Rail Transportation and Pipelines

Authors: Dr. Jean-Paul Rodrigue and Dr. Brian Slack

1. Rail Transportation and Rail Lines

Although primitive rail systems existed by the 17th century to move materials in quarries and mines, it is not until the early 19th century that the first real rail transportation systems came into existence. Rail transportation has been the product of the industrial era, playing a major role in the economic development of Western Europe, North America and Japan. It represented a major improvement in land transport technology and has obviously introduced important changes in the movement of freight and passengers. This was not necessarily because of heavy loads, since maritime transportation excelled at doing so, but because of the time element. Rail transport systems dramatically improved travel time as well as the possibility to offer reliable schedules that could be included in the planning of economic activities such as production and distribution. The coherence of economic activities and social interactions was thus substantially improved.

With the introduction of the steam locomotive in 1829, a mechanized land transport system became available for the first time. According to the geographical settings, rail lines were established differently because of the variety of strategies to be achieved, namely access to resources, servicing regional economies and to achieve territorial control. The first railway companies were mainly point to point ventures with the company often taking the name of the serviced destinations. As the rail system expanded, several mergers took place, which lead to rather peculiar semantic results. For instance BNSF Railway (Burlington Northern Santa Fe; the company uses the acronym to avoid confusion) is the outcome of some 390 different railroad lines that merged or were acquired over a period of more than 150 years.

Rail transportation is characterized by a high level of economic and territorial control since most rail companies are operating in situation of monopoly, as in Europe, or oligopoly, as in North America. The United States has seven large rail freight carriers, each having a market area. Operating a rail system involves using regular (scheduled), but rigid, services. Rail transportation, like roads, has an important relationship with space, since it is the transport mode the most constrained by the physiography. These constraints are mainly technical and involve issues such as:

• Space consumption. Rail transportation has a low level of space consumption along lines, but its terminals are important consumers of space, especially in urban areas. This increases operation costs substantially. Still, rail terminals tend to be centrally located and accessible.
• Gradient and turns. Rail transportation can support a gradient of up to 4% (e.g. 40 meters per kilometer), but freight trains rarely tolerate more than 1%. This implies that an operational freight rail line requires 50 kilometers to climb 500 meters. For turns, the minimal curvature radius is 100 meters, but radiuses of 1 km for a speed of 150 km/hr and 4 km for a speed of 300 km/hr are needed.
• Vehicles. Rail transportation is very flexible in terms of vehicles and there is a wide variety of them filling different purposes. The locomotion technology ranges from steam, to diesel (mainly for freight in the United States) and electric (mainly for passengers in Europe). The recent trend has been a specialization of freight wagons, such as hopper wagons (grain, potash and fertilizers), triple hopper wagons (sand, gravel, sulfur and coal), flat wagons (wood, agricultural equipment, manufactured goods, containers), tanker wagons (petrochemical products), box wagons (livestock, paper, manufactured goods), car wagons and passengers wagons.
• Gauge. The standard gauge of 1.435 meters has been adopted in many parts of the world, across North America and most of Western Europe for example. It accounts for about 60% of the railways. But other gauges have been adopted in other areas, such as the broad gauge (1.520 meters) in Russia and Eastern Europe accounting for about 17% of the railways. This makes integration of rail services very difficult, since both freight and passengers are required to change from one railway system to the other. As attempts are being made to extend rail services across continents and regions, this is an important obstacle, as for example between France and Spain, Eastern and Western Europe, and between Russia and China. The potential of the Eurasian land bridge is limited in part by these gauge differences.

