Rail Freight Solutions to Roadway Congestion--Final Report and Guidebook (2007) / Chapter Skim
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Pages 59-88
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From page 59... ...
A freight rail typology and market benchmarks are presented, and the discussion concludes with a framework for market segmentation, useful as a basis for diversion evaluation. • Section 4.5, Diversion Opportunities.
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From page 60... ...
In a large survey of freight shippers released by Morgan Stanley Equity Research, the number one reason that shippers had not shifted more truck freight to rail intermodal was slow transit, followed closely by unpredictability of service.2 • Truck lines form an important intermediate customer group for rail intermodal services, providing both the pickup and delivery operations and the retail marketing to shippers. In market research conducted for the Virginia I-81 corridor, motor carriers made the significance of transit time performance quite clear.
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From page 61... ...
The logistical implications of rail carload service can be significantly different from motor carriage, on the other hand, and are an impediment to diversion. Even so, the class of railroad service that competes most aggressively with highway transportation and is most likely to produce congestion relief is the intermodal product, which strives to emulate truck performance and offers the shipper equivalent loading characteristics.
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From page 62... ...
Visibility The movement to low-inventory, market-responsive supply chains has caused the visibility of product inside the system to become vital. The objective ideally is to be able to locate and affect any item in real time anywhere in the chain: at the factory, the warehouse, the store, or aboard the freight carrier.
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From page 63... ...
Private research by the authors for railroads, motor carriers, and public agencies from the 1980s through 2003 show the same thing. 6This is the author's long-standing experience.
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From page 64... ...
To summarize, shippers slot their carriers into logistical roles according to their categorical levels of service, and within those roles in an everyday way, carriers principally compete on cost. This renders service as a step function in the dimension of reliability, as well as in the dimension of transit time.
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From page 65... ...
To divert highway traffic sufficiently to affect congestion, rail services must climb to the step that motor carriers occupy. Small gradients in speed and reliability will not matter much, but equivalent performance is a categorical change in the railroad product proposition.
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From page 66... ...
An advantage to intermodal services with network motor carriers can be better load balance, produced by the situation of intermodal inside a larger trucking operation and by the interchangeability of equipment. 67 12In other words, the GIS network does not capture sidings.
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From page 67... ...
Capabilities of this sort can be developed, negotiated, or possibly zoned by city planners. • Proximal rail access is an attempt to establish or retain transload facilities so as to hold down drayage distances (and truck VMT)
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From page 68... ...
Although such schemes may not have the systemwide impacts associated with the Kansas City Flyover and the Alameda Corridor, its significance for the City of Chicago should not be understated. Since congestion occurs mainly in dense urban areas, intra-urban schemes such as this could be as effective as large-scale highway or railroad capacity expansion to provide for time-critical freight needs.
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From page 69... ...
Ninety-one percent of truck freight shipping falls within this limit, as Table 4-1 demonstrates, and some threequarters of it lie within 200 miles.17 Interestingly, 44 percent of all rail freight tonnage also moves within 500 miles, and 22 percent within 200 miles; however, rail transit times typically are much longer than overnight.18 In intermodal services, which are the chief alternative when direct rail access is absent, and are the most substitutable for truck transportation, just 14 percent of rail tonnage is below 500 miles and perhaps 2% is below 200.19 For service reasons, and for reasons of access and costs explored above, it is difficult for rail to address the distance segment of the freight market where most of the truck traffic lies. 70 Distance Fleet Operation Proportion by Segment: Proportion 200 Miles & Under: Proportion Over 200 Miles: Proportion Over 500 Miles: 47% 45% 53% 69% 51% 54% 44% 27% All Truck 200 Miles & Under 500 Miles & Under Over 500 Miles Distance Trailer Type Proportion by Segment: Proportion 200 Miles & Under: Proportion Over 200 Miles: Proportion Over 500 Miles: All Truck 200 Miles & Under 500 Miles & Under Over 500 Miles 74% Truckload LTL Private 91% 9% 74% 91% 9% 78% 95% 5% 71% 87% 13% 69% 70% 66% 64% Dry Van Reefer Flatbed Bulk Tank Auto Livestock 75% 92% 8% 2% 1% 4% 6% 39% 71% 29% 5% 4% 7% 9% 61% 85% 15% 10% 11% 6% 9% 85% 92% 8% 14% 14% 17% 13% 70% 92% 8% 0% 0% 0% 0% 27% 51% 49% 0% 0% 0% 0% 52% 68% 32% 55% 75% 25% 1% 1% 2% 4% Table 4-1.
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From page 70... ...
Private fleet business typically is difficult for railroads to attract, yet the Canadian Pacific has had success through its Expressway service; alternately, the outsourcing of private 71 20 From IANA's "Intermodal Market Trends & Statistics," fourth quarter publications for the corresponding years. 21 Based on a Reebie Associates analysis conducted for AASHTO, using 1998 FHWA Freight Analysis Framework tonnage data, further adjusted for the international portion of intermodal dray.
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From page 71... ...
Another, more subtle aspect of compatibility is concerned with the integration of rail with highway operations. Because intermodal services are dependent on trucks, they should be understood as a variant form of motor carriage, as much as they are a variant of rail, and they need to be effective as such.
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From page 72... ...
