Freight Data Cost Elements (2013)

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27 The freight industry is dynamic in its use of equipment, its relationships with other freight transportation providers and customers, and its operating philosophies. The industry experiences major shifts in response to external and internal factors, such as economic conditions, government regulations, and changes in supply chains, locations, and production. The freight industry also must respond rapidly to unanticipated events, which requires a dynamism that can be challenging for public-sector agencies. As the nature of each new change becomes known, public-sector goals and functions must adjust accordingly. This chapter identifies evolving public-sector freight transportation planning and decision-making func- tions, and the cost data that might be used to support those functions as they evolve. This chapter is divided into two sections. Section 4.1 iden- tifies possible future scenarios that may affect current freight transportation functions or require the creation of new public- sector freight transportation functions. Section 4.2 identifies the cost data needed to support those changed or new public- sector freight transportation functions. 4.1 Potential Policy Scenarios 4.1.1 Methodology A four-step methodology was used to identify evolving public-sector freight transportation planning functions: Step 1: A broad search was conducted of documents that examine emerging trends or programs that affect freight trans- portation, with an emphasis on anticipated changes involving goods movement. The literature review included an exhaus- tive search of U.S.DOT publications and a thorough search of documents produced by TRB and the National Coopera- tive Research Programs. The team also utilized web searches to identify journals, periodicals, and news articles relevant to the project. The bibliographies of these documents were also reviewed to identify additional sources. Section 4.1.2 summa- rizes the sources used and provides a brief synopsis of the rel- evance of each source. Step 2: The research team scanned each document, search- ing for emerging trends and changes to the industry. A second, more analytical reading was then completed to ensure that no overriding themes or implicit trends were missed. Step 3: With several specific scenarios identified from each article, a composite list was compiled and the major implica- tions were identified. Scenarios from individual sources were compared to scenarios described by other sources, and those mentioned repeatedly were selected to represent the topics most discussed by freight transportation experts and industry leaders. These topics include: • Increased standards (federal and/or state) • Technological innovations • Increased renewable energy use • Increased congestion pricing • Increased intermodal development • Freight industry consolidation • Accelerated shipping times • Increased/enhanced security measures • Multi-stakeholder decisionmaking Step 4: The selected scenarios were examined to see how they might affect public-sector freight-related functions and to determine the freight cost information potentially required. The list of functions provided in Section 3.1.4 was used. These functions cover all levels of the public sector. If a scenario had an effect on the activities required by a function, then the scenario was linked to that function. Examples of effects include adding activities, ending activities, and changing information requirements. 4.1.2 Literature Review This section provides an overview of the key publications selected for their descriptions of evolving trends in freight transportation. NCFRP Report 5: North American Marine Highways provides extensive detail about the development C H A P T E R 4 Public-Sector Future Cost Data Needs

28 of a marine highway system in the United States (Kruse and Hutson 2010). The report covers topics ranging from capi- tal costs to standardization of vessel size, and notes several steps that legislative, public-sector, and private-sector stake- holders could take to make a marine highway system easier to operate and more beneficial to the U.S. freight industry. The development of this system is also a large part of several multimodal freight transportation models. Transportation’s Role in Reducing US Greenhouse Gas Emis- sions presents current data on the levels of greenhouse gas emissions in the United States and projects future growth of emissions if no changes are made to U.S. policies (U.S.DOT 2010). The report suggests several courses of action to reduce emissions throughout the transportation industry, including within the freight transit sector. Congestion pricing, higher fuel taxes, carbon cap-and-trade programs, and investment in clean energy generation are all recommended to reduce greenhouse gas emissions. Potential technological solutions are presented in the ITS Strategic Research Plan, 