CONSIDERATIONS FOR 21ST CENTURY FREIGHT MOVEMENT

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CONSIDERATIONS FOR 21ST CENTURY FREIGHT MOVEMENT

• Dr. Steve Roop
• Assistant Director
• Texas Transportation Institute

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(No Transcript)
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Freight Transportation Convergence of Critical
Issues

• Over the Next Two Decades
• Increase demand on highways
• Increase in maintenance expenditures
• Decrease in funds available for capacity
  expansion
• Diminishing returns on highway expenditures
• Projected growth in freight
• Increased truck traffic
• Environmental issues restrictions
• Homeland security constraints
• Insufficient public funds available to address
  transportation needs

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Freight-Rail Capacity
Does the freight-rail system have the capacity to
handle the growing volume of freight even if
mode shares remain constant?

2020 Additional Rail Tons
2000 Rail Tons
2020 Additional Truck Tons
2000 Truck Tons
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U.S. Domestic Freight Tonnage Growth Forecasts by
Mode, 2000-2020
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Federal and State Expenditures for All
Transportation Modes
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Obligation on Federal Funds for Roadway Projects
by Improvement Types
Growth in maintenance expenditures will limit
funds available for capacity expansion
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Transportation Fuel Considerations

• Oil Dependency

• Transportation demand for oil in U.S.
• Comprises 89 of all future growth
• Growth of 2.5 / year through 2020
• Comprises virtually 100 of transportation
  energy
• (DOE Energy Information Administration, 2002)

• Production of world oil reserves
• ultimate recovery 2 trillion barrels
• currently recovered 935 billion barrels
• (Salameh, 2002)

• Concerns for transportation planners
• Peak in world oil production (not ultimate total
  production)
• Majority of remaining reserves from Middle East
  by 2010
• (International Energy Agency, 2001)

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Anticipating the Peak
40
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Discovered Oil
Oil Volume, Billion Barrels
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Produced Oil
10
1960
1940
1920
1980
2000
2020
Year
10
Anticipating the Peak
Est. Time of Peak When 1/2
40
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Discovered Oil
Oil Volume, Billion Barrels
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Produced Oil
10
1960
1940
1920
1980
2000
2020
Year
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Why is peak oil production significant?
Demand
40
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Historic Oil Production
Future Production
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ANNUAL PRODUCTION IS NOW 4 TIMES GREATER THAN
ANNUAL DISCOVERIES
10
1920
1980
1960
1940
2000
2020
Year
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What about hydrogen as a transportation fuel?
U.S. will still need 11 MBO/Day (current
consumption rate) in Year 2040 even though
oil production will be in decline
1.0 Annual Growth (assumed)
2.5 Annual Growth (Energy Information
Administration)
Year 2000 Consumption 11 MBO/Day
Hydrogen replaces 11 MBO/Day by Year 2040 (White
House projection)
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• Conclusions on Transportation Fuels
• Current reliance on oil cannot be sustained
• Time of peak oil production is more significant
  than time of final production
• OPEC will soon produce majority of world oil
• Alternative fuel development will not keep pace
  with fuel demand
• Goal of creating oil demand elasticity in
  transportation should be emphasized in
  infrastructure planning design
• Relevant to both freight and passenger
  transportation

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Current Freight Issues

• Demand on highways is increasing while lane-miles
  remain constant

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Congested Highways, 2000Congestion Disrupts
Freight-Truck Service by Making Trips Slower,
Less Reliable, and More Expensive
Source Federal Highway Administration Highway
Performance Monitoring System data.
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Potentially Congested Highways, 2020As
Congestion Grows, Trucks will be Exposed to More
Delay without More Capacity, Logistics Costs
will Rise
Source Federal Highway Administration Highway
Performance Monitoring System data.
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Highway Safety

• Highway Injuries Fatalities
• 2.9 million injured persons in 2002
• 42,815 fatalities in 2002
• Economic Impacts of Motor Vehicle Crashes
• Crashes in the United States cost an estimated
  231 billion 820 per person or 2 of the Gross
  Domestic Product

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Current Freight Issues - Rail

• Transportation Public Policy Characterized By
• Growing recognition that freight rail is a
  critical component of the nations goods movement
  system
• Actively seeking assistance from rail to stem the
  growing tide in freight volumes

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Current Freight Issues - Rail

• Railroads are increasingly receptive to
  appropriately configured public-private
  partnership opportunities
• Alameda Corridor
• Chicago CREATE Project
• Virginia I-81
• Balance public-private benefits
• Represents a major departure from historic,
  independent stance

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Current Freight Rail Issues Public-Private
Partnerships
ROR
A
NPV 0
B
Project Feasibility Zone
C
ROR i
ROR i
NPV
Opportunity for Project Success A B C
i acceptable corporate ROR
NPV 0
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Miles of Rail Line in the US
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Railroad Productivity is Increasing
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Decline in Rail Rates Versus Other Modes
Following Deregulation
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Declining Freight-Rail Revenue per Ton-Mile
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Class I Railroad Return on Investment Versus Cost
of Capital
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Needed Capital Expenditures Exceed Class I Funds
Available for Reinvestment
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Railroad Capital Needs are Far More Intensive
Than Other Industries
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Emerging Freight Rail Strategy

• Railroads are beginning to evaluate revenues by
  each major commodity category
• Network congestion,
• Crew and locomotive shortages,
• Rising fuel prices
• An emerging business strategy may result in the
  shedding of some commodity groups
• Control volume of business in several key
  corridors and terminals
• Increase loads having higher profit margins
• Recent decision to reduce aggregate car-loadings
  by 1/3 in Texas
• Require unit-train operations

