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NATIONAL NCHRP REPORT 586 COOPERATIVE HIGHWAY RESEARCH PROGRAM Rail Freight Solutions to Roadway Congestion-- Final Report and Guidebook

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TRANSPORTATION RESEARCH BOARD 2007 EXECUTIVE COMMITTEE* OFFICERS CHAIR: Linda S. Watson, CEO, LYNXCentral Florida Regional Transportation Authority, Orlando VICE CHAIR: Debra L. Miller, Secretary, Kansas DOT, Topeka EXECUTIVE DIRECTOR: Robert E. Skinner, Jr., Transportation Research Board MEMBERS J. Barry Barker, Executive Director, Transit Authority of River City, Louisville, KY Michael W. Behrens, Executive Director, Texas DOT, Austin Allen D. Biehler, Secretary, Pennsylvania DOT, Harrisburg John D. Bowe, President, Americas Region, APL Limited, Oakland, CA Larry L. Brown, Sr., Executive Director, Mississippi DOT, Jackson Deborah H. Butler, Vice President, Customer Service, Norfolk Southern Corporation and Subsidiaries, Atlanta, GA Anne P. Canby, President, Surface Transportation Policy Partnership, Washington, DC Nicholas J. Garber, Henry L. Kinnier Professor, Department of Civil Engineering, University of Virginia, Charlottesville Angela Gittens, Vice President, Airport Business Services, HNTB Corporation, Miami, FL Susan Hanson, Landry University Professor of Geography, Graduate School of Geography, Clark University, Worcester, MA Adib K. Kanafani, Cahill Professor of Civil Engineering, University of California, Berkeley Harold E. Linnenkohl, Commissioner, Georgia DOT, Atlanta Michael D. Meyer, Professor, School of Civil and Environmental Engineering, Georgia Institute of Technology, Atlanta Michael R. Morris, Director of Transportation, North Central Texas Council of Governments, Arlington John R. Njord, Executive Director, Utah DOT, Salt Lake City Pete K. Rahn, Director, Missouri DOT, Jefferson City Sandra Rosenbloom, Professor of Planning, University of Arizona, Tucson Tracy L. Rosser, Vice President, Corporate Traffic, Wal-Mart Stores, Inc., Bentonville, AR Rosa Clausell Rountree, Executive Director, Georgia State Road and Tollway Authority, Atlanta Henry G. (Gerry) Schwartz, Jr., Senior Professor, Washington University, St. Louis, MO C. Michael Walton, Ernest H. Cockrell Centennial Chair in Engineering, University of Texas, Austin Steve Williams, Chairman and CEO, Maverick Transportation, Inc., Little Rock, AR EX OFFICIO MEMBERS Thad Allen (Adm., U.S. Coast Guard), Commandant, U.S. Coast Guard, Washington, DC Thomas J. Barrett (Vice Adm., U.S. Coast Guard, ret.), Pipeline and Hazardous Materials Safety Administrator, U.S.DOT Marion C. Blakey, Federal Aviation Administrator, U.S.DOT Joseph H. Boardman, Federal Railroad Administrator, U.S.DOT John A. Bobo, Jr., Acting Administrator, Research and Innovative Technology Administration, U.S.DOT Rebecca M. Brewster, President and COO, American Transportation Research Institute, Smyrna, GA George Bugliarello, Chancellor, Polytechnic University of New York, Brooklyn, and Foreign Secretary, National Academy of Engineering, Washington, DC J. Richard Capka, Federal Highway Administrator, U.S.DOT Sean T. Connaughton, Maritime Administrator, U.S.DOT Edward R. Hamberger, President and CEO, Association of American Railroads, Washington, DC John H. Hill, Federal Motor Carrier Safety Administrator, U.S.DOT John C. Horsley, Executive Director, American Association of State Highway and Transportation Officials, Washington, DC J. Edward Johnson, Director, Applied Science Directorate, National Aeronautics and Space Administration, John C. Stennis Space Center, MS William W. Millar, President, American Public Transportation Association, Washington, DC Nicole R. Nason, National Highway Traffic Safety Administrator, U.S.DOT Jeffrey N. Shane, Under Secretary for Policy, U.S.DOT James S. Simpson, Federal Transit Administrator, U.S.DOT Carl A. Strock (Lt. Gen., U.S. Army), Chief of Engineers and Commanding General, U.S. Army Corps of Engineers, Washington, DC *Membership as of March 2007.

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NATIONAL COOPERATIVE HIGHWAY RESEARCH PROGRAM NCHRP REPORT 586 Rail Freight Solutions to Roadway Congestion-- Final Report and Guidebook Joseph Bryan GLOBAL INSIGHT, INC. Lexington, MA Glen Weisbrod ECONOMIC DEVELOPMENT RESEARCH GROUP Boston, MA Carl D. Martland MASSACHUSETTS INSTITUTE OF TECHNOLOGY Sugar Hill, NH AND WILBUR SMITH ASSOCIATES, INC. Columbia, SC Subject Areas Planning and Administration Highway Operations, Capacity, and Traffic Control Rail Freight Transportation Research sponsored by the American Association of State Highway and Transportation Officials in cooperation with the Federal Highway Administration TRANSPORTATION RESEARCH BOARD WASHINGTON, D.C. 2007 www.TRB.org

