Transportation Deployment Casebook/Rail Passenger Car
The early 1800s, brought a revolution to transportation that changed how the world fundamentally worked. Rail technology not only made commerce incredibly more efficient, it made people many times more mobile than ever before. Rail companies represent one of the first examples of corporate structure. A fundamental portion of these corporations was rooted in passenger rail service (White 15).
Passenger rail technology evolved rapidly both in structure and in purpose. Cars that transported people exclusively began looking much like carriages and carts. By 1870, the passenger car fleet began to take shape and specialized to meet specific needs of the customer. In this decade, cars were predominately coach style with baggage cars being used concurrently (Solomon 53). Sleeper cars also began to find their niche with travelers taking advantage of the quickly expanding rail network.
1880 saw the fleet of passenger cars specialize even further as it expanded. As travelers began to travel longer distances and as rail attracted a more diverse range of classes, cars were created that catered to the entertainment and daily needs of customers (Railroad Facts 34). This decade saw the development of both Parlor and Diner cars. Parlor cars were required to provide the male gentry a place to commune and smoke tobacco. Diner cars allowed passengers to eat in a more formal setting than the coach cars (Yenne 103).
At the peak of passenger car era in 1930, 63,900 vehicles were in use (Moody's 58). Rail was the dominate transportation mode of the day and the diversity and size of the passenger car fleet reflected this reality. At this point, business men could work on the train while traveling in office cars. Mail cars had also been widely deployed as a way for the Postal Service to increase efficiency while subsidizing the rail companies for providing service, especially in remote areas (White 354).
After 1930, the number of passenger cars began to decline dramatically. People in the U.S. traveled less, in general, during WWII and mode substitution became prominent in the post-war period. Automobiles and the interstate highway system eliminated demand for most short and mid-range trips. The aviation industry then eliminated the demand for long-range trips, especially from the profitable business classes (Moody's 804).
Predicted Passengers is calculated using the formula: S(t) = K/[1+exp(-b(t-t0)] K represents the theoretical saturation level and is 63900 in the case of passenger cars. T(0) is the theoretical year at which half of K is reached. The value is 1888 in this scenario.
This graph shows the actual historical number of passenger cars in deployment in comparison to the predicted number of cars using the formula above. The model appears to very closely predict the actual levels of deployment from the historical data. Using this model, we can generally identify the major life-cycle stages of the technology. 1840 to 1860 marks the “birth” stage of the technology as it was slowly implemented and fine-tuned. 1860 to 1900 saw the widespread adoption of the technology at a break-neck pace and can be considered the “deployment” phase. 1900 to 1930 is where the technology came of age and reached “maturity” as very few cars were produced while maintaining very high overall numbers. 1930 to 1970 witnessed a wholesale abandonment of the technology and marks the “decline” stage.
The natural log of actual numbers of passenger cars is necessary to run more complex regressions of the data. This shows a smoother curve of the data graphed a section before.
The regression add-in on Microsoft excel was used to generate evaluation statistics of the data. With an R-squared statistic above .9 and a very high t-statistic, this model shows a very close fit to the data set. This means that the deployment of rail passenger cars statistically behaved in a very predictable matter until maturity.
When the same regression is run on the decline of the technology, somewhat different results emerge. The R-squared comes in high at .82 and the t-statistic large but almost half of the opposite side of the curve. This small but noticeable difference can be attributed to the rapid mass adoption of alternative modes which caused the decline to happen at a much faster rate than the implementation of passenger cars.
The number of passenger cars in the U.S. followed a typical life-cycle for a transportation technology and fits closely with regression models. It grew slowly in the beginning years as the technology as the early-adopters did fine-tuning and costumers became comfortable with what it had to offer. Passenger cars then exploded in popularity and became widely adopted as the standard for travel in the U.S. In the time around WWI, its adoption continued to grow but at a slowing rate as the mature technology reached its natural limitations. After 1930, other modes emerged in direct competition with passenger rail cars. Automobiles and passenger planes emerged as more attractive technologies and a mass substitution took place causing the number of passenger rail cars to decline rapidly.
It will be interesting if this technology re-emerges as a viable mode. Deployment of roads has been in the “mature” phase for a few years and the market appears to be searching for a substitution. High speed rail has been all the rage among transportation planners as a high-capacity alternative to highways. Only time will tell if HSR catches in the U.S. and the passenger rail cars see a new age of glory.
- Moody’s. “Transportation Manual.” 1992. New York: Moody’s Investor Service, 1 – 1214.
- Railroad Facts. “1989 Edition.” 1989. Washington: Association of American Railroads, 1-61.
- Solomon, Brian. “Great Passenger Trains: The Milwaukee Road’s Hiawathas.” 2006. St. Paul: MBI Publishing Company, 1 – 159.
- White, John H. “The American Railroad Passenger Car.” 1978. Baltimore: Johns Hopkins University Press, 1 – 693.
- Yenne, Bill. “Great Passenger Trains: Great Northern Empire Builder.” 2005. St. Paul: MBI Publishing Company, 1 – 160.