How States and Companies shape transport
Why high-speed rails exist in some places but not others?
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My primary subject to explore today is how high-speed rail is accepted in some societies but rejected, or rather, faces significant resistance in others. Initially, I wanted to title this issue “how money and culture shape transport”, but I adjusted the keywords to “States and Companies” because it captures the more fundamental force behind different choices of transportation in different countries.
In 2021, the Chinese Rail loses 300 million RMB per day running their high-speed rail, surely it is not money that enticed Chinese Rail (State-owned Enterprise) to build more high-speed rails, it is the political and economic agents behind those SOEs with a strong socialist undertone that encourage these projects.
In order to explore the factors around this subject though, we need to understand more about high-speed rail.
Or rather, I need to make my case for high-speed rail, because it is probably not clear to everyone that the railway is better at all. In fact, to many of you, the railway may be synonymous to a run-down system with low quality of services and convenience, particularly if you live in the U.S.
Basically, High-speed rail is … better
People in different countries experience railways differently, not everyone gets to enjoy high-speed rails.
While my EU audiences may be familiar with Eurostar High-speed rail services that span all across Europe through France, the Netherlands, Belgium, and Germany, My American and Indian audiences might not know the benefit of that, because there is no high-speed rail in India and the US, while the milage for high-speed rail in China is already over 38,000 km in 2021. Japan has more than 3,000 km of high-speed rail in comparison.
Each country has its own definition of what high-speed rail is, in the above overview, I used the European definition which defines high-speed rail to be above 250 km/hr in speed. The US has a lower bar at 150 km/hr speed.
So, is high-speed rail a superior mode of transportation? It seems so at least for travels between 200km and 1000km distance category. Let me explain.
Here is Mackinsey’s list of key reasons to choose the mode of transportation ranked by its level of importance to consumers.
As you can see, for both private and business trips, “time to destination” and “fare” are consistently ranked the top reasons for choosing the mode of transportation. And high-speed rail is better for both reasons based on empirical data gathered.
When it comes to time to destination, the chart below makes a great representation of the competitive edge of high-speed rail
The horizontal axis is the distance to the destination and the vertical axis is the time needed to complete the trip. High-speed rail saves passenger hours in the 200 km to 1000 km distance interval. Passenger air travel and high-speed rail lines intersect at around 1000 km, after which air travel becomes more convenient and time-saving. This does not take into consideration the cost factor.
With the speed of 350 km/hr for the Chinese Gaotie (HSR), a typical trip from Beijing to Shanghai by Gaotie takes 4 and a half hours to complete and the cost is around 80 dollars (550 RMB), trips through air travel from Beijing to Shanghai, on the other hand, is faster at 2 hours 15 minutes and the cost is upward of 150 dollars, but if you take into consideration luggage check-in and waiting for it at your destination, the real difference between the two modes of transportation is about 30 minutes
Further considering the much better connectivity between high-speed rail and local Subway system, the real travel time is about the same as shown in the above chart, not to mention the possibility of maglev in the future which will double the current speed.
The distance between Beijing and Shanghai is 1200 km so it’s on the far end of examples, for shorter distances travel such as within England or from London to Paris which is around 400 km, high-speed rail should save you around 1 hour travel time compared with air travel.
The price for high-speed rail is also consistently lower, often half the price of a typical flight for the same destination, therefore, HSR is a better alternative to air travel in terms of travel time and fare, at least in China.
Another research on “Intermodal competition in the London–Paris passenger market: High-Speed Rail and air transport” points towards a similar conclusion for Europe. Though in Europe, the cost factor is almost similar.
And, HSR is environmentally friendly.
Another seldomly talked about the benefit of high-speed rail is environmental protection. Since high-speed rail is powered by electricity and is the most environmentally friendly mode of transportation out there because of three reasons,
Automobile engines are much less efficient because they are small and they only carry a few passengers,
Aircraft carries more people per vehicle, but its engines produce more pollutants because of the engine design and the need for speed, high-speed rail is the best of both worlds.
HSR has a higher passenger capacity with the Beijing to Shanghai route taking 1000 passengers per trip while a typical 737 and A320 only carries from 150 to 200 passengers per trip, therefore high-speed rail produces much lower per capita pollution.
So, for any trip below 1000km in distance, HSR is superior in almost every sense for consumers. I discussed the “time to destination” and “fare” factors, but in fact, if you look back at the other factors that affect peoples’ decision on transport mode such as convenience and space and privacy, HSR is better as well.