2010–2014, as well as a step-by-step plan regarding implementation of any and all new technol- ogies related to the transportation sector (U.S.DOT 2009). The report provides broad overviews of initiatives that will affect commercial and private transportation in the com- ing years, the expected start dates of these technologies (if ready), and the research and testing schedules for still- developing technologies. The report can be regarded as a blueprint for public-sector technological changes for the freight transportation sector. Estimated Cost of Freight Involved in Highway Bottlenecks attempts to value the freight industry’s time and money lost to bottlenecks on U.S. highways (Cambridge Systematics 2008). The report’s findings serve as support for the potential use of congestion pricing throughout the United States. The Status of the Nation’s Highways, Bridges, and Transit provides a comprehensive look at the current (2008) state of transportation in the United States (U.S.DOT 2008). This report provides the level of use, rate of deterioration, and future needs of the nation’s transportation infrastructure. Several of the report’s key points relate to how different lev- els of funding can correct or combat different transportation issues effectively. Potential short- and long-term solutions are presented regarding congestion, deterioration, new methods of transportation, and funding opportunities. The Supply Chain Security report prepared for the U.S. Government Accountability Office (GAO) discusses the cur- rent ability of DHS to effectively scan all containers entering the United States (Caldwell 2010). It also presents a cost- benefit analysis framework for creating a better system to scan more containers in a more time- and cost-efficient manner. This technology supports additional security measures that the U.S. government may enforce/implement, and would reduce freight transportation transit times and facilitate faster freight disbursement to inland markets. Freight Transportation: National Policy and Strategies Can Improve Freight Mobility offers a series of recommendations to the federal government on strategies that could increase the effectiveness of freight transportation polices throughout the United States (U.S. GAO 2008). A focus on intergovern- mental cooperation is stressed, and GAO highly recommends engaging all stakeholders, including industry representatives, in the decision-making process. GAO tackles the immense issue of financing and planning for freight transportation upgrades in Freight Transportation: Strategies Needed (U.S. GAO 2003). Key issues discussed are increased regulations and security measures that make freight transportation more expensive, and the lack of creative ways for local, regional, and state transportation departments to secure federal money for projects. Also noted is a lack of freight industry involvement in the planning process around transportation changes because there is an assumption that the changes will address solely passenger, not freight trans- portation issues. EPA’s SmartWay program, started in 2004, promotes envi- ronmentally friendly products and services in the transpor- tation industry (EPA 2010). SmartWay Transport is a joint initiative of EPA and the freight sector to improve the fuel efficiency and performance metrics of the shipping indus- try. Participating companies are listed on the EPA website. The initiative includes the DrayFLEET emissions and activ- ity model, which depicts drayage activity in terms of vehicle- miles traveled (VMT), emissions, cost, and throughput, and reliably reflects the impact of changing management prac- tices, terminal operations, and cargo volume. EPA’s program is another example of increased cooperation between indus- try and governments, and it is a change agent in the drive for increased fuel economy and emissions standards. A report prepared by Informa Economics, Inc., on behalf of the Soy Transportation Coalition in 2009 discusses the potential positive and negative economic outcomes of allow- ing higher weight limits on the U.S. Highway System (Informa Economics 2009). Results from the study indicate that the potential efficiency gains and resulting savings may outweigh costs and risks, though the increase will likely necessitate ren- ovation or rebuilding of some bridges and support structures. TRB published Special Report 267: Regulation of Weights, Lengths, and Widths of Commercial Motor Vehicles in 2002 (National Research Council 2002). The report analyzes the costs and benefits associated with changing the specific reg- ulations governing commercial trucks. The report findings state that significant efficiencies can be realized in commer- cial transportation, but only if changes are enacted in a man- ner that is coordinated with safety regulations and the general network management of U.S. highways. The report supports

