Identifying and Using Low-Cost and Quickly Implementable Ways to Address Freight-System Mobility Constraints (2010)

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53 This chapter defines the criteria for low-cost and quickly implementable improvements to address freight mobility constraints and presents strategies for addressing them. Infor- mation presented in this chapter is based primarily on the results of the stakeholder interviews and surveys. This chapter also presents examples of low-cost, quickly implementable improvements aligned with the freight mobility constraints by mode. 5.1 Definition of Low-Cost, Quickly Implementable Improvements An important element in determining low-cost and quickly implementable strategies to mitigate mobility constraints is to determine how stakeholders vary in their definition of low-cost and quickly implementable improvements. The following sec- tions discuss the modal definitions and summarize the charac- teristics of low-cost improvements followed by a generalized definition with caveats for each mode. 5.1.1 Highways The agencies interviewed differ significantly when defining what would constitute a low-cost or quickly implementable project. In general, a low-cost and quickly implementable improvement could be defined as one that does not require special programming, does not require right-of-way acquisi- tion, and is within budget limitations enabling implementation at a district level. The consensus was that a low-cost improve- ment project should be on the order of $1 million or less, and “quickly implementable” was considered to be 1 year or less. To contrast, most agreed that a project requiring an investment of $10 million was a fairly major effort. Some specific examples of the definitions are presented below: • Oregon DOT has a specific program that targets low- cost, quickly implementable freight projects. The pro- gram rewards projects that could be implemented in one to three construction seasons. Such projects tend to have smaller right-of-way footprints, lack significant environ- mental impacts, have community support, and are unlikely to be delayed by other project development factors. “Low cost” is defined as being between $50,000 and $2 million. “Quickly implementable” includes projects that can be built within 3 years. • New Jersey DOT has a program called Fast Moves, which funds projects of up to $10 million. It does not have specific thresholds for “quickly implementable” or “low cost,” but it considers Fast Moves projects to be so because they gener- ally lack extensive right-of-way or environmental complex- ities. Costs range from less than $2 million to more than $10 million. • California DOT (Caltrans) has not developed a formal definition of a low-cost freight mobility project. However, a low-cost project may only address certain elements of a problem or alleviate the congestion for a few years. Low-cost projects may be more associated with an initial project phase than with a particular strategy or program for building an entire low-cost freight mobility project. • Ohio DOT produced more than 700 quickly implementable and low-cost projects when it began an intensive and focused safety program in the mid-2000s. The projects were driven exclusively by safety and not by freight mobility. Proj- ects included basic improvements such as enhanced lane markings to delineate through lanes in areas of “lane drops.” Pavement with poor friction was treated with thin overlays in areas where rear-end crashes were common. Lighting and signage were improved. Outside of these specific programs, the personnel who were interviewed across all responding agencies gave wide ranges in their personal descriptions of what are “low cost” and “quickly implementable.” Officials who were accustomed to addressing deficient system interchanges indicated that “low cost” could be as high as $20 million. A project of $20 million that addressed C H A P T E R 5 Low-Cost, Quickly Implementable Improvements

a freeway bottleneck was considered “low cost” in comparison to the much larger total highway program. Others said low-cost projects would be in the $50,000 to $250,000 range. The respon- dents’ perspectives appear to vary with their position. Opera- tions personnel tended to cite lower thresholds for “low cost.” Respondents accustomed to working with larger capital pro- grams tended to define “low cost” considerably higher, up to $20 million. Similar perspectives were given to the definition of “quickly implementable.” One respondent categorized “quickly imple- mentable” as being any strategy that an agency can adopt administratively, without seeking approval from outside agen- cies. When outside agency approval is needed, it generally indi- cates that the project has some impacts and will result in more lengthy reviews. 5.1.2 Railroads The definition of a “low-cost” and “quickly implementable” improvement project varies depending on the category of the railroad. For a regional railroad, a “low-cost” improvement project is one that is less than $500,000 while “quickly imple- mentable” would be completion in under 6 months. For a short-line railroad of modest size, projects that cost less than $2 million and that could be completed in 2 years would fit the criteria. A major Class I railroad, on the other hand, thought the cost range might be more like $1 million to $10 million. Ideally, a low-cost and quickly implementable improvement project is one with a cash payback within the current year—so that there would be no impact on net income. This criterion would also allow a line manager to use an authorized operat- ing budget to complete a “capital” project outside of the firm’s annual capital expenditures budget and thus speed up realization of the project benefits. Most railroads prepare cap- ital budgets midway through the year, effective the following January 1, and thus there is a minimum 6-month delay in implementing a new capital project. Also, amendment of cap- ital budgets to accommodate new projects is infrequent at rail- roads with tight cash flow constraints. However, the current year payback scenario represents unusual circumstances, as few projects yield returns this high and this fast. Also, most rail- roads probably would frown on going outside established cap- ital budgeting guidelines in this manner. While most projects of the low-cost and quickly imple- mentable size can be completed in a single construction season, to do so requires advance preparation and coordinated sched- uling. On large railroads with dense traffic, moreover, the spe- cific constraint is likely to be “track time,” i.e., the “window” in train schedules for maintenance of way (MOW) work, rather than total elapsed time. Railroads make great efforts to sched- ule availability or delivery of all the needed resources (labor, materials, track construction machinery) around train sched- ules to minimize disruption to trains and specifically to cus- tomer commitments. It is not unusual for railroads to work with major customers on track improvement projects – for example, by coordinating track work with a factory slowdown for vacations or heavy maintenance. Given the state of short- line infrastructure, the issue is not whether projects are inex- pensive and can be implemented quickly, but how they can be financed. 5.1.3 Deepwater Ports and Inland Waterways Low-cost physical improvements to reduce port congestion and enhance landside freight movement are similar to those for the primary modes linking the intermodal facilities. Examples include improving the turning radii and lanes for intermodal connectors and adding rail spurs and tracks serving the ports. Operational improvements include port peak pricing strategies that use pricing to encourage pickup/delivery of cargo at less congested times so as to reduce freight and passenger conges- tion on the transportation system, improve operating efficien- cies, and reduce truck wait and idling times, among others. Interviews with port terminal operators indicate that given the complexity of their operations, and noting that the major mobility constraints are regulatory and operational in nature, no “low-cost” and “quickly implementable” action could be identified. However, from a private-sector point of view, any regulatory requirements that positively impact their opera- tions could be viewed as low cost. Also, given that intermodal connectors are critical elements in the efficient movement of freight through the ports, any improvements that remove mobility constraints are reflected in the efficiency of opera- tions of the port terminals. A “low-cost” improvement in the inland waterways would involve better scheduling of and allowing transit of waterborne cargo according to two factors: (i) urgency of need for the cargo and (ii) resulting financial impact to the stakeholder of delay. Specific ideas included: • Resource optimization instead of addition • Not re-inspecting cargo that was already inspected at a for- eign port terminal • Using the arbitration system favored by unions to discuss greater use of optical readers at gates that would result in clerk reductions; also discuss flexible shifts this way. Results of the survey indicate that overall, 43 percent of the respondents defined “quickly implementable” as improve- ments that can be completed in less than 1 year and another 35 percent of respondents indicated less than 2 years. The results strongly suggest that a quickly implementable, low-cost improvement project should be completed in less than 1 year 54