Other factors that inhibit the movement of trains between different countries include signaling and electrification standards. These are particular problems for the European Union where the lack of "interoperability" of the rail systems between the member states is a factor limiting the wider use of the rail mode. There are also signs that the passengers and freight markets are being separated. First, it is occurring at the management level. The liberalization of the railway system that is being forced by the European Commission is resulting in the separation of passenger and freight operations. This had already taken place in the UK when British Rail was privatized. Second, the move towards high speed passenger rail service necessitated the construction of separate rights of way for the TGV trains. This has tended to move passenger train services from the existing tracks, thereby opening up more daytime slots for freight trains. Third, the Dutch are building a freight only track, the Betuwe Line, from the port of Rotterdam to the German border, having already sold the freight business of the Netherlands railway (NS) to DB, and having opened up the freight business to other firms.

It is often possible to combine rail transportation with road transportation, simply by carrying trailers. This is called "piggy back" and it is increasingly used to efficiently combine the inland potentials of rail and road transportation. The most flexible is obviously the RO-RO (Roll On – Roll Off) method where the tractor and the trailer are directly loaded on a rail platform. The driver usually rolls in with an outbound carriage and rolls out with an inbound carriage. Overall, rail transportation is more efficient than road transportation, although its main drawback is flexibility as traffic must follow fixed routes and transshipment must be done at terminals.

2. The Spatial Economy of Rail Transportation

The ability of trains to haul large quantities of goods and significant numbers of people over long distances is the mode’s primary asset. Once the cars have been assembled or the passengers have boarded, trains can offer a high capacity service at a reasonable speed. It was this feature that led to the train’s pre-eminence in opening the interior of the continents in the 19th century, and is still its major asset. With containerized unit trains, economies of scale can be readily been achieved while road accounts for no such advantage. Each additional container being carried by road involves the same marginal cost increase, while for rail there is a declining marginal cost per additional container until the unit train size is reached. Passenger service is effective where population densities are high. Freight traffic is dominated by bulk cargo shipments, agricultural and industrial raw materials in particular. Rail transport is a ‘green’ system, in that its consumption of energy per unit load per km is lower than road modes.

The initial capital costs are high because the construction of rail tracks and the provision of rolling stock are expensive. Historically, the investments have been made by the same source (either governments or the private sector). These expenditures have to be made before any revenues are realized and thus represent important entry barriers that tend to limit the number of operators. It also serves to delay innovation, compared with road transport, since rail rolling stock has a service life of at least twenty years. This can also be an advantage since the rolling stock is more durable and offer better opportunities at amortization. On average, rail companies need to invest about 45% of their operating revenues each year in capital and maintenance expenses of their infrastructure and equipment. Capital expenditures alone account for about 17% of revenue, while this share is around 3 to 4% for manufacturing activities.

Since the end of the 1950s, railway systems in advanced economies have faced an increasing competition from road transport, with varying results. In several countries such as China, India, and Japan, rail transportation accounts for the majority of interurban passenger transportation. Among developed countries, there are geographical differences in the economic preference of rail transportation. For Europe, rail transportation is still very important, mainly for passenger transportation, but has declined over the last decades. High-speed passenger rail projects are however improving its popularity. For North America, rail transportation is strictly related to freight, with passengers playing a marginal role only along major urban corridors. This as reached a point where passenger trains are getting increasingly delayed because priority is given to freight. It is only in the northeastern part of the United States that passenger services are running on time since Amtrak (the federally owned passenger rail operator) owns the tracks.

An important concept in rail competitiveness concerns the breakeven distance which is a threshold above which rail becomes most cost effective than road. Conventionally, the breakeven distance between intermodal rail and truck is in the 600-800 miles (950 - 1,300 km) range. Under 500 miles (800 km), drayage costs from the terminal usually account for for 70 percent of total costs. There are regional differences impacting the breakeven distance. For Europe it is in the range of 650 miles (1050 km) while in the United States it is around 750 miles (1,200 km). For the United States, only around 5 percent of the intermodal rail traffic concerns distances of less than 750 miles underlining the clear supremacy of trucking for such a service range. The average rail haul length is about 1,900 miles (3,050 km), with around 65 percent involving distances of more than 2,000 miles (3,200 km).