29 either increased or changed standards governing freight trans- portation, as well as the idea that these standards need to be developed with a multi-stakeholder frame of reference. The Texas Transportation Institute (TTI) report on modal comparisons of domestic freight transportation presents facts and figures supporting the development and revitaliza- tion of U.S. inland waterway systems (Kruse 2007). Central to this argument are the potential emission and congestion reductions that could be realized with an increase in water- way and a decrease in truck transportation of goods. The article, “Wave of Consolidation Continues through Industry,” describes the stress that has been placed on smaller, niche market trucking companies (Bearth 2004). As large national and international shipping companies continue to encroach on all markets, the less-than-truckload sector is expected to contract. In a conference in 2006, FedEx pointed out that freight consolidation could save 15% in transpor- tation costs, and “there is a growing trend toward retailer- controlled freight and leveraging freight consolidation both domestically and internationally to drive down per unit transportation costs” (FedEx 2010). While these articles were written several years ago, the trends discussed are still rel- evant to forecasting potential future scenarios. Goodwill lists what he and his associates consider the trends that will affect freight transportation in “Some Trends that Will Drive Freight Transportation in 2011” (Dan Goodwill & Associates 2010). Of particular note are (1) the expectations of retailers and other businesses to continue to reduce their promoted delivery times; (2) the increased likelihood of free trade agreements being forged; and (3) the increased devel- opment and use of intermodal shipping centers. It is impor- tant to note that this decrease in delivery time, combined with the overall continued increase in demand for shipped goods, is likely to continue to stress the already over-taxed freight truck drivers. A shortage of drivers could potentially slow freight movements from region to region, with the potential result of (at least temporary) higher wages for drivers until the demand can be met. The report and presentation by Leonard describes the Gateway Cities Fleet Modernization Program that was in place from 2002 to 2008 in California (Leonard 2009). Funded by several state-level agencies and the ports of Los Angeles and Long Beach, the program provided grant money for trucking companies to upgrade their fleets with newer power units. More fuel-efficient trucks were purchased, and carriers com- mitted to their upkeep and the promotion of the program for 5 years following their grant award. This program represents a strategy that local, state, and potentially federal organiza- tions can employ in response to increased fuel economy and emissions standards. It also serves as a blueprint for increased participation through all levels of government and the pri- vate sector. “Breathing Easier, Nationally” provides an independent cri- tique of the Gateway Cities Program in California and a greater contextual understanding of the ways the program succeeded and where it could have gone further (Mongelluzzo 2011a). Mongelluzzo’s article about the Port of Oakland receiving a grant from the Bay Area Air Quality Management District reflects an industry trend toward reducing the environmental effects of ports (Mongelluzzo 2011b). The grant is to help fund installation of a port-side electric grid for freight vessels to connect to. Vessels can turn off their diesel engines once connected, thus reducing pollution and emissions at the port. This project complements California’s Air Resources Board regulations, which state that, by 2014, 50% of a fleet’s vessels must operate on shore-side electric power. NCHRP and AASHTO are working together to provide a series of papers that will address the major issues facing the transportation industry in the United States (NCHRP 2009). A series of seven reports are being crafted, each analyzing a different aspect of transportation (TRB 2010). 4.1.3 Scenarios Identified from the Literature Review Table 4.1 summarizes the future freight scenarios that emerged from the literature review. A check mark indicates that a particular scenario was identified from the correspond- ing source document listed to the left. All of the scenarios identified in Table 4.1 will be realized only if certain actions occur. Table 4.2 provides context to the scenarios by detailing the macro-level catalysts with the poten- tial to initiate each scenario. These are events or activities with the potential to change the freight industry, as indicated by the scenario to which they are correlated. For example, a U.S. mili- tary conflict (e.g., in the Middle East) could cause the United States to adopt higher fuel economy and emissions standards. Having considered the potential forces driving the future scenarios, the remainder of this section considers their poten- tial policy or business impacts. The discussion also details the effect each scenario could have on public agency functions and decisionmaking. 4.1.3.1 Changes to Fuel Economy and Emissions Standards Fuel economy and emissions standards have been a popu- lar topic of debate for several years. In general, arguments in support of increased fuel economy and emissions standards for transportation vehicles value the potential benefits to the environment and efforts to become more energy indepen- dent. NHTSA and EPA are issuing a joint proposal to estab- lish a new nationwide program for passenger cars and light trucks to improve fuel economy and reduce greenhouse gas