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NATIONAL COOPERATIVE HIGHWAY NCHRP REPORT 586 RESEARCH PROGRAM Systematic, well-designed research provides the most effective Project 8-42 approach to the solution of many problems facing highway ISSN 0077-5614 administrators and engineers. Often, highway problems are of local ISBN: 978-0-309-09893-9 interest and can best be studied by highway departments individually Library of Congress Control Number 2007931909 or in cooperation with their state universities and others. However, the 2007 Transportation Research Board accelerating growth of highway transportation develops increasingly complex problems of wide interest to highway authorities. These problems are best studied through a coordinated program of COPYRIGHT PERMISSION cooperative research. Authors herein are responsible for the authenticity of their materials and for obtaining In recognition of these needs, the highway administrators of the written permissions from publishers or persons who own the copyright to any previously American Association of State Highway and Transportation Officials published or copyrighted material used herein. initiated in 1962 an objective national highway research program Cooperative Research Programs (CRP) grants permission to reproduce material in this employing modern scientific techniques. This program is supported on publication for classroom and not-for-profit purposes. Permission is given with the understanding that none of the material will be used to imply TRB, AASHTO, FAA, FHWA, a continuing basis by funds from participating member states of the FMCSA, FTA, or Transit Development Corporation endorsement of a particular product, Association and it receives the full cooperation and support of the method, or practice. It is expected that those reproducing the material in this document for Federal Highway Administration, United States Department of educational and not-for-profit uses will give appropriate acknowledgment of the source of any reprinted or reproduced material. For other uses of the material, request permission Transportation. from CRP. The Transportation Research Board of the National Academies was requested by the Association to administer the research program because of the Board's recognized objectivity and understanding of NOTICE modern research practices. The Board is uniquely suited for this purpose as it maintains an extensive committee structure from which The project that is the subject of this report was a part of the National Cooperative Highway Research Program conducted by the Transportation Research Board with the approval of authorities on any highway transportation subject may be drawn; it the Governing Board of the National Research Council. Such approval reflects the possesses avenues of communications and cooperation with federal, Governing Board's judgment that the program concerned is of national importance and state and local governmental agencies, universities, and industry; its appropriate with respect to both the purposes and resources of the National Research Council. relationship to the National Research Council is an insurance of The members of the technical committee selected to monitor this project and to review this objectivity; it maintains a full-time research correlation staff of report were chosen for recognized scholarly competence and with due consideration for the specialists in highway transportation matters to bring the findings of balance of disciplines appropriate to the project. The opinions and conclusions expressed research directly to those who are in a position to use them. or implied are those of the research agency that performed the research, and, while they have been accepted as appropriate by the technical committee, they are not necessarily those of The program is developed on the basis of research needs identified the Transportation Research Board, the National Research Council, the American by chief administrators of the highway and transportation departments Association of State Highway and Transportation Officials, or the Federal Highway and by committees of AASHTO. Each year, specific areas of research Administration, U.S. Department of Transportation. needs to be included in the program are proposed to the National Each report is reviewed and accepted for publication by the technical committee according Research Council and the Board by the American Association of State to procedures established and monitored by the Transportation Research Board Executive Committee and the Governing Board of the National Research Council. Highway and Transportation Officials. Research projects to fulfill these needs are defined by the Board, and qualified research agencies are The Transportation Research Board of the National Academies, the National Research Council, the Federal Highway Administration, the American Association of State Highway selected from those that have submitted proposals. Administration and and Transportation Officials, and the individual states participating in the National surveillance of research contracts are the responsibilities of the National Cooperative Highway Research Program do not endorse products or manufacturers. Trade Research Council and the Transportation Research Board. or manufacturers' names appear herein solely because they are considered essential to the object of this report. The needs for highway research are many, and the National Cooperative Highway Research Program can make significant contributions to the solution of highway transportation problems of mutual concern to many responsible groups. The program, however, is intended to complement rather than to substitute for or duplicate other highway research programs. Published reports of the NATIONAL COOPERATIVE HIGHWAY RESEARCH PROGRAM are available from: Transportation Research Board Business Office 500 Fifth Street, NW Washington, DC 20001 and can be ordered through the Internet at: http://www.national-academies.org/trb/bookstore Printed in the United States of America

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COOPERATIVE RESEARCH PROGRAMS CRP STAFF FOR NCHRP REPORT 586 Christopher W. Jenks, Director, Cooperative Research Programs Crawford F. Jencks, Deputy Director, Cooperative Research Programs Christopher J. Hedges, Senior Program Officer Eileen P. Delaney, Director of Publications Hilary Freer, Senior Editor NCHRP PROJECT 8-42 PANEL Field of Transportation Planning--Area of Forecasting Cecil Selness, Minnesota DOT, St. Paul, MN (Chair) Leo Penne, AASHTO, Washington, DC Stephen M. Anderson, Washington State DOT, Olympia, WA William R. Black, Indiana University, Bloomington, IN Steve Branscum, Burlington Northern Santa Fe Railway, Fort Worth, TX Steven A. Brown, Port Authority of New York & New Jersey, New York, NY David L. Ganovski, Maryland DOT, Berlin, MD Richard Hollingsworth, Gateway Cities Partnership, Inc., Paramount, CA J. Reilly McCarren, Kenilworth, IL Thomas C. Messer, California DOT, Sacramento, CA Khali Persad, University of TexasAustin, Austin, TX Rolf R. Schmitt, FHWA Liaison Elaine King, TRB Liaison