(see Figure 18). The following section presents generic defini- tions of quickly implementable low-cost improvements. 5.2 Criteria for Low-Cost Improvements Based on discussions presented above, the following para- graph presents generic criteria for low-cost, quickly imple- mentable improvements and is followed by mode-specific definitions. Table 24 summarizes key characteristics of these improvements. A “low-cost and quickly implementable” improvement to address freight mobility constraints may be defined as an action that modifies existing geometry and operational fea- tures of the freight transportation infrastructure system and that can be implemented within a short period without extended disruption to traffic flow. Such an improvement may be physical, operational, or regulatory, as long as it enables greater throughput from existing facilities. These actions may be spot (or location-specific) improvements or may be lim- ited to short sections of the physical infrastructure. Likewise, they may be specific to a given supply chain process point, regulation, or mode; they may also be multimodal. Further- more, low-cost improvements do not involve massive recon- struction of infrastructure that usually takes many years to complete. Highways: A low-cost and quickly implementable improve- ment does not require special programming, time-consuming environmental clearances, or right-of-way acquisition and are within budget limitations enabling implementation at a district 55 0 10 20 30 40 50 60 Highways Railroads Deepwater Ports Pe rc en t o f R es po nd en ts < 6 mos >= 6 mos but < 1 yr >= 1 yr but < 2 yrs >= 2 yrs Figure 18. Definition of “quickly implementable.” Mode Characteristics of Low-Cost Actions Quickly Implementable Highways • Less than $1 million • Spot or location-specific improvements • No environmental clearances necessary • No right-of-way acquisition • No special programming required • Implementation at district lowest operation unit level (limited direct HQ oversight) Less than 1 year Railroads • Class I railroad – $1 million to $10 million Less than 2 years • Regional railroad – less than $2 million Less than 1 year • Short-line railroad – less than $500,000 Less than 6 months Deepwater Ports & Inland Waterways • Less than $1million • Physical improvements may involve highway and rail projects within and outside the port terminals at links serving ports – location-specific actions • Mainly operational actions including technology deployments • Uniqueness of each port acknowledged Less than 2 years Table 24. Key features of low-cost and quickly implementable improvements.