30 Table 4.1. Emerging/future freight scenarios. Research Sources sdradnat S leu F desaercnI snoitavonnI lacigolonhce T es U ygren E elba wene R desaercnI gnicirP noitsegno C desaercnI s metsy S lado mretnI fo es U desaercnI noitadilosno C yrtsudnI thgierF se mi T gnippihS ni snoitcude R ytiruce S decnahn E & desaercnI gnika M-noisice D redlohekat S-itlu M NCFRP Report 5: Marine Highways US DOT: Reduce GHGs US DOT: ITS Research Plan US DOT: Highway Bottlenecks US DOT: Status of Highways US GAO: Supply Chain Security US GAO: Freight Mobility US GAO: Financing Limits US EPA: SmartWay Brand Tx Trans: Modal Comparison Bearth, Dan: Industry Consolidation Dan Goodwill & Assoc.: 2011 Trends TIAX: Lessons from Gateway Program Mongelluzzo: Breathe Easier Mongelluzzo: Port of Oakland Table 4.2. Macro-level catalysts. In cr ea se d S ta nd ar ds T ec hn ol og ic al I nn ov at io ns In du st ry C on so lid at io n In cr ea se d R en ew ab le E ne rg y U se R ed uc ed S hi pp in g T im es C on ge st io n Pr ic in g U ti li ze d In te rm od al T ra ns po rt at io n Sy st em D ev el op ed E nh an ce d S ec ur it y M ea su re s M ul ti -s ta ke ho ld er D ec is io n M ak in g egnahC etamilC ytilibaliavA/secirP liO elitaloV erutcurtsarfnI noitatropsnarT fo noitaroireteD kcattA tsirorreT ro tcilfnoC yratiliM SU sisirC gnidnuF cilbuP & ytniatrecnU cimonocE serutcurtS larutluC ro lacitiloP SU ni stfihS shguorhtkaerB cifitneicS latnemnorivnE lanoitanretnI ni noitapicitraP SU tnemeergA soiranecS yrtsudnI & yciloP M ac ro -L ev el C at al ys ts

31 emissions over Model Year 2012–2016, the first-ever joint proposal by NHTSA and any other agency (NHTSA 2010). If national policy significantly increases the minimum fuel economy and emissions standards in the United States, pub- lic agencies will be responsible for the policy’s implementa- tion and enforcement, and for analyzing its effectiveness. All functions are critical, but implementation and enforcement will involve adjusting a fuel standard, not creating one for the first time. The analysis of the effectiveness of this policy would most affect data needs. For example, the environmen- tal planning function would require data on the effects of these increased standards, and regulatory functions could also require new cost data related to changes in enforcement procedures or non-compliance penalties. Another topic of debate within the industry is changes in regulations regarding weight and dimensions limits for trucks transporting freight across the United States. Several reports suggest that the economic benefits for increasing the allowable tonnage on U.S. roadways outweigh the potential safety and security risks, while other reports raise safety concerns with respect to the structural capacity of bridges. Organizations such as ASCE and AASHTO have conducted studies of U.S. infrastructure conditions. However, more up-to-date data and analysis might be needed by public-sector decisionmakers considering whether or not to increase the allowable weights. 4.1.3.2 Technological Innovations The development of new or transformative technology is an ongoing future scenario, and one with the potential to drastically change how decisionmakers gather and analyze information. It is impossible to predict the new technologies that will emerge and significantly affect freight transporta- tion. However, examples from the recent past illustrate how influential new technology can be. FHWA established a part- nership with the American Transportation Research Institute (ATRI) to determine whether, and how, information from communications technologies could provide data to support freight performance measures (DeWitt 2005). The joint team has conducted research on the use of global positioning sys- tem (GPS) data to generate truck travel time/speed/reliability measures for North America. A 2010 report on supply chain security provides another example, reviewing a more effective and efficient technologi- cal process to scan shipment containers before they enter U.S. ports (Caldwell 2010). The program has been successful in integrating outputs from the various types of scanning equipment used to scan cargo containers at foreign ports participating in the Secure Freight Initiative (SFI) program. CBP [Customs and Border Patrol] and DOE were able to integrate the outputs from RPM and NII equipment with the Automated Targeting System (ATS) so a CBP officer can review all the data and information associated with a container on a single screen. These officers could observe the scanning equipment outputs in combination with information from ATS to make determinations as to whether to request that the cargo container being scanned be more closely examined by host government personnel (Caldwell 2010). The new scanning technology was able to provide faster, more accurate data, which allowed employees to process freight shipments more efficiently. 