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FOREWORD By Christopher J. Hedges Staff Officer Transportation Research Board This report presents guidance on evaluating the potential feasibility, cost, and benefits of investing in rail freight solutions to alleviate highway congestion from heavy truck traf- fic. An extensive research effort is documented and accompanied by a set of guidelines that present a three-phased approach to evaluating rail freight solutions: preliminary assessment, detailed analysis, and decisionmaking. This report will be useful for trans- portation planners in state and regional transportation agencies, freight planners in pri- vate transportation companies, and senior decisionmakers who control the funding and implementation of transportation investments. Interaction between rail and other modes of freight movement continues to be an issue for transportation planners. Concerns about reliability, flexibility, and timeliness have con- tributed to a decline in market share for rail freight movements (despite their role as a work- horse for international trade). On the other hand, congestion, air quality, safety, energy, and security concerns lead planners to consider rail options. There is a particular need to ana- lyze the impacts and opportunities for public investment in rail freight capacity to help miti- gate roadway congestion. Congestion in urban areas and intercity corridors is a growing concern. Truck traffic has become a significant contributor to road congestion. In addition, many planners see rail as an underutilized mode. Increasing the opportunities to move freight by rail could help decrease deterioration of existing highways, while positively affecting congestion, safety, and pollution. Federal, state, local, and private-sector transportation planners can use the prod- ucts of this research to develop cooperative relationships, which might include cost sharing in construction and operation of future facilities that include rail as a necessary component of transportation corridors. Under NCHRP Project 08-42, a research team led by Joe Bryan of Global Insight, Inc., developed a Guidebook to help assess the potential for rail freight solutions to relieve road- way congestion. The study had a number of components: a thorough review of relevant lit- erature and ongoing research, case studies where rail freight solutions have been applied to help relieve highway congestion, and examination of factors leading to the choice of freight shipping mode, as well as short- and long-term trends that affect freight flow pattern. The report provides guidance on the available sources of data that are useful for assessing rail freight solutions and develops an analysis framework for using that data to assess the rela- tive costs, benefits, and feasibility of rail freight investments. The final report includes a Guidebook that incorporates the research findings into a set of tools and methods for trans- portation planners to evaluate when it can be beneficial to invest in solutions that shift freight traffic from highways to rail.

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CONTENTS 1 Preface 3 Chapter 1 Introduction and Overview 3 1.1 Objective 3 1.1.1 Background 3 1.1.2 Report Goals 3 1.2 Elements of the Study 5 Chapter 2 Literature Review 5 2.1 Rail and General Freight Economics 5 2.1.1 Themes 6 2.1.2 Railroads and Economic Development 6 2.1.3 Declining Marginal Costs 6 2.1.4 Service Capabilities 7 2.1.5 Truckload Competition 8 2.1.6 Role of Technology 10 2.2 Intermodal Planning Including Truck and/or Rail Freight 11 2.3 Studies of Congestion Cost 12 2.4 Rail Relocation and Road/Rail Conflict 13 2.4.1 Rationalization of Rail Facilities 14 2.4.2 Redevelopment of Urban Rail Facilities 14 2.4.3 Location of Intermodal Terminals 15 2.4.4 Grade Crossings and Grade Separation 15 2.5 Benefit-Cost Assessment and Modeling 16 2.5.1 Examples of Intermodal Freight Planning Studies 18 2.5.2 Performance Models for Specific Types of Services 19 2.5.3 Guidebooks 21 2.6 Public-Private Partnerships 21 2.6.1 Brief History of Public-Private Relationships with Rail Industry 23 2.6.2 Intermodal Case Studies--Public-Private Partnerships 23 2.6.3 Perspective on Public-Private Investments 24 2.7 Concluding Observations 24 2.8 References 27 Chapter 3 Detailed Case Studies 27 Case Study 1: Pennsylvania Double-Stack Clearances 31 Case Study 2: Virginia I-81 Marketing Study 36 Case Study 3: The Betuweroute Freight Line--Netherlands 38 Case Study 4: Alameda Corridor 42 Case Study 5: Sheffield Flyover, Kansas City, Missouri 45 Case Study 6: Vancouver Gateway Transportation System 49 Case Study 7: Freight Rail Futures for the City of Chicago 52 Case Study 8: State Rail Access Programs

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55 Case Study 9: Inland Ports 59 Additional References 60 Chapter 4 Shipper Needs and Structural Factors 60 4.1 Introduction 61 4.2 Shipper Needs 61 4.2.1 Service 62 4.2.2 Cost 63 4.2.3 Other Needs 64 4.2.4 Carrier Selection 66 4.3 Structural Factors 66 4.3.1 Access 70 4.3.2 Addressable Market 73 4.4 Market Segmentation 73 4.4.1 Demand Side 73 4.4.2 Supply Side 78 4.5 Diversion Opportunities 79 4.5.1 Railcar 80 4.5.2 Intermodal 81 4.5.3 Shorthaul Rail 84 4.6 Social and Economic Impacts of Diversion 85 4.6.1 Forms of Incremental Impact 87 4.6.2 Factors Affecting Incremental Impact 88 4.6.3 Modal Diversion Models 89 4.7 Summation 90 Chapter 5 Trends Affecting Freight Movement 90 5.1 Overview of Trends Discussion 90 5.1.1 Objective 90 5.1.2 Organization 91 5.2 Congestion Cost Trends 91 5.2.1 Road Travel Demand Continues to Increase 91 5.2.2 Rising Congestion as Supply Does Not Keep Up with Demand 91 5.2.3 Rising Cost of Congestion 92 5.2.4 Increasing Breadth of Congestion 92 5.3 Role of Trucks in Congestion 92 5.3.1 High-Volume Truck Routes 93 5.3.2 Truck Contribution to Total Congestion 93 5.4 Growth in Freight Activity Levels 94 5.4.1 Rates of Freight Growth 95 5.4.2 Mode Shifts 95 5.4.3 Shipment Value and Weight 95 5.4.4 Shipment Distance 97 5.4.5 Import and Export Shipment Patterns 97 5.5 Business Location Trends 97 5.5.1 Development of Rail and Urban Industry 98 5.5.2 Development of Highways and Dispersed Industry 100 5.5.3 Industry Examples 101 5.5.4 Land Development Trends 102 5.5.5 The Example of Chicago 103 5.6 Technology Trends

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104 5.6.1 Intermodalism 104 5.6.2 Motor Carriage 104 5.6.3 Railroads 104 5.6.4 Marine 105 5.6.5 Commodities 105 5.6.6 Economy 106 5.7 Summation 107 Chapter 6 Data Sources 107 6.1 Introduction 108 6.2 Practicalities 109 6.3 Commodity Flow Data 111 6.4 Traffic Count Data 113 6.5 Commodity Characteristics 115 6.6 Maps and Inventories of Rail Infrastructure and Service 117 6.7 Railroad Engineering Cost Data 118 6.8 Shipper Characteristics and Needs--Establishment Data 119 6.9 Modal Service and Cost Parameters 121 6.10 Trend Data--Traffic and Economic Projections 122 6.11 Institutional and Privacy Factors 124 6.12 Data Environment 125 Chapter 7 Framework Structure 125 7.1 Planning Process Framework 126 7.2 Decision-Making Framework 127 7.3 Structured Sequence of Steps

