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Guidelines for Preliminary Evaluation of Alternatives G-21 Exhibit 3-1. Major Phases of the Decision-Making Process. Phase 3 Decision-making Support. The final phase puts results in the context of decision choices. First, findings must be placed in the context of other options, such as doing nothing and living with congestion; building more highways; expanding the capacity of existing highways; or using tolls, fees, or regulations to restrict traffic flows. Second, each option must be considered from the perspective of its economic, political, and practical feasibility for the various partici- pants. This includes consideration of the levels and types of benefits that might accrue to each party and confirmation of the sufficiency of benefits for shippers to accept a change of mode. It requires direct interaction with the shipping community in any of several ways and an assort- ment of steps for the assurance of traffic volumes. Third, for the public evaluation component, additional analysis of social and broader economic impacts might be needed. Thus, Phase 3 makes use of procedures for comparing alternatives in a broader context that may include regional economic models and/or multi-criteria assessment tools. 3.2 The Five Steps for Preliminary Screening Organization of this Chapter The remainder of this Chapter guides readers through the five steps of the Phase 1 assessment. These steps are illustrated in Exhibit 3-2. Each of these steps is discussed in terms of the types of information and analysis needed, the tools that can be used, and the ways in which findings can be presented and used. Chapters 4 and 5 then provide guidance on public-private institutional considerations and available analytical tools for carrying out Phases 2 and 3. Step 1. Screening for Relevancy The first step is to conduct a three-part screening process to clarify the local situation, avail- able alternatives, and public policy levers. The three parts are 1. Screening the Situation--whether the local situation matches prototype situations where multi-modal freight planning is most appropriate; 2. Screening Available Actions--whether potentially available local actions match any of the prototype action categories for promoting rail freight use; and

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G-22 Guidebook for Assessing Rail Freight Solutions to Roadway Congestion Exhibit 3-2. Five Steps in the Initial Assessment Process. 3. Screening Available Policies--whether public agencies and policies exist to implement rel- evant actions. Part 1 Screening the Situation. The first screening assesses whether the local situation matches any model situations where rail freight can be relevant to reducing highway congestion. The goal is to identify situations where there is a need and opportunity for achieving greater use of rail. Exhibit 3-3 lists the six categories of situations that are the potentially most promising situ- ations for rail freight solutions. In the text that follows, each situation is described in terms of the type of context in which they might be particularly applicable and examples where rail projects or programs have taken advantage of these opportunities. The user of this guide must determine whether the local situation matches any of these six categories. In general, judgments concern- ing the local relevance of these types of situations can be addressed and answered by a group of knowledgeable public officials, railway officials, and customers. Only in promising situations is it reasonable to encourage further analysis of rail solutions for roadway congestion. Exhibit 3-4 shows factors to consider in characterizing the local context and type of conges- tion conditions and using that information to define the form of congestion and conformity to any of six types of prototype situations described as follows. Situation 1, where severe congestion seems to require extensive investment in highways, can be found in two contexts: (1) congested highways with high truck volumes and (2) local conges- tion related to delays at grade crossings. Examples of the first include I-5 between Portland, Tacoma, and Seattle, where Northwest Container Services has taken 100,000 trucks off the interstate in order to reduce congestion; and I-95, where the I-95 Coalition is promoting Exhibit 3-3. Situations Where Multi-Modal Freight Planning Is Most Needed.

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Guidelines for Preliminary Evaluation of Alternatives G-23 Exhibit 3-4. Situation Screening Process. greater use of rail as a way to remove trucks from this heavily traveled highway. Examples of the second include the Alameda Corridor Project (a very large grade separation project, among other things) and numerous smaller efforts around the county to close rail-highway grade crossing or to replace them with bridges. Situation 2, where over-reliance on trucks leads to severe local congestion, has two primary con- texts: (1) truck traffic moving to and from ports causes severe congestion along the major access routes; and (2) truck traffic serving local industry (or agriculture or mines) is growing, causing rapidly escalating maintenance costs for and congestion on local street networks. Examples of the first include the series of projects in New Jersey undertaken by The Port Authority of NY/NJ to promote the use of rail for containers moving to and from the port. Examples of the second abound, especially in locations with recent investments in major industrial facilities that rely on large, frequent deliveries of supplies, such as automotive assembly plants and distribution centers. Situation 3, where the rail network structure restricts performance of highways, occurs when rail facilities block logical development of the metropolitan area or disrupt the flow of local street traffic. For example, Crystal City, a major development project opposite Washington National Airport, was made possible by the closure and redevelopment of Potomac Yard. The Kansas City Flyover eliminated train delays associated with two very busy rail-rail crossings, thereby relieving very extensive congestion in nearby neighborhoods. Another example of rail infra- structure restricting highway performance involves substandard roadway clearances at railroad underpasses, which is not an uncommon problem where such underpasses were con- structed as part of grade separation projects undertaken prior to WWII. In Chicago, this is sometimes referred to as the "viaduct problem." There is little railroad benefit from solving this problem, which would entail significant reconstruction costs as well as disruption to the transportation system. Situation 4, where the rail network structure restricts the role of rail, can occur when railroad invest- ments in intermodal terminal capacity at the outskirts of metropolitan areas are increasing local