4.1.3.3 Increased Renewable Energy Usage Considerable attention has been given to increasing the use of renewable energy products in the United States. Solar power, wind-generated power, and—to a lesser extent—hydro- electric and nuclear energy production have been cornerstones of political and business platforms for several years. Invest- ment in these renewable power sources continues to grow, and the technology for utilizing these different power sources is becoming more affordable and widely available. For these rea- sons, it is plausible to foresee a future in which a major policy initiative is passed or enacted that stipulates widespread invest- ment in or usage of these energy-generation tactics. Documen- tation of ongoing research has led to several governmental and educational reports calling for such policy action. A U.S.DOT Center for Climate Change and Environmen- tal Forecasting publication, Transportation’s Role in Reducing U.S. Greenhouse Gas Emissions, states that environmental gains from renewable energy usage could be significant, pro- vided that the research is validated and costs come down. The paper states that: if technical successes in fuel cell development and low-carbon hydrogen production, distribution, and onboard storage can be achieved, hydrogen fuel cell vehicles could reduce per vehicle GHG [greenhouse gas] emissions by 80% or more. Aggressive deploy- ment could reduce total transportation emissions by 18 to 22 per- cent in 2050 (U.S.DOT 2010). For public agency decisionmakers, one major concern is exactly where to invest time and money for renewable energy development and adaptation. The revenue source that would be lost if less diesel and gasoline are used is likely to be another concern now and in the future. In short, as technologies and methodologies advance, decisionmakers will need cost data to understand how to adapt existing infrastructure (i.e., fueling stations) to renewable fuel sources, and more generally, how to support the nation’s ability to shift to these new energies. 4.1.3.4 Congestion Pricing The widespread use of congestion pricing is a scenario that may develop in response to increasing delays on highways and

32 railways and at shipping ports. This strategy is also a potential revenue generator for local and state governments, with col- lections potentially funneled back (depending on state and federal laws) into infrastructure improvements. U.S.DOT recognizes the potential of congestion pricing and has referenced it in several reports. For example, a 2010 report includes this statement: “Widespread congestion pric- ing, in which higher prices are charged for traveling in periods of high demand, would not only reduce VMT but also result in more efficient traffic operations” (U.S.DOT 2010). Another report states the following: “The trend toward tolling as an innovative finance technique has continued. Not only is there renewed emphasis on existing programs, such as the Conges- tion Pricing Pilot Program, but SAFETEA-LU also established several new innovative programs” (U.S.DOT 2008). If utilized, congestion pricing would have local public policy and planning effects. From a city or regional plan- ning perspective, congestion pricing could alter methods of forecasting and planning for infrastructure maintenance. For example, data like price elasticity might be required to better estimate the effects of price changes on traffic levels. On a state and national level, congestion pricing for one mode of transportation might affect utilization rates for other modes of transportation. This, in turn, could affect operational performance, delivery times, and freight mobil- ity. Public agency decisionmakers would require a variety of cost data, on such topics as the value of time saved in delivery versus the cost of changing delivery patterns, or the anticipated costs (in time and money) that congestion pric- ing might incur on other modes of transportation, as well as additional operational costs (i.e., additional labor hours or new technological costs) that might be incurred. 