Even if rail transportation was primarily developed to service national economies, globalization is having significant impacts on rail freight systems. These impacts are scale specific:

• At the macro scale, new long distance alternatives are emerging in the form of land bridges in North America and between Europe and Asia. In North America, rail has been very successful at servicing long distance intermodal markets, underlining the efficiency of rail over long distance and high volume flows.
• At the meso scale, the railway transportation network is influenced by the pattern of energy consumption. Many countries still rely overwhelmingly on foreign suppliers for their source of fuel. Countries still build major fuel moving transport arteries. Another important trend has been the growing integration of rail and maritime transport systems. Rail transportation has thus become the extension of maritime supply chains. A key issue is the concentration of investments in shaping rail corridors.
• At the micro scale, recent tendencies notably in extended metropolitan regions reveals a specialization of rail traffic as well as a transfer of certain types of commodities from the rail network to the fluvial and road network systems. Railways servicing ports tend more and more to concentrate on the movement of container traffic. This strategy followed by rail transport operators allows on the one hand, an increase in the delivery of goods and on the other hand, the establishment of door-to-door services through a better distribution of goods among different transport modes.

3. Technical Changes in Rail Transportation

Rail transport has been affected by continuous innovations, technical and commercial changes. Increasing electrification and automation will also improve the efficiency of rail transportation, passenger and freight alike. A few new rail lines are being built, but mainly in developing countries. Railway speed records have constantly improved. For instance, portions of the French high speed rail system (also known as TGV: Tres Grande Vitesse) can reach speeds up to 515 km/hr. Variable wheel-base axles permit rail transport between different gauges. However, freight trains run at a considerably lower speed, in the range of 30-35 km/hr. In some cases, as the rail system gets more used, operational speed may decline.

Longer and heavier rail coupled with major engineering feats allow the suppression of natural obstacles, which enhance network continuity. The Seikan tunnel between the islands of Honshu and Hokkaido in Japan has a length of 53.8 kilometers while the Channel tunnel between France and England reaches 50.5 kilometers. One of the most technically challenging rail segment ever built was completed in 2006 in China. The 1,142 kilometers line links Golmud in Qinghai province to Lhasa in Tibet. Some parts go through permafrost and altitudes of 16,000 feet, conferring its status of the world's highest rail line. Rail transport has comparative advantages in carrying heavy bulk traffic on specific itineraries over long distances. For instance, a 10 car freight train can carry as much cargo as 600 trucks. Beside its emphasis on safety and reliability, rail transport favors the fast commuting of suburbanites during peak hours and has become an important mode supporting passenger movements in large cities.

The global trend involves the closure of unprofitable lines as well as the elimination of several stops. Over the last 50 years, with downsizing of rail transportation, while traffic was moving to other modes, rail companies abandoned lines (or sold them to local rail companies), removed excess terminals and warehousing capacity and sold off property. The process of rationalization (deregulation) of the rail network is now completed in a number of countries, such as in the United States. This has implied significant labor savings with the reduction of train crews (from 3-4 to 2), more flexible working hours and the usage of subcontractors for construction and maintenance. In addition to energy efficient (the fuel efficiency of locomotives has increased by 68% between 1980 and 2000) and lighter equipment, the usage of double-stack cars has revolutionized rail transportation with additional fuel efficiency and cost reductions of about 40%. Unit trains, carrying one commodity-type only, allow scale economies and efficiencies in bulk shipments, and double stacking has greatly promoted the advantages of rail for container shipments. Rail transport is also enjoying a resurgence as a mode for commuters in many large cities.

