Freight Pipeline, Rail, and Truck Cost Comparison

This paper describes the use of four models for comparing the cost of transporting manufactured products via freight pipeline, truck, truck on flat car (TOFC), and rail carload. It was found that cost comparison is sensitive to the transportation configuration, i.e., location, transport distance, and the number of terminals, annual tonnage, the size of shipment, the design of pipeline system, access conditions, and accounting procedure. The study shows that, based on the annualized cost methodology, the transport cost per ton-mile via freight pipeline is cost competitive with truck, rail, and TOFC for four of the five configurations within the Philadelphia-Chicago transportation corridor if the annual tonnage is high. For the fifth configuration, truck is clearly a less expensive mode. However, based on the project's present value methodology, pipeline is cost competitive in all five configurations. Based on the annualized cost methodology, pipeline becomes reasonably attractive for three configurations and for one configuration it compares very favorably (2.7 cents/ton-mile for pipe vs. 2.8 cents/ton-mile for T-R combination).