Is it cheaper for a business to move freight by truck or rail? Long-haul shipments of at least 800 kilometers...
GMAT Multi Source Reasoning : (MSR) Questions
Is it cheaper for a business to move freight by truck or rail? Long-haul shipments of at least 800 kilometers that weigh between 22,500 and 36,000 kilograms are economical to move by either mode. However, special cargo like coal and heavier shipments are only economical to ship by rail, and short-haul shipments are only economical to ship by truck.
The average cost to transport freight by truck varies, ranging from €0.1021 per ton- kilometer (where 1 ton = 1,000 kilograms) for shipments less than 400 kilometers, to €0.0371 per ton-kilometer for shipments more than 800 kilometers. The aggregated average cost for all rail shipments is approximately €0.0108 per ton-kilometer and is €0.0129 per ton-kilometer for intermodal shipments—those involving both trains and trucks. Intermodal shipments use trucking-trailers carried on flatbed railcars, allowing cargo to move between trucks and trains without having to be loaded into different containers.
For each of the following questions about the freight railroad companies mentioned in the tabs, select Can be determined if it can be answered solely on the basis of the information provided. Otherwise, select Cannot be determined.
OWNING THE DATASET
Understanding Source A: Business Consultant's Cost Analysis
| Information from Dataset | Analysis |
|---|---|
| "Long-haul shipments of at least 800 kilometers that weigh between 22,500 and 36,000 kilograms are economical to move by either mode" |
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| "special cargo like coal and heavier shipments are only economical to ship by rail" |
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| "short-haul shipments are only economical to ship by truck" |
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| "\(€0.1021\) per ton-kilometer...for shipments less than 400 kilometers, to \(€0.0371\) per ton-kilometer for shipments more than 800 kilometers" |
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| "aggregated average cost for all rail shipments is approximately \(€0.0108\) per ton-kilometer" |
|
| "\(€0.0129\) per ton-kilometer for intermodal shipments" |
|
Summary: The business consultant shows that rail is generally cheaper per ton-kilometer than trucking, but each mode has exclusive advantages—trucks for short distances under 800km and rail for very heavy cargo.
Understanding Source B: Rail Advocate's Policy Position
| Information from Dataset | Analysis |
|---|---|
| "Trucks operate on publicly financed highways. However, freight railroad companies pay nearly all costs related to their tracks, bridges, and tunnels" |
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| "From 1980 to 2009, railroads reinvested approximately \($325\) billion...approximately \(30\) percent of their total revenue" |
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| "we propose tax incentives for any project that expands freight rail capacity" |
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| "shifting \(10\) percent of the long-distance freight that currently moves only by truck to rail instead would save \(4\) billion liters of fuel per year" |
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| "using railroads helps reduce roadway congestion" |
|
Summary: The rail advocate argues for tax incentives to level the infrastructure funding disparity between rail and trucking, emphasizing that shifting long-distance freight to rail would save fuel and reduce congestion—benefits that align with the cost advantages shown by the business consultant.
Overall Summary
- The business consultant's data shows rail costs about one-third of trucking costs for long-distance freight (800km+), while the rail advocate explains this advantage exists despite rail companies paying for their own infrastructure while truckers use public highways
- Both sources agree that rail excels at long-distance freight while trucks dominate short-haul, with neither advocating complete modal replacement
- The rail advocate's proposal to shift \(10\%\) of long-distance truck freight to rail through tax incentives is supported by the consultant's cost data showing rail's competitive advantage at 800km+ distances
Question Analysis
For each of the three statements about freight railroad companies, determine if the answer can be found solely based on the provided information sources.
Key Constraints:
- Answer only based on the given information sources
- Each statement requires a binary determination: can be answered or cannot be answered
- There are exactly three statements to evaluate
Answer Type Needed: Binary fact verification (Can be determined / Cannot be determined)
Connecting to Our Analysis
The provided analysis includes data from Source B specifying that freight railroads spent about 30% of their revenue on maintenance AND improvement from 1980 to 2009, totaling approximately $325 billion. Fuel purchase volumes are not provided in any source. Total revenue can be calculated from these values.
Can Answer from Analysis: Partially - depends on careful interpretation of what the data actually represents
Extracting Relevant Findings
Evaluate each statement against the information in the sources to decide if each can be determined. Statements regard percentage of revenue spent on maintenance only, fuel purchases comparison, and total revenue of freight railroads from 1980 to 2009.
Hypothesis: Source B provides data for maintenance AND improvement spending combined, but fuel purchase amounts are not available.
Individual Statement Evaluations
Statement 1 Evaluation
- Focus: Percentage of revenue spent on maintenance only
- Available Data: Source B states approximately 30% was spent on "maintain AND improve" infrastructure
- Analysis: Cannot separate maintenance costs from improvement costs based on given information
- Result: Cannot be determined from the given information
Statement 2 Evaluation
- Focus: Whether railroads buy more fuel per year than trucking companies
- Available Data: Sources discuss fuel efficiency but not fuel purchase volumes
- Analysis: Information missing for direct comparison of fuel purchase amounts
- Result: Cannot be determined due to insufficient data
Statement 3 Evaluation
- Focus: Total railroad revenue from 1980 to 2009
- Available Data: $325 billion spent as 30% of total revenue
- Analysis: Total revenue can be calculated as approximately $1,083 billion using the relationship between spending amount and percentage
- Result: Can be determined through calculation from given data
Systematic Checking
Verify each evaluation point carefully against source content and analysis:
- Statement 1: Source B provides 30% figure for maintenance AND improvement spending combined, not maintenance alone - insufficient data to answer the specific question
- Statement 2: No provided data for total fuel purchases; only fuel efficiency is discussed - missing data
- Statement 3: Total revenue calculated from maintenance+improvement spending amount and percentage - calculable
Final Answer
- Statement 1: Cannot be determined
- Statement 2: Cannot be determined
- Statement 3: Can be determined
What percentage of their revenue did freight railroad companies spend to maintain tracks and machinery from 1980 to 2009?
On average, do freight railroad companies buy more fuel per year than freight trucking companies do?
Approximately how much revenue did freight railroad companies take in from 1980 to 2009?