Diesel locomotive break down. Hydraulic transmission for locomotives was developed in Germany. There is still debate over the relative merits of hydraulic vs. electrical transmission systems: advantages claimed for hydraulic systems include lower weight, high reliability, and lower capital cost. By the 21st century, for diesel locomotive traction worldwide the majority of countries used diesel–electric designs, with diesel hydraulic designs not found in use outside Germany and Japan, and some neighbouring states, where it is used in designs for freight work. In Germany and Finland, diesel–hydraulic systems have achieved high reliability in operation. In the UK the diesel–hydraulic principle gained a poor
Diesel locomotive was uneconomical to apply to lower-traffic areas. The first regular use of diesel–electric locomotives was in switching (shunter) applications, which were more forgiving than mainline applications of the limitations of contemporary diesel technology and where the idling economy of diesel relative to steam would be most beneficial. GE entered a collaboration with the American Locomotive Company (ALCO) and Ingersoll-Rand (the "AGEIR" consortium) in 1924 to produce a prototype "boxcab" locomotive delivered in July 1925. This locomotive demonstrated that the diesel–electric power unit could provide many of the benefits of an electric locomotive without the railroad having to bear the sizeable