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19 CHAPTER 1 Research Objective Research Statement fall. If freight volumes are to rise, then additional investment in system capacity is required. Without insight into future trends, The objective of this project is to develop measures to investment and policy decisions are significantly hampered. gauge the performance of the freight transportation system, Fourth, the inclusion of operations measures infers the including its subsystems and components. The project's areas need for continuous travel-time performance information. of emphasis include efficiency, effectiveness, capacity, safety, Operations decisions in the private sector tend to be in real security, infrastructure condition, congestion, energy, and the time or near real time in terms of selecting routes, choosing environment. The measures are to be comprehensive, objec- modes of transport, or selecting which warehouse, port, or tive, and consistent and to reflect local, regional, national, and depot to use. In the public sector, highway operations deci- global perspectives. The measures are intended to support sions also occur in near real time. Therefore, having opera- investment, operations, and policy decisions by a range of tions measures increases the frequency, granularity, and detail stakeholders, both public and private. of performance information that would be required to satisfy The key stakeholders who may be interested in a freight the project's objectives. performance measurement framework were to be identified and their interests described. The framework was to include specific examples of performance measures. Background on Research Need Inherent within the project charge are several key implica- tions. First, the framework and performance measures need Two trends converged to create demand for freight sys- to allow for assessment of broad, national transportation tem performance measures. First, freight's importance has systems, with the ability to "drill down" into subsystems and increasingly been recognized within local, state, and federal components. An example would be performance measures of transportation programs. Secondly, the emphasis on mea- the National Highway System (NHS) that could allow aggre- suring outcomes in transportation programs has grown. gation to a national level, with granularity at a regional level The convergence of these trends creates an interest in a set of and down to a specific link or interchange. Otherwise, the measures that can provide insight into the functioning of the subsystems and components could not be measured. multifaceted freight transportation network. Second, the framework needs to address all aspects cited in Freight shipments and the transportation network have a the project objectives and tasks ranging from freight system symbiotic relationship. Freight patterns are affected by the efficiency, to environmental externalities, to freight sys- configuration, condition, and performance of the transpor- tem costs. As a result, a variety of modes need to be considered tation system, while the presence of freight affects both the and the issues surrounding each mode must be measured. condition and the performance of the transportation system Third, the framework needs to include leading indicators, itself. Efficient freight movement is an essential ingredient in as well as lagging ones. This emphasis upon leading indica- a modern economy, yet, left unchecked, freight movement tors is not explicit in the project objective but implicit. If the can create externalities that increase societal costs in terms framework and measures are to be relevant to stakeholders, of traffic crashes, emissions, growing energy consumption, they need predictive capability, particularly for consideration and other impacts. Society in both explicit and implicit ways of investment and policy alternatives. If freight volumes were seeks to promote freight's contributions while diminishing expected to decrease, the need for system investment would its impacts.

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20 Further complicating freight measurement is its inextri- weeks acceptable. Therefore the needs of the private sector cable linkage to every sector of the economy. Not only does a are as diverse as are the 6 million individual U.S. employers. complex and diverse freight-movement industry (Table 1.1) See Table 1.2. have interests in freight system measurement, but all the cus- Freight's importance to the economy has become increas- tomers of the freight industry also have their own mirror- ingly recognized by transportation officials. For the past decade image concerns. The private sector focuses heavily upon cost, they have developed increasingly sophisticated approaches to speed, and reliability, but the value placed on all three varies understanding how the transportation system affects freight dramatically by industry. An on-line retailer needs instanta- movement, and how freight movement affects transportation neous delivery, whereas the user of high-volume, low-unit- system performance. The movement of goods is an essential valueSecondly, bulk commodities may find the emphasis shipment times on measuring of several outcomes component in transportation of traditionally programs has grown.important sectors of the economy The convergence