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1 PREFACE This document, produced in fulfillment of NCHRP Project 8-42: Assessing Rail Freight Solutions to Roadway Congestion, consists of A final report, which presents information collected and analyzed as part of the study process, including a literature review, analysis of case studies, analysis of issues in freight shipping and mode choices, analysis of trends affecting freight shipping patterns, and evaluation of data sources. A Guidebook, which presents tools and methods that transportation planners can use to examine the potential for rail freight as a way to help control the growth of roadway traffic congestion. The last chapter of this final report describes the structure used in the Guidebook. It serves as a bridge to the Guidebook, an introduction to its content, and an overview of the analyt- ical method that planners can use to apply rail freight solutions to roadway congestion. Note: URLs were current at the time of report submission.

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120 travel speeds, the number of drivers, and hours of service reg- is generally costly and difficult to ascertain rail freight per- ulations. Overnight trucking service with a single driver is formance by direct field observation, because of the long typically difficult for rail to divert, as is the premium team variability of run-times and the difficulty of tracking the service where two drivers alternate shifts. Longer distance operations without using one of the railroad's proprietary trucking service that involves a layover for a single driver information systems. (thus, with a dock-to-dock average speed lower than about 50 There are also two major types of cost data: (1) accounting mph) can often be diverted with rail intermodal. Beyond data, which may be available from shippers or carriers willing intermodal, rail service tends to compete on characteristics to make them public or share them through an intermediary other than speed, such as costs, safety, size of shipment, and conducting a study on behalf of a public agency; and (2) cost other factors. model data, which are calibrated by a knowledgeable party Rail service characteristics can vary with the type of rail based on known expense and operating factors. Price data are service purchased, proximity to major yards and mainlines, rarely possible to observe directly and therefore must be train frequencies, and other system-wide factors. Thus, pre- obtained through modeling, interviews, and other coopera- dicting the service level in a given rail lane is much more dif- tive methods. ficult than for trucking. If the rail freight diversion proposed relies on existing services, then the railroads would usually Levels of Accuracy and Precision have a fairly good time estimate for the shipment. If new service is being planned, then the sponsor may have more For typical rail freight diversion applications, service flexibility over cost and service levels--with the caveat that times need to be known to within one day, or perhaps half truck-equivalent service levels tend to be more expensive a day. Service time precisely to the hour is usually less except in high-volume service lanes. Generally, the best way important than the reliability factor. Under unconstrained to validate proposed service levels is through careful opera- conditions, a train may be able to move from siding to sid- tions planning, followed by test runs designed to determine ing in a standard number of hours; however, for a feasible the feasibility of the operating plan and its impact on other service plan, the number of intermediate switching moves railroad operations. and the probability of delay at each location must be The major Class I railroads (and the two Canadian majors, accounted for. Even for bulk commodities, a missed deliv- CN and CP) are required to report service performance lev- ery can lead to problems at the receiving plant unless a suf- els to the STB on a weekly and quarterly basis. Although these ficient stockpile is maintained--which drives up the total numbers are available from a website maintained by the logistics costs. Thus, errors in reliability estimations may AAR4, the highly aggregated performance data are of limited lead to excessive costs being incurred by the shipper, result- value for predicting service levels within particular service ing in a seemingly promising operation becoming an uneco- lanes. Nonetheless, they are a good indicator of broad service nomical one. trends (e.g., whether the probability of a regular shipment For intermodal diversion, time performance can be espe- arriving on time is increasing or decreasing). cially critical, since the truck-like performance it aims for is often associated with low levels of inventory. Nevertheless, typical services still are discussed in terms of morning, after- How can the data be collected? noon, or evening delivery, instead of a specific hour within There are two major types of service performance data: which the shipment must arrive. While there are premium (1) empirical results, which must come from the carrier, the intermodal products that do guarantee certain time windows shipper, the agent, or another interested party who has kept and cut-offs, those normally are geared to the requirements historical records such as the sources mentioned above; and of a particular customer or group. (2) performance simulations, which can be estimated with Operating costs are an important factor in determining knowledge of current operating practices, plans, and infra- whether services can be sustained. Prior to investment in structure conditions by either a consultant or the carrier's expensive infrastructure, comparative analyses of modal costs operating managers, but must be validated by actual service should be conducted. The cost savings of moving from truck performance or test runs. Ultimately, the data must be to rail need to be significant in order to allow an annual obtained from one of these sources. Unlike passenger rail, it contribution toward paying off the infrastructure. If the cost savings are not significant, then even if the infrastructure is 4 constructed, the traffic may not materialize. Thus a com- The website at http://www.railroadpm.org/ features such performance measures as Total Cars On Line, Average Train Speed, Average Termi- pelling case is required before an investment decision is nal Dwell Time, and Bill of Lading Timeliness. Performance measures made--but having made such a case, and given the magni- of shortlines have not generally been available. tude of infrastructure costs, minor errors in rail operating

