Testing the Hypothesis

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Can Rail Reduce Congestion?
Testing the Hypothesis
Bill Schafer Director, Strategic Planning March
21, 2007
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Discussion Points

• How Rail Intermodal Works Today
• Where It Works
• Where It Doesnt
• Where It Should
• How NS Is Testing the Hypothesis
• Conclusions

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Intermodal Today

• gt 500 Mile Hauls
• Once a Day Frequency
• Average Speed 25 mph
• Reliability 60-70
• 10 Annual Volume Growth

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Intermodal Today

• Customer-Focused
• Organic Growth
• Internally Funded
• Benefits to Customers, Employees, Owners
• Discipline of the Marketplace
• No Incentive to Reduce Highway Congestion
• Better Freight Replaces Good Freight
• Capital Improvements Enhance Shareholder Value

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Intermodal Not Keeping Up With Growth
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Key Question

• Can Rail Reduce Truck Congestion?
• If So, How Much?
• What is Needed?
• How Much Will It Cost?
• Where Will Money Come From?

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Where Its Already Happening

• Chicago-California
• As Much As 80 Penetration in Some Lanes
• BNSF Betting the Farm
• New York-Chicago
• 30 Penetration
• NS and CSXT Have High Capacity Routes
• Medium- to Long-Hauls, gt750 Miles
• High Volumes

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Where It Isnt Happening

• Shorter Hauls, lt750 Miles
• Fragmented Origin-Destination Flows

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Where It Could Happen

• 500 1500 Mile Hauls
• Neither Truck Nor Rail Has Clear Advantage

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How NS Is Testing The Hypothesis

• Intermodal Expressway (Working Name)
• In-House Study
• Network of New Intermodal Services
• Between Northeast and Texas
• Target Market Dry Vans
• Byproduct Effect on I-81 Congestion
• Virginia DOT
• Virginia DRPT

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Goal Better Service

• Faster Average Speeds
• Higher Frequency
• Greater Levels of Reliability

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Goal Additional Assets

• Track and Structures
• Terminals
• Equipment
• Personnel

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Goal Additional Benefits

• Public
• Highway Users
• Freight Shippers
• Private
• Norfolk Southern
• Truck Lines

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Goal Public-Private Partnership

• Heartland Corridor Example
• Federal
• State
• Local
• Railroad

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Next Steps

• Complete the Study
• Train Simulations
• Cost of New Services
• Identify Additional Assets
• Identify Sources of Funding
• Begin Outreach
• Federal-State-Local Partners
• Potential Customers
• Implement

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3-Phase Analysis Approach
1. Preliminary Assessment of Feasibility

• Q Can rail help relieve congestion?
• Use simple sketch planning tools

2. Detailed Analysis

• Q Do benefits justify the costs?
• Use traffic diversion and benefit models

3. Decision-Making

• Q Is this project better than alternatives?
• Use benefit/cost and multi-criteria analysis

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Conclusions

• We Believe Rail Can Help With Highway Congestion
• Benefits Will Be Perceived By
• Shippers
• Shareholders
• Motoring Public