level. A low-cost improvement project is generally considered to cost $1 million or less, and a quickly implementable project is to take 1 year or less to complete. Railroads: The definition of a low-cost and quickly imple- mentable improvement project varies depending on the category of the railroad. For a short-line railroad, a low-cost improvement project is one that is less than $500,000 while a quickly implementable project would be completed in less than 6 months. For a regional railroad of modest size, projects that cost less than $2 million and that could be completed in 2 years would fit the criteria. A major Class I railroad, on the other hand, thought the cost range might be more like $1 million to $10 million. Right-of-way acquisition almost always delays a project and eliminates it from the low-cost category. Deepwater Ports and Inland Waterways: Low-cost opera- tional improvements are typically economic-incentive–based programs that influence demand, lead to changes in operations and processes (including the use of advanced technologies), and encourage modal shift. Low-cost physical improvements to reduce existing and potential port congestion and enhance landside freight movement may need to be coordinated with highway and rail improvements both within and outside the terminal. These improvements facilitate intermodal activities, e.g., restriping and signal timing changes at intersections lead- ing to port terminals and improvements of rail tracks and switches. A low-cost and quickly implementable improvement for both deepwater ports and inland waterways would cost up to $1 million and require up to 2 years for implementation. 5.3 Characterization of Improvements The type of improvement is not determined by the type of constraint. Operational improvements can be used to address physical constraints and vice versa. Similarly, regulatory and policy actions can be implemented to remove operational and physical constraints. Consistent with the type of con- straint, the three main types of improvements are defined below. Policy-type improvements are considered under the reg- ulatory type, while economic-based actions that affect price and market-based solutions are classified as operational improve- ments. These definitions are generic, and while physical improvements are quite distinct, certain types of improve- ments could fit either regulatory or operational categories. The grouping or labeling is less important than the actual strategy or action itself. 5.3.1 Physical Improvements Physical improvements involve construction activities to improve geometry or add capacity by adding more usable space. Examples include extensions to rail sidings to allow longer trains, addition of turning lanes at intersections, and addition of space to increase terminal capacity. 5.3.2 Operational Improvements Operational improvements are directed at reducing occur- rences of conflicts and delays to processes and traffic through the implementation of technology, changes in operational schedules, and sequences. Examples include use of intelli- gent transportation systems to provide traveler information, changes in signal phasing at intersections, congestion pricing to control demand, use of economic-incentive strategies to control demand, and use of centralized train control systems. 5.3.3 Regulatory Improvements Regulatory improvements entail the institution, relaxation, or modification of regulations, policies, and actions that improve freight mobility on the transportation system. These improvements include labor agreements, technology standards, and stakeholder partnerships directed at improving coopera- tion among modes and among public and private stakeholders for the primary goal of improving freight mobility. Examples include relaxation or modification of regulations governing the operating hours of freight vehicles especially in central business districts during peak hours, changes in land use and zoning laws to provide more parking for freight vehicles, and land bor- der crossing requirements and controls. 5.4 Low-Cost Strategies for Addressing Mobility Constraints This section discusses improvement strategies that have been deployed by public agencies and private stakeholders to address and mitigate freight mobility constraints. These strategies are derived from the results of the interviews and surveys with representatives of public agencies and private stakeholders involved in freight movement. Also presented are the processes used and factors considered in selecting improvements. 5.4.1 Highways Improvement Strategies Responses from public-sector representatives such as state DOT and MPO officials are separated from the private sector (e.g., trucking industry) in order to distinguish their perspec- tives on strategies to address freight mobility constraints. 5.4.1.1 Public-Sector Strategies A wide variety of strategies are in use by the responding agencies to address freight mobility constraints in order to 56

reduce congestion on the highway system. Examples of low- cost physical improvements include: • Operational capacity improvements such as auxiliary lanes between interchanges to reduce weave movements • Selected improvements at system interchanges to eliminate at-grade merges or inside merge conditions • Location-specific arterial improvements such as improved turning radii, the addition of turn slots, or the consolida- tion of driveways to reduce conflict points • Restriping the merge/diverge areas to better serve demand • Shoulder usage, especially on interchange ramps • Modifying weaving. Table 25 compares the rankings of low-cost physical im- provements as derived from results of the surveys. From the perspectives of the public sector (represented by state DOTs and MPOs) and the private sector (motor carriers), traffic sig- nal synchronization and auxiliary lanes were ranked the most effective low-cost actions in improving freight mobility on the highway systems. Traffic signal synchronization was considered an effective strategy but no example could be cited where it was applied specifically for a freight corridor. The economics of truck oper- ation are such that minimizing braking and idling can produce substantial operating cost savings over time (as well as reduc- tions in emissions) in addition to whatever time savings are garnered. Whereas steep grades can be implemented more as a safety countermeasure, they can be mobility constraints especially where the truck volume is high. In such cases, the use of truck climbing lanes is effective in addressing the constraint. It was noted that the basis for AASHTO design of accelera- tion and deceleration lanes is the passenger car. Motor carriers recommend that truck acceleration capabilities be part of high- way geometric design criteria. Different truck types are now being used with uncertain turning characteristics. Generally the view is that trucks are more maneuverable now (doubles and triples have lesser requirements). Offsetting light standards, signs, poles, and improving the turning radii at intersections with tight turns are effective improvements. Traveler information including advance notification of work zones, closures, and detours for motor carriers was seen as very important to enhance mobility. Deployment and use of variable message signing with real-time information was viewed as valuable. Part of this problem involved notification of wide-load restrictions due to work zone configuration. Stakeholders also identified the following specific low-cost operational and technological improvements to be potentially effective in addressing freight mobility constraints: • Ramp metering and ramp closures • Intersection “channelization” or lane improvements • Signal timing coordination • Various intelligent transportation system strategies such as variable message boards to alert traffic of incidents and to advise motorists to seek alternate routes • Advisory radio broadcasts to motor carriers warning them of accidents, steep grades, sharp turns, or other locations of incidents that could cause delay or accidents • “Quick clear” teams and policies to respond to accidents • Programmatic maintenance of traffic practices during con- struction to reduce delay. These can include night construc- tion, use of temporary lanes, and contractual incentives for contractors to complete work quickly. One of the most mature and detailed operational approaches to freight congestion relief is taken by the I-95 Corridor Coali- tion (86). The Coalition offers extensive training in operational strategies such as “quick clear,” and other practices to pro- mote greater efficiency along the corridor. It encourages 57 Public Sector (State DOTs and MPOs) Private Sector (Motor Carriers) 1. Traffic signal synchronization 2. Auxiliary lanes 3. Truck climbing lanes 4. Improved intersection turn radius 5. Truck restrictions 6. Acceleration and deceleration lanes 7. Intersection turn lanes 8. Restriping to add more lanes 9. Ramp metering 10. Ramp widening 11. Temporary ramp closure 12. Traveler information 13. Removal of vertical clearance impediments 14. Paved shoulders 1. Traffic signal synchronization 2. Auxiliary lanes 3. Acceleration and deceleration lanes 4. Truck climbing lanes 5. Restriping to add more lanes 6. Paved shoulders 7. Traveler information Table 25. Top ranked improvements.