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121 costs are unlikely to change the fundamental conclusions in The previous chapter of this report presented a cross sec- a freight diversion project. tion of trend and forecast information and cited relevant sources that may be consulted. For the tracking of traffic con- gestion, it displayed data from the Texas Transportation Insti- 6.10 Trend Data--Traffic and tute, whose annual Urban Mobility Study7 is the standard Economic Projections compilation of developments across the nation. TTI indexes What is the problem? What kind of data and ranks traffic congestion problems for the 85 major U.S. would be useful? urban areas, and its data can be compared and extended in time series. However, forecasting future traffic congestion In planning, trend data are sometimes used to illustrate a based exclusively on its current trend is not advisable beyond future scenario and to convince the stakeholders that changes about 5 years; to understand the extent of long-range conges- are needed now to prepare for the future. Congestion tends to tion, long-term economic trends should be used. worsen with economic growth, and if rail freight investment For more information on forecasting future freight con- can keep ahead of growth while highway investment remains gestion, a good source is the NCHRP report 8-43: Guidebook stagnant, railroads will become comparatively more attractive on Statewide Freight Planning. Although this manual does to some shippers. Trend data are therefore needed to illustrate not specifically deal with rail freight, using the methodologies the effect of both highway and railroad congestion if nothing demonstrated therein to understand where future congestion were to be done, and the payoff from taking action. and bottlenecks may occur could be helpful. Once these In general, trend data fall in two broad categories: (1) eco- potential hotspots are identified, the methods in this Guide- nomic trends and (2) traffic trends. Economic trends serve to book can help planners decide if a rail freight diversion suggest how fast the economy might grow in future and can scheme is apt to alleviate the likely problem. be used to infer how costs, service levels, and other attributes of freight transportation may change over a long planning horizon. Traffic trends serve a shorter term purpose--if con- How can the data be collected? gestion is growing by a certain percentage per year on one The economic and traffic trends rely on numerous data highway route, it can be conjectured that the congestion will sources, and it is generally not cost-effective to duplicate the continue to grow at a similar rate until the facility becomes data collection effort. Economic trends require data about comparatively less attractive versus substitutable facilities or trade activity, which is collected by the Department of Com- versus alternatives such as supply source substitution. merce through business reporting requirements. Traffic trend data and projections may be based on Highway Perfor- Are there readily available sources mance Monitoring System (HPMS) and automated data col- for the data? lection devices. The source data are publicly available. Economic forecasting is a specialized discipline, and fore- casting data are made available both by governmental agen- Levels of Accuracy and Precision cies and commercial vendors. Past economic trends can be Economic and traffic trends are usually reliable, if their found in various reports made available by the Department data are sound and their dynamics are accurately understood. of Commerce,5 Bureau of Economic Analysis, and the Eco- Projecting from trends is another story, because of the under- nomics and Statistics Administration, in addition to private lying presumption that past events will continue on a logical economic research resources. However, the federal-level data course toward a future conclusion, which is not always the may not contain enough regional detail, and state-level data case. More sophisticated forecasting tries to anticipate course should be consulted. Many states have official projections of changes and the interaction of trends, and while inevitably population and other economic drivers, and some have imperfect, it will give a better result. Econometric forecasts of invested in forecasts directly aimed at transportation or rea- this type can be purchased from a number of sources, and sonably pertinent to it. In addition, a number of regional eco- banks and news services like the Wall Street Journal offer nomic models are available6 in the marketplace. comparative performance ratings for vendors. In many cases, predicting economic growth itself is not as 5 See http://www.commerce.gov/ and http://www.bea.doc.gov/ for more important as predicting political decisions. Lack of highway details on the types of data provided. 6 investment is one catalyst for rail freight investment; how- Examples include REMI from Regional Economic Models, Inc.; REDYN from Regional Dynamics, Global Insight (DRI*WEFA); Fair 7 Model (Yale University)--as well as many consultants who produce See http://mobility.tamu.edu/ums/congestion_data/ for more details forecasts based customized versions on one or more different models. about this study.

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122 ever, if congestion becomes too severe, citizens may demand introduces institutional and privacy issues. Some of these highway or mass-transit improvements. When planning rail issues are explored below. freight investments, many such factors should be taken into account and weighed through a scenario analysis. Planners should prefer not to rely on a single set of traffic or economic Privacy Concerns assumptions being completely correct or base the viability of Private-sector carriers in both trucking and rail are rightly a specific rail freight plan on a single scenario. The best rail concerned that their competitors might use information freight plans will view an investment case under a range of about the flows on their network (and by inference, about development assumptions and test its success across them. their customers) to their own advantage. The negative effects can include customer poaching, disruption of density, and 6.11 Institutional and Privacy loss of network balance. This type of competition also may Factors result in destructive price wars that can harm individual car- riers or delay reinvestment by an industry. Shippers of freight To develop a successful rail freight diversion scheme or have similar concerns. In addition, rail carriers may worry that other rail freight solutions, three basic types of data are any new reporting of market data begins an unwelcome return needed. The planner should have an understanding of (1) the of government oversight, such as prevailed prior to the Stag- markets in which freight travels and levels of demand; (2) the gers Act. supply cost of providing freight services and infrastructure For reasons such as these, the STB waybill sample is pro- to meet that demand at appropriate levels of service; and tected by law. Decisions on using its detailed version are (3) the economic trend data that reflect how the supply and reviewed by the Federal Railroad Administration, and state- demand, the associated congestion, and the area's economic level governments have access only in a controlled fashion. development can be expected to change in the near and fur- On the occasions when a private enterprise is permitted to ther future. There are a series of sources for satisfying each, make use of these data, strict guidelines must be adhered to. with options that can be scaled to the size or phase of a proj- In most cases, the data processing must be done by an inter- ect or program, from small or preliminary to very large or mediary, who then must use the data only for the specified well advanced. purpose and destroy it after the work is completed. When pri- State DOTs, MPOs, and other organizations should make mary data from motor carriers have been tapped for some an active effort to make freight data collection part of their public studies, it has been done voluntarily, instead of on the regular data collection efforts. In some cases, data collected for compulsory basis that applies to the rail waybill. Nevertheless, passenger facility performance monitoring and/or for opti- mization of facility maintenance strategies can be used to pro- restrictions and protections have been built in for the benefit duce informative freight data streams. Alternately, it may be of cooperating truck lines: information has been aggregated, possible to add features to a data collection program that will intermediaries have been employed to avoid subjection to the partially feed freight planning applications. Freight activity is Freedom of Information Act, and reuse has been prohibited. also heavily connected to economic activities; thus, as part If state DOTs and other governmental organizations of an area-wide economic development or re-development expect to develop the trust of industry in conducting plan- effort, data streams might have already been collected that ning studies and sharing data and plans to mutual advantage, could assist freight planning. Since ownership of these data these privacy concerns must be taken very seriously. Demon- could lie outside the domain of DOTs, it is important to estab- strating a good understanding of the issues and why privacy lish contacts in other public organizations with overarching is necessary, honoring the commitments, having a codified responsibility for economic development and become famil- policy on how data may be used and distributed, and never iar with the information they may have available. Examples of using data in less than good faith will go a long way toward such organizations include building a successful and fruitful relationship with industry partners. In joint planning, it is always important to achieve Local economic development agencies (e.g., the Boston a win-win outcome; the industry cannot `win' if the data pro- Redevelopment Authority); vided for planning purposes are not treated with care and Local port authorities (e.g., the Delaware River Port caution by trusted agencies. Authority); and Multi-state agencies (e.g., the Tennessee Valley Authority). Financial Data Developing a data program and encouraging working rela- Publicly held companies are required to report certain tionships with entities that may become sources of information financial data to the Securities and Exchange Commission