Trends concerning cargo transport using trailers on flat cars (TOFC) and containers on flat cars (COFC) well illustrate the increasing adoption of intermodal transport. Due to its great versatility, the container is highly favored as such a means of cargo transport. Double-stack rail technology is a major challenge for the rail transport system as it is effective for long distances where additional terminal costs are compensated by lower transport costs. The United States has a notable advantage over Europe on this issue since a full double-stacked unit train can carry between 500 and 600 TEU (200 to 300 containers) and can have a length exceeding 10,000 feet (about 3,000 meters). Further, most railroads were constructed early in the 20th century and have an overhead clearance that is inadequate for the usage of double-stack trains. This is notably the case for tunnels and bridges. Even if improving clearance is a major investment, several rail companies, notably in North America, have invested massively on double-stacking projects. In 2005, American and Canadian railways carried more than 13.9 million intermodal containers and trailers. The economies and improved capacity of double-stacking have justified investments of raising the clearance from 5.33 meters (17’6") to 8.1 meters (20’6") along major long distance rail corridors. Europe is less advanced in this process because most of its rail facilities were built in the middle of the 19th century. Clearance thus forbids the usage of double-stacking on most European rail corridors.

The emergence of high-speed rail networks and increasing rail speed had significant impacts on passengers transportation, especially in Europe and Japan (high speed freight trains are not currently being considered; see Application 1 for a more detailed overview). For instance, the French TGV has an operational speed of about 300 km/h. High-speed passenger trains require special lines, but can also use the existing lines at a lower speed. In many cases it permitted a separation between rail passenger traffic rolling at high speed and freight traffic using the conventional rail network. The efficiency of both the passengers and freight rail network is thus improved significantly. Since high-speed trains require some time to accelerate and decelerate, the average distance between stations has increased significantly, by-passing several centers of less importance. Over average distances, they have proved to be able to compete effectively with air transportation.

4. Pipelines

Pipelines are an extremely important and extensive mode of land transport, although very rarely appreciated or recognized by the general public, mainly because they are buried underground (or under the sea as in the case of gas pipelines from North Africa to Europe). In the US, for example, there are 409,000 miles of pipelines that carry 17% of all ton/miles of freight. Two main products dominate pipeline traffic: oil and gas, although locally pipelines are significant for the transport of water, and in some rare cases for the shipment of dry bulk commodities, such as coal in the form of slurry.

Pipelines are almost everywhere designed for a specific purpose only, to carry one commodity from a location to another. They are built largely with private capital and because the system has to be in place before any revenues are generated, represent a significant capital commitment. They are effective in transporting large quantities of products where no other feasible means of transport (usually water) is available. Pipeline routes tend to link isolated areas of production to major refining and manufacturing centers in the case of oil, or to major populated areas, as in the case of natural gas.

The routing of pipelines is largely indifferent to terrain, although environmental concerns frequently delay approval for construction. In sensitive areas, particularly in arctic/sub-arctic areas where the pipes cannot be buried because of permafrost, the impacts on migratory wild-life may be severe, and be sufficient to deny approval, as was the case of the proposed McKenzie Valley pipeline in Canada in the 1970s. The 1,300 km long Trans Alaskan pipeline was built under difficult conditions and is above the ground for most of its path. Geo-political factors play a very important role in the routing of pipelines that cross international boundaries. Pipelines from the Middle East to the Mediterranean have been routed to avoid Israel, and new pipelines linking Central Asia with the Mediterranean are being routed in response to the ethnic and religious mosaic of the republics in the Caucasus.

Pipeline construction costs vary according to the diameter and increase proportionally with the distance and with the viscosity of fluids (need for pumping stations). Operating costs are very low, however, and as mentioned above, pipelines represent a very important mode for the transport of liquid and gaseous products. One major disadvantage of pipelines is the inherent inflexibility of the mode. Once built (usually at great expense), expansion of demand is not easily adjusted to. There are specific limits to the carrying capacity. Conversely a lessening of supply or demand will produce a lowering of revenues that may affect the viability of the system. A further limit arises out of geographical shifts in production or consumption, in which a pipeline having been built from a location to another may not be able to easily adjust to changes. For example, the refineries in Montreal, Canada, were served by a pipeline from Portland, Maine in order to receive shipments year-round because of ice on the St. Lawrence River. In the 1980s a pipeline from western Canada was built to provide domestic crude oil at a time when the price of the international supply was escalating. Since then the Portland pipeline has been lying idle.