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NCFRP National cooperative Freight Research Program Report 13 Sponsored by the Research and Innovative Technology Freight Facility Location Selection: Administration A Guide for Public Officials

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TRANSPORTATION RESEARCH BOARD 2011 EXECUTIVE COMMITTEE* OFFICERS Chair: Neil J. Pedersen, Administrator, Maryland State Highway Administration, Baltimore Vice Chair: Sandra Rosenbloom, Professor of Planning, University of Arizona, Tucson Executive Director: Robert E. Skinner, Jr., Transportation Research Board MEMBERS J. Barry Barker, Executive Director, Transit Authority of River City, Louisville, KY Deborah H. Butler, Executive Vice President, Planning, and CIO, Norfolk Southern Corporation, Norfolk, VA William A.V. Clark, Professor, Department of Geography, University of California, Los Angeles Eugene A. Conti, Jr., Secretary of Transportation, North Carolina DOT, Raleigh James M. Crites, Executive Vice President of Operations, Dallas-Fort Worth International Airport, TX Paula J. Hammond, Secretary, Washington State DOT, Olympia Michael W. Hancock, Secretary, Kentucky Transportation Cabinet, Frankfort Adib K. Kanafani, Cahill Professor of Civil Engineering, University of California, Berkeley Michael P. Lewis, Director, Rhode Island DOT, Providence Susan Martinovich, Director, Nevada DOT, Carson City Michael R. Morris, Director of Transportation, North Central Texas Council of Governments, Arlington Tracy L. Rosser, Vice President, Regional General Manager, Wal-Mart Stores, Inc., Mandeville, LA Steven T. Scalzo, Chief Operating Officer, Marine Resources Group, Seattle, WA Henry G. (Gerry) Schwartz, Jr., Chairman (retired), Jacobs/Sverdrup Civil, Inc., St. Louis, MO Beverly A. Scott, General Manager and CEO, Metropolitan Atlanta Rapid Transit Authority, Atlanta, GA David Seltzer, Principal, Mercator Advisors LLC, Philadelphia, PA Lawrence A. Selzer, President and CEO, The Conservation Fund, Arlington, VA Kumares C. Sinha, Olson Distinguished Professor of Civil Engineering, Purdue University, West Lafayette, IN Thomas K. Sorel, Commissioner, Minnesota DOT, St. Paul Daniel Sperling, Professor of Civil Engineering and Environmental Science and Policy; Director, Institute of Transportation Studies; and Interim Director, Energy Efficiency Center, University of California, Davis Kirk T. Steudle, Director, Michigan DOT, Lansing Douglas W. Stotlar, President and CEO, Con-Way, Inc., Ann Arbor, MI C. Michael Walton, Ernest H. Cockrell Centennial Chair in Engineering, University of Texas, Austin ex officio members Peter H. Appel, Administrator, Research and Innovative Technology Administration, U.S.DOT J. Randolph Babbitt, Administrator, Federal Aviation Administration, U.S.DOT Rebecca M. Brewster, President and COO, American Transportation Research Institute, Smyrna, GA Anne S. Ferro, Administrator, Federal Motor Carrier Safety Administration, U.S.DOT LeRoy Gishi, Chief, Division of Transportation, Bureau of Indian Affairs, U.S.DOT John T. Gray, Senior Vice President, Policy and Economics, Association of American Railroads, Washington, DC John C. Horsley, Executive Director, American Association of State Highway and Transportation Officials, Washington, DC David T. Matsuda, Deputy Administrator, Maritime Administration, U.S.DOT Victor M. Mendez, Administrator, Federal Highway Administration, U.S.DOT William W. Millar, President, American Public Transportation Association, Washington, DC Tara O'Toole, Under Secretary for Science and Technology, U.S. Department of Homeland Security, Washington, DC Robert J. Papp (Adm., U.S. Coast Guard), Commandant, U.S. Coast Guard, U.S. Department of Homeland Security, Washington, DC Cynthia L. Quarterman, Administrator, Pipeline and Hazardous Materials Safety Administration, U.S.DOT Peter M. Rogoff, Administrator, Federal Transit Administration, U.S.DOT David L. Strickland, Administrator, National Highway Traffic Safety Administration, U.S.DOT Joseph C. Szabo, Administrator, Federal Railroad Administration, U.S.DOT Polly Trottenberg, Assistant Secretary for Transportation Policy, U.S.DOT Robert L. Van Antwerp (Lt. Gen., U.S. Army), Chief of Engineers and Commanding General, U.S. Army Corps of Engineers, Washington, DC Barry R. Wallerstein, Executive Officer, South Coast Air Quality Management District, Diamond Bar, CA *Membership as of June 2011.