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G-24 Guidebook for Assessing Rail Freight Solutions to Roadway Congestion truck traffic within the region. In Atlanta and other metropolitan areas, new intermodal termi- nals have been located on the fringe of the city. In Chicago, conversion of the Joliet Arsenal into an intermodal freight facility is an attempt to use "brownfield" sites at the fringe of the region for serving metropolitan rail freight operations. Also in Chicago, extensive freight and commuter operations strain network capacity, leading to conflict between commuter and freight opera- tions. The CREATE (Chicago Region Environmental and Transportation Efficiency) Program was developed by railroads and regional agencies in Chicago to reduce rail-rail and rail-highway conflicts. Situation 5, where freight users are too small or too scattered for efficient use of rail, occurs in many contexts including cases where local companies lack access to the rail network or there are untapped opportunities for regional warehouses or distribution centers at locations served by rail. Investments aimed at addressing the first include the many efforts to make intermodal transport cheaper, more reliable, or more accessible, all of which make rail ser- vice more convenient to shippers who lack sidings; state programs such as those in Ohio and Maine that help fund construction of rail sidings; and state programs such as those in New York and Pennsylvania that help improve the track structure or increase clearances to allow taller, longer, or heavier cars. Investments aimed at addressing the second include public investments by the state of Maine in a transload facility that eliminated 100,000 to 150,000 truck trips per year to the port. An example of a private-sector investment to promote effec- tive use of rail would be UPS's development of sorting facilities next to new or renovated intermodal rail yards in Chicago and Jacksonville. Situation 6, where regional economic development is threatened by lack of goods movement capac- ity, is most often associated with the following contexts: (1) a region's economy is based to a significant degree on a city's role as an international port or border gateway and growing road- way congestion threatens the continued viability and competitiveness of that economic func- tion; and (2) a region's infrastructure and location make it ideal for locating intermodal interchange facilities or bypass routes and regional officials see this as an opportunity to spur economic growth in the area. Examples of the first include Vancouver, BC, where forecasts of traffic growth indicated congestion barriers to goods movement at ports and border crossings, factors that could significantly reduce regional economic competitiveness and growth; and the I-5 corridor through Portland, OR, and Seattle, WA, where congestion threatened the portions of the region's economy that are based on international trade. Examples of the second include efforts by communities in Pennsylvania, New Jersey, and Connecticut to develop inland or satellite port facilities that can accept truck shipments and transfer them by rail or barge to the Port of NY/NJ for overseas shipment. These efforts were aimed at helping economically depressed communities take on a new transportation function while also relieving congestion in New York City. Part 2 Screening Available Actions. Having characterized the local situation, a user of this guide will have a basis for identifying the possible types of local actions that might succeed in improving the performance of the rail system. Exhibit 3-5 lists five classes of actions that can increase the role of rail freight in controlling road congestion. In the text that follows, each action Exhibit 3-5. Range of Actions to Promote Greater Use of Rail.

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Guidelines for Preliminary Evaluation of Alternatives G-25 category is followed by examples. The user of this guide must determine which (if any) of the five classes of actions appear relevant in the local context and potentially useful as a way to shift freight traffic from highway to railway. Action 1--Rationalization of the center city rail network is the most complex and the most costly, but can sometimes be the most valuable. Built for land use patterns and transporta- tion technologies of the 19th century, urban rail networks are seldom well structured for the needs and competitive environment of the 21st century. There are likely to be too many small terminals, too many low-capacity track segments, poor integration with other modes, and excessive conflicts among transport flows. The public may also be concerned about the risks or environmental impacts associated with the rail system, as reflected in the District of Columbia's attempt to restrict the flow of hazardous material through the city. Action 2--Reducing conflicts among traffic flows is another aspect of rationalizing urban rail systems. Conflicts include competition among passenger trains and various kinds of freight trains for space on the major routes, as well as conflicts at rail-highway grade crossings and where rail mainlines cross each other at grade. Possible solutions include adding capacity to the mainlines so they can handle more trains, eliminating grade crossings, and constructing flyovers. Action 3--Increase use of rail/truck intermodal transportation--this is the most rapidly grow- ing rail service and is also a form of service where it is often difficult for railroads to add capac- ity. Railroads have already started to locate major terminals well outside of cities, which means that local shipments will still need to use the metropolitan highway network, even if they are destined to move on an intermodal train. From a public perspective, air quality and congestion benefits could accrue from having multiple intermodal terminals throughout the metropoli- tan area, rather than a single large terminal on the edge of the region. Another approach would be public support to promote short-haul intermodal service, either through investment in facil- ities or through operating subsidies. Forms of short-haul service could include shuttles between ports and inland terminals or special services designed to move highway truck traffic through metropolitan areas. Action 4--Improving rail service to industry, a strategy aimed at customers rather than rail- roads, can be a key way to encourage carload traffic. Several states have provided support for constructing rail sidings as an incentive for industrial development or as an incentive for using rail. Another approach is to support warehouses or distribution centers that could be served by rail, perhaps within a freight village or industrial park development. Action 5--Upgrading facilities to handle heavier/higher cars is a strategy that relates to two situa- tions. The first is the rail industry's decision in 1990 to increase axle loads so as to reduce the total costs of bulk transportation. The standard maximum weight for rail cars rose from 263,000 to 286,000 pounds, allowing some efficiencies in transport costs, but only if the track structure can bear the heavier cars. On high-density lines, the costs of upgrading the track and of strengthen- ing the bridges can be justified by operating savings. However, on light-density lines, especially lines operated by shortline railroads, it is difficult to justify the initial capital expenditures. Given that the industry as a whole is moving toward the heavier cars, the location of industrial activity will depend in part on which locations can originate or receive the heavier cars. Public interests in maintaining efficient rail service, in retaining employment, or in industrial development might, therefore, lead to support for upgrading some of these light-density lines. The second situation is where lateral or overhead clearances restrict the movement of double-stack container cars or other large cars. Limited clearances are mainly a problem encountered in the east. Rail- roads have pursued clearance projects with public support, for example, to improve intermodal service for the sake of the competitiveness of ports. Individual projects fitting any of these five action categories do not necessarily have to be complex, costly, or time-consuming efforts that require cooperation among multiple