4.1.3.5 Increased Use of Intermodal Systems The integration of different modes of freight transportation is an attractive potential solution to the projected future con- gestion problems. In 2010, NCFRP Report 5: North American Marine Highways drew attention to the development of marine coastal highways that could connect the heavily populated coastal regions in the United States (Kruse and Hutson 2010). Goods from one area could be loaded and shipped to another, then offloaded and moved inland via truck or rail. The report states, “These marine highways could theoretically provide a low-cost and energy-efficient alternative for moving cargo, and would greatly expand the total transportation capacity of the United States” (Kruse and Hutson 2010). With increased use of intermodal systems, more research on highway bottle- necks at entrances to and exits from intermodal facilities may become necessary to understand and address the problem. Any policy developed to enhance the use of intermodal sys- tems for freight transportation will affect several freight trans- portation functions. For example, as planners work to ensure freight mobility throughout the United States, they will need to know potential delays or complications that could occur as freight is transferred from one mode to another, as well as highway bottlenecks at entrances to and exits from inter- modal facilities. A comparison of congestion delays utilizing only one mode would then be weighed against transfer delays. Another function affected would be environmental planning, given that the development of stations and facilities to trans- fer goods may require changes to certain natural features like river channels and low-lying land. 4.1.3.6 Industry Consolidation It seems counterintuitive to consider freight transporta- tion experiencing an industry-wide consolidation, especially given the forecasted doubling of freight volume in the coming years. However, industry consolidation does not necessarily mean a reduction in capacity. The article by Bearth expands on this idea, stating that “[m]any carriers are in a [financial] position . . . which would enable them to take over weaker rivals and provide customers with additional freight-hauling capacity or services” (Bearth 2004). Although this statement was written in 2004, before the worldwide financial crisis, the U.S. economy has since returned to a growth stage, mak- ing this forecasted development relevant once again. Larger companies can potentially leverage their existing market power to acquire smaller, more regional freight transporta- tion companies, resulting in fewer companies controlling a larger percentage of freight transportation throughout the United States. These industry changes may not affect functions such as congestion management or roadway maintenance, but they could very well affect an agency decisionmaker’s relationship with industry leaders, and his or her ability to form collabora- tive partnerships for city, regional, or larger area planning. It may also affect security planning because, as more freight flows through a smaller number of now-more-powerful companies, policies aimed at enhancing hiring standards or container searches could be thwarted by more influential lobbying efforts from these companies. 4.1.3.7 Accelerated Shipping Times as a Marketing Tool As with industry consolidation, improved shipping times is another potential business and industry scenario that could impact the functions of freight transportation plan- ning. Industry-wide competitive pricing, and faster and better technological services available to companies have fueled this trend in recent years. The article by Dan Goodwill & Associ-

33 ates links the trend to Internet sales. “Amazon.com launched Amazon Prime, its free shipping service which guarantees delivery of products within 2 days for an annual fee of $79. Wal-Mart Stores, Best Buy®, Target, and J.C. Penney® unveiled their free shipping programs for the holidays. A consortium of 20 retailers, including Barnes & Noble, Sports Authority and Toys “R” Us banded together to offer their own ‘copycat’ $79 2-day shipping programs” (Dan Goodwill & Associates 2010). As mentioned previously, these large companies may utilize programs such as those described in Goodwill’s article as the catalyst for their own shipping divisions. NCHRP Report 505: Review of Truck Characteristics as Factors in Roadway Design identified growth in heavy truck traffic, largely due to economic factors such as just-in-time deliveries (Harwood 2003). The increased use of heavy trucks and the effort to increase truck dimensions will inevitably impose pressure on transporta- tion infrastructure. Public agency decisionmakers may focus on business strategies such as Amazon’s Prime program, for example, because such strategies could place more stress on freight transportation infrastructure. 