agencies to work cooperatively to promote regional approaches intended to maximize the existing capacity in the corridor and to improve bottlenecks, whether they are physical, opera- tional, or regulatory. 5.4.1.2 Methods and Approaches to Selecting Improvements Data gathered from the survey of stakeholders indicate that state DOTs and MPOs use cost, availability of funding, and regulatory requirements as the main factors when considering a low-cost improvement action to address a mobility con- straint (Figure 19). However, in comparing alternative poten- tial improvements, historical information on past project performance and stakeholder/customer inputs (Figure 20) are the factors most often considered. The figure suggests that benefit-cost analysis is less often used in selecting improvement options. Agencies use different strategies to select improvements but most depended upon both quantitative and qualitative consid- erations. In some cases, quantifiable factors were used to iden- tify candidate projects which then were ranked by qualitative factors. In other cases, qualitative factors were used to identify potential actions which then were finally selected based upon quantitative scoring. The following examples illustrate the steps used by different agencies: • In the greater Phoenix area, the Maricopa Association of Governments and Arizona DOT cooperate on the identi- fication of locations where auxiliary lanes could be added to improve weave and merge conditions. The locations are selected upon “hard” factors such as traffic volumes and crash histories but also “soft” factors such as ease of implementation. • In Florida, the identification of routes and facilities for inclusion on the Strategic Intermodal System is formally quantified. Range factors and thresholds are used, such as the volume of freight, number of flights, port volumes, and regional connectivity of corridors. Ranges and val- ues are used to identify facilities and then to categorize them by importance. However, when individual actions are taken to improve those facilities, additional qualita- tive factors are considered. These include the importance given to the project by regional planning officials, speed with which the improvement can be implemented, per- ceived economic benefit, and the degree of local finan- cial support. • In Ohio, the identification of high-crash freeway locations was formal and quantified. The department sought out loca- tions that had crashes well above the mean for a 3-year period. The department then analyzed crash locations by crash type such as rear-end, angle, or head-on to help iden- tify countermeasures. Finally, the qualified judgment of engineers as to the speed of construction, cost, and effective- ness of the countermeasure was considered before finally selecting a project or action. • Ohio followed a similar process for identifying high-con- gestion freeway locations. The top 250 high-congestion freeway locations were analyzed based upon traffic volumes and volume to capacity ratios. Candidate projects were then given qualitative assessments by engineers as to the feasibil- ity of improvements considering factors such as cost, envi- ronmental constraints, or community sensibility. Projects that passed those quantitative and qualitative factors were then ranked by additional factors such as crash history, vol- umes, congestion, truck volumes, economic impact, and regional priority for the project. • Oregon’s ConnectOregon non-highway freight projects and its highway-focused Transportation Innovation and Operations Demonstration Program projects are solicited through public calls for applications. Formal applications are submitted and the data included in the applications are used for quantitative and qualitative ranking by indepen- dent panels. 58 0 4 8 12 16 20 Co st Be ne fit s (pe rce ive d a nd a ct ua l) Fu nd in g a va ila bi lity Im pl em en ta tio n tim e S af et y Se cu rit y R is k R eg ul at or y re qu ire m en ts Pe rc en t o f R es po nd en ts Figure 19. Factors for evaluating improvements. 0 10 20 30 40 Benefit-Cost analysis Historical information (past performance) Stakeholder /customer input Pe rce nt of Re sp on de nts Figure 20. Steps in selecting improvements.

A strategy used by some organizations to respond to freight mobility constraints is to solicit input from freight stakehold- ers. The Maricopa Association of Governments formed a freight advisory group and invited a member of a prominent logistics firm to serve on its board. In Utah, the DOT’s freight coordinator sought out trucking firms for group meetings in which they would review maps and share experiences in order to identify mobility constraints. Caltrans has one of the largest freight mobility programs in the nation. Beginning in June 2004, the state began a con- certed effort to assemble goods movement stakeholders. Those efforts led to the publication of a Goods Movement Policy (87). That, in turn, was followed by a $107 billion freight investment program, which focuses on highways, rail, and other freight infrastructure facilities. Complementary land use and environmental policies also were included in the program. Caltrans officials indicate that the program will result in significant capital investment but also will signifi- cantly increase the department’s focus upon improved oper- ations of the system. They note that modeling indicates that without the state’s Strategic Growth Plan, congestion will rise by 35 percent. With the plan in place, congestion will rise nearly 19 percent. Even with the massive investment, conges- tion will grow and will require continued use of operational strategies. Maryland DOT recently completed a Maryland Freight Profile, which is an extensive data set that delineates the freight system. From there they are developing a Maryland Statewide Freight Plan in conjunction with internal staff and outside freight stakeholders. Also in Maryland a Freight Proj- ect Needs Inventory has been drafted and will be further developed as the study continues. The Plan is designed to emphasize clear, achievable capital planning and outputs that can be implemented within 5-year and 25-year planning horizons. Outreach meetings to identify freight-system defi- ciencies and to recommend solutions are now under way. These meetings are being held across the state, and participa- tion of both public and private stakeholders is encouraged. 5.4.1.3 Effectiveness of Improvements The formal evaluation of project effectiveness is not com- mon. From a freight effectiveness standpoint, no formal post- project evaluation processes were identified among the agencies interviewed. However data gathered from the surveys indicate that, for all three modes, stakeholders often use customer feed- back and key performance indicators in assessing the success of improvements, as shown in Figure 21. Benefit-cost ratio is not routinely used to evaluate implemented projects, having been cited by fewer than 20 percent of respondents. 5.4.1.4 Private Sector Strategies The survey results indicated that customer rebates or penal- ties for missed deliveries or pickups are common consequences of congestion or delay. The following are the main impacts of delay and congestion on customers: • Some customers have expanded, adapted, or changed shipping/receiving hours at facilities. • Cost of moving freight has increased due to congestion and delay. • Customers have had to stop or delay manufacturing activ- ities because goods are not received at a specific time due to congestion/delay. • Customers have been displeased by late or missed deliveries. 59 Figure 21. Assessing success of improvements.