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G-26 Guidebook for Assessing Rail Freight Solutions to Roadway Congestion railroads and public agencies. They can be as simple as expanding intermodal facilities, sidings, and road/rail crossings, although they can also involve regional efforts to reorganize rail yards or subsidize costs for new services. In any case, the same basic analytical steps must be completed. Part 3 Screening Potentially Relevant Programs and Policies. Having characterized poten- tially relevant actions, a user of this guide will have a basis for identifying specific types of programs or strategies that public agencies can use to maintain, improve, or promote the use of rail. Exhibit 3-6 lists six classes of public programs that are most often used for this purpose. These programs and strategies deal with rail finances and industrial development issues, as well as with particular kinds of investments in rail technologies. Policy 1--Project finance programs are an option to put public money into cooperative rail projects that add capacity and divert trucks. Policy 2--Public ownership of the railway right-of-way is another option sometimes used to keep a light-density route open for rail service. Purchase and lease-back of rail lines can also be used to promote the economic health of railroads serving a region. Policy 3--Redevelopment of rail facilities refers to selective closure and shifts in usage of various parts of the urban rail network to improve rail service. This can also provide an opportunity for better uses of the land occupied by some rail yards. It might be possible to use the devel- opment potential of the land to help fund relocation of rail facilities to equivalent or superior sites. Policy 4--Taxation is a strategy that can affect the general costs of doing business for railroads and their competitors. Tax policies have historically been important aspects of transportation policy. Some, but not all, states have granted property tax relief for certain rail properties. The federal government has from time to time offered investment tax credits for railroads and other industries facing financial difficulties. Tax policy provides a way of encouraging invest- ments in particular industries or activities to further various public interests in the services provided by those industries. Policy 5--Financial reform is another approach that seeks equitable treatment of the various modes. The taxes and fees charged to heavy trucks, fuel taxes, toll charges, and other aspects of highway financing affect the competitive boundary between rail and truck. Policy 6--Land grants were a major incentive used in the United States and elsewhere to help finance the construction of early railroads. More recently, there have been specific instances where land grants facilitate the construction of a new rail link or bridge (e.g., the donation of small bits of land to allow construction of a flyover, as in Kansas City). Land grants and land swaps might be needed in order to be able to locate intermodal terminals where they can be most effective in attracting traffic off the highways. Policy 7--Light-density line programs include public purchase or subsidy of rail lines in order to maintain rail operations, as well as investment in low-volume lines in order to improve the ability to serve customers. Exhibit 3-6. Public Programs and Policies Related to Rail Freight.

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Guidelines for Preliminary Evaluation of Alternatives G-27 This list of policy directions is not an endorsement of any of them, as this is not the place to judge the extent to which such strategies have been effective in the past. The intent is simply to encourage public agencies to consider the full range of options open to them. The success of any project or of any program will depend on local conditions and the particulars of implementation. Step 2. Estimating the Magnitude of the Problem Having classified the local situation and identified potentially relevant actions and policies, the second step has two parts. The two parts are to develop 1. A representation of current and projected future traffic conditions; and 2. Measures of the level of congestion, its location, and the extent to which truck traffic contributes to its severity so that such information can be used to compare scenarios and assess the mag- nitude of their congestion reduction benefits. Part 1 Representation of Traffic Conditions. This typically requires some representation of regional or corridor highway demand and performance characteristics in terms of current and future vehicle trips, distances, and speeds. By estimating traffic volumes and congestion conditions under alternative scenarios, it is possible to identify the magnitude of the future con- gestion problem under base case conditions that assume no diversion to rail freight (and later under alternative scenarios that create some diversion to rail freight). Most metropolitan areas have some type of road network and traffic model that can be used to represent current conditions and project expected future conditions in terms of the flow of vehicle trips, distances, and speeds. Typically, these models start with a forecast of truck and car trip generation by zone (including detailed zones internal to the region and larger zones repre- senting areas or directions outside the region that are ultimate origins or destinations). They then provide a forecast of trip assignment between origins and destinations based on current traffic levels and expected future changes in employment and population location patterns. Finally, they provide a forecast of trip distribution among particular links and nodes, based on a "least time" or "least cost" path for future traffic. This process can forecast shifts in traffic as travel times slow for those links and nodes forecast to have high volume-to-capacity ratios. The results are some measures of vehicles, link speeds, and trip distances. Those measures, in turn, are used to calculate the amount of total daily traffic measured as vehicle-miles of travel (VMT) and total time spent traveling measured as vehicle-hours of travel (VHT). Generally, these models are accompanied by some data concerning the portion of vehi- cle trips made by trucks. Many states also have statewide models used for major highway corri- dors; that data can similarly be applied to calculate current and future VMT, VHT, and truck volumes on those routes. This information provides a basis for calculating current and expected future congestion for areas and corridors under base case conditions, which assume no diver- sion of any freight movements to rail. Later steps will provide estimates of the potential freight diversion to rail that might be possible or expected in an alternative (future project) scenario. Then, this same process of traf- fic analysis can be reapplied to calculate the changes in traffic volumes, VMT, and VHT expected to occur under that future scenario. Most road network models will forecast how a reduction in freight-related truck traffic (due to rail diversion) will lead to shifts in the spatial distribution of vehicles on various road links throughout the road network, and then calculate the implications for overall VMT and VHT levels on a regional basis. Part 2 Measures of Congestion Problems and Benefits. The traffic modeling analysis, and its findings of changes in traffic conditions, can be used to develop a number of different meas- ures of congestion growth and the additional cost of congestion for freight and passenger travel.

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G-28 Guidebook for Assessing Rail Freight Solutions to Roadway Congestion The issue of measuring congestion and its costs is addressed in NCHRP Study 2-21 (NCHRP Report 463),i which examined the economic impacts of road congestion. It notes that "a great deal of attention has been devoted to the definition and measurement of congestion in existing research, and is reflected in the development of congestion management systems. Indicators of congestion are available for urban areas and are reported in FHWA's Highway Statistics and BTS's National Transportation Statistics." Exhibit 3-7 lists the seven most common measures of road traffic congestion. The use of each measure and its advantages and disadvantages is discussed below. Summary of Congestion Measures:ii Time Delay (aggregate VHT by vehicle type). Generally, the measure of travel time delay is most appropriate for this study. This is the most widely used measure of congestion delay. Road network models can be used to forecast differences in total aggregate travel time delay associated with allowing congestion to worsen, compared to taking actions to reduce vehicles on the road (as could occur if rail freight growth replaced some of the future truck volume growth). The values of total delay (increase in VHT) can be used along with business "value of time" factors to calculate the total cost of freight congestion. Accessibility or Travel Time Contours. The travel time contours from a single point to/from multiple destinations/origins can be plotted on a map showing times in discrete intervals (e.g., 5 or 10 minutes at a time). These are most useful for studying travel to a major employment center such as the port, airport, border, rail intermodal facilities, Central Business District, or industrial zone of a city. Percentage of Time Average Speed is Below Threshold Value. This spot-speed measure uses information collected from automated speed monitoring equipment. The measure uses data that can be collected in a completely automated fashion, with an increase in the value of this measure corresponding unambiguously to an increase in the degree of congestion. This meas- ure would appear to be practical as long as the threshold speed is set at 20 or 25 mph or higher due to potential equipment inaccuracies at lower speeds. Volume-to-Capacity Ratio. The FHWA's HPMS (Highway Performance Monitoring System) dataset includes peak-period volume-to-capacity ratio (V/C) as a data item. Also, the distribu- tion of total traffic by V/C can be estimated using the HPMS data items, annual average daily traf- fic volume (AADT) and capacity, together with tables showing the distribution of traffic by V/C for different values of AADT. V/C ratios are used as the basis for estimating network link speeds in traffic assignment models, in a function known as the BPR (Bureau of Public Roads) curve. Congestion Indices. Much of the research on congestion indices has facilitated comparisons of relative levels of congestion among U.S. cities. These are valuable tools for estimating over- all levels of congestion but might not be applicable at the regional level and across multiple Exhibit 3-7. Summary of Congestion Measures. i Economic Implications of Road Congestion, Weisbrod, G., D. Vary and G. Treyz. National Cooperative Highway Research Program, Report 463, National Academy Press, 2001. ii Text is drawn from NCHRP Report #463; op cit.

