Railroads: Still a Major Player?

After reading this week’s work I was amazed by the profound influence the advancements in transportation have had not only on the individual, but on business.  As The Visible Hand makes clear the railroad industry was the birth of modern business, but I found particularly interesting the fact that it was the railroads that really fueled the evolution of all other business enterprise. This obviously makes sense, but it appears to be another aspect of the business world that surrounds us that is taken for granted in a time when almost anything can be shipped anywhere rather quickly.

 

 As The Visible Hand points out, mass production and mass distribution were made possible by this new form of mass transit.  I have to wonder how this ability to transport materials and finished products continues to fuel the economy and influence modern corporations, or is it simply a technology that is now so implemented that the operation of shipping is simply not a major factor in business decisions.  I think back to the recent hikes in gas prices and the influence this had on the cost of certain commodities, so it seems evident that shipping problems can still lay a heavy hand on modern industry.

 

In our current world we have mass transit and shipping available by rail, road, sea, and air.  Certainly we think little of it, but when analyzing the role played by transit it is easy to understand the crucial role the railroad industry played in increasing all other industry.  Even on a very small level we can utilize reliable shipping today.  If we buy or sell something on EBay, Amazon, or any other buying/trading site, we can have it shipped in any number of ways.  When we buy an item it usually shows up without incident within days of purchasing. This is certainly a luxury of the modern world.

 

 I can only imagine what it must have been like to make products in a small shop, ship them on a wagon over horrendous roads to a port of some kind, and get these products on a ship.  If sending goods to Europe in the colonial era one was looking at several months rather than several days.  When considering these limited forms of transporting manufactured goods, or the resources needed to produce those goods, it is easy to understand how the railroad industry revolutionized every aspect of industry.

 

An interesting point to note is where the railroad industry stands today when there are so many more forms of shipping available.  While certainly diminished from the role it once played, I was surprised to find that a very large percentage of manufactured goods, and especially a large percentage of raw materials, are still transported by rail.  The trucking industry has certainly reduced the reliance on rail transportation, but the railroad industry holds on, especially in the areas of transporting coal and other fuel materials.  Here is a link that shows a very interesting comparison of shipping between truck, rail, and other methods.  Certainly the ability to ship materials and finished products is still the life blood of corporations.

 

http://www.nationalatlas.gov/articles/transportation/a_freightrr.html

Comments

[Lindsey Bestebreurtje]

I think that the cultural changes associated with the railroad from the 1870s-90s is particularly interesting so I too enjoyed Chandler's explanation of their expansion on the corporate level.

There was a point in time when I would have argued that railroads were on their way out. I looked up Amtrak on wikipedia to try and find out which year the federal government took over Amtrak, and it turns out we have been pumping money into that baby since the early 1970s. Even though Amtrak clearly does not have the best business model, the governments intervention highlights how important the system itself is. With the increase in gas prices and the extra charges imposed by airlines for bags I think that we will be seeing an increase in the use of trains for shipping and travel. Railroads will continue to be a major player.

[Dianne Schmidley]

I say bring back the railroads big time. China must think so too as it just invested heavily in CSX.