length of haul. But we are following
the freight,” he says.
What, us worry?
Truckers, for their part, don’t seem
too concerned. Nor should they be,
according to some analysts. Trucks
are unencumbered by the need to
find railheads, track, or rail ramps.
In addition, they have the edge over
railroads when it comes to travel dis-
tances. Because the foundations of
the nation’s rail network were laid
before 1900 and were built to follow
the contours of America’s coastal
and inland waterways, which were
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not the shortest distance between two
points, the average rail move remains
about 20 percent longer than the typical
truck move.
Then there is the expense of the dray—
the delivery to and from the rail ramps—
that can often offset the economic benefits of the rail move itself.
On longer hauls, there is enough revenue mileage for a railroad to incorporate
the drayage expense and still provide savings to the shipper and consignee. On
shorter distances, however, there is less of
a cushion. With fewer rail miles to work
with, the high cost of drayage will often
make a rail move more expensive than a
door-to-door movement by truck, analysts say.
Larry Gross, an analyst for FTR, says the
only way railroads can compete with
trucks over shorter lengths of haul is if
railroads built more local or “secondary”
terminals that would allow drayage to be
performed within 50 to 60 miles of a shipper’s plant or the consignee’s dock.
“The more secondary terminals that are
established, the greater intermodal’s competitiveness at the shorter lengths of haul
will be,” Gross says.
Given that railroads are far from building out such dense infrastructures, Gross
doesn’t see much of a competitive threat
to trucks from intermodal. “I don’t think
that truckers operating in the 500- to 750-
mile lengths of haul have too much to
worry about,” he says.
Herb Schmidt, president of Con-way
Truckload, agrees, saying that “short-haul
on rail is trying to stick a square peg in a
round hole.” And Curtis Whalen, executive director of the American Trucking
Associations’ Intermodal Motor Carriers
Conference, says he’s not worried about
where his members’ next load is coming
from, especially as a truck must be a part
of every intermodal move. “Our guys will
keep pretty busy,” he says.
Observers like Finkbiner of Railex
believe a spike in diesel fuel prices similar
to what occurred in 2008 could shift the
balance in favor of rails even at shorter
lengths of haul. Gross insists, however,
that the most important factor is “not the
price of the fuel but the footprint of the
rail intermodal network.” ;
