The US Has The Best Rail System in the World, and Matt Yglesias Actually Pointed Out the Reason

Yglesias has a very good article on why passenger rail is not a bigger deal in the US.   In it, he says this (emphasis added):

Instead the issue is that the dismal failure of US passenger rail is in large part the flip side of the success of US freight rail. America's railroads ship a dramatically larger share of total goods than their European peers. And this is no coincidence. Outside of the Northeast Corridor, the railroad infrastructure is generally owned by freight companies — Amtrak is just piggybacking on the spare capacity.

It is a short article, so it does not go into more depth than this, but I have actually gone further than this and argued that the US freight-dominated rail system is actually far greener and more sensible than the European passenger system.  As I wrote years ago at Forbes:

The US rail system, unlike nearly every other system in the world, was built (mostly) by private individuals with private capital.  It is operated privately, and runs without taxpayer subsidies.    And, it is by far the greatest rail system in the world.  It has by far the cheapest rates in the world (1/2 of China’s, 1/8 of Germany’s).  But here is the real key:  it is almost all freight.

As a percentage, far more freight moves in the US by rail (vs. truck) than almost any other country in the world.  Europe and Japan are not even close.  Specifically, about 40% of US freight moves by rail, vs. just 10% or so in Europe and less than 5% in Japan.   As a result, far more of European and Japanese freight jams up the highways in trucks than in the United States.  For example, the percentage of freight that hits the roads in Japan is nearly double that of the US.

You see, passenger rail is sexy and pretty and visible.  You can build grand stations and entertain visiting dignitaries on your high-speed trains.  This is why statist governments have invested so much in passenger rail — not to be more efficient, but to awe their citizens and foreign observers.

But there is little efficiency improvement in moving passengers by rail vs. other modes.   Most of the energy consumed goes into hauling not the passengers themselves, but the weight of increasingly plush rail cars.  Trains have to be really, really full all the time to make for a net energy savings for high-speed rail vs. cars or even planes, and they seldom are full.  I had a lovely trip on the high speed rail last summer between London and Paris and back through the Chunnel — especially nice because my son and I had the rail car entirely to ourselves both ways.

The real rail efficiency comes from moving freight.  As compared to passenger rail, more of the total energy budget is used moving the actual freight rather than the cars themselves.  Freight is far more efficient to move by rail than by road, but only the US moves a substantial amount of its freight by rail.    One reason for this is that freight and high-speed passenger traffic have a variety of problems sharing the same rails, so systems that are optimized for one tend to struggle serving the other.

Freight is boring and un-sexy.  Its not a government function in the US.  So intellectuals tend to ignore it, even though it is the far more important, from and energy and environmental standpoint, portion of transport to put on the rails. ....

I would argue that the US has the world’s largest commitment to rail where it really matters.  But that is what private actors do, make investments that actually make sense rather than just gain one prestige (anyone know the most recent company Warren Buffet has bought?)  The greens should be demanding that the world emulate us, rather than the other way around.  But the lure of shiny bullet trains and grand passenger concourses will always cause some intellectuals to swoon.

Which would you rather pounding down the highway, more people on vacation or more big trucks moving freight?  Without having made an explicit top-down choice at all, the US has taken the better approach.


  1. herdgadfly:

    Matt Yglesias is incorrect when he writes: "The way Amtrak is currently set up, there's no real incentive to undertake incremental improvements. The Northeast Corridor already generates an operating profit, which simply defrays losses elsewhere in the system."

    According to Randall O'Toole, "As it turns out, no rail transit line in the country comes close to covering its operating costs,much less its total cost." O'Toole has pointed out time and time again in his Antiplanner blog that the government does not count track maintenance as part of operating costs.

  2. HenryBowman419:

    Yep, certain interstate highways (mostly the west-east ones, such as I-40 and I-80) have lots of truck traffic, and it makes them rather miserable for someone driving a car. One of the worst stretches is I-40 between Little Rock and Memphis, as truck traffic from Dallas on I-30 merges with the west-east I-40 traffic — the traffic from Dallas is mostly headed north to the Chicago area, and so turns north onto I-55 just west of Memphis. The combined truck traffic on I-40 between Little Rock and Memphis, though, is horrible.

    Those who want high-speed passenger rail traffic outside of the NE corridor are, in my view, delusional.

  3. james:

    Fascinating post.
    I wonder if the comparison with Europe is strictly fair. Europe, I'd guess, does less bulk transport than US, since it often has the option of seaborne freight.
    I'd also like to know where the real advantages are in the range parcel, pallet, container and bulk transport.

