The following excerpt was taken from the Worldbank website, found in a note explaining differences in the world’s railroads (dated October 1993):
"Perhaps the most significant distinguishing characteristic of the typical railway is the type of traffic it carries. This is important in several dimensions.
"First, the mix of freight carried determines the ability of the railway to capture a number of production economies which have emerged over the last two decades: railways carrying large amounts of bulk traffic between a limited number of origins and destinations (especially coal and grain) can operate unit trains which permit extremely high productivity of both labor and equipment, whereas railways carrying mostly wagonload (or smaller) amounts of merchandise traffic are highly constrained.
"More critical, certain railways (e.g., the US, FSU, China, and Mexico) carry mostly freight which permits higher productivity and which, at least in principle, permits a “commercial” approach to prices and services. Other railways (e.g., Sri Lanka, India, and most of the Western European railways) carry much more passenger service than freight, which constrains productivity, raises cost, and invites political interference in operations and pricing.
“Finally, the passenger problem is aggravated where, as in the case of India and the Western European railways (and Russia), a significant part of the passenger activity is suburban commuting which is both the most costly and the least remunerative of all.”