Joined: 03 Sep 2012
Concentration: Finance, Entrepreneurship
WE: Investment Banking (Investment Banking)
, given: 1
Please rate this, Thanks for helping :), much appreciated [#permalink]
04 Apr 2013, 10:49
“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 amore 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.”
The argument presents a conclusion stating that the trucking companies contribute only a portion of the highway maintenance cost while railways spend billions every year in its upkeep, hence the latter is a better medium for ground transportation requires further consideration. Though the argument is valid to a certain extent however there are certain other aspects that should be considered before coming to a conclusion.
One fact that the author has overlooked is the fact that the highway infrastructure is used by many other forms of transport mediums. Other forms of transportation like personal cars and buses would also be contributing to the total highway maintenance and upkeep expenses. It is highly possible that the trucking industry is contributing its part of the total maintenance cost.
Further, the trucking industry could be spending a fair amount on the upkeep and maintenance of their vehicle fleet, along with contributing to the highway maintenance cost. Considering that aspect, the trucking industry could prove to be a more reliable and better maintained form of transporting goods.
Third, the author has not disclosed any parameters on which we could do base a cost-benefit analysis, for the expenditure done on the upkeep on highways and the comparable amount spent on the upkeep of the railway infrastructure.
Fourth, the author has overlooked the fact that the railways cannot reach all the remote locations. Roads connect even the remotest of the locations and hence can prove to be a more appropriate medium of transportation.
To conclude, the argument presented stands valid to a certain extent that the railways may be a more cost effective and efficient mode of transporting goods, however if the author could present more information to address the above mentioned requirements, w e could come to a better conclusion.