SCAG 40th Anniversary General Assembly

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SCAG 40th Anniversary General Assembly
Goods Movement, Economic Growth Clear
Skies The Southern California Challenge
Paul E. NowickiBNSF Railway
May 04, 2005
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U.S. Freight Transportation
Ton-Miles
Water 13
Pipe 17
Rail 40
Air 1
Truck 29
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U.S. Railroad Performance 1964-2003(Index 1981
100)
Productivity
Volume
Staggers Act Passed Oct. 1980
Revenue
Price
Source AAR
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Railroads Do Not Earn Their Cost of Capital
Class I Cost of Capital vs. Return on Investment
Cost of Capital
Return on Investment
Source Surface Transportation Board
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Railroading is Americas Most Capital-Intensive
Industry
Capital Expenditures as a of Revenue
18
6
5
4
4
3
2000, U.S. Bureau of the Census
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Rail Industry Investments
Buildings, Information Systems, etc. 5
Freight Cars 9
Locomotives 11
Right of way 75
Source Transmatch Consulting
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Public Policy Should Encourage Use of Freight Rail
In Mil
Advantages of Rail A Ratio of 5 to 1
Air Pollution NoiseCongestionAccidents
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Rail Is Less Polluting Than Other Surface Modes
for All Pollutants
Rankings based upon Emissions per ton-mile
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Goods Movement Short Term

• Achieve mutually exclusive objectives
• Maximize economic opportunity
• Improve the environment
• Dont stop progress waiting for perfectaction
  plan
• Improve utilization of existing infrastructure
• Utilize market-based solutions (PierPass, etc.)
• Who will lead?

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Lessons from CREATE

• Similarity Fragile system/Community tension
• Adverse Event
• Leadership (Mayor Daley)
• Congressional support (Hastert, Lipinski,Durbin,
  etc.)
• Not in regional transportation plans

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Long Term

• Leadership required
• Complex governance
• Federal role
• Need congressional sponsor
• Leverage demand inelasticity
• PPPs required
• Private capital commensurate with private
  benefits
• Public capital commensurate with private benefits
• Circumstances must converge

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