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Guidelines for Preliminary Evaluation of Alternatives G-29 modes of travel. To expand on the work done in the past, the Texas Transportation Institute (TTI) developed an index that takes all modes of transport into account and is based on a measure called Volume/Acceptable Flow Rate. The flow rate deemed acceptable by local offi- cials is calculated based on various local roadway classification characteristics. Delay Measures. Delays of any type increase travel time and reduce travel speeds. As such, measures of delay are closely tied to time-related measures. By focusing on delay as a per- formance measure, specific problem locations can be identified. A number of recent studies, focused on non-recurring congestion, have demonstrated the importance of incident-related delays and the benefits that can be derived from their reduction. Minute Miles of Delay is the product of the length of a roadway segment and the difference between an acceptable travel rate and the actual travel ratio (where the actual travel ratio is equivalent to 60 minutes divided by the speed on the segment). This measure combines the effects of lower speeds on congested highways and the distance that must be traveled on congested highways. Level-of-Service (LOS) classifications are derived from other performance measures and merely represent a qualita- tive measure describing operational conditions within a traffic stream, and their perception by motorists and/or passengers (TRB, 1985). Any of these measures can be used to characterize the severity of congestion and qualitatively assess the extent to which it presents a problem for various types of goods movement. For pur- poses of benefit-cost analysis, the travel-time delay measures offer the simplest means for quan- tifying the total business costs of future congestion. This can be done by multiplying total delay hours times various values of time for specific types of vehicles, trips, and commodities. Value of time factors are discussed later in this guide. Other measures can also be useful for evaluating the effect of congestion on goods movement. For instance, the measurement of congestion impacts on travel time contours can be particularly important if congestion disproportionately affects throughput and accessibility to ports, bor- ders, or particular industrial areas. The V/C and related congestion index can be used to identify conditions in which there will be a disproportionately higher rate of traffic incidents and hence reduction in reliability of travel time. That consideration can be especially important if just-in- time production and logistics scheduling are a major factor for area businesses. For that reason, it can also be important to distinguish "recurring delays" (due to speed slowdown) from "non- recurring delays" (due to traffic incidents). The latter can be particularly significant because traf- fic incident delays can cause businesses to incur high costs as they pad their schedules (in effect, anticipating incidents) in order to avoid being unduly hurt by them. Note on Handling of Induced Demand. Often, projects that add to the effective capacity of roads lead to less-than-expected congestion reduction benefits on those routes due to shifts in regional traffic patterns. Some of the changes, such as a tendency for traffic to shift from other congested parallel routes to the now less-congested route, can still lead to overall sys- tem-wide savings in both VMT and VHT. However, sometimes the net reduction in conges- tion and area-wide time savings is less than expected because longer and/or more frequent trips occur when travel times shorten. For instance, delivery services may respond to a reduc- tion in congestion by expanding the frequency of deliveries or the distance of their delivery areas. Individuals may make shopping or recreation trips to more distant destinations. The net result is more vehicle-miles of travel and fewer vehicle-hours of time savings than would otherwise be expected from the new capacity. This effect is referred to as "induced demand growth." It may reduce or offset the congestion reduction that would otherwise occur from rail or roadway improvements. The more sophisticated traffic studies for congested urban areas and highway corridors are now accounting for induced demand in their forecasts of long-term impacts. From the viewpoint of traffic engineering, this consideration is an important step in making more realistic traffic

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G-30 Guidebook for Assessing Rail Freight Solutions to Roadway Congestion forecasts. However, from the viewpoint of benefit-cost analysis, care must be taken in the treat- ment of induced demand. After all, no traveler or shipper would change the frequency or length of trips unless there was some benefit in doing so. So it would be wrong to merely assume that the induced demand is a reduction in the economic benefit of congestion reduction. Step 3. Characterizing Freight Patterns Having assessed the magnitude of congestion problems in Step 2, the third step is to identify what is being delayed--i.e., the extent of delay for goods movement and the characteristics of the freight flows that are affected--and what might be diverted. This step involves four parts: 1. Develop a representation of local freight shipping patterns in terms of flow volumes, their spa- tial patterns, and commodity mix; 2. Conduct a macro analysis of the extent to which truck trips contribute to current and expected future congestion conditions; 3. If part 2 establishes that truck trips are a major contributor to congestion, then conduct a micro analysis which examines the types of goods being shipped, the potential for truck-to-rail diversion, and the types of investments required to support such diversion; and 4. If part 3 determines that some commodities could be shifted to rail freight, then conduct a geographic analysis which examines the origins and destinations of truck freight flows in the study area. The involvement of private-sector entities during this step of analysis is initially useful and ulti- mately essential. The following chapter on "Public-Private Dialogue" begins with the importance and methods of engaging such entities. For preliminary screening, they can assist with data and expert information, provide practical guidance, and offer realistic assessments of whether and why a project aimed at traffic diversion should or should not succeed in the market. Part 1--Representation of Local Freight Shipping Patterns. It is necessary to develop a pro- file of the pattern of freight flows by truck and by rail currently flowing through the region or corridor in order to identify their spatial pattern and the composition of goods movement. This will allow the analyst to begin to assess the potential for freight diversion from truck to rail. Exhibit 3-8 lists the relevant characteristics of freight flows that should be assessed. Information on volume of truck freight is important for determining whether freight truck traffic is a significant contributor to congestion in the study area. Freight flow directions and commodity information are important because they directly affect the viability of rail freight as an alternative to trucking: some commodities moving by truck could potentially be shipped by rail, while rail might be impractical for commodities that are more fragile or time sensitive. The internal/external split of trip end locations is important as it is an indicator of the contribution of local freight movements to congestion and also as it reflects trip length which influences potential demand for local intermodal Exhibit 3-8. Freight Flow Characteristics to be Measured.