of these trends creates an interest in a set of measures that can provide insight into the functioning of the Table 1.2. Summary of employers illustrates the many types of priva multifaceted freight transportation network. differing interests in freight measurement. Table 1.1. Selected statistics. Table 1.2. Summary of U.S. employers. Table 1.1. Selected statistics. Although th Selected Transportation Statistics Types of U.S. Firms the marine sy Freight shipments and the transportation network have All Industries 6,022,127 (USACE) rep Transportation as percentage of a symbiotic relationship. Freight patterns are affected 10% locks, and da GDP Agriculture, by the configuration, Forestry, condition, andFishing, performance of 22,888 and Hunting Transportatio Total transportation employment 13.1 the transportation system, while the presence of freight affects both Mining the condition and the performance of the 20,583 infrastructure (millions) transportationUtilities system itself. Efficient freight 6,554 national netw For hire transport and movement is an essential ingredient in a modern 791,558 ports have ex 4.5 Construction warehousing employment container vol (millions) economy, yet, left unchecked, freight movement can Manufacturing 286,039 create externalities that increase societal costs in terms economy ove Transportation-related Wholesale Trade 334,594 along with im 2.1 of traffic crashes, emissions, growing energy manufacturing employment consumption, Retail Trade and other impacts. Society in both 725,557 ships, trucks, (millions) localized air explicit and Transportation implicit ways seeks and to promote freight's 171,947 Million miles of highways in US 3.9 Warehousing contributions while diminishing its impacts. Information 74,952 In addition to Miles of Interstate Highway 46,769 Further complicating freight measurement is its inextricable Finance linkage toand Insurance every sector of the economy. 263,028 of the freight National Highway System miles 115,032 Not only does a complex Real and diverse Estate, Rental, and freight- 305,981 system perfo Leasing movement industry (Table 1.1) have interests in freight societal atten Public use airports 5,286 regulating im system measurement, but all Professional, the customers Scientific, and of the 772,025 Technical freight industry also have their own mirror-image certain impor Miles of Class I railroads 98,944 concerns. The private sector Management focuses heavily upon cost, Companies 26,760 the public. T Regional freight lines miles 15,648 speed, and reliability, but the value placed on all three and its states Waste Management 323,282 varies dramatically by industry. An on-line retailer of canals, po Educational Services 73,793 river channel Local freight line miles 26,347 needs instantaneous delivery, whereas the user of high- Health Care volume, low-unit-value and commodities bulk Social may find605,845 came various Navigable waterway miles 26,000 Assistance protect publi shipment times of several weeks acceptable. Therefore Public ports 150 the needs of Arts, Entertainment, the private sector areandas diverse as are115,049 the practices. Recreation six million individual U.S. employers. See table 1.2. Today, regul Accommodation and Food 467,120 Oil pipelines in miles 64,336 Freight's importance terms of freig Service to the economy has become increasinglyOther recognized by transportation officials. For emissions, an Product lines in miles 75,565 Services, Except Public 672,056 the past decade they have developed increasingly Administration terms of cont Gas transmission lines 309,503 sophisticated approaches to understanding how the27,027 control of inv Unclassified Source transportation system affects freight movement, and international how freight movement affects transportation system performance. vast size, The its enormous movement complexity, of goods its fixed facilities, and its m is an essential component of traditionally important sectors of the economy suchsociety that impacts are as manufacturing, felt in many agriculture, areas of health, safety, and retailing, mining, and construction. Growth in freight movement has for theThepast two decades measurement of increased at a faster therefore, requires a freight performance, rate than overall growth in the economy. This has occurred despite Its measurement must include areasthat the growth in economic sectors do speed and reliabil of travel not rely primarily on goods movement, such as finance, information technology, and entertainment. The

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21 such as manufacturing, agriculture, retailing, mining, and about $36 billion moved nearly 12 billion ton-miles on the construction. Growth in freight movement has for the past nation's transportation network every day in 2002.6 The two decades increased at a faster rate than overall growth in figures underestimate the total amounts actually shipped the economy. This has occurred despite the growth in eco- because they do not capture the estimated 300,000 private nomic sectors that do not rely primarily on goods movement, trucking companies alone, not to mention the rail, water, such as finance, information technology, and entertainment. pipeline, and intermodal transporters. The federal statistics The growth in freight has occurred because transport has been cannot capture all