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123 (SEC), for example, on the Form 10-K.8 However, 10-K spare capacity on a not-yet-congested portion of railroad is information typically is not very useful to the transportation still an expensive commodity, even if infrastructure upgrades planner, as it is rolled up for the whole corporation (most are not immediately required for new traffic. Public agencies likely a multi-state enterprise), and there are ways to report wishing to use capacity on private railroads must understand the information such that it is difficult to understand the that not only do they have to cover the operating cost of the company's cost structure. In addition, some very large freight train, they must offer a premium to out-bid any future use of carriers are held by private entities, who are under no obliga- that capacity the railroad may have planned. A pragmatic tion to disclose financial results to the SEC. On the other solution to this problem is to have the public agency upgrade hand, railways in the United States are required to submit a piece of private railroad infrastructure at public expense, in R-1 reports annually, which set forth a substantial body of lieu of premium payment for a spare train path. financial and operating statistics, some of it like conventional In some cases, loading a network with additional traffic can balance sheet and income statements, and some of it quite cause sometimes-subtle effects that lead to increased costs. different and oriented, for example, to operating assets. (Dis- For example, spare capacity may be required at strategic continuance of the comparable if less detailed M-1 reporting points about the network to prevent cascading congestion for motor carriers was noted above.) when long-distance traffic is delayed. The cost of this capac- Railroad capital programs normally are published annually ity is usually borne by the railroad. Cascading congestion can and can both be helpful and unhelpful to the public planner. be extremely expensive, requiring many more crews and The capital budgets will be defined in terms of number of ties power units to move the same amount of freight compared to to install, bridges to rebuild, and sidings or track miles to add. an uncongested network. Increasing traffic can dramatically In addition, ongoing projects may have special line items that increase the cost of recovering from such an incident and is a highlight the investment that railroads are planning using cost that public planners should be aware of when aiming to their own capital. However, it is generally difficult to extract use apparently untapped capacity. specific cost numbers from such documents. Moreover, pub- lic agencies rarely are invited into the strategic planning Data Collection is a Cost process at private railroads, so public planners may believe that they have little influence. In addition to the concerns discussed above, two further Still, many Class I railroads have a government relations issues may give carrier management pause in respect to shar- department. Taking a proactive approach to railroad capital ing data: planning at a state level can yield fruitful results. In several states, there are standing funds available for railroad infra- Rate of Return on Data Collection Activities. Developing structure upgrades, which can be a good way to become a relationship with public authorities and finding new engaged in railroad capital planning. With a stake in the freight with public support can be profitable activities for process, it becomes much easier to acquire financial data railroads in the long run. Even so, rail managers may think needed for planning and budgeting on the public side; also, they lack the current resources to manage a data collection planners will develop a better understanding of whether rail exercise or may doubt that new business is going to arise freight diversion plans can work or not and how much they from the effort. Even in a business development environ- may cost. ment, managers will be reluctant to do extensive data col- lection or grant high priority to the proposals of public planners unless the prospects of rewards are substantial. Railroad Capacity and Reliability When requesting data, it is helpful to state upfront what Public planners are aware that it can be difficult to per- the rewards might be--for instance, by showing that suade railroads to release seemingly `spare' capacity on their investment funds will become available through a certain tracks that is not currently in use because, once an operating feature or channel. Railroad partners may be more likely to agreement is entered into, it will be difficult for the railway to engage in data collection if such data are made a part of the remove that traffic, replace it with more profitable business, application for a specific grant or if the data are being and not cause a public-relations problem. Without removing offered on the understanding that public officials will pur- existing traffic, infrastructure upgrades typically are required sue available funds and take over some of the development when additional capacity is needed. These can be time- work based on the data. consuming and costly, especially in metropolitan areas. Thus, The Litigation Threat. Freight carriers, like other corpo- rations, have a healthy respect for the legal system, and 8 See http://www.sec.gov/answers/form10k.htm for more details. The some of their caution with information release may stem Securities and Exchange Commission is at http://www.sec.gov/. from the lack of clearly codified limits on how data may be