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Guidelines for Preliminary Evaluation of Alternatives G-31 loading facilities. Information on time of day or day of week, if available, could also be useful in determining the extent to which the truck freight flows affect peak-period congestion. This information on characteristics of freight movements will be needed in Step 4 to assess the potential for freight diversion to rail and in Step 5 to assess particular types of rail investments that could relieve congestion. In addition, the economic costs of congestion vary by type of busi- ness, so knowing the types of commodities is also important for that reason. These business costs of delay can be substantially greater than the cost of driver time and vehicle operating time alone. For some businesses, there can also be implications for revenues and costs related to the size of the business market and/or service areas; to business inventory and logistics costs; to just-in-time production costs; and to workforce attraction. Part 2--Macro Analysis. A macro analysis of shipping patterns answers two general ques- tions, as shown in Exhibit 3-9. The first question is whether or not rail investments are a feasible way to reduce local conges- tion. There are three types of truck freight movements: those that begin in the study area ("ori- gin"); those that end in the study area ("destination"); and those that pass through the local area ("overhead traffic"). The greatest potential for diversion to rail within local control are trips with a local origin or destination, because shippers and receivers decide on mode choice options and make the mode choice decisions, so they are strongly influenced by the cost and quality of rail service and congestion costs in the areas served. In addition, because the customers are located in and around the study area, it is possible to involve them in planning and public meetings regarding rail investments. Diversions to rail of "destination" movements are likely to be strongly influenced by changes in cost and service in the locations in which the trip originates, although destination conditions certainly affect them, especially if the receiving business has control of the carrier selection (as will happen with automobile plants and large retailers, among others). "Overhead" trips are less directly influenced by rail cost or service in the study area, unless the region acts as an interchange point or hub. The second question is concerned with future levels of truck freight trips. In cases where truck traffic is not currently a major source of congestion, but could be in the future, or where already heavy traffic promises to become very much heavier, this question is especially pertinent for pur- poses of long-term infrastructure planning. To assess the proportion of current congestion related to freight truck trips originating in the study area, it is necessary to examine the compo- sition of current traffic. Unfortunately, there is no one public source that decomposes freight traffic by origin, destination, and overhead, and most sources are several years old. However, as noted in Step 2, most metropolitan areas have highway models, which can be used to estimate the contribution of trucks to overall congestion levels. State DOTs will often collect information on the volume of truck traffic in a state or locale; federal sources, including the U.S. Bureau of Census's Commodity Freight Survey (CFS) and the FHWA's Freight Analysis Framework (FAF), collect information on freight movements by origin and/or destination and commercial sources offer relevant information for sale. In addition, material from partners and stakeholders is a com- mon and often highly pertinent source of traffic information in projects. (Data sources are Exhibit 3-9. Macro Analysis Issues.

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G-34 Guidebook for Assessing Rail Freight Solutions to Roadway Congestion Exhibit 3-10. Examples of Truck to Rail Diversion Potential by Commodity. These classifications were then translated into estimates of the percentage of freight that can be diverted. Values used in this illustrative analysis are: 0 percent for "zero or negligible," 20 per- cent for "small," 40 percent for "significant," and 80 percent for "large." However, actual values used should be tailored to each analysis based on knowledge of local conditions: actual diversion potential will be strongly influenced by local factors such as local infrastructure and average trip length. In all cases, local knowledge about these factors should be used in lieu of the default clas- sifications and values presented here. After potential diversion values have been finalized, the values can then be multiplied by the current amount of each commodity shipped by truck to esti- mate total potential diversion for all commodities. A sample calculation of 2002 CFS data is pre- sented in Exhibit 3-11. Using the default values discussed above, it shows that much of the truck freight (61%) is not divertible, but that also means that up to 39 percent could potentially be diverted to rail. Part 4--Geographic Analysis. A geographic analysis can be used to examine the geographic pat- terns of truck freight flows. This information can be used to estimate the amount and direction of

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Guidelines for Preliminary Evaluation of Alternatives G-35 Exhibit 3-11. Sample Calculation of Potential Freight Diversion by Commodity. truck freight originating in a study area; the amount and direction of truck freight destined for a study area; and in some cases, an estimation of overhead traffic. At the most general level, analysis will focus on the amount and direction of truck freight originating in or destined for the study area. These data will provide a snapshot of the direction of truck freight flows to and from the study area and will be used in Step 4 to determine whether the broad characteristics of truck freight flows make it possible for large-scale diversion to rail. The geographic analysis might indicate, for example, that truck freight flows are generally north-south while rail infrastructure goes east-west, in which case, diversion to rail would be difficult; or that truck freight flows are concentrated in two or three states currently connected to the study area by rail, in which case diversion to rail is technically feasible. An example of analysis using 2002 CFS data for Illinois and Montana is presented in Exhibit 3-12.

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G-36 Guidebook for Assessing Rail Freight Solutions to Roadway Congestion Exhibit 3-12. Truck Freight Flows by State of Origin. These data show that about three-quarters of all truck freight flows (origin and destination) stay within each state. For truck freight that leaves Montana, almost 60 percent goes to one of five states (i.e., Wyoming, Idaho, Utah, California, and Washington), a pattern similar to Illinois'. This concentration suggests that in both states, better or cheaper rail service to a handful of states could result in large diversions of truck freight. Truck freight coming into Montana, however, tends to be more dispersed, with the five largest (origin) states accounting for less than half of all truck freight coming into Montana. For Illinois, on the other hand, almost 60 percent of all incoming truck freight originates in one of five states. It is possible as well to perform state-to-state freight flow analyses by 2-digit commodity, allowing analysts to combine the findings of the micro analy- sis with a geographic analysis. This would be particularly useful where a few commodities account for a large portion of truck freight. This could also be useful for interstate highway corridor proj- ects, where it is important to determine the benefit to participant and non-participant states from infrastructure investment in each of the participant states in order to allocate costs appropriately. Alternate Method for Intermodal Analysis. For intermodal services, a conventional commodity- based approach to preliminary diversion assessment is limited by the source data. The Com- modity Flow Survey does not sample import shipments, which account for about half of the

