In Britain, Freightliner "had a cost edge over highway for any movement over 150 miles, and had the edge for shorter hauls when available roads were especially congested, as between London and Southampton. BR contemplated shifting all residual carload freight to Freighliner and abandoning classification yards."
It would perhaps have been clear to state the cost/benefit in travel-time terms, rather than miles. Then you don't need the congestion exception, since the time taken to travel a shorter distance would be a longer time, comparable to a longer distance at a faster rate. But that is a minor detail.
I recall posting about ag short lines and farmers buying used tractor trailers to truck their harvest to a nearby class 1 railroad facility which paid slightly more than the closer elevator served by a shortline. The trucks were willing to go, IIRC, about 75 miles, which suggests this little discovery was somewhat universal. The farmers were apparently not bright enough to factor in how much more expensive their fertilizer etc. costs would be when they had to have those trucked in, instead of delivered by rail, but the _real_ problem was the poor saps who had to maintain the roads those trucks were traveling on. Which had _not_ been designed with heavy harvest traffic in mind and were being shredded in the process.
The correct answer seems clear from this distance: the poor saps maintaining the roads should make the farmers pay. The farmers balance sheet would then show the short line as the better deal. The short line, over time, could maybe even raise their rates and still be a better deal for the farmers than paying to shred the asphalt. Unfortunately, the poor saps maintaining the roads are probably representing a public made up of the farmers doing the shredding, and it's just soooo tempting to try for a free lunch somewhere. An alternative answer, of course, is to have the saps maintaining the roads subsidize the cost to use the ag short line instead, so it is more attractive to the farmer in that manner. Then, the farmer feels like the free lunch is delivered, the poor saps breathe a sigh of relief, the short lines stay in business, the class 1's continue to avoid dealing with chump change switching.
So is this an argument for libertarianism (everyone feels like they got screwed, but it all works out right) or agonizingly involved governmental apparatus (everyone feels like they got a deal, but they're scratching their heads over why it costs so much to get that deal)?