Trains work well for certain kinds of loads. In terms of cost per ton-mile, they're astoundingly good.

But they work well when you have a lot of freight or people that are all going to the same place at the same time. For non-urgent freight, that's not a big deal (and part of why the container system works well), but unless an environment is really high-density, there's a significant amount of waiting for the trains to arrive, and scheduling costs if the available trains don't do the direct route you want to take.

That's the real advantage of the automobile: It's often much more convenient, and involves less waiting. In some environments you can get by without a car, and there's something of a phase change where there are enough train-users to make it worthwhile to build a really good train system. Cars are, fortunately or unfortunately, usually good enough.