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National cooperative Freight Research Program NCFRP Report 13 Freight Facility Location Selection: A Guide for Public Officials Christopher W. Steele CWS Consulting Group, LLC Newton, MA Daniel Hodge HDR Engineering, Inc. Boston, MA Halcrow, Inc. Cambridge, MA Fitzgerald & Halliday, Inc. Hartford, CT Resource Systems Group, Inc. White River Junction, VT Subscriber Categories Economics Environment Freight Transportation Marine Transportation Motor Carriers Railroads Terminals and Facilities Research sponsored by the Research and Innovative Technology Administration T r a n s p o r tat i o n R e s e a r c h B o a r d Washington, D.C. 2011 www.TRB.org

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national cooperative Freight NCFRPREPORT 13 research program America's freight transportation system makes critical contributions Project NCFRP-23 to the nation's economy, security, and quality of life. The freight ISSN 1947-5659 transportation system in the United States is a complex, decentralized, ISBN 978-0-309-21354-7 and dynamic network of private and public entities, involving all Library of Congress Control Number 2011937874 modes of transportation--trucking, rail, waterways, air, and pipelines. 2011 National Academy of Sciences. All rights reserved. In recent years, the demand for freight transportation service has been increasing fueled by growth in international trade; however, bottlenecks or congestion points in the system are exposing the COPYRIGHT Information inadequacies of current infrastructure and operations to meet the Authors herein are responsible for the authenticity of their materials and for obtaining growing demand for freight. Strategic operational and investment written permissions from publishers or persons who own the copyright to any previously decisions by governments at all levels will be necessary to maintain published or copyrighted material used herein. freight system performance, and will in turn require sound technical Cooperative Research Programs (CRP) grants permission to reproduce material in this guidance based on research. publication for classroom and not-for-profit purposes. Permission is given with the understanding that none of the material will be used to imply TRB, AASHTO, FAA, FHWA, The National Cooperative Freight Research Program (NCFRP) is FMCSA, FTA, RITA, or PHMSA endorsement of a particular product, method, or practice. a cooperative research program sponsored by the Research and It is expected that those reproducing the material in this document for educational and Innovative Technology Administration (RITA) under Grant No. not-for-profit uses will give appropriate acknowledgment of the source of any reprinted or reproduced material. For other uses of the material, request permission from CRP. DTOS59-06-G-00039 and administered by the Transportation Research Board (TRB). The program was authorized in 2005 with the passage of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU). On September 6, 2006, a contract to NOTICE begin work was executed between RITA and The National Academies. The project that is the subject of this report was a part of the National Cooperative Freight The NCFRP will carry out applied research on problems facing the Research Program, conducted by the Transportation Research Board with the approval of the Governing Board of the National Research Council. freight industry that are not being adequately addressed by existing The members of the technical panel selected to monitor this project and to review this research programs. report were chosen for their special competencies and with regard for appropriate balance. Program guidance is provided by an Oversight Committee comprised The report was reviewed by the technical panel and accepted for publication according to of a representative cross section of freight stakeholders appointed by procedures established and overseen by the Transportation Research Board and approved by the Governing Board of the National Research Council. the National Research Council of The National Academies. The NCFRP Oversight Committee meets annually to formulate the research The opinions and conclusions expressed or implied in this report are those of the researchers who performed the research and are not necessarily those of the Transportation Research program by identifying the highest priority projects and defining Board, the National Research Council, or the program sponsors. funding levels and expected products. Research problem statements The Transportation Research Board of the National Academies, the National Research recommending research needs for consideration by the Oversight Council, and the sponsors of the National Cooperative Freight Research Program do not Committee are solicited annually, but may be submitted to TRB at any endorse products or manufacturers. Trade or manufacturers' names appear herein solely time. Each selected project is assigned to a panel, appointed by TRB, because they are considered essential to the object of the report. which provides technical guidance and counsel throughout the life of the project. Heavy emphasis is placed on including members representing the intended users of the research products. The NCFRP will produce a series of research reports and other products such as guidebooks for practitioners. Primary emphasis will be placed on disseminating NCFRP results to the intended end-users of the research: freight shippers and carriers, service providers, suppliers, and public officials. Published reports of the national cooperative Freight research program are available from: Transportation Research Board Business Office 500 Fifth Street, NW Washington, DC 20001 and can be ordered through the Internet at: http://www.national-academies.org/trb/bookstore Printed in the United States of America