A primary analysis starts from division of rail operations into the three classes used elsewhere in this report: unit train, carload, and intermodal services. Figure 4-6 lays out these classes and shows how they differ in the dimensions of markets and economics.
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From page 73... ...
New Baseload BENEFIT UNIT TRAIN CARLOAD INTERMODAL Public Benefits Bridges & pavements No (heavy axle loads) Congestion & capacity Avoided traffic No (but rail is door-to-door)
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From page 74... ...
The manifest trains that bear carload traffic are regularly the slowest, and intermodal trains the fastest class of service, with unit trains lying in between. Railroads publish such statistics, but one citation showing this pattern is trafficWORLD, 3/8/04, page 30, where there is a table of comparative speeds on the Union Pacific.
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From page 75... ...
generates the strongest gains. This share pattern is a direct result of service economies: railroad service performance and unit costs both improve as the linehaul component overtakes pickup and 76 MODAL MARKET SHARE BY LANE DENSITY & DISTANCE RAIL INTERMODAL (IMX)
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From page 76... ...
RAIL OPERATION ACCESS CONDITIONS ECONOMIC GEOGRAPHY ■ Intermodal ■ Unit Train ■ Carload ■ Drayage • Rail Direct • 1-End, 2-End Dray ■ Transload • Unitized Lift, Ramp • Bulk Transfer • Break-bulk ■ Distance ■ Lane Density ■ Equipment Type ■ Competitive Modal Share Table 4-4. Dimensions for market segmentation.
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From page 77... ...
Truck concentration at hubs and terminals can be created by other modes (such as ship lines or the motor carriers themselves) , by facilities (like an inland port)
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From page 78... ...
The general opportunity for railcar and intermodal services to capture highway business is discussed next, along with treatment of the special circumstances for short-haul rail. 4.5.1 Railcar In the 10 years from 1990 to 2000, railroad coal tonnage grew at a compound rate exceeding 2 percent, intermodal tonnage rose at a rate close to 5 percent, intercity trucking expanded at a pace of almost 7 percent, and growth in the rest of the rail business was under 1 percent annually.37 Clearly, the carload traffic38 was losing market share; this is the customary business of the Class I railroad industry, and it has been in long-term decline.
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From page 79... ...
One such carrier is the Iowa Interstate Railroad, owned by the Railroad Development Corporation. The 687-mile regional line carries 6.1 million tons per year45 or approximately 75,000 carloads.
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From page 80... ...
Public investment to moderate the capital intensity of railroading can lift the limits on possible opportunity and modify the markets to which rail services are introduced. The bottom line for traffic diversion lies in the twofold nature of this core question: can the product be good enough, and can enough of it come to market?
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From page 81... ...
Railcar business includes unit trains of stone and cement; in one operation, two to three million tons of rock are brought 200 miles from south Florida to Cocoa, then transloaded and drayed 50 miles to construction sites around Orlando. Traffic of this kind is attractive to the FEC for at least two reasons.
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From page 82... ...
Class I Railroad officials discussed short-haul operations in Intermodal at the Transportation Research Board meeting in Washington, DC, in January of 2003.57 Only two of the active examples cited actually were under 500 miles, but the success factors identified were notable: routes were single-line and not circuitous, drayage requirements were significantly curtailed, traffic was concentrated, volume was balanced by the lane or network, terminals were efficient and well situated, and trains were fast, reliable, and sufficiently frequent. One highlighted service was the CP Rail Expressway, which is believed to carry 2 to 3 percent of the truck volume on the continuous corridor from Montreal to Toronto (330 miles)
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From page 83... ...
Case Study 2: Northwest Container Services58 The core operation of Northwest Container Services is a daily stack train supplied to the international trade, between the Portland, OR, market and the seaports at Seattle and Tacoma, WA. Containers drayed through a Portland terminal are railed 170 miles to Seattle piers.
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From page 84... ...
For low-valued bulk commodities that divert to rail, the net effect of time and expense will be lower total logistics costs and, in some instances, a railconnected distribution center may be replacing a local processing site. For rail intermodal, in lanes where it offers genuine truck-equivalence, transit time will match the highway and overall service performance will be competitive.
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From page 85... ...
Rail operations, by design, occur in a loosely supervised environment where ensuring cargo accountability is more difficult; in instances where direct rail service is not available, transloading will be required, which is inherently less secure than a single truck movement. However, trucks are more mobile, and it is far easier to disrupt truck operations than train operations.
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From page 86... ...
The local considerations this points up are manifold. Heavy truck traffic through residential neighborhoods, on narrow streets, and near schools and other public gathering places tends to get more attention than that traveling on the interstate highway system.
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From page 87... ...
• Economic Value of Flow: Different commodities correspond to distinct industries and supply chains, with characteristic job densities, job features, and economic relationships. These variables in turn determine to what extent transportation infrastructure investments produce local development (or indeed, how diversion to slower modes or how lack of suitable capacity will retard local economic progress)
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From page 88... ...
For more ambitious schemes, a more general local economic assessment is required, to ascertain whether the target flows will remain for the foreseeable future. 4.7 Summation This chapter has considered how shipper needs and structural factors delimit the expansion of rail freight, how market analysis techniques can point toward promising segments where diversion challenges might be overcome, and where real opportunities are more and less likely to lie.
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