-
odoaker
- Newbie | Next Rank: 10 Posts
- Posts: 9
- Joined: Wed Jan 23, 2013 5:50 am
- Followed by:1 members
Dear Brian,
please take a look at the below, whether it is going again in the right direction.
Thanks,
Odoaker
The following appeared as part of an editorial in an industry newsletter:
"While trucking companies that deliver goods pay only a portion of highway maintenance costs and no property tax on the highways they use, railways spend billions per year maintaining and upgrading their facilities. The government should lower the railroad companies' property taxes, since sending goods by rail is clearly a more appropriate mode of ground transportation than highway shipping. For one thing, trains consume only a third of the fuel a truck would use to carry the same load, making them a more cost-effective and environmentally sound mode of transport. Furthermore, since rail lines already exist, increases in rail traffic would not require building new lines at the expense of taxpaying citizens."
Discuss how well reasoned ... etc.
The author of the given article argues that railroad property taxes should be lowered by the government in order to increase railroad goods transportation. This would be beneficial, since shifting goods from highway to railroad transportation would be more appropriate, cost-effective and environmentally sound.
Although the author has some valid points, especially with regards to the environmental issue, he fails to evaluate the most important issues to make such a conclusion for a country. I will show that his conclusions may easily refuted when certain conditions in the country apply. First, I will tackle the issue of shifting goods transportation from the road to the railway and then evaluate whether one mode is more appropriate as the other.
The author argues that since rail lines already exist, rail traffic could increase without the taxpayer being burdened with building new tracks. This may be true, however there is no information given by the author as to what extent the railway system is utilised. If the railway system is already fully utilised and cannot take any additional rail traffic, there would be no possibility to increase traffic at no extra cost. In that case, the railway system would have to be extended, which in general is very costly. Hence the author fails to provide a valid argument, mostly due to a lack of sufficient information.
Secondly, it is very questionable whether rail traffic is more appropriate than highway traffic. This depends highly on how well developed the railway system is and whether many goods travel at the same time to destinations close together. Given that there are only few railway lines for goods transportation, the railway system would be too inflexible to replace highway traffic. In such case it would be necessary to load the goods onto trucks and transport them to their final destination. The cost involved is likely to be very high and the time lost would be significant. It may be that the transport by rail would be less cost-effective in such a scenario. Therefore we cannot conclude that rail traffic is generally more appropriate than highway traffic.
This leads me to my third point, the environmental issue. In case the railway system is not well developed, goods cannot be transported on a direct route. This would lead to the goods being transported, offloaded, loaded to a truck, and shipped to the final destination. This may very well be environmentally less efficient than transporting the goods directly by truck.
To conclude, the author fails to make valid conclusion, because too much information about the premises is missing. As I have shown with the example of a fully utilised railway system and an underdeveloped railway system, the arguments of the author cannot be sufficient to make such conclusion.
If, however, the railway system had a high, unutilised capacity as well as being very well developed, the author may have a point of arguing that it would be more efficent for some goods to be transported by rail instead of truck.
please take a look at the below, whether it is going again in the right direction.
Thanks,
Odoaker
The following appeared as part of an editorial in an industry newsletter:
"While trucking companies that deliver goods pay only a portion of highway maintenance costs and no property tax on the highways they use, railways spend billions per year maintaining and upgrading their facilities. The government should lower the railroad companies' property taxes, since sending goods by rail is clearly a more appropriate mode of ground transportation than highway shipping. For one thing, trains consume only a third of the fuel a truck would use to carry the same load, making them a more cost-effective and environmentally sound mode of transport. Furthermore, since rail lines already exist, increases in rail traffic would not require building new lines at the expense of taxpaying citizens."
Discuss how well reasoned ... etc.
The author of the given article argues that railroad property taxes should be lowered by the government in order to increase railroad goods transportation. This would be beneficial, since shifting goods from highway to railroad transportation would be more appropriate, cost-effective and environmentally sound.
Although the author has some valid points, especially with regards to the environmental issue, he fails to evaluate the most important issues to make such a conclusion for a country. I will show that his conclusions may easily refuted when certain conditions in the country apply. First, I will tackle the issue of shifting goods transportation from the road to the railway and then evaluate whether one mode is more appropriate as the other.
The author argues that since rail lines already exist, rail traffic could increase without the taxpayer being burdened with building new tracks. This may be true, however there is no information given by the author as to what extent the railway system is utilised. If the railway system is already fully utilised and cannot take any additional rail traffic, there would be no possibility to increase traffic at no extra cost. In that case, the railway system would have to be extended, which in general is very costly. Hence the author fails to provide a valid argument, mostly due to a lack of sufficient information.
Secondly, it is very questionable whether rail traffic is more appropriate than highway traffic. This depends highly on how well developed the railway system is and whether many goods travel at the same time to destinations close together. Given that there are only few railway lines for goods transportation, the railway system would be too inflexible to replace highway traffic. In such case it would be necessary to load the goods onto trucks and transport them to their final destination. The cost involved is likely to be very high and the time lost would be significant. It may be that the transport by rail would be less cost-effective in such a scenario. Therefore we cannot conclude that rail traffic is generally more appropriate than highway traffic.
This leads me to my third point, the environmental issue. In case the railway system is not well developed, goods cannot be transported on a direct route. This would lead to the goods being transported, offloaded, loaded to a truck, and shipped to the final destination. This may very well be environmentally less efficient than transporting the goods directly by truck.
To conclude, the author fails to make valid conclusion, because too much information about the premises is missing. As I have shown with the example of a fully utilised railway system and an underdeveloped railway system, the arguments of the author cannot be sufficient to make such conclusion.
If, however, the railway system had a high, unutilised capacity as well as being very well developed, the author may have a point of arguing that it would be more efficent for some goods to be transported by rail instead of truck.