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The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. On the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Ralph J. Cicerone is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. Charles M. Vest is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, on its own initiative, to identify issues of medical care, research, and education. Dr. Harvey V. Fineberg is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy's purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. Charles M. Vest are chair and vice chair, respectively, of the National Research Council. The Transportation Research Board is one of six major divisions of the National Research Council. The mission of the Transporta- tion Research Board is to provide leadership in transportation innovation and progress through research and information exchange, conducted within a setting that is objective, interdisciplinary, and multimodal. The Board's varied activities annually engage about 7,000 engineers, scientists, and other transportation researchers and practitioners from the public and private sectors and academia, all of whom contribute their expertise in the public interest. The program is supported by state transportation departments, federal agencies including the component administrations of the U.S. Department of Transportation, and other organizations and individu- als interested in the development of transportation. www.TRB.org www.national-academies.org

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cooperative Research programs CRP STAFF FOR NCFRP REPORT 13 Christopher W. Jenks, Director, Cooperative Research Programs Crawford F. Jencks, Deputy Director, Cooperative Research Programs William C. Rogers, Senior Program Officer Charlotte Thomas, Senior Program Assistant Eileen P. Delaney, Director of Publications Scott E. Hitchcock, Editor NCFRP PROJECT 23 Panel Freight Research Projects A. Ray Chamberlain, Fort Collins, CO (Chair) Vann Cunningham, BNSF Railway Company, Fort Worth, TX Anne V. Goodchild, University of Washington, Seattle, WA Arthur Goodwin, Alameda Corridor Transportation Authority, Carson, CA John "Jock" Menzies, The Terminal Corporation, Baltimore, MD Jennifer L. Moczygemba, Texas DOT, Austin, TX John C. Morris, Cushman and Wakefield of Illinois, Inc., Rosemont, IL Roberta E. Weisbrod, Sustainable Ports, Brooklyn, NY Edward L. Strocko, FHWA Liaison Ann Purdue, TRB Liaison