movements, such as those conducted by a relatively inexpensive input to the production chain, causing in-house fleets, such as those that serve Wal-Mart and other producers to "consume more transport." Supply chains have companies. Also, many commodities such as timber, farm lengthened as producers sought inexpensive foreign sources products, or fisheries products cannot be completely calcu- of production. The high reliability of international and trans- lated. Construction, solid waste, and crude petroleum are continental shipments has reduced distance as an impedi- among several categories that are of economic importance ment to production. Producers and consumers could for the but cannot be adequately estimated. Therefore, these and past 20 years be physically separated by vast differences but other estimates used nationally represent the best available be linked continuously by a reliable and relatively inexpensive but are acknowledged to be incomplete.7 multimodal logistics chain. Freight system impacts are experienced not only as con- The complexity of measuring freight performance reflects gestion but also as degradation in the physical infrastructure the vast dimensions and vast complexities of the North Amer- of highways, railroads, ports, airports, locks, and dams. The ican freight transportation network. The U.S. economy is the lack of adequacy in infrastructure investment has been docu- world's largest, generating a gross domestic product (GDP) mented in most modes. The doubling of freight volumes, as of $11.7 trillion in 2004.1 The U.S. economy is closely tied shown for trucks in Figure 1.1, and the aging of the infra- to the Canadian and Mexican economies, which represent, structure have led to concerns over the future condition of respectively, the second and third largest U.S. trading part- the national freight network. ners.2 In addition, the U.S. economy has increasingly relied The 2007 National Rail Freight Infrastructure and Capacity on international trade. Trade has grown from 13 percent of Study forecasts that if the 2035 rail freight volumes were to the U.S. economy in 1990 to 26 percent in 2000.3 Trade with occur on today's rail network, 30 percent of the major rail net- China grew from $85 billion in 1998 to $343 billion in 2006, work would be operating above capacity and creating severe representative of recent trade patterns.4 Therefore, the freight congestion. Because of the interrelated nature of the nation's transport network in the United States has evolved to serve rail network, this congestion would affect every region of the not only the immense amounts of domestic freight that move country. Frustrated shippers would potentially shift freight to within the country but also an estimated 2 billion tons of already congested highways, the study suggests. freight that move into or out of the nation annually.5 The success of the national and international freight net- Freight system impacts are experienced not only as work led to a near doubling in freight volumes over the past congestion but also as degradation in the physical P e rc e n ta g e T ru c k a n d T ra ffic two decades--and to commensurate degradation in freight infrastructure system performance. of highways, The degradation hasrailroads, not beenports, uniform. G ro w th It has been airports, locks, displayed and dams. The as disproportionately lack of adequacy congestion on in key links and nodes of the network of highways, railroads, in infrastructure investment has been documented 2.20 most ports, airports, modes. and marine The doubling highways. of freightand Congestion volumes, travel- as 2.00 shown for trucks in Figure 1.1, and the aging time degradation on these individual networks is only of the par- 1.80 tially understood. Even less understood by the public infrastructure have led to concerns over the future sector are impediments and delays caused freight by inefficient linkages 1.60 condition of the national network. between the modes. These inefficient handoffs between port 1.40 and rail shipments, between trucks and trains at intermodal 1.20 The 2007 yards, or between National ships Rail Freight and railroads at ports Infrastructure are not regu- and Capacity lated, measured, Study forecasts or quantified by the public that if sector. the 2035 As result, rail 1.00 the magnitude of the inefficiencies at the linkages freight volumes were to occur on today's rail between 94 98 00 02 04 80 82 84 86 88 90 92 96 modes is only partially and anecdotally understood. network, 30 percent of the major rail network 19 19 19 19 20 20 20 19 19 19 19 19 19 Even the actual volumes of freight on the network are would be operating above capacity and creating High way Truc k Combination Truc ks understood incompletely. The Freight in America report noted that severe an estimated 53 million congestion. tonsof Because ofthe goods valued at interrelated Figure 1.1.1.1. Figure Freight volume Freight growth. volume growth. nature of the nation's rail network, this congestion would affect every region of the country. Frustrated shippers would potentially shift freight to already congested highways, the study suggests. For highways, the most conservative forecast of the National Surface Transportation Revenue and Policy Study Commission (the National Commission) indicates that the nation needs to be investing at least $199