The result of these impacts on shippers and distribution centers is a decrease in operating efficiencies and subse- quent increases in both operating costs and transportation costs. For example, trucking firms and 3PLs have had to modify business practices to mitigate the impact of freight mobility constraints on their businesses. Furthermore, freight mobility constraints impact motor carrier opera- tions in a number of ways. The most frequently reported consequences are: • Increased operating costs • Reduced revenue and equipment (e.g., tractor) utilization • Increased difficulty positioning equipment and drivers • Increased driver turnover in congested areas • Higher pricing to offset increased costs • Longer transit time • Decreased levels of service. The following actions are the top three specific actions often taken by motor carriers to reduce congestion and delay or to mitigate mobility constraints: 1. Use alternate routes to avoid congestion, which can result in trucks traveling on facilities that are not designed for heavy truck traffic, creating additional risks (including a lack of available safe locations where drivers can take breaks) 2. Reschedule trip/delivery 3. Deploy in-cab communication. Other common strategies to mitigate these operational impacts include adding resources to maintain service levels such as drivers, tractors, trailers, terminals, and support per- sonnel. In addition to adding resources, carriers must utilize existing resources in innovative ways. Examples include the use of lower cube equipment (i.e., smaller trucks) to access areas with physical constraints, the use of third parties or agents to make deliveries or pickups in severely congested areas, and a greater use of technology to monitor all aspects of fleet operations and costs. Another innovation is the more flexible use of drivers. For example, respondents note local pickup and delivery routes are oftentimes a joint decision between management and drivers, with a strong emphasis on efforts to keep drivers on regular routes. There is also a growing trend of driver swaps and relays. Carriers also prefer to use team drivers for high-value loads to avoid unsafe routes or lack of adequate and secure parking facilities. In response to carrier needs for more flexibility of driver use, recent labor contracts now allow carriers to use “hybrid” drivers, a type of driver that may be used for line-haul or local pickup and delivery. Other actions taken by carriers to miti- gate mobility constraints include: • Higher pay for drivers operating in congested areas • More off-peak period operations • Earlier truck departure times and later arrival times • Adding terminals to cover smaller service areas • Carrier-imposed restrictions on the movement of high- value shipments • Facilitation of data exchange with shippers on the avail- ability of loads and preclearance for pickups or deliveries • A greater propensity to operate less than full trucks • Additional charges for pickups and deliveries in congested areas or facilities. More than half of the fleets surveyed (60 percent) indicated that customers have not assisted in mitigating the impact of delay and congestion. Of the 40 percent that indicated that customers had taken actions to help mitigate the impact of delay and congestion, the following aggregated responses were provided: • Customers have allowed more driving time for travel through congested areas or to locations with significant congestion • Customers have changed pickup and delivery hours including: – 24-hour access to trailer staging areas/drop yards – Early morning/late evening delivery times to help carriers avoid peak hour – More efficient loading/unloading processes. Another area of emphasis commonly cited by respondents is carrier recognition of the impacts of mobility constraints on their customers. As congestion and mobility constraints have increased, the geographical area for just-in-time (JIT) inven- tory replenishment has decreased. Carriers must be aware of customer efforts to mitigate constraints, as these efforts typi- cally also affect motor carrier operations. Actions taken to min- imize effects of constraints on shippers include: • Incentives for customers to maximize use of trailer capac- ity by double-stacking pallets during loading • Incentives for off-hours pickup and delivery appointments (for some segments) • Carrier efforts to cultivate relationships between drivers and regular customers • Encouraging customer use of reduced packaging sizes • Relocating or adding terminals or drop yards closer to cus- tomer locations. A final proposed solution is the development of a more cohesive marketplace between carriers and shippers, where shippers play a larger role in the efficient movement of freight. In this model, motor carriers would provide a driver and a trac- 60

