it is not right that it doesn’t work. I made exactly the same setup. I had like 9 cities pulling goods from a steel mill when I realized, the demand is around 700 units of goods, and the steel mill producing only 400. So I did the same, started feeding oil to a nearby oil refinery and started delivering goods from oil refinery to the station near the steel mill, as I had a crazy rail network from that refinery to all the cities.
At first I was disappointed and thought that it will not work, but in time, the oil refinery started producing and was delivering nice amounts of goods into the steel mill station.
But yeah, it was slow progress. That is a problem with train fever, every change in the cargo market has a sloooooooooooow progress. So it is not very flexible, but in time, even distribution centers work. Of course, you need to calculate with the time limit and have this setup when you got fast trains.