Quote:

chris
1) Shipping the commodity by truck takes less time

Bingo! If a shipment has to get there within a certain amount of time or before a certain time/date (usually within a day or two) and the shipper in question doesn't want/need to or cannot send it by air, then it will go by truck; 25-50% time savings might not sound like much to you, but it's still a significant savings for many customers. Time-sensitive, small-quantity shipments are one area where both trucks and air freight are far more competitive and effective (in most cases) than railroads. Combine that with the ability of trucks to go anywhere the trains can't on land (where there are decent roads, that is) and it's little wonder why there's still a lot of trucks on the road. The railroads learned this a long time ago, and they no longer try to compete with trucks for these shipments.

Quote:

chris
2) Shipping the commodity by truck costs less

As you implied, this isn't really the case; flexibility is, though. Sure, there's a lot of potential customers that are fairly close to a railroad line, but how many of them are able or willing to ship by rail, especially if they don't have spurs or sidings leading to them or there aren't any suitable unloading facilities nearby? And what if they're not shipping or receiving in large enough quantities to interest the railroads? Even if it's shipped part of the way by rail, it's very likely that a given load will still need to go by truck the rest of the way, and that could be a fairly long distance in some cases.