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Since the towns early on are pretty tiny, it's barely profitable on "Medium" difficulty to create local lines, so you only have two solutions: connect two towns or make a line that connects to the train station.
Early game passengers are usually best taken from Town A to town B with a local route covering the inner town service at both ends. That way you can add more buses to the inter town line without having them all wasting time in each town. If you have three towns in a row use the internal line to transfer passengers from stations on the outskirts of the central town and you will gain more profits as each journey adds to your income.
The optimal line is one that goes as direct as possible between point A and Point B with stops along the way. Loops are less profitable because passengers (and cargo) pay according to the straight-line distance between where they got on and when they got off. By going around a loop, rather than cross a loop, you're getting paid as though they went direct, but they spend a larger portion of the trip taking a seat away from another potential paying customer.
I generally prefer frequent stops. Everytime I've ramped up the number of stops on a line, I always see line usage go up, and if a line is servicing Residential to Industrial or Commercial, or travelling from an intercity mod of transportation to such areas, those lines are often profitable.
Don't limit your buses to just local transit. Cheap passengers also like to travel to the nearby cities, and despite having a rail line, some percentage of them won't bother to pay the higher price tag, and will stay local. I generally setup a stop or station in one town, do the same in another town and run Point to Point between those two stops. I might then have that same stop service a second line running to a third town, allowing passengers in one town to travel to and continue on to the third town, using Town 2 as a transfer point.
Having both bus and rail intercity connections will increase the options available for passengers to travel and that further increases line usage and overall profitability. You can never go wrong running intercity buses.
Your local transit lines have to compete with two other modes of transportation that you don't have any direct control over. Their Feet and personal cars (once they start showing up). Passengers are more than willing to use your lines over those alternatives so long as you can make them efficient.
Another thing I noticed is I was not able to get wheat and livestock to a dock even though dock was within the farms area (lighted up). So I built two truck stations one near farm and another near the dock and setup a truck route. The trucks never loaded anything at the farm even though there was stuff there waiting to be transported. So basically what I was trying to do here was load that cargo at the dock on a ship to be transported and off loaded at another dock down the river and picked up by trucks at a truck station to be brought to an inland food factory for processing. So I possibly might be doing something wrong here too. Could it be that my truck stations and dock were all in range of the farm?
For the freight posting screenshots will help . Show the whole route from farm to factory concentrate on where the goods change method of transport as you may not have the correct ship or dock type etc
To your second (cargo): production only starts the first of the third month after you setup the line, unless you save the game and reload. Boats are more restricted than trucks (not by much), as the crude oil, oil and fuel must have one type of boat, and everything else must be on the other type of boat.
On my cargo logistics, I read somewhere here where someone mentioned having a full production line setup before production will begin at any facility. I checked the facility and sure enough it said it was not using my lines. So I setup a ship line farm dock to destination dock. Then truck line from destination dock to food processing with livestock and wheat then back to dock with food. Then finally on same ship line i had ship loading the food to take across the river to the city. There it would go to a truck station to be delivered to city commercial district.
So once all of this was setup I purchased my vehicles then the farm said yes to using my line. Then stacks of cargo started to appear at my dock waiting to be picked up. Last the products were moving and my cash was going up. I try to keep most of my ships set to full load unlimited wait time since they seem expensive to run. I have 4 ships operating on that single line now. I prefer ships with this route, slow but they carry a lot of cargo and no rails or roads required. Then if destination is too far inland I just truck the cargo from dock to destination.
A long bus route will work fine as long as you have sufficient vehicles on the line to give a good enough frequency. The general limitation on travel is whether the line hits the maximum ticket price cap which is hard coded and unknown to us. This is generally only an issue for long distance high speed (ie expensive) lines such as planes and trains.
When troubleshooting a cargo line that isn't working, check to see whether there is line usage and whether or not the factory is detecting demand (ie buyers). A line has to have atleast one vehicle to be considered a valid route, and you must be able to trace a set of valid paths between raw resource producer and end consumer.
It's generally recommended to not have vehicles wait for a full load. This can affect frequency of the line, and it can have a ripple effect causing production to stall. Ships are relatively profitable even at low cargo levels. Due to their slow speed you have to make up for it with quantity of ships to improve the frequency. There is a technique where you buy a ship and have it kick off production. When it's loaded 15-16 units, buy and place a second one on the line and send the first on it's way. By the time the new ship reaches the dock, it'll load, and send it out when it also has 15-16 units. Repeat this until the first ship returns. If you can, find other products to ship on the line so you can increase the quantities transported.
Alternatively increase the amount of demand that the line is servicing. More customers means more product flowing which allows you to ramp up the income. I did this in my European Freeplay series and Skye Storme did it in his EPEC challenge.
Never bothered with buses (stage coaches) in one town always from town to town and around those two towns and if they stop near one or more passenger train stations people will use them to get to and from the train. Never (in the early stages) put buses in direct competition with trains people will (in the main) use the cheaper service!. Frequency of service (as many have mentioned) is also important!.