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124 handled. The U.S. Census, and the STB waybill sample more than analysis. Because the systems are intended mainly achieve successful data collection in part because there are for internal use, there may be limited standardization on clear laws on how the public may use and disseminate the what kind of data are kept, how they are kept, and what for- data. Confidentiality is guaranteed and exemptions mat they are kept in. Public planners should understand that plainly exclude certain data-mining activities. Steps such data simple to generate in an environment powered by latter- as those outlined in the discussion of privacy issues will day data centers are not necessarily easy for every carrier to allow public planners to assuage concerns about litigation compile, despite their best intentions. exposure. The establishment of clear contracts limiting With that in mind, it is important to be patient and flexi- the application of data for planning purposes and the use ble when requesting data that may require downloading from of vetted intermediaries to process it help to create a legacy systems. It is possible that carriers in these environ- trusted framework for information exchange. ments will have to expend substantial effort to find the data being sought by public planners. Once the data are found, they might be available only as a line-printer output, requir- 6.12 Data Environment ing optical character recognition software to translate into There are special issues concerning the electronic data machine-readable form. It is likely that carriers would want environment in railroad and motor carriers alike that are to further process such data before handing it to the public worth understanding. Some data systems are legacies from planner, in order to elide commercially sensitive information, development early on in the computer revolution, when each and this imposes an expense on the carrier. Offering com- carrier sought to acquire IT capability for its own internal pensation for such expenses or maintaining a confidential financial planning and operations purposes. As such, data data-processing expertise in house can be ways to ensure that formats occasionally predate the concept of relational data- data collected by the private sector for private purposes are bases and data mining and are driven by transactions far not lost as a planning resource.

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125 CHAPTER 7 Framework Structure All of the preceding sections on research literature, case Processes for Public Investment Planning. Traditionally, studies, mode choice factors, freight trends, and data together most state DOTs and MPOs have focused their infrastruc- provide a structural foundation for the final product of this ture planning largely on highways and given less attention to project, which is a Guidebook for planners. This last chapter rail investment, for the fundamental reason that they control of the Final Report describes the structure of an analysis investment in highways while they typically do not own or framework that forms the foundation and structure for the control investment in railroads or rail right of way. Guidebook. This structure has three dimensions: However, there is a growing recognition that (1) more multi-modal public planning is needed for freight move- Planning Process Framework. The methodology described ment; (2) such planning should include rail as well as in the Guidebook must be designed to address the relevant highway options for freight movement; and (3) rail freight issues and needs faced by transportation planners at both planning, if done well, can help address a wide range of public agencies and private transportation companies. issues relating to security, congestion, safety, and air quality. Decision-Making Framework. The methodology described Methods to Identify Transportation Issues and Assess Po- in the Guidebook must be structured to encompass the tential Solutions. Before expanding multi-modal invest- benefit and cost considerations involved in the mode choice ment analysis for freight movement, it is necessary for state decisions made by freight shippers and the investment and regional transportation planning agencies to (1) clar- decisions made by public agencies. ify the range of possible transportation issues that should Structured Sequence of Steps. The methodology must pro- be addressed, (2) define the range of potentially feasible rail vide a structured series of steps that can be adapted to apply and highway solutions to be assessed, and (3) apply appro- to a broad set of circumstances ranging from simple to priate methods to assess their relative benefits and costs. complex multi-modal projects. For instance, while there is a current emphasis on address- ing problems of growing highway congestion, planners The Guidebook is also available for download from the need workable ways of assessing these needs and identify- NCHRP section of TRB's web site (www.trb.org). ing feasible rail-freight solutions for them. Approaches for Private-Public Cooperation. Given the private ownership of many railroad and truck-rail inter- 7.1 Planning Process Framework modal facilities, it is necessary for rail freight planning to As the gap between highway demand and capacity is fore- involve both private and public sectors. At the same time, cast to accelerate in the future, there has been increasing key representatives of cargo shipping, trucking, and recognition of the importance of multi-modal planning and, railroad companies also have a strong interest in seeing specifically, the need for more attention to rail freight issues improved planning and investment, as they are keenly and opportunities in the transportation planning process. aware of the current shortcomings and needs for This has led both public agency planners and private trans- improvement in existing road and rail infrastructure sys- portation company officials to recognize a need for tools and tems serving freight movement. Thus, there is clear methods that they can use to address freight transportation opportunity for enhancing private-public cooperative re- planning issues. These needs fall into three broad topic areas: lationships in freight infrastructure planning.

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126 To address these three sets of needs, the guide must (and distribution of benefits and costs, as well as effectiveness, does) have separate sections providing: (1) screening crite- among public and private parties. That is necessary to enable ria to identify situations where analysis of rail freight solu- the public-private cooperation required for any strategy tions is warranted, (2) steps for calculating benefits and involving shippers, railroads, and roadway planning/oper- costs of rail freight alternatives, and (3) instructions on how ating agencies and to help ensure its success. the information can be best used as part of a broader pub- lic-private dialogue between transportation agencies and To carry out this process, the Guidebook lays out a strat- railroads. egy involving three phases of analysis: Preliminary assessment: situations where rail solutions ap- 7.2 Decision-Making Framework pear feasible, The core of the guide is a set of steps for assessing the rela- Detailed analysis: evaluation of rail options, and tive benefits, costs, and practical feasibility of implementing Decision-making: Multi-criteria and benefit-cost analysis. alternative policies, programs, or investments to encourage rail freight solutions as a way of reducing roadway congestion. These phases are shown in Table 7-1 and explained in the Figure 7-1 shows the elements of decision-making. It can be text that follows. summarized as follows: Phase 1--Initial Screening. In general, public agencies are looking for particular rail projects or programs that can help The first part of the process is to identify applicable situa- to relieve highway congestion. As such, there is a need for tions where rail freight solutions are potentially applicable guidance in identifying the types of situations where rail might and focus only on them. help; expected benefits associated with congestion relief; and The second part of the process is to evaluate rail freight al- the specific types of projects or programs that might be ap- ternatives by considering the technical feasibility (benefit propriate given local conditions. These assessments are part of measurement) perspective of planners and the practical the first phase of the analysis, which focuses on determining feasibility (funding and regulation) perspective of deci- whether there is a reasonable chance that the costs of rail proj- sion-makers. ects or programs can be justified in terms of their contribution The third part of the process is to develop funding and im- to congestion relief. This phase involves carrying out five steps plementation plans that account for differences in the to (1) screen for relevancy of rail freight solutions, (2) gauge Figure 7-1. Decision-Making Process for Rail Freight Investment.