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Guidelines for Preliminary Evaluation of Alternatives G-37 intermodal business, and this depresses the apparent participation of rail in commodity car- riage. There also are questions as to the completeness with which the Survey can recognize intermodal activity, since respondents see their pickups made by truck and are not always aware of the line haul mode. The Carload Waybill Sample offers a more inclusive picture on both accounts, but most of its commodity identification for intermodal shipments is with the catch-all category FAK, for "freight all kinds," and specific detail is not available. An alternate approach begins with the consideration that the great majority of rail intermodal transportation involves "containerizable" goods of the sort hauled in dry van trailers on the road. A commodity list can be screened for containerizable goods; the classification of many (e.g., paper products) will be straightforward, yet some (e.g., various forms of chemicals) will be divided between dry vans and other equipment types, and an allowance has to be made for the mixture. More readily, the preponderance of truck traffic moves in dry vans can be employed in a simple estimation. Dry vans account for approximately 66 percent of the truck traffic over 200 miles and 70 percent of the traffic at or under 200 miles. Applying these percentages to truck flow data produces a first approximation of the traffic volume compatible with intermodal transport. An intermodal capture rate can be estimated by means of a market share matrix, as shown in Exhibit 3-13. The matrix displays the average penetration rate for rail intermodal service within the market for dry van carriage. It is organized by the distance and density of traffic lanes, based on flows between metropolitan markets. It can be used in conjunction with traffic flow data from a source such as the CFS, to benchmark intermodal participation and potential diversion. Several points affect the analysis: If data are no finer than state-to-state lanes, they will be too broad to establish lane density but can offer a general picture of distance. The length of haul totals to the right of the matrix would then be used, although further interpretation could be gleaned from density figures for state lanes with obviously huge or small volumes. If traffic is denominated in numbers of trucks, it can be converted to tonnage for correspon- dence to the matrix by multiplying the number of trucks by 15 tons per load, which is a rule MODAL MARKET SHARE BY LANE DENSITY & DISTANCE RAIL INTERMODAL (IMX) Vs OVER-THE-ROAD (OTR) DRY VAN TRUCK Source: TRANSEARCH 2000 LANE DENSITY (Annual Tons [000] by IMX+OTR) HIGHWAY 400 Total MILES IMX OTR IMX OTR IMX OTR IMX OTR 1-100 0.1% 99.9% 0.1% 99.9% 0.4% 99.6% 0.4% 99.6% 100 - 299 0.3% 99.7% 1.1% 98.9% 1.4% 98.6% 1.3% 98.7% 300 - 499 0.8% 99.2% 2.3% 97.7% 3.6% 96.4% 3.0% 97.0% 500 - 699 1.3% 98.7% 5.8% 94.2% 11.1% 88.9% 6.6% 93.4% 700 - 999 1.3% 98.7% 8.3% 91.7% 27.2% 72.8% 12.6% 87.4% 1000 - 1499 2.6% 97.4% 8.7% 91.3% 28.1% 71.9% 11.4% 88.6% >1500 7.3% 92.7% 24.8% 75.2% 62.0% 38.0% 37.1% 62.9% Total 2.4% 97.6% 6.6% 93.4% 8.2% 91.8% 7.0% 93.0% Total > 500 3.0% 97.0% 10.8% 89.2% 33.8% 66.2% 16.8% 83.2% Total < 500 0.6% 99.4% 1.5% 98.5% 1.5% 98.5% 1.4% 98.6% MARKET SHARE KEY: OTR TRUCK > 80% BOTH 80% Exhibit 3-13. Example of an Intermodal Matrix.

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G-38 Guidebook for Assessing Rail Freight Solutions to Roadway Congestion of thumb used by rail and motor carriers for a typical dry van payload on the road. Some com- modity groups will have significantly higher or lower tons per load figure, so the actual tons per load by STCC code may be needed if traffic is concentrated in a few commodity groups. Ton-miles can be calculated from tons by factoring in an average lane distance. Benchmarking against modal share should take into account the existing intermodal pene- tration. This can be derived by joining truck data to intermodal information from the Car- load Waybill Sample--a source all states may tap and to which MPOs may request access through their state DOT. Intermodal traffic gains assume access to rail transfer terminals and the provision of lane ser- vice and pricing competitive with over-the-road trucks. These need to be in place or in prospect for any preview of possible diversion to be valid. Beyond these points, application of the matrix is a clear-cut exercise of multiplying rail per- centages against total traffic, with the difference between current and benchmark penetration indicating the diversion potential. For well-developed intermodal lanes or where new rail ser- vices are expected to be especially competitive, the matrix values from adjacent cells can be used to suggest upside traffic gains. The whole procedure produces a preliminary evaluation of pos- sible traffic capture, helpful at a sketch planning level but requiring more rigorous analysis for project assessment, as will be described in later steps. Step 4. Characterize Available Rail Resources Having assessed the pattern of truck and rail freight flows in Step 3, the fourth step is to iden- tify the nature of rail lines and supporting facilities available to serve freight movements. The determination of these rail resources will make it possible to get a first-order estimate of the por- tion of current truck flows for which rail freight can potentially be a viable option. In other words, just by screening the direction of railroad lines, location of intermodal facilities and type of services offered, it will be possible to identify the portion of truck freight movements that involve commodities, origins and destinations that can be serviced by existing rail services. This step involves three parts: 1. Determination of the geographic areas and markets served by the existing rail configuration; 2. Assessment of the current availability of various classes of rail service; and 3. The match of rail services to types of transport services needed for diversion of truck freight to rail. Part 1--Geographic Areas and Markets Served by Rail. The best source of information on the current rail services offered is the local railroads, who will have the best understanding of (1) current operational capacity; (2) operational constraints; and (3) the types of demand (i.e., geographic and commodity characteristics) they can readily absorb; as well as (4) any issues related to terminal or service availability. However, it must be noted that issues related to rail- road capacity are complex and can involve proprietary data, so obtaining such information would require close contact with carriers. Material gathered from the railroads can then be compared to information previously col- lected on the geographic pattern of existing truck freight flows, as assembled for Step 3, part 3 (and also illustrated previously in Exhibit 3-12). This comparison provides a basis to determine whether existing patterns of demand for freight movements could be filled using existing rail resources. Part 2--Availability of Various Classes of Rail Service. The second part of the characteriza- tion of rail resources focuses on the availability of rail operations by three classes: (1) unit train, (2) carload, and (3) intermodal services. This typology of rail service into three classes is intended as an overview of the major railroad business groups and is functional as such. Key aspects of the