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F ORE W OR D By William C. Rogers Staff Officer Transportation Research Board NCFRP Report 13: Freight Facility Location Selection: A Guide for Public Officials describes the key criteria that the private sector considers when making decisions on where to build new logistics facilities. The location of freight facilities can have both positive and negative economic and social effects on local communities, regions, and states. By providing insight on location decisions for freight facilities, and suggesting best practices for transportation, land use, economic development, and regional partnerships, public sector agencies can ben- efit from a fuller understanding of the dynamics of freight movement and the factors affect- ing private sector location decisions. With this insight, public sector agencies may success- fully plan for, attract, locate, and partner with freight-related activities in their jurisdictions. Public officials at the state and local levels are frequently called on to consider the siting of freight intermodal terminals, inland ports, and warehouses and distribution centers. Decisions to pursue these facilities as economic development generators--as a supporting function for current and future businesses or in response to outside proposals--have a greater potential for success when the public sector understands the private sector financial and transportation drivers. A limited understanding of these critical site-selection drivers can lead public officials to expend time and resources on flawed strategies to attract facilities and react incorrectly to facility proposals. For instance, they may not understand the differ- ences between international and domestic freight markets in the supply chain, the various functions they provide, or their respective support requirements. This can ultimately lead to inefficient transportation systems and failed economic development strategies. To for- mulate effective economic development strategies and react appropriately to proposals for the development of public or private freight facilities, public sector decision makers should have the benefit of a better understanding of these drivers and impacts. Under NCFRP Project 23, CWS Consulting Group, with the assistance of HDR Engineer- ing, Halcrow, Resource Systems Group, and Fitzgerald & Halliday, was asked to develop a guide to (1) inform public sector freight policy and decision makers about the key criteria that the private sector considers when determining where to locate new freight facilities, (2) inform the public sector about the complexity of the various facility types and the role they play in goods movement and supply chain management, and (3) enhance the potential for successful projects. A final report that provides background material used in the develop- ment of this Guide has been published as NCFRP Web-Only Document 1: Background Research Material for Freight Facility Location Selection: A Guide for Public Officials (NCFRP Report 13), available at http://www.trb.org/Main/Blurbs/165743.aspx

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Table of Contents Preface ix Chapter 1: Introduction and Background 1 What is the purpose of this guide? 1 Who should use this guide? 3 How to use this guide 4 What do we mean by freight facilities? 5 Keys to freight facility development success 10 Chapter 2: Evaluating Freight Facility Impacts and Benefits 11 Economic effects 13 Transportation effects 14 Other public sector costs 16 Chapter 3: The Critical Roles of Groundwork and Collaboration 17 Laying the groundwork 19 Public sector assistance and incentives 22 Best practices for the public sector 25 Chapter 4: How the Location Selection Process Works 29 Site selection: the big picture 30 Stages of site selection 31 Planning and strategy 32 Network modeling and analysis 34 Location screening 35 Field and site analysis 36 Cost modeling 37 Incentives, negotiations, and final selection 38 Chapter 5: How Candidate Sites Are Evaluated 39 Ability to access key markets or customers 40 Interaction with transportation networks 43 Labor and workforce 48 Total cost environment 49 Freight Facility Location Selection: A Guide for Public Officials vii

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Availability and cost of suitable facilities 50 Utilities 52 Permitting and regulation 52 Tax environment 52 Public sector assistance and incentives 53 Climate and natural hazards 53 Weighing site selection factors 53 Chapter 6: The Changing Landscape (Complicating Factors) 55 Changing role of the freight facility 55 Changes in global sourcing 56 Fuel costs and environmental factors 58 Organizational factors and comprehensiveness 60 Computer model use and sophistication 60 Transportation network congestion 61 Competition with other types of development 62 Appendix A: List of private sector interviewees 63 Appendix B: Glossary of terms 64 viii Freight Facility Location Selection: A Guide for Public Officials

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Preface This guide for public sector officials is made possible by funding from the National Cooperative Freight Research Program (NCFRP) of the Transportation Research Board. The guide is a companion to, and results from, research contained in the final report for NCFRP Project 23: "Economic and Transportation Drivers for Siting Freight Intermodal and Warehouse Distribution Facilities," published as NCFRP Web-Only Document 1 (http://www.trb.org/ Main/Blurbs/165743.aspx). The objective of this research is to develop a guide that: 1. informs public sector planners and decision makers about the key criteria that the private sector considers when siting logistics facilities, 2. informs the public sector about the complexity of the various facility types and the role they play in goods movement and supply chain management, and 3. enhances the potential for successful projects. Both the technical report and this guide were developed by a project team consisting of: CWS Consulting Group, LLC HDR Engineering, Inc. Halcrow, Inc. Resource Systems Group, Inc. Fitzgerald & Halliday, Inc. Special thanks to CWS Consulting Group, LLC, Halcrow, Inc., and Fitzgerald & Halliday, Inc. for photographs and graphics. Freight Facility Location Selection: A Guide for Public Officials ix