tor, while shippers would be responsible for maximizing use of trailer capacity. From the labor unions’ perspective, low-cost solutions to address freight mobility constraints would be those that do not increase the operating expense to motor carriers, or jeopardize the safety of truck drivers or the motoring public. The strate- gies include: • Empowering motor carriers to more efficiently use union drivers to suit their operational needs, which has improved carriers’ ability to work around freight mobility constraints • Greater emphasis on off-hours schedules for travel in both rural and urban areas • Lifting tractor trailer route restrictions during off-peak hours, if the road can be safely traveled by large trucks, allowing for greater freight mobility • Moving more freight at night. 5.4.2 Railroads Improvement Strategies Strategies often used to respond to rail freight mobility constraints include: • Contracting out for special skills • Hiring temporary workers • Supporting labor training programs • Establishing labor/management operations planning and troubleshooting teams • Fast-tracking environmental clearances where possible— including with public-private partnership (PPP) projects • Rapid installation under traffic (which requires advance planning and logistics support—and may involve tempo- rary re-routing of traffic away from the site) • Upgrading communication technologies—subject to FCC rules. The technique of the maintenance/renewal “blitz” began about 10 years ago on lines serving the Powder River Basin coal mines and has become widely used. The technique takes a line completely out of service, say for a long weekend, and then with round-the-clock activity, finishes all steps in the construc- tion process before returning the facility to normal operations. In addition to track renewal, the blitz approach has been used effectively for bridge replacements. The blitz strategy is also a good one for making use of quality off-the-shelf products— which may include pre-spiked track panels (of commercial or company manufacture) distributed along the project site before beginning the blitz. In a somewhat different context, a company- or division-wide safety blitz can quickly focus man- agement and employee attention on a safety shortcoming. The following low-cost improvements are considered to have high potential of implementation to address rail freight mobility constraints. These are ranked in decreasing order of potential: • Deployment of advanced technologies • Train control/advanced dispatching • Advanced electronic inspection techniques • On-board sensors • Rapid on/off maintenance of way machinery • Trunked digital communications systems • Electronically controlled pneumatic brakes. Operational/Technological Strategies: An overriding issue is better communication up, down, and across the organization and to and from customers. A generic response to the survey was that research on IT systems lowering capacity barriers was needed, including outside-the-box thinking, and recognition that the causes of capacity bottlenecks may be different for small and large carriers. Within the rail commodity/operating mix, there seems to be more concern about supporting carload manifest service than unit trains and intermodal operations. Contributing to this broad concern (and the specific worry about the future of carload business) is the perceived inade- quacy of tracking systems. Suggested solutions range from broader use of automatic car identification (ACI) readers and an overhaul of the Car Location Message (CLM) system to comprehensive scheduling of rail operations, including car time at shipper locations. Existing CLM practices are out of date. Technology seen in powered consumer markets must find application in the rail space to ensure improved speed and visibility of shipments, both load and empty, in the entire North American supply chain. There are simply too many errors, passive interchanges, track maintenance delays, etc. to allow fleet optimization and utilization levels to climb aggres- sively enough to offset the increased cost of shipping goods via rail. As long as this issue is unaddressed, rail will continue to experience slow growth versus its actual utility and value. It was observed that automatic equipment identification (AEI) readers would not be granular enough for the next gen- eration of computer aided dispatching (CAD), on-board oper- ating and computer control systems, while the level of radio frequency identification (RFID) used for lading may be too granular. Solutions will be found, like global positioning sys- tem (GPS) and terrestrial tracking. Capacity modeling will become increasingly important as density increases. PTC tech- nologies, like moving blocks with dynamically calculated safe braking distances and elimination of wayside signals (a major constraint today), are coming. Public policy can help with the issues of standardization and interoperability. Public Policy/Regulatory Strategies: Respondents had numer- ous suggestions for public policy changes that would improve freight mobility at low cost to consumers. One respondent noted that 61

The elephant in the room is the threat of re-regulation. There is no incentive for rail investors to expand capacity if legislators and the Surface Transportation Board (STB) will limit return [including compensation for risk]. Capping returns at average capital cost at the top of the business cycle virtually prevents investment whose long-term recovery must span the entire busi- ness cycle. A shot at earning a premium at the top is needed to carry the investment through bad times. And it is that premium that attracts further capital to expand capacity. There is the urgent need for national initiatives employing railroads to address energy imperatives and reduction of the nation’s carbon footprint. Some respondents suggested invest- ments in passenger transport facilities that could benefit freight operations collaterally. The Investment Tax Credit (ITC) to accelerate investment (a neutral device as among competing companies and management prerogatives) was mentioned as an ideal way to lower mobility costs for users. A stronger Fed- eral preemption to head off local obstructions harming rail mobility projects might be needed. Measures to fund and facil- itate PPPs would be much in order. Despite concerns about “strings” on public funding, many respondents believed that there should be increases in public funding of capital investments in rail infrastructure. A short- line executive stated the need for Federal funding as follows: From our standpoint, state assistance programs similar to those in Ohio, Pennsylvania, New York and other states that provide funding for customer-related rail infrastructure would be a major plus. Normally states or local road authorities fund high- way improvements associated with new or expanded customer facilities but neither [of the states our short line operates in] pro- vide any funding for customer rail access. Such funding would be particularly helpful to speed the adoption of new technology [-based] safety improvements, which are often difficult to justify for our low-density lines. Very little research funding finds its way to topics of keen inter- est to the short line and regional railroad community, yet local rail- roads now compose roughly 25 percent of the national freight rail network. The relatively modest purchasing budgets of short lines don’t encourage suppliers to devote much product development to areas aimed at low density lines. Federal and state government could play a role here to identify cost-effective solutions to improve the safety, efficiency, and utility of the local railroad network. From the labor unions’ perspective, low-cost solutions should: • Allow special agreements where engineers can transfer, temporarily or permanently, from one seniority district to another to address severe engineer shortages. • Improve channels of communication so that issues can be worked out at the local level and overlapping management roles are streamlined. • Continue to allow long-haul crews to meet and swap trains while en route when both crews have sufficient time left to work under the law. Under some circumstances this can be cost neutral and can be implemented in relatively short order. • Revise the Hours-of-Service limits to allow some flexibility to address worker shortages that develop in a particular region. 5.4.2.1 Methods and Approaches to Selecting Improvements Most survey respondents indicated that their companies used at least informal cost-benefit analysis in setting capital project priorities. A semi-formal cost-benefit evaluation on every project is utilized where it can be demonstrated that a project can result in capacity or operating improvement. In other cases, where external funding is sought, then a return on investment (ROI) analysis will be undertaken. Financial per- formance in the form of a rate of return exceeding 15 percent and/or a payback of 18 months or less typically would qualify the project. In general, the required rates of return have to sig- nificantly exceed the cost of capital. In the absence of this, the project has to satisfy a regulatory need or else be required to sustain operations. Most railroads and rail suppliers apparently have a cross- functional senior management team responsible for review of capital investment needs and project priorities. The senior team reviews formal capital requests from managers and direc- tors, and these are supported by standard financial analyses. 5.4.3 Deepwater and Inland Waterways Improvement Strategies Three major methods of selecting improvement options were identified by the survey respondents: 1. Undertake an evaluation to identify and execute ways to improve or change their business process. Decisions to undertake a change in business process to improve per- formance are driven by labor rules, capital cost, operation cost, risk, capacity, productivity, and rate of return. This reflects the private-sector approach to decision making that involves constant evaluation for process improvement. 2. Dialogue with key stakeholders to identify problems and ways to address them. Several ports organize meetings among their stakeholders so that labor, motor carriers, regulatory agencies, and others can meet in various com- mittees to address concerns. For example, one “port coor- dination team” on a major shipping channel meets to determine when to open and close the channel to accom- modate vessel traffic requirements. Another terminal oper- ator focuses on its customers to keep them informed of the various factors affecting the delivery process and to work with them on how to improve the system. 3. Discuss Federal regulatory impacts on terminal operations with Federal agencies to address effective operational and enforcement policies so that they can be applied reason- ably while meeting the required objective of the initiative. 62

