From coal-fired steam to modern diesel electric, the railroad industry has survived the rise of passenger cars, diesel trucks and jet airplanes. But the combination of two new technologies may finally kill them off once and for all.
Episode Summary:
Commercial railways have been around for 200 years in America. And for most of that time, they represented a low cost, high speed and reliable way to haul large tonnages of freight across a very wide country. As private passenger cars and air travel drove passengers away from rail service, freight took up the slack and railways remained unchallenged on a cost per ton mile basis for many kinds of freight up to the present. But a new generation of self-driving diesel and electric trucks may drive the metaphorical nail into the coffin of the American railway industry.
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Transcript of this week’s show:
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Railways have been around a long time. The first commercial railway in the US was the Baltimore and Ohio, who received their charter in 1827 to operate a line 13 miles long. At one time, railways were as much a symbol of national power and importance as space programs are today and were considered a vital strategic national interest.
But starting a hundred years ago, competition began to encroach on the railways’ monopoly on speed and distance. Better roads and the internal combustion engine, then the boom in private car ownership and the Interstate highway system in the 1950s, and finally low-cost jet air travel in the 1960s all created declines in passenger use of railways, and a major shift in freight lines from mixed cargo to specialized service, especially as trucks took over the drayage business.
But trains are still here. That, however, may not be true for long. Just as robotaxis are predicted to replace human cab drivers in the near future, with several companies testing units on public roads now, human truck drivers operating Class VIII tractors on long-haul routes may soon become a thing of the past. San Diego-based TuSimple has created a freight network of self-driving trucks that promise to significantly reduce the cost of freight transport and possibly give road transport the final competitive edge over railways.
On a 951-mile intercity run from Nogales Arizona to Oklahoma City, a TuSimple self-driving truck hauled a load of produce in 14 hours and six minutes, 10 hours faster than possible with the human driver. That’s a 42% improvement, and although the autonomous portion of the trip did not include local pickup and delivery, the time savings of round-the-clock operations are tough to beat. The test vehicles in this case were diesel powered, but companies such as Tesla and Freightliner have already built electric highway tractors and Swedish company Einride, who recently signed a major self-driving truck deal with GE Appliances, claims that 40% of current US truck routes can realize cost savings right now with current technology.
Railways have traditionally had dual advantages of speed and low cost in hauling large tonnages of freight over long distances. Per gallon of fuel burn, it’s tough to beat trains when you’re hauling bulk products like wheat or iron ore, but for general cargo and high-value freight, the Achilles’ heel of rail has always been its intermodal nature. Even with containerization, the containers must move off the ship, onto a truck, to a railhead, then off the railcar and onto another truck for last mile delivery at destination.
Autonomously driven tractor-trailers however aren’t paying salaries to wait at ports and can be dispatched automatically to collect containers as they come off cargo ships, and carry them directly to their destination, operating 24/7 except for downtime for charging. And even that downtime is now being challenged by high-rate charging technology and even battery swapping.
According to the American Transportation Research Institute, by percentage, the top three components of a trucking company’s operating costs are driver wages and benefits, 42%, fuel, 24% and lease or finance payments for the vehicle at 16%. 66% of the cost of running a truck is in the driver and the fuel to operate it. Other factors like tires, insurance and maintenance represent a small enough proportion of the costs that improvements in these areas can’t generate a substantial savings.
But eliminate the driver, and the diesel fuel, and significant cost savings can be realized. And these costs don’t factor in the productivity improvement of autonomous vehicles that can operate with much less downtime than the mandatory rest periods required of long-haul truckers. We’ve all seen mile-long trains hauling 40-foot shipping containers. Will we still see them 20 years from now? Somehow, I doubt it.