4.1.3.8 Enhanced Security Security issues involving the transportation of goods will always be a top priority for public agency decisionmakers. With more frequent and more sophisticated threats comes a desire for increased security across all modes of freight trans- portation. As described in the report, ITS Strategic Research Plan 2010–2014, significant effort will be placed on developing newer, faster, and more comprehensive technologies to keep freight transportation safe (U.S.DOT 2009). One example is a research program aimed at border crossing security: This system enables uniform and consistent application of pol- icies and procedures related to safety and compliance assurance of cross-border commercial traffic. The data will be augmented to include verification of more than 20 additional screening fac- tors and enable identification and full safety/compliance verifica- tion of carriers, trucks, trailers, and drivers electronically within 3 seconds or less of a truck’s presentation at the processing point” (U.S.DOT 2009). When developed, such a system will more accurately scan incoming freight vehicles at U.S. borders in a faster, more effi- cient manner, increasing security while maintaining freight mobility. Public agency decisionmakers implementing security poli- cies will affect almost all freight transportation functions because safety/security is a component of all goods trans- portation. Depending on how a new security policy is imple- mented, functions such as congestion management, terminal/ border access, and hazardous materials planning could all be required to adapt. 4.1.3.9 Multi-Stakeholder Decisionmaking Multi-stakeholder decisionmaking is not a policy that can be passed or enacted. Rather, this approach to planning attempts to recognize and place importance on the idea of cooperation and consensus building, between government agencies and between government and industry leaders. This topic was mentioned in some form in most of the research considered by the research team. For example, a GAO report states the following: Although stake-holders have taken steps to enhance freight mobility, public planners . . . face challenges when attempting to advance freight improvements. These challenges include compe- tition for public funds from non-freight projects . . . [and] lack of coordination among various government entities and private- sector stakeholders. These challenges are exacerbated by the absence of a clear federal strategy for enhancing freight mobility (U.S. GAO 2008). An earlier GAO report also found that industry involve- ment in planning processes provides for a much more com- plete policy that can satisfy both public and private desires, stating, “[a]ctive participation by the private sector in part- nership with the public sector often helps to ensure a suc- cessful outcome. The private sector often can bring a more global view of freight needs to the planning process, can help identify and implement projects, and can provide new data for making more informed decisions” (U.S. GAO 2003). FHWA also conducted a number of studies on stakeholder facilitation and engagement. A guidebook provided by the agency identified freight stakeholder groups at the federal, state, and regional levels, and outlined potential public- and private-sector challenges and issues related to these groups (FHWA 2009a). These reports and studies appear to support multi- stakeholder participation across all functions of freight transportation policy. Each function could potentially be changed or influenced by other levels of government, or by private-sector industry. There is potential for such a process to provide better data for analysis, leading to better policies. 4.2 Looking Ahead: Cost Data for Assessing Future Freight Scenarios The research team defined and presented several freight transportation public-sector functions and the cost data cur- rently employed to perform them. A series of potential policy scenarios were identified as likely to significantly influence the activities of public agency functions and decisionmakers. The final step of this process was to link these potential policy scenarios with the likely cost data information requirements,

34 to provide insight into how cost data needs may change as freight transportation policy evolves. 4.2.1 Linking Scenarios and Cost Data Table 4.3 summarizes the general findings on future sce- narios, and the cost data needs anticipated to assess them. The first column provides the scenario; the second column identifies the level of government each scenario is likely to influence; and the third column identifies specific public- sector functions that are likely to be altered by each sce- nario. For example, increased fuel economy and emissions standards are likely to affect public decisions at all levels of government, and are most likely to influence decisions sur- rounding environmental, regulatory, and information plan- ning. The far right column provides the general cost data needs likely to be needed when considering each scenario. 