  4. Matthew Slyfield:

    "O'Toole has pointed out time and time again in his Antiplanner blog that
    the government does not count track maintenance as part of operating

    There is good reason for that. Amtrack almost exclusively piggy backs on on freight lines with sweetheart deals forced on the freight lines by force of government. Amtrack has very little in the way of track to maintain. The freight companies are forced to handle all the track maintenance.

  5. herdgadfly:

    Actually, the government does budget capital for such things rolling stock and high-speed track, and the like, but these appropriations are not counted as operating costs - and of course, there is never a fare increase to pay for these sometimes gigantic expenditures. Spend a million or spend a billion as long as there is a perceived need - but keep those underpopulated passenger trains rolling! Soon even commuters will need to work from home when "other people's money" runs out.

    Even when I rode Northeast corridor trains in 1970, I was struck by the rundown facilities and the the rundown neighborhoods that train track went through and I have always wondered why there is a folklore that surrounds the bad service that was provided then and how nothing has really changed today.

  6. SethRoentgen:

    You are still borking this, just as you did last time you commented on Japanese rail. I'll try to make this simple. Japan comprises a series of heavily populated coastal enclaves separated by mountains.

    Bulk stuff (iron ore, coal) comes in by sea and goes out by sea (steel, Toyotas). Express, high value and fresh products go by road or air. The fish you buy in Tokyo this morning were caught off Hokkaido yesterday. They haven't spent six days honking in a freight wagon between Seattle and New York.

    The practical and economic differences between the purpose and operation of US and Japanese rail systems makes any naive comparison useless. Its 6 1/2 hours to drive to central Tokyo from where I live. If I walk 100 metres from my front door to the station, its 3 hours. I get to travel in a train with active suspension, climate control and free wifi. A trolley dolly comes through every 20 minutes with food and booze. The original E400 series rolling stock were replaced at 18 years old by the current E-3 series, so the rolling stock is new. And you think the US rail system is superior to Japan's? Really?

  7. Matthew Slyfield:

    "Actually, the government does budget capital for such things rolling stock and high-speed track,"

    The government, not Amtrak. Again, it's not Amtrak spending the money so it doesn't affect Amtrak's profit/loss.

  8. Fred_Z:

    The train ride you describe sounds great, but how much does it cost you and the taxpayer?

  9. Fred_Z:

    I am always amazed in Europe at the number and size of freight barges going up and down the rivers. I read recently an article, which I can't find now, about Great Lakes shipping and its large efficiencies over rail.

    Even so, Coyete's fundamental point, that government supported rail is bound to be inefficient is quite correct. Perverse inefficiencies heaped one on the other to provide the usual unintended consequences.

  10. David Zetland:

    Yep. A LOT of Dutch freight goes in canals.

  11. David Zetland:

    Did you forget that the USG had to intervene in the rail market to break up trusts (after it intervened to make trains profitable)?

  12. SethRoentgen:

    It costs about 20,000 Yen (about 185 USD) return. Thats about the same as the cost of fuel and expressway charges for the same trip. With more than one person in the car, driving makes more sense unless you count the time and effort.

    Cost to the taxpayer is one of those open ended "externality" things where an economist can make up whatever numbers they want. The system was/is expensive to build. It is clean, efficient and reliable. Without it, some people would choose not to travel. How do you count the cost of "business not done"?

    JR East (my railway company) makes a healthy operating profit. The capital costs get paid from consolidated revenue, just as they do when I turn on the tap and get drinkable water, and use the toilet and the result goes to the sewage farm rather than straight into the river. Its our taxes that get spent to the infrastructure that we want. Most people in Japan are happy with the result: first world infrastructure.

    My complaint with the original post is it compares a system designed for freight with a system designed for public transport and finds the former superior on the basis that it carries more freight. Ah yes, the USA measures itself and wins the World Series yet again!

  13. mlhouse:

    But the United States does not have the same geography as Japan. Nor does EUrope.

    The fact is, the reason why US politicians want rail projects, high speed and local, is that they want to pretend they are cosmopolitan like the fancy New Yorkers and Europeans. The cost is born by others (the undeserving rich).

    In MInnesota they just completed a light rail project that cost over $1 billion that operates along the most usable bus route in the metro area. A bus ran (route 16) ran along the route every 10 minutes. THe need to spend more than $1 billion was simply not there. Yet, to have "rail" they spent the money.

    It is a sad reality sometimes.