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Guidelines for Preliminary Evaluation of Alternatives G-39 Exhibit 3-14. Rail Freight Typology. economic and market issues that distinguish these three classes are shown in Exhibit 3-14. The most useful aspect of this typology is the linking of commodities with class or type of service. These are as follows: The unit train business handles high-volume bulks like coal and grain in trainload quantities. Dedicated operations make time performance fairly good, and the emphasis of service prin- cipally is the turnaround time of equipment to keep shippers resupplied. Dense, non-stop, door-to-door transportation in imbalanced lanes conforms to railroad strengths, and this is the traditional baseload of the industry. The carload group carries industrial goods, chiefly for further processing, in mixed train con- sists that require intermediate switches (which is essentially a kind of hubbing). Multi-car shipments are an important component of this category. Shippers who can use carload or multi-carload service typically are focused on equipment supply and low-cost transportation for higher lading weights, because performance can be slow and irregular. The time and cost challenges of handling carload traffic cars has caused this historical traffic of the railroads to contract steadily relative to unit trains and intermodal. Another factor contributing to the rel- ative decline in carload traffic is that heavy manufacturing--typically involving major carload customers--has diminished in the American economy and, in some cases, relocated along interstate highway corridors, with no rail sidings. On the other hand, carload service is much cheaper than truck service, and there is a potential for replacing three to five trucks with a sin- gle carload movement. Rail carload service can also involve a service to a transload facility, where the freight is transloaded to trailers or containers for delivery to the customer.

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G-40 Guidebook for Assessing Rail Freight Solutions to Roadway Congestion The intermodal business moves consumer goods and general merchandise, half of it imports and exports, primarily in solid trains with some intermediate hubbing. Service is among the railroads' best, and although it is mostly slower than highway, on premium trains or in well-developed lanes like Los AngelesChicago, it is fully the equivalent of over-the-road. Intermodal trains run in a smaller, more concentrated network than carload traffic, but in these markets they are at the front of modal competition between highway and rail. The intermodal business became the top source of Class I revenue in 2003, surpassing coal and in some ways rendering itself the new base- load of the industry. Because it is the class of service most similar to standard truck service, inter- modal is the type most likely to divert highway traffic on a large scale. Data on class of service offered by railroads can be assembled from sources like the Carload Waybill Sample, public information like the federal Commodity Flow Survey, commercial data- bases, traffic surveys, or directly from the railroads themselves. Linking class of service and demand by commodity supplies a basis for understanding potential diversion based on existing railroad resources, as well as the types and significance of barriers to diversion and opportuni- ties to reduce them. Part 3--Match of Rail Services to Demand for Transport Services. With the information col- lected in Parts 1 and 2, the analyst can develop a spreadsheet to show how the available classes of rail service (collected here) match with the potentials for diversion by commodity class previously assembled in Task 3 (and shown in Exhibit 3-11). A sample spreadsheet with hypo- thetical data is presented in Exhibit 3-15. (For intermodal transportation, the alternative method described in Step 3 can also be used.) This spreadsheet provides an estimate of the demand for (new) freight ton-miles for each class of rail service. The results from the above table can then be compared to an estimate of the availability of rail capacity, as illustrated in Exhibit 3-16. This organizes information for determining whether or not existing rail infrastructure is sufficient to capture freight diverted from truck. It represents a first-order approximation of the amount of potential freight diversion, given current demand and supply conditions. If existing rail service is not sufficient for diversion to occur, this table will provide a basis for analysis of the types and level of investments that would have to be made in order to divert rail (used later, in Step 5). Exhibit 3-15. Demand for Rail by Class of Service.

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Guidelines for Preliminary Evaluation of Alternatives G-41 Exhibit 3-16. Hypothetical Example of Potential Freight Diversion Given Rail Capacity. As Exhibit 3-16 shows, two pieces of information are needed for this calculation: The first is the current geographic configuration of rail capacity (from Part 1), which is needed to determine the extent of the overlap between the markets served by truck freight and the markets served by the current rail configuration. If, for instance, all of the current or projected future truck freight moves east to west and rail capacity is only available north to south, the potential for diversion would be zero. In general, the exercise is aimed at estimating the por- tion of truck freight that could be diverted to rail, given the geographic characteristics of truck freight movements and the geographic configuration of rail capacity. In the hypothetical example in Exhibit 3-16, this portion is estimated to be 90 percent. The second is the current availability of various classes of rail services to which the demand for freight movements can be compared. For this calculation, it is necessary to obtain indications of available rail capacity. Information on terminal and service availability usually must be obtained directly from the railroads and probably will be expressed in terms of the possible numbers and types of additional trains that might be accommodated. In the example in Exhibit 3-16, it is estimated that 56 percent of demand can be met with existing rail capacity and that, overall, the current terminal and service availability at the railroads is sufficient to satisfy 50 percent of potential freight diversion. The sample calculation in Exhibit 3-16 greatly simplifies the factors that will shape the capac- ity of existing rail resources to capture and serve existing freight traffic, so it is imperative to uti- lize information obtained from the railroads themselves about local conditions in this calculation. For areas in which short rail freight movements are unusual or unlikely, an analyst might assume that available rail resources cannot be used for intra-state movements, in which case assumptions about the percent of state demand that can be met with existing resources would be much lower. If information about local conditions is utilized properly, the general logic in Exhibit 3-15 is sound; the ability of existing supply to meet demand will depend on the intersection of the char- acteristics of freight traffic with the characteristics of existing rail resources.