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Projected Rail Growth and Investment Over the
Next 20 Years
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Projected Rail Growth and Investment Over the
Next 20 Years
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Projected Rail Growth and Investment Over the
Next 20 Years
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The 20-year Cost of Failure to Invest in Freight
Rail Infrastructure
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Current Freight Rail Funding Programs

• Potential Approaches to Freight Rail Funding
• Rail User Fees/Surcharges (Alameda Corridor)
• Direct Federal Appropriations
• CMAQ Program Grants
• Transportation Infrastructure Finance and
  Innovation Act (TIFIA)
• Railroad Rehabilitation and Improvement Finance
  Program (RRIF)
• Borders and Corridors
• Federal Tax-Credit Bond-Financing Programs
• Tax Exempt Debt for Railroad Infrastructure
• Infrastructure Tax Credit

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Critical Issues Affecting Trucking

• Trucking is the dominant freight mode
• Carries approximately 90 of intercity freight
• Industry revenues approaching 10 times that of
  rail
• Has advantage in
• door-to-door flexibility
• Low market entry costs
• Transit speed
• Public right of way

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Critical Issues Affecting Trucking

• Trucking concerns
• Highly competitive mode
• Thin margins
• High variable costs
• Sensitivity to fuel prices
• Driver issues
• Recruitment
• Training
• Retention
• Hours of service
• Safety
• Size and weight

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Desirable Characteristics for 21st Century
Freight Movement

• Separation of Freight and Passenger Traffic
• Safety
• Productivity
• Grade Separation
• Safety
• Productivity
• Alternative Energy Sources
• Oil independence
• Cost containment
• Automation
• Cost containment
• Simplicity of Design
• Reliability
• Cost containment
• Compatibility with JIT delivery strategies
• Cost containment
• Security

Sheffield Junction Flyover (Kansas City)
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Desirable Characteristics for 21st Century
Freight Movement

• Separation of Freight and Passenger Traffic
• Truck-only lanes
• Truck toll facilities
• Urban by-pass routes
• Additional private-sector opportunities to
  design, build, operate, and maintain highway
  infrastructure

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Desirable Characteristics for 21st Century
Freight Movement

• Energy Independence
• Evaluation of Alternatives
• Policy Support added incentives
• Security
• Inspection
• Tracking
• Route designation

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21st Century Freight Movement

• Needed New Approaches
• Public-private cooperation
• Additional funding
• Trucking-rail alliances
• Facility relocation
• Urban by-passes
• New technologies

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Introduction to TransDec2.0A Multimodal /
Multicriteria Decision Framework

• Texas Transportation Institute

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TransDec2.0

• Multicriteria Approach
• Decisions often require trade-offs
• Contemplation of competing or conflicting
  objectives
• Reliance on a variety of measures
• Different scales
• Variety of metrics
• Objective and subjective factors
• Need to consider measures other than dollars

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TransDec2.0

• Provides a Framework Within Which to Rank and
  Select Alternative Projects
• Results in a Single Index
• Provides Component Contributions
• Allows Modification and Updates
• Stores, Reports, and Prints Results

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TransDec2.0

• A Common Decision Framework
• Establish Broad Hierarchy of Goals
• Safety
• Environment
• Mobility
• Cost effectiveness
• Define Objectives that address each goal
• Usually discrete efforts or processes
• Select performance measures that reflect
  achievement of the objectives
• Define rating scales and preferred outcomes

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TransDec2.0

• Rating Scales
• Numerical
• Project cost per pound of emissions eliminated
  (low value preferred)
• Average free flow traffic speed (high value
  preferred)
• Categorical Ratings or Rankings
• High, Medium, Low
• Level of Service A, B, C, D, F
• Binary
• Yes, No

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TransDec2.0

• Combination of Diverse Scales and Measures is
  Accomplished by Mapping All Scales to a Universal
  10-point Metric

Cost per Pound of NOx Reduction
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TransDec2.0

• Continuous Scale Mapping

Continuous Scale of Some Sort
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TransDec2.0

• Once Criteria and Performance Measures are
  Established
• Define Alternative Projects
• Collect and Input Data
• Establish Objective Weights
• Evaluate Project Alternatives
• Independent (orthogonal)
• Single Index
• Component Displays

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TransDec2.0

• In Summary
• TransDec is a Multicriteria
• Cross Modal
• Evaluation Framework
• Each Evaluation May be Tailored to Situation /
  Need
• Consensus Building Tool
• Readily Understood and Communicated
• Amenable to what-if Testing Through Alteration
  of Weights

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TransDec2.0

• Example
• Selecting One Project That Best Achieves Both
  Safety and Mobility Objectives
• Competing Conflicting Objectives
• Safety vs. mobility
• Cost vs. impact
• Immediate vs. long term benefits
• Differential Emphasis
• What is valued how are weights distributed?
• Addition of New Criteria

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TransDec2.0 Example FAST Corridor Seattle, WA
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TransDec2.0 User Interface
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Presents a Step by Step Process
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Allows User to Define the Structure of the
Evaluation
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Establish Measurement Scales Suited to the Issues
at Hand
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Define Alternatives
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TransDec2.0 Forms an Evaluation Matrix Based on
User Specifications
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TransDec2.0 Evaluation Reports
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TransDec2.0

• Contact Information
• Dr. Steve Roop
• Assistant Director
• Texas Transportation Institute
• Texas AM University System
• College Station, TX 77843-3135
• [phone]
• s-roop_at_tamu.edu