-In the late 1950s, there were branchlines going everywhere. For the railroads, they were required by their unions to have a minimum crew size (3?). Therefore, they'd send a locomotive down a branchline to pick up one or two cars, and then bring them back to the yards. How are you going to compete with trucks? They call haul the same amount of freight with less manpower. The trucks were also more fuel effiecient in that they were operating at design specifications (speed & tonage) while the locomotives were running inefficiently slow and light. and my next point...
-Railroads must pay 100% of the taxes & maintanence on their trackage while the truckers only pay a small % do to sharing of the costs with other drivers (through gas taxes). This further tilts the local service in favor of trucks.
Some reasons why the revival:
-our economy is booming which means there's more freight to ship
-the price of labor has skyrocketed which hurts the trucking industry dramatically.
-the increase in fuel prices has affected trucks more than mainline freight trains. This is because 200 trucks use far more fuel driving from LA to Chicago than a 2 SD-90s on a freight train.