Is it cheaper for a business to move freight by truck or rail? Long-haul shipments of at least 800 kilometers that weigh between 22,500 and 36,000 kilograms are economical to move by either mode. However, special cargo like coal and heavier shipments are only economical to ship by rail, and short-haul shipments are only economical to ship by truck.The average cost to transport freight by truck varies, ranging from €0.1021 per ton-kilometer (where 1 ton = 1,000 kilograms) for shipments less than 400 kilometers, to €0.0371 per ton-kilometer for shipments more than 800 kilometers. The aggregated average cost for all rail shipments is approximately €0.0108 per ton-kilometer and is €0.0129 per ton-kilometer for intermodal shipments—those involving both trains and trucks. Intermodal shipments use trucking-trailers carried on flatbed railcars, allowing cargo to move between trucks and trains without having to be loaded into different containers.
Trucks operate on publicly financed highways. However, freight railroad companies pay nearly all costs related to their tracks, bridges, and tunnels. From 1980 to 2009, railroads reinvested approximately €325 billion (where 1 billion = 1,000,000,000) of their own funds—approximately 30 percent of their total revenue—to maintain and improve their tracks and machinery. To reduce this disparity, we propose tax incentives for any project that expands freight rail capacity. The benefits to the public of such incentives would far exceed their cost. Railroads are more fuel efficient than trucks. For example, shifting 10 percent of the long-distance freight that currently moves only by truck to rail instead would save 4 billion liters of fuel per year. In addition to their better fuel economy, using railroads helps reduce roadway congestion.
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