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In 1807 Rober Fulton created the steam engine for use in a boat called the Clermont, in order to travel up the Hudson River easily. This greatly reduced travel time and shipping rates.
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The greatest breakthrough of cargo movement by water was canals. The federal government refused to dig a canal between the Great Lakes and the Hudson River, so in 1817 the state of New York decided to break ground on the Erie Canal. After $7million and 8 years being put into it it became a financial success.
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Beginning around 1830 though steamboats were still widely used, the development of railroads began. This would mean competition between boats and trains as trains could get to places much faster than steamboats.
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By 1833 the Charelston and Hamburg railways had extended by over 136 miles west of Charelston. By 1840, the U.S. had over 3,000 miles of tracks, nearly double the mileage of all of Europe. Trains were growing because they were simply faster and safer ways to transport goods.
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By 1860 the U.S. had over 30,000 miles of railroad tracks developed, about three fourths of them being in the north. After a few obstacles and cons with railways were fixed, it became the most used method of transportation, redering the steamboat nearly obsolete.