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127 Table 7-1. Major phases of the decision-making process. Main Question Phase Major Activities Methodology & Desired Outcome 1 Preliminary - Can rail help relieve - Review information on freight assessment: highway congestion by facilities & traffic flows situations where handling more freight? rail solutions - Use framework to identify appear feasible - Identification of promising problems& potential solutions rail projects or programs - Use simple models to estimate aimed at specific solutions costs & benefits of potential to congestion problems solutions 2 Detailed analysis: - Do benefits of proposed evaluation of rail - Estimate project costs and actions justify their costs? impacts on rail service options - Analysis of costs & benefits - Traffic diversion study of rail solutions, including economic & environmental - Benefits analysis factors. 3 Decision-making: - Is this project or program Multi-criteria & as good as or better than - Consider alternatives benefit-cost other approaches? including rail, highway analysis investments, and public policy - Comparative analysis of regarding taxation & finance. major alternatives magnitude of the road congestion problem, (3) characterize nothing and living with congestion, building more highways, the local pattern of freight shipping, (4) characterize available expanding the capacity of existing highways, or using tolls, rail resources, and (5) use "sketch planning" approaches to fees, or regulations to restrict traffic flows. Second, each assess the potential viability (benefit and cost) of available option must be considered from the perspective of its options. economic, political, and practical feasibility for the various Phase 2--Detailed Analysis. Only if there seems to be participants. This includes consideration of the levels and potential for a particular project or program should the types of benefits that might accrue to each party and confir- analysis proceed to Phase 2 for a more detailed analysis of mation of the sufficiency of benefits for shippers to accept a the proposed options. The logical place to begin is by look- change of mode. It requires direct interaction with the ship- ing at specific rail investment options and estimating how ping community in any of several ways and an assortment of they could affect cost or any of the service factors that influ- steps for the assurance of traffic volumes. Third, for the pub- ence total logistics costs. The next step is to use a logistics lic evaluation component, additional analysis of social and cost or mode-split model to determine whether service broader economic impacts might be needed. Thus, Phase 3 improvements, if obtained, would be likely to affect makes use of procedures for comparing alternatives in a road/rail choices and, if so, to estimate how many trucks broader context that may include regional economic models might be diverted to rail. Given the potential diversion, it is and/or multi-criteria assessment tools. then possible to estimate the effects on highway perform- ance using various highway models. The changes in highway 7.3 Structured Sequence of Steps performance can then be compared to the costs associated with the rail initiatives to see if further consideration is The Guidebook consists of sections that readers can con- warranted. Thus, Phase 2 makes use of (1) rail cost or per- sult or ignore as appropriate for their particular situations. formance analysis, (2) logistics cost or mode-split analysis, The sections fall into the following groups: (3) highway performance analysis, and (4) economic and Initial Grounding. Guidebook Chapters 1 and 2 provide a financial evaluation. basic grounding in freight analysis issues. Phase 3--Decision-making Support. The final phase puts results in the context of decision choices. First, findings Chapter 1(Introduction) defines the coverage of this guide. must be placed in the context of other options, such as doing It classifies the types of situations, issues, and solutions that

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128 can be considered in planning and evaluation of rail freight Chapter 4 (Guidance for Public-Private Dialogue) discusses solutions to traffic congestion. needs, uses, and procedures for bringing highway and Chapter 2 (Background: Context) provides information for freight planners in discussion with representatives of insti- readers who are not already experts on rail freight plan- tutional players and private-sector freight operators in ning. It discusses the process of rail freight planning and order to design cooperative strategies that can be accept- factors affecting rail/truck diversion. able to key parties. General Guidance. Guidebook Chapters 3 and 4 provide Technical Analysis Methods. The Guidebook's final chap- the basic core guidance on technical analysis and discussions ter provides material for advanced use in analyzing options to ascertain the potential for rail freight to help reduce traffic and presenting results in ways that can gain support among congestion growth. diverse parties. Chapter 3 (Guidance for Evaluation of Alternatives) outlines Chapter 5 (Detailed Analysis Methods) describes the avail- a series of five basic analysis steps that can be conducted by ability and application of various analysis tools, methods, planners at relatively low cost to screen available rail freight and data sources for assessing road and rail options, options for reducing congestion and identify when further diversion between them, and the relative benefits and discussion and analysis are warranted. costs involved.

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Guidebook for Assessing Rail Freight Solutions to Roadway Congestion

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CONTENTS G-1 Introduction G-1 1.1 Rail Freight as a Solution to Congestion G-3 1.2 Objective and Organization of this Guide G-7 Background: Context for Rail Freight Planning G-7 2.1 Rail Freight Planning and Policy Issues G-11 2.2 Diversion Obstacles G-14 2.3 Diversion Levers G-16 2.4 Examples of Rail Freight Solutions G-20 Guidelines for Preliminary Evaluation of Alternatives G-20 3.1 The Three Phase Approach G-21 3.2 The Five Steps for Preliminary Screening G-45 3.3 Further Steps for More Detailed Assessment G-47 Guidelines for Public-Private Dialogue G-47 4.1 Cooperation First G-52 4.2 Conflict Resolution G-55 4.3 Distribution of Labor G-56 4.4 Institutional Development G-61 4.5 Designing Transactions G-68 4.6 Winning Support G-73 Methods for Detailed Analysis G-73 5.1 Assess Congestion Levels and Reduction Needs G-77 5.2 Identify Carrier Cost and Service Levels G-84 5.3 Analyze Overall Logistics Costs G-89 5.4 Estimate Truck to Rail Diversion G-92 5.5 Calculate Traffic & Economic Benefits G-103 5.6 Representation of Benefit-Cost Findings G-112 Additional Resources