The following is a priority ranking of actions that are often used to address freight mobility constraints. This ranking reflects the relative effectiveness of the actions. Obviously, reg- ular communication and coordination of activities are the most effective tools in addressing mobility issues. 1. Regularly communicate with elected officials, manage- ment, and community stakeholders to garner support for regulatory improvements 2. Coordinate capital improvement planning and improve- ments with modal and community partners to avoid unanticipated negative congestion consequences 3. Use customized technology programs 4. Support labor training programs 5. Empower problem-solving action groups 6. Prepare and budget for implementing contingency plans. Among the potential low-cost improvements, the follow- ing are considered to have some or high potential of imple- mentation to address freight mobility constraints: • Reconfigure terminal to add more capacity • Utilize wireless communications on terminal to facilitate proper storage, ship operations, and gate operations • Establish regular pre-planning meetings to coordinate ship, rail, labor, and drayage requirements • Institute on-terminal traffic management by managers • Deploy “Fast Lane” at gates using paperless checking • Install auxiliary gate lanes • Locate secured inspection areas outside of major traffic areas. These actions are ranked in order from the most likely to the least likely to be used. All respondents indicated that ter- minal reconfiguration to add more capacity has the highest potential for addressing freight mobility constraints at deep- water ports. This is followed by the use of advanced commu- nication technologies to coordinate and facilitate terminal activities. Labor unions suggest the following strategies to address freight mobility constraints at the deepwater ports and inland waterways: • Greater uniformity of trained labor so that individuals can be rotated from one port to another to perform similar jobs at all ports; so a crane operator in Philadelphia, for example, can be moved to operate a crane in South Car- olina. The Seafarers union has placed an emphasis on con- tinuous recruiting of labor supply as demand has increased over recent years. Training at the Piney Point School is aiming to achieve its goal of providing well-trained seafar- ers to take on all types of work required by the industry. They provide all levels of training so that the employers can have well-trained union members who can meet all of the employers’ requirements. • Interoperability and uniformity of systems - currently, each terminal operator has its own individual data systems for clerks, checkers, and longshore personnel to use. If a checker moves from one terminal to another, he or she must be trained in an entirely new system. Union specialist lock operators and mechanics are fre- quently on single-person shifts to operate the facilities and must have expertise in the total operational facility as they are the first responders to any difficulties at the facilities. The union representing these workers has worked with manage- ment at the local level to counteract contracting out to in- experienced workers. The Teamsters have responded to mobility constraints by allowing motor carriers more flexible use of Teamster driv- ers. For example, the Teamsters now allow companies to put empty trailers on rail equipment, whereas before, the con- tract required motor carriers to use road drivers to do so. Also, to reduce travel during peak congestion times, the union strongly advocates that trucking companies and their cus- tomers allow evening and weekend deliveries. In addition, the Teamsters’ new contracts create a new type of driver, a “util- ity” or hybrid driver. This driver offers trucking companies flexibility in working around mobility constraints by allow- ing the carrier to use a driver in different roles, such as for local pickup and delivery or off-hours pickup and delivery. 5.4.3.1 Approaches in Selecting Improvement Options The complexity of trying to identify a single process by which to select improvement options restricts system-wide improvement options, especially when so many players are involved who make individual decisions based on their own objectives and business frameworks. Decisions to undertake a business process change focused on performance improve- ment are driven by labor rules, capital cost, operating cost, risk, capacity, productivity, and rate of return. Three out of the four respondents indicated that they routinely employ a cost-benefit analysis in evaluating and selecting alternative improvements. The survey respondents listed several factors considered in evaluating improvement options, including: • Safety • Labor rules • Capital cost • Operating cost • Risk • Productivity • Rate of return 63

