroad commercial campaign to dramatize those claims of rail’s superiority. The spots, aired as Congress is weighing transport legislation, also state that railroads are three times more fuel efficient than trucks.

Perry, who was an executive at Schneider National Inc., CSX and Cummins Inc., believes market share won’t change much.

“The discussion of these issues should be based on more accuracy,” Perry told Transport Topics on Jan. 11. “Railroads are very good at moving heavy commodities over long distances,” he said. “Where trucks haul freight, in almost every case they are more efficient on a door-to-door basis.”

At most, railroads could gain only as much as 10%, or $5 billion, from trucks, he said. That represents just 0.8% of the $505 billion U.S. truck freight market.

“That is not enough to warrant truck management attention,” Perry said.

Neither the Association of American Railroads nor American Trucking Associations returned calls to TT for comment by press time.

But competitive battlegrounds do exist for intermodal shipments around 1,000 miles and some moves of bulk products, Perry said.

For 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.”

“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,” according to Perry’s report.

The economics change when the total supply-chain picture is considered, he said, including factors such as more circuitous rail routes, and the substantial costs a shipper that switches to rail would incur to carry more product as a cushion against unreliable rail schedules and more frequent damage.

In addition, he said, railroads lose efficiency by burning fuel moving empty cars to their next load point.

Perry also challenged notions that shifting more freight to trains in urban areas would cut traffic congestion by 10%.

That can’t happen, he said, because trains now haul very little freight within urban areas and such a shift would mean a ninefold increase above current rail volumes in urban areas.

“It is unlikely that the railroads could find new capacity for that kind of change,” he wrote. “Keep in mind as well that the same environmentalists that want truck freight on rail do not want trains crossing their streets.”

The report also assesses energy policy and emissions by trains and trucks, concluding that energy use is effectively allocated between the modes in today’s market.

However, he said, truck energy efficiency could be boosted 20% by allowing 97,000-pound trucks and further helped by improving road access to rail/truck terminals.

Railroads have opposed an increase from the current 80,000-pound limit on motor freight, saying that trucks already don’t pay the full cost of road damage.

“Truck technology has progressed well beyond the limits of current size and weight laws,” he wrote. “Larger trucks help reduce congestion. Fuel consumption increases geometrically for all the vehicles in a traffic jam.”

Another significant issue, Perry said, is a broadening of the review of emissions.

Railroads move freight four times farther over long distances while emitting the same amount of carbon dioxide, he noted.

However, that is not the case for nitrogen oxide, or NOx, which is emitted by both trains and trucks.

When that factor is added, rail’s significant carbon advantage is reduced or eliminated altogether, he said.

One reason is that trucks already face standards for NOx emissions at least four times stricter than those for trains.

The looser NOx rules that apply to railroads compared with trucks shouldn’t be held against the railroads, he said, because federal regulators made the rules that apply to both modes.

The report concludes that modal market share shouldn’t be regulated, that NOx emissions regulations should be equal for each mode, size and weight standards should be liberalized and more rail transload facilities should be built to help both modes.

“Lobbyists from both modes would do well to consider the implications,” Perry wrote, citing issues such as access to fossil fuels, greenhouse gas and other emissions rules and economic regulation.

“Time and money spent improving the quality of debate on those issues has a far bigger payout than encouraging public involvement in modal share decisions,” the report concludes.