Plus, 1000km is also the majority of air travel trips in Europe, more than 60% of all air trips taken in Europe are within 1000 km in distance.
In addition, I would argue that even though high-speed rail loses its competitive edge when it comes to time to destination between 1000km to 1500km, it is still more convenient with more leg rooms for passengers, not to mention the straightforward environmental benefit. So, even a higher percentage (75 -80%) of air travel trips should be replaced by high-speed rail in an ideal world.
Of course, if one could develop a subjective preference for air travel or consumer automobiles. What I’m saying is, based on the top reasons of choosing the mode of transportation namely, time to destination, price of trip, space and privacy, convenience, to avoid congestion as well as sustainability, high-speed rail wins hands down.
So, if HSR really is better for short to medium-distance trips below 1500 km, why is it adopted in some parts of the world and not others?
Power, population, and money.
Depending on where you are, the world can be classified into three geographies when it comes to HSR adoption. China, Europe & Japan, and the U.S.
China’s situation is the most straightforward. The most prominent catalyst for the development of HSR in China is curiously something that’s done in Mao’s era, on the 30th June 1950 right after the Chinese Communist Party take over from Kuomintang. It’s the Chinese Land reform and Collectivization, it’s called land reform but basically what happened was that “land was confiscated from former landlords and redistributed to landless peasants and owners of small plots.” The state becomes the ultimate owner of all lands in China and because of that, infrastructure building in China is much easier than in most parts of the world. If CCP has decided to build another HSR from Shanghai to Beijing, the land is theirs to do so. Chinese official statistics have shown that China now has 38,000 km HSR, 147,000 km Railway, and every year 3.3 billion people take the train to their destinations. Huge demand, land reform, and advanced engineering capability is China’s secret to becoming the world’s no. 1 HSR nation.
But what’s more important of course was the fact that private market powers do not reign supreme in China. Markets play a big role in shaping China’s current economic landscape, but they have always been subordinate to the CPC’s control. As I’ve explained earlier, China Railway loses 300 million RMB per day running HSRs in China, they run it anyways (at a subsidized rate) because the head of China Railway (SOE) directly appointed by the China State Council and his communist party membership is essential to his promotion in the future. I explained this in my previous issue on China space endeavors. These power dynamics indirectly enabled HSR in the process
The case for high-speed rail in Japan is different, especially if you look at railway’s dominance. So, how does Japan enjoy such a high percentage of passenger railway usage?
Well, the answer is intuitive, it is population density. The denser an area is in terms of per square km population, the more reliant people are on public transportation. This includes buses, railways, and high-speed rail. When you have 14 million people in the small area of Tokyo, you need public transport to make sure the city functions as intended. Similar argument can be made for Europe as well. Both Europe and Japan traditionally had powerful governments to direct resources and enforce compromises among interests, which is an important enabler for railway projects.
Finally, let’s talk about the US. Americans have an almost romantic sentiment towards automobiles, but is it really that the Americans just love cars? I think not.
Before the second world war, America was the world leader in railway infrastructure, but railways in the US slowly deteriorated over the years. One of the direct causes of this deterioration is the Federal-Aid Highway Act of 1956 enacted by president Eisenhower, who spent $25 billion for the construction of 41,000 miles (66,000 km) of the Interstate Highway System.
There were also wide-ranging anti-railway campaigns funded by the auto and the oil industry which led to the collapse of the passenger railway industry in America with only Amtrak surviving.
The situation right now was also due to the way American cities were planned. Americans are used to living in satellite communities where they are far from shopping centers, hospitals, and schools and they must drive to those places. But for the entirety of my life living in Asia, schools, clinics, and shopping centers are within walking distance.
Therefore, various GM campaigns & policies favoring building highways in the past, oil, aviation & auto lobbyists now, & America’s lack of commitment to infrastructure building for the future becomes the major hindrance for the high-speed rail projects in the US. In the developed world, this is almost an exclusive problem for the U.S. and Australia, probably the vast landmass with a much less dense population also hindered HSR’s prospect in the U.S.
If the prevalence of HSR in China is due to its state power’s push for railway systems, the US auto industry lobbyists reigned supreme, coupled with population density, all of these shaped how railways (HSR) were and are treated in each country today.
This is the end of today’s issue on high-speed rail. Thanks again for 500!