Intermodal Competition for the Intercity Transport of Manufactures.

The intercity freight market has emerged as an area of prime concern to policymakers as a number of important issues have arisen. Deregulation of the freight market is being emerged as a means of restoring health to the railroad industry and as a means of stimulating competition for the benefit of shippers. Extremely large, long, low-value shipments are traffic for which the railroads have a distinct comparative advantage, shipments whose character is of the opposite extremes are secured to trucking. Between these extremes there lies a middle range of shipments, constituting the competitive interface between the modes. As neither mode has a distinct advantage in winning the traffic of this interface, such traffic most enjoys the benefits of intermodal competition. The operating assumption of the paper is that the presence or absence of intermodal competition for a particular traffic is revealed by the observed division of that traffic among the modes. Three dimensions of a shipment are particularly critical in determining for which mode that shipment is suited. They are length of haul, shipment size, and commodity. initially these dimensions will be examined one at a time, identifying that length of the spectrum in which traffic is competitive and those lengths in which it is non-competitive.