4.2.2 Analysis of Current Cost Data Importance Freight cost data are often very difficult to obtain. Accord- ingly, it is useful to prioritize cost data needs to identify which will be most crucial to the analyses that must be undertaken. In Section 4.2.2, the needs associated with future freight sce- narios analyses are compared to the cost data needed for cur- rent freight-related analyses. Knowing that certain cost data may become more essential will enable public agencies to reconsider information collec- tion priorities. With this in mind, the research team decided to keep cost data currently deemed crucial at the same level of importance. Cost data categorized as very important and important were then analyzed for their potential to increase in importance. In Table 4.4, cost data that was assessed as likely to increase in importance is identified with horizontal lines in the background of the cell. For example, route average costs for congestion management are currently considered to be very important. In the analysis of future scenarios, the research team moved its level of importance to crucial. Newly identified or upgraded costs also were noted. For example, in Table 4.4 a dot is changed under the category vehi- cle fixed costs for the freight mobility planning function. In the table, cells with horizontal lines in the background denote upgraded data costs. Section 4.2.3 provides a summary of each changed or added cost element. 4.2.3 Descriptions of Potential Cost Data Changes by Function Section 4.2.3 provides a detailed description for each change in the freight transportation cost data needs presented in Table 4.4. Major changes in data needs were identified in nine public- sector functions related to freight transportation. The follow- ing subsections describe the changes in freight transportation cost data needs for the specific public-sector functions. 4.2.3.1 Congestion Management • Company Cost: Several future scenarios (i.e., an increase in traffic due to a decrease in average delivery time, or the need to create additional funds to maintain infrastructure) could lead to the introduction of a congestion management pricing program. These programs could alter a freight trans- portation company’s costs to the point that relocating the company’s headquarters away from a route with a pricing program could be an effective cost reduction strategy. In Table 4.4, this potential movement is represented by the dots in the company fixed and company average cost categories. • Route Cost: The research team increased the level of impor- tance of route average costs within the congestion manage- ment function from important to crucial because congestion management pricing programs could alter important cost considerations, such as the number of days of operation per week and the hours that drivers operate. Congestion management will also affect the route variable cost cate- gory, given that it captures such costs as tour time and tolls. However, because this cost category was already deemed crucial, no change was made to the table. 4.2.3.2 Safety Planning and Analysis • Vehicle Cost: The decision to upgrade the vehicle fixed cost category from important to very important is based on the potential mandatory increase in safety training that may be required of freight transportation companies due to increased security measures. These training classes and materials were previously captured within this category as an individual line item. • Route Cost: Another potential result of an increased safety mandate could be a reduction in the allowable speed for freight transportation vehicles. This potential reduction could increase freight transport times. This, in turn, would increase the cost associated with each freight delivery, and these increased costs are reflected in the route variable cost category changing from important to very important. 4.2.3.3 Freight Mobility Planning • Vehicle Cost: Additional training and education costs for drivers and crews are noted, along with the potential for an increase in specialized equipment costs. The training and education costs are based on the fact that freight mobility planning is projected to be influenced by the development

35 Scenario Level of Government Affected sdeeN ataD-tsoC dezilareneGdetceffA snoitcnuF ecnailpmoc-non rof ytlanep/eef fo eulaV * gninnalP latnemnorivnE * laredeF * stsoc evitaler dna edom yb dradnats GPM * tnemecrofnE dna noitalugeR * etatS * * Local * Safety Planning and Analysis * Emergency Preparedness Planning * Security Planning * Transportation and Land Use Planning Integration * Implementation costs stsoc lanoitacudE * gninnalP latnemnorivnE * laredeF * egnahc erudecorp htiw detaicossa stsoC * gninnalP laicnaniF * etatS * noitavonni fo efil-flehS * gninnalP rodirroC ladomretnI * lacoL * * Sustainable Transportation Planning * Operational Performance * Collaborative Partnership in Planning Process edom yb sgnivaS/tsoC * gninnalP latnemnorivnE * laredeF * sgnivas/tsoc detagerggA * tnemecrofnE dna snoitalugeR * etatS * stsoc ecivres/ecnanetniaM * gninnalP laicnaniF * * Congestion Management devas emit fo eulaV * gninnalP ytