Freight Capacity for the 21st Century Special Report 271 (2003) / Chapter Skim
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From page 50... ...
TRENDS IN TRAFFIC, INFRASTRUCTURE, AND PERFORMANCE Historical data on freight traffic, infrastructure development, and freight transportation system performance are summarized in the sections below. The presentation is organized in seven topical areas: highway trends; railroad industry trends; problems related to congestion at freight terminals and border crossings; the long lead times and rising costs of infrastructure projects; trends in congestion in urban areas, especially on facilities shared by passengers and freight; trends in other freight modes; and underlying trends in productivity, finance, and technology.
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From page 51... ...
Roads are shared by trucks and cars, so it is impossible to separate highway freight capacity from the question of overall system capacity for serving all vehicles. Trucking is the major freight mode in terms of expenditures in the United States.
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From page 52... ...
Capital Expenditures, Capital Stock, and Traffic From the late 1940s to the 1960s, real capital expenditures for highways grew at least as fast as did highway travel; but since that time, while VMT has steadily grown, the long-run trend in real capital expenditures appears nearly flat (Figure 3-2)
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From page 53... ...
The BEA measure of capital stock, published only since 1985, exhibits more rapid growth than do the data for road miles. BEA estimates that capital expenditures have been con siderably exceeding depreciation (Figure 3-4)
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From page 54... ...
industry; the trend in the rail industry has been parallel, as shown in the next section, and another 120 Capital stock VMT 100 100 = 80 1992 60 Index: 40 20 1956 1961 1966 1971 1976 1981 1986 1991 1996 2001 Year FIGURE 3-4 Net capital stock of highways and streets; annual vehicle miles. (SOURCES: FHWA various years; Katz and Herman 1997, Table 12; Lally 2002, Table 12.)
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From page 55... ...
Data on time trends in performance of the entire highway system are sparse, and forecasting future performance has proven to be difficult. A 1987 study of urban freeway congestion estimated an annual cost of 1.2 600 Electric power consumption Electric utility net capital stock 500 100 400 = 300 1960 200 Index: 100 0 1959 1969 1979 1989 Year FIGURE 3-5 Electric power consumption and utility capital stock.
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From page 56... ...
, while total urban Interstate travel grew at 4.1 percent annually during the period. Projections Projections of total and combination truck VMT typically predict lower rates of growth in the next decades than occurred during the 1990s.
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From page 57... ...
FHWA estimates that a highway capital spending program in which projects were carried out in order of cost-effectiveness and the level of spending was just sufficient to maintain present physical condi tions of pavements and bridges would require annual capital expenditures averaging $57 billion (in 1997 dollars) over the period 19982017, a rate
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Railroad Infrastructure Downsizing and Service Disruptions Capital Expenditures and Traffic In 1999, railroads carried 37 percent of intercity freight ton-miles in the United States and rail revenues accounted for 10 percent of expenditures
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Rail freight traffic grew slowly, and the rate of real capital expenditures declined in the postWorld War II period through the 1970s. Since the end of most economic regulation of the industry in 1980, traffic growth has accelerated, and spending for road way and structures has grown more rapidly than traffic (Figure 3-9)
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From page 60... ...
Most of the downsizing occurred in the Northeast, where traffic growth has been relatively modest. According to BEA estimates, the strong rate of capital spending for new roadway and structures has not kept pace with depreciation and retirements, so the real net capital stock of all U.S.
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From page 61... ...
The capital stock and investment trends are consistent with the view that the railroad industry had substantial excess capacity in 1980 and has since been shedding uneconomic capacity while maintaining and upgrading the best-performing components of the network. By some accounts, the period of systemwide downsizing came to an end within the past few years, and the railroads now face the need for expansion if they are to serve expected demand growth (Machalaba 1998)
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From page 62... ...
The trends in railroad output, capital stock, and average revenue sug gest strong productivity growth; that is, the railroads are getting more and more service out of existing facilities. Caution is required in inter preting trends in ratios of outputs to inputs for railroads, as for any trans portation sector, because ton-miles is a very approximate measure of physical output.
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. Service Disruptions No recent event has brought greater public scrutiny of the national freight transportation system than the service disruptions that occurred following the 1996 merger of the Union Pacific (UP)
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report described the Union Pacific episode as follows: In the summer of 1997, during implementation of the Union Pacific/Southern Pacific merger, rail lines in the Houston/Gulf Coast area became severely congested, and freight shipments in some areas came to a complete halt. As the problem spread, many grain shippers experienced delays in railcar deliveries of 30 days or more, while some grain shippers in Texas did not receive railcars for up to 3 months.
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From page 65... ...
As noted previously, capacity con straints are localized in time and space, so aggregate trends cannot be definitive tests. However, most trends are consistent with a condition of tightening capacity: long-run contraction of the extent of the network, the declining net capital stock measure in spite of historically high rates of industry capital expenditures, rising profits, slowing train speed, and sporadic service failures.
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waterborne commerce (excluding inland waterway traffic but including domestic Great Lakes and coastwise tonnage) , as well as historical and projected capital expenditures by pub lic port authorities.
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port authority capital expenditures and waterborne commerce tonnage.
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Traffic volumes and truck loads on a typical road are much greater today than in earlier decades. Systematic data on trends in project delivery times and costs are not available.
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. · A review of large transportation infrastructure projects worldwide found that among 41 U.S.
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The growing importance of environmental constraints is driven by growing populations near airports. The Alameda Corridor project, which involves eliminating some surface rail lines, illustrates how pressure grows to displace freight traf fic when urban freightpassenger conflicts worsen.
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The American Public Transportation Association in 2001 supported a legislative pro posal that would allow local governments to petition the federal Surface Transportation Board to gain access to track when they failed to reach agreement with the railroad (AASHTO 2001)
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Air Freight The U.S. aviation system experiences recurring congestion in airport flight operations, airport landside connections, and the air traffic con 150 Capital expenditures, constant dollar Inland waterways ton-miles, domestic 100 = 100 1992 50 Index: 0 1965 1970 1975 1980 1985 1990 1995 2000 Year FIGURE 3-18 Inland waterways: federal government capital expenditures and ton-miles.
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From page 73... ...
To put them in context, the committee examined certain more fundamental developments. These include freight transportation industry productivity and output, which are measures of overall industry performance; public infrastructure finance, which is one of the key determinants of the performance of public-sector transporta tion activities; and technological and social developments, which are the drivers of long-run change.
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From page 74... ...
One possible interpretation of this trend is that the decline in the postwar years reflected the decline in rel ative importance of the extractive industries and heavy manufacturing, while the growth since the 1980s may reflect, at least in part, the growing importance of trade in the economy. Finance In spite of endorsements of the principle of user fee finance by succes sive administrations and congresses and by state transportation agen cies, there has been no pronounced trend in favor of user fees to finance public-sector construction and operation or in favor of reliance on the market mechanism for managing public-sector transportation facilities.
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From page 75... ...
The railroads carried more than 9 million containers and trailers in 1999, and rail intermodal loadings grew 4.4 percent annually during the 1990s. Rail intermodal is seen as an opportunity to relieve pressure on overburdened highways and reduce external costs of freight transportation.
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From page 76... ...
The cases were Virginia's 20-year plan for expanding capacity on I-81, a major truck corridor; plans of USACE to expand lock capacity on the Upper Mississippi River; the FAST Corridor port access project in Washington State; the Florida Freight Stakeholders Task Force, a body charged with advising the Florida Department of Transportation on freight issues, including capital expenditure decisions; and PrePass, a public private system to automate certain trucking regulatory enforcement func tions. The Virginia and Upper Mississippi River cases each involve efforts of a government agency to expand capacity on a mainline route that it owns and operates.
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From page 77... ...
I-81 is a major inter city highway freight artery facing capacity constraints in the future if no action is taken. At issue is whether resources will be available for increasing capacity on such routes, how environmental impacts or local community objections may affect the feasibility of expansion, and what alternatives have been recognized for responding to traffic growth.
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From page 78... ...
Traffic Forecasts The Virginia Department of Transportation (VDOT) traffic forecast used in its study of highway expansion requirements predicted that AADT would increase by 100 percent from 1997 to 2020, equivalent to a 3 percent annual growth rate.
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The estimated cost of the separate truck facility was $2.5 billion. The facility would require substantial right-of way acquisition (apparently more than the recommended widening, which involves adding only one lane in each direction)
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While these railroads did cooperate on some passenger and bulk commodity services, both the Pennsylvania and the Southern preferred to route most of the merchandise traffic on alternate routes that provided longer hauls and more revenue for them. The 1982 merger of Norfolk and Western and the Southern and the 1999 purchase of Conrail lines by NS finally created a route under single control between the Northeast and the Southeast.
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From page 81... ...
A more realistic approach from the state's point of view might be to consider whether improvements on rail lines throughout a cor ridor or region could reduce truck traffic on the main roads throughout the region. If rail improvements were successful in developing intermodal freight, then such traffic reductions would be achieved, although the effect of the rail line improvements might be to increase truck traffic in certain locations on roads leading to intermodal terminals.
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From page 82... ...
First, it might be cheaper in some circumstances from the standpoint of the government to aid the railroad than to provide the same freight capacity by expanding highways. Such cost savings might be most significant in a densely developed location where right-of-way was more readily available for rail upgrading than for highway expansion.
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From page 83... ...
Third, it is argued that rail freight transportation generates lower external costs per ton-mile (air pollution, highway congestion, and exter nal accident costs) than truck and that favoring rail over truck would tend to promote more environmentally benign high-density urban devel opment rather than low-density development.
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From page 84... ...
The growth of traffic and congestion on several important intercity truck routes today suggests that self-financing through marginal cost-based user fees on these routes might be as feasible as on congested urban roads. In any case, it would be possible to maintain a user fee scheme that featured an urban-to-rural subsidy in the aggregate but did not subsidize intercity truck travel.
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From page 85... ...
If rail is the low-cost alternative for freight traffic and the state charges truckers their true costs and does not provide economically unjustified highway capacity, then private-sector investment in rail expansion ought to be profitable. Upper Mississippi River Locks USACE recently conducted a study evaluating proposals for improve ments to locks and other navigation facilities on the Upper Mississippi River and its tributary the Illinois River, to allow faster lock traversals of barges and relieve congestion at the locks.
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on the Illinois. Capital expenditures averaged more than $100 million annually on the Upper Mississippi from the late 1980s through the mid-1990s (USACE 1997, 4-24-26)
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In the Upper Mississippi study, the only significant ben efit is the transportation cost reduction caused by the time savings from reduced congestion at locks. Second, the volume of traffic depends on the cost of using the waterway, including the cost of delays.
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The fore casts are estimated with historical data through 1992. Low-, mid-, and high-traffic-growth scenarios projected growth averaging 0.7, 1.1, and 1.5 percent annually.
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From page 89... ...
If this rule were applied in the evaluation of capital improvements on other publicly operated modes, in particular highways, it would greatly reduce the apparent benefits of many projects, since users of these modes also suffer from inefficient traffic management. ENVIRONMENTAL COSTS USACE spent the majority of the $50 million study budget on studies of the environmental impacts of the incremental changes in waterway traffic volumes that would result from lock improvements (e.g., changes in bank erosion, water turbidity, and fish mortality)
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FAST Corridor Project in Washington The FAST Corridor in Washington State is a joint activity of the Washington State Department of Transportation (WSDOT) and the Puget Sound Regional Council (PSRC)
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From page 91... ...
The FAST Corridor Project (as well as the Florida Freight Stakeholders Task Force described as the next case) can be viewed as experiments aimed at developing procedures and institutional arrangements to overcome these perceived problems in carrying out local freight projects.
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From page 92... ...