• Clearly beneficial results • Regulatory compliance (including Customs and Border Protection enforcement process improvements that bene- fit the shipping line or the terminal) • Minimizing financial impact to stakeholders. 5.5 Summary of Improvements Table 26 presents the range of options for different types of constraints for highway movements. This table is based on information on completed low-cost improvement projects by various stakeholders. While most constraints for the highway mode are physical, the improvements are a combination of physical and operational actions. It is acknowledged that regu- latory actions are more complex and not easily or quickly implemented. This is because regulatory changes would involve extensive rulemaking effort. Information on highway projects were obtained from projects implemented in Florida, Maryland, Minnesota, New Jersey, Ohio, Texas, Utah, and Washington. Table 27 summarizes actions commonly taken by motor carriers to avoid or eliminate the effects of constraints on their operations. These actions are intended to guide private-sector 64 Physical Constraint Improvement Options Physical Constraint Improvement Options Turning Radii Add turning lane Inadequate Mainline Capacity Add a lane Widen lane Add warning signs Extend existing lane Modify median bull noses Speed reduction Weaving Add lane Add channelization Add auxiliary lane Improve road signage Extend turning lane Restriping Add turning lane Signal upgrade Extend existing lane Revise merging/diverting area Redirection of traffic Inadequate Intersection capacity Add dedicated turning lane Re striping Add a lane Lane Drop Add auxiliary lane Extend turning lane Extend ramp length Auxiliary lane Inadequate I nterchange Capacity Add auxiliary lane Widen turning lane Add turning lane Signal phasing Add lane Intersection layout improvement Add traffic signal Proper roundabout design near freight facilities Extend acceleration and deceleration l anes Operational Constraint Improvement Options Extend ramp length Traffic Control (lack of, or poor signal timing) Signal installation Ramp metering Traffic signal upgrade Interchange realignment Synchronize signal phasing Widen lane Signal phasing Speed reduction Poor Signage/Warning Signs Improve road signage at interchange entrances and exits Add warning signs Better advance navigational signing Improve road signage Steep Grade with Ramp Meter Remove ramp meter Channelization Relocate ramp meter Restriping Alter ramp metering operation Shortage of Truck Drivers More flexible use of drivers Regulatory Constraint Improvement Options Narrow Tunnel Add a l ane Truck Lane Restrictions Modify restrictions Steep Grade Add a passing lane Inadequate Parking Provide parking facilities even with no facilities a Parking Restrictions Revise parking restrictions Pave shoulders Provide additional parking Widen shoulders on mainline and ramps Allow parking on paved shoulders and ramps b a - likely opposition by truck stop interest competitors b - risk of crashes and security Table 26. Highways—public-sector improvements.

65 decision makers in selecting proven strategies to overcome the effects of mobility constraints while achieving acceptable pro- ductivity levels. For rail and water modes, operational constraints are more prominent than physical and regulatory constraints. For rail, data were derived from implemented projects in Alaska, Arizona, Illinois, North Carolina, Missouri, and Washington. Tables 28 and 29 summarize the constraints and correspon- ding improvement options for the rail and water modes, respectively. The constraints and corresponding improvement options presented in these tables together with the detailed imple- mented project information contained in the database are inte- gral components of the methodology described in the next chapter. Also these options are described in greater detail in the catalog of improvements later in this report. Constraint Type Potential Action Constraint Type Potential Action Physical and Operational • Use of alternate routes • Reschedule trip/delivery • Deploy in-cab communication • Add equipment/drivers/ resources • Hire drivers • Higher pay for drivers operating in congested areas • Operate less-than-full-load trucks • Incentives for off-peak period operations • Facilitate data exchange between shippers and motor carriers • Incentives to customers to maximize use of trailer capacity Regulatory • Seek regulatory changes • Report inefficiencies to government agencies Table 27. Highways—private-sector actions.

66 Physical Constraint Improvement Options Physical Constraint Improvement Options Inadequate Track Capacity New track (siding) turnout Inadequate Siding Capacity Extended siding track Curve superelevation New siding track Realign tracks Turnout Upgrade siding track Realign tracks Extended siding track Centralized traffic control system Provide crossover Connection tracks Connection tracks Operational Constraint Improvement Options Centralized traffic control system Lack of Skilled Labor Hire temporary workers Branch line upgrades Inefficient Labor Utilization Negotiate contracts to accommodate “limbo time” Tie replacement Switching Conflicts/ Inefficient Switching Remote switching Track surfacing Upgrade/reconfigure interlocking, low-emission switch engines Advanced electronic inspection techniques Coordinate operations of Class I and short- line/regional railroads Improve crossing warning systems and make current passive crossings active Outdated Communication and Signaling Centralized traffic control system Inadequate Capacity of Yards and Port Terminals Expansion of carload terminals Signal improvements – advanced technologies Internal gateway facilities On-board and wayside defect detection and other advanced sensors Expansion of intermodal terminals Trunked digital communications systems Table 28. Railroads—improvements.

67 Operational Constraints Improvement Options Regulatory Constraints Improvement Options Lack of Crews Hire temporary labor Supply Chain Connectors Smooth out mismatched labor structures Support labor union and training programs Labor Laws and Restrictive Contractual Limitations Negotiate training terms and conditions to increase skills and trained labor supply Inefficiencies in Operations of Terminal Yard/Gates – causing congestion and delays Expanded gate hours Inefficient Labor Utilization Negotiate contract to accommodate “limbo time” Congestion pricing TWIC requirements and lack of card- reading equipment Upgrade card readers Trucking appointment system Automated yard marshalling and inventory control Use existing software packages for card readers Joint inspection facilities Establish flexible labor shifts Physical Constraints Improvement Options Partnership to accommodate uneven demand cycles Rail Intermodal Connector Capacity Expanded rail connections Utilize wireless communications to facilitate proper storage, ship operations, gate operations Terminal Yard/Gates – Roadway Connector Widen local roads Incentive-based program to shift freight from trucks to rail Restriping to add lanes High-speed gates/fast lane using paperless checking Auxiliary gate lanes Multi-pick cranes Inadequate Capacity of Terminal Yard/Gates Locate secured inspection areas outside major traffic areas Terminal Yard/Gates – Roadway Connector Capacity Synchronizing traffic lights Traffic management Rail Intermodal Connector Capacity Fast rail shuttles Terminal reconfiguration to add capacity Integrated maritime and rail movements Off-dock container yards Partnership to reduce passenger/freight rail use conflicts Table 29. Deepwater ports and inland waterways—improvements.