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G-42 Guidebook for Assessing Rail Freight Solutions to Roadway Congestion Step 5. Initial Assessment of Benefit and Cost This step is the culmination of the Preliminary Assessment. It builds on information assem- bled in Tasks 1 through 4 to provide an initial assessment of the possible viability of rail freight solutions. This is sometimes referred to as "sketch planning" because it relies on relatively sim- ple models that can be performed to make strategic-level decisions about the value of spending more time and resources on a detailed analysis. Methods for more detailed analysis and appli- cation of more sophisticated analytical tools are then described in the final chapter of this guide. Taken together, Steps 1 through 4 provided answers to two questions: (1) How much con- gestion is related to freight movements by trucks? and (2) How much of the truck freight move- ments could be diverted to rail? Through use of a spreadsheet model containing rules of thumb for the value of reduced congestion and other factors, Step 5 addresses a third question: (3) What is the maximum investment that could be justified, given the external benefits associated with the potential freight diversion? A sketch planning calculation relies on rule-of-thumb benefit valuations to provide a simple, first-order assessment of the magnitude of the possible benefits from rail diversion. At this junc- ture, it is not necessary to have specified projects and costs--only the potential magnitude of the congestion problem, possible diversion, and benefits from such diversion are being assessed. However, this preliminary assessment does provide a screening to determine whether or not there is a potential to substantially reduce roadway congestion. Utilizing the first-order estimate of the potential benefits of rail investments, it is straightforward to set a corresponding maximum level of expenditures that could be justified to bring about congestion reduction. The basic logical flow of the sketch planning calculations is shown in Exhibit 3-17. For instance, the components of Exhibit 3-18 show alternative estimates of the marginal exter- nal (i.e., non-private) costs associated with reduction of truck usage and the average private and external costs of truck and rail freight modes. The estimates differ in the following ways: Exhibit 3-17. Sketch Planning Calculation.

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Guidelines for Preliminary Evaluation of Alternatives G-43 Exhibit 3-18a shows the marginal public cost of highway use by trucks in terms of cents per vehicle-mile. A reduction in vehicle-miles of truck travel means a reduction in those public costs. Exhibit 3-18b shows the marginal public cost of highway use by trucks in terms of cents per ton-mile. A reduction in ton-miles of trucks similarly translates to a reduction in those public costs. Exhibit 3-18c shows the average private and public cost of moving freight (per ton-mile) via trucks and via rail. However, it does not include congestion costs, which account for roughly Source: Reproduced in part from Addendum to the 1997 Federal Highway Cost Allocation Study Final Report; U.S. Department of Transportation Federal Highway Administration, May 2000, Table 13. Exhibit 3-18a. Marginal Cost of Highway Use by Trucks. Source: Calculated by the authors using data from Exhibit 3-16a and assuming average truck load of 14.8 tons Exhibit 3-18b. Marginal Costs of Highway Use by Trucks (Cents per Ton-Mile). Source: Forkenbrock, David, 2001.. "Comparison of external costs of rail and truck freight transportation," Transportation Research Part A, Vol. 35, p. 334. Exhibit 3-18c. Average Private and External Costs of Truck and Rail Freight.

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G-44 Guidebook for Assessing Rail Freight Solutions to Roadway Congestion 30 to 70 percent of public costs in urban areas and 10 to 30 percent of public costs in rural areas. Taken together, the data in these tables paint a reasonably consistent picture in which public costs of truck freight movements (in today's dollars) are roughly in the range of 2 to 5 cents per ton-mile in urban areas and 0.5 to 1.5 cents per mile in rural areas. Four factors are worth noting. The derivation in Exhibit 3-18b of cost per ton-mile was calculated assuming an average ton load of 14.8 tons (Forkenbrock, 1999; p.509).viii This represents the average weight of truckload (TL) general freight. If freight is diverted from less-than-truck-load (LTL) move- ments or if the average weight of truckload is lower, marginal external costs per mile will be higher. The value of external costs varies greatly, depending on truck characteristics: an 80 kip 5-axle combination truck will generate roughly twice the social costs as a 40 kip 4-axle single-unit truck. Thus, characteristics of the local truck fleet will affect average and total external costs. The benefits associated with reduction in truck traffic will be partially offset by the increase in external costs associated with increased rail freight. As the data in Exhibit 3-18c suggest, the offset ratio is roughly 4:1, i.e., each $1.00 in benefits from reduced truck freight is accompa- nied by an increase in external costs of rail freight of roughly $0.25. These benefits represent only public benefits associated with reductions in congestion, noise, pavement costs, and air pollution. They do not include other public benefits (e.g., economic development and security) or other private benefits (e.g., lower prices, better service, or larger delivery markets). While they are not included in this sketch planning phase, they can be addressed in a more detailed evaluation as described in the final chapter. For sketch planning purposes, the following gross numbers can be used as the basis for esti- mating benefits of truck diversion: 4 cents per ton-mile in urban areas and 1 cent per ton-mile in rural areas. These estimates are taken from the high range of the values presented in Exhibits 3-18b and 3-18c. (To determine whether or not rail investments might be an economically feasible way to reduce congestion, high-end estimates should be used. If high-end estimates of benefits from rail investments are not economically feasible, then it is unlikely that any rail investments would be an economically efficient means of reducing congestion costs.) For the actual calculations, net benefits (which include the offsetting increase in external costs associated with increased rail freight traffic) should be used: these are roughly 3 cents per ton-mile in urban areas and 0.75 cent per ton-mile in rural areas. Chapter 5 provides more detailed discussion on the range of estimates associated with truck diversion. A sample sketch planning calculation is presented in Exhibit 3-19. The first number entered is the estimate of potential freight diversion, given rail resources from Step 4 (Exhibit 3-15), which in this example is 19.2 million ton-miles. Assumptions about the net external benefit of truck diversion for urban and rural areas are then entered. In this example, the default values of 3 cents and 0.75 cents are used. (See above for derivation of these estimates.) If data are available, infor- mation on highway investment plans in the study area--including expected public benefits in the first decade after investment--is then entered. The latter numbers are used to calculate maximum rail project spending that could match the return on investment (ROI) associated with highway investments, given the expected change in the factors listed in Exhibit 3-18b (e.g., congestion and noise). viii Forkenbrock, David J., 1999. "External costs of intercity truck freight transportation," Transportation Research Part A; Vol- ume 33, pp. 505526.