Partnership Arrangements: The Freight Mobility Roundtable Since its inception, the FAST Corridor project has been implemented through partnership agreements among several public and private orga nizations. FAST participants include Washington State, PSRC, the Port of Tacoma, the Port of Seattle, the Port of Everett, 12 cities, 2 counties, the Burlington Northern Santa Fe Railroad, and the Union Pacific Railroad.
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. To implement the program, each party agreed to a Memorandum of Understanding in 1998, which included the following provisions: · Rail congestion and growth in vehicular traffic present challenges for international trade throughout the Puget Sound region.
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51111_50_107 3/31/03 4:33 PM Page 94 wise cost) negligible= low= low= terial; 1 other= 1 1 delay× oject 0 ar ADT× high,= high,= history oute;r 5 5 delay;× 1.5= ea )
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From page 95... ...
Planning activities are in the very early stages for elements not relating to Phase I, and funding for the later stages is uncertain. Relation of the Project to Freight Capacity Freight mobility in the EverettSeattleTacoma Corridor is tied to the operational characteristics of the railroads, and rail performance today is constrained not by passenger-car conflicts but by the condition and capac ity of the rail lines (Roop and Mather 1997, Appendix B)
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From page 96... ...
Public expenditures to mitigate harmful side effects of freight traffic growth may well stimulate local res idents to ask whether it is really in their best interest to host the freight facilities, considering the negative spillovers, demands for public subsidies, and the facilities' occupancy of valuable urban property. Florida Freight Stakeholders Task Force The 1991 federal surface transportation act (ISTEA)
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From page 97... ...
The Stakeholders Task Force Process The Florida Freight Stakeholders Task Force, organized as an outcome of the 1998 Governor's Intermodal Transportation Summit, was charged with identifying and prioritizing freight-related transportation projects for fast-track funding as well as developing recommendations for the Year 2020 Florida Statewide Intermodal System Plan. Task force members represented port and airport authorities, MPOs, state and local government agencies, shippers, carriers, and third-party transportation services (CUTR 1999)
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From page 98... ...
Establish the Florida Strategic Freight Network as part of the state's Intermodal Systems Plan, 2. Adopt the Florida Freight Stakeholders Task Force process for prioritization and selection of future freight projects, 3.
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It is not possible to ascertain whether the new priorities increase the efficiency of Florida's transportation capital expenditures. As the task force recommended, $240,000 of its initial $10 million funding was allocated for continuing research on project benefit quantification and related tasks.
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From page 100... ...
Extended applications would require enhancement of technical capabilities, greater investment in hardware by industry and public agencies, and new organizational arrangements. Improved enforcement capabilities could actually allow carriers greater freedom of operation with respect to routes, dimensions, and hours restric tions, because enforcement feasibility would become a lesser consideration in the design of regulatory programs.
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Governments often appear to favor capital-intensive solutions over operational improvements. None of the cases selected indi cates government interest in reexamining the scope of public involvement in freight transportation.
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From page 102... ...
INDUSTRY INTERVIEWS The committee solicited views of shippers, carriers, and port operators, through informal interviews or requests for written comments, as an additional method of identifying freight capacity problems. The inter views were not a systematically conducted survey, so inferences must be limited.
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From page 103... ...
Port operators identified environmental regulations governing disposal of dredged material as a serious constraint on capacity expansion. The emerging trends affecting the adequacy of freight capacity that were most often mentioned mainly relate to continued change in the char acteristics of freight demand.
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General Accounting Office MARAD Maritime Administration NRC National Research Council PSRC Puget Sound Regional Council SCAG Southern California Association of Governments TRB Transportation Research Board TTI Texas Transportation Institute USACE U.S. Army Corps of Engineers VDOT Virginia Department of Transportation AAPA.
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From page 105... ...
2000. Report on the Status of the Recommendations of the Florida Freight Stakeholders Task Force.
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From page 106... ...
1996. Special Report 246: Paying Our Way: Estimating Marginal Social Costs of Freight Transportation.
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From page 107... ...
1997. 1997 Inland Waterways Review.
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