Disadvantages of Narrow Gauge
Narrow gauge railways cannot interchange rolling stock such as freight and passenger cars freely with the standard gauge or broad gauge railways they link with, unless they exchange bogies. Thus it is expensive and inconvenient for the railway company to transfer passengers and freight between the two railway systems: the transfers require time consuming manual labour or substantial capital expenditure. Some bulk commodities, such as coal, ore and gravel, can be mechanically transshipped, but this still incurs time penalties and the equipment required for the transfer is often complex to maintain.
One solution to the problem of transshipment is bogie exchange between cars. Another solution to this problem is the rollbock system. Although successfully deployed in some countries such as Germany and Austria, this technique came too late for the majority of narrow gauge lines. Transfer of containers is also an option.
Transfers between systems are less of a problem if there is a large system of lines on the same narrow gauge, for example in northern Spain, and there is no problem in those countries in which a narrow gauge is standard, e.g. the Cape gauge in Japan, New Zealand, South Africa, and Tasmania, and the metre gauge in Malaysia and Thailand.
The problem of interchangeability is more serious in North America because a continent-wide system of freight car interchange developed. All the standard gauge railways in North America use the same standard couplings and air brakes, so freight cars can be freely interchanged between railways from Northern Canada to Southern Mexico. Railways which need more freight cars in peak periods can hire them from other railways, at rates set by common agreement. Peak demand, particularly for grain shipment, occurs in different parts of North America at different times, so the freight cars are moved to wherever they are needed. Motive power can also be interchanged, so Mexican locomotives sometimes pull Canadian freight cars and vice versa.
Narrow gauge railways (as well as railways with a broader gauge than the regional standard) could not participate in this system, so they had to own enough rolling stock to meet peak demand, which might be much more than needed by equivalent standard gauge railways, and the surplus equipment generated no cash flow during periods of low demand.
All North American broad gauge railways were converted to standard gauge by 1910 (see Rail gauge in North America). Increased costs and lower revenues eventually resulted in nearly all North American narrow gauge railways either converting to standard gauge or going bankrupt. In many cases, larger railways subsidized the conversion of connecting short-line railways to standard gauge.
Another problem for narrow gauge railways was that they lacked the physical space to grow: their cheap construction meant they were engineered only for their initial traffic demands. While a standard or broad gauge railway could more easily be upgraded to handle heavier, faster traffic, many narrow gauge railways were impractical to improve. Speeds and loads hauled could not increase, so traffic density was significantly limited.
Narrow gauge railways can be built to handle increased speed and loading, but at the price of removing most of the narrow gauge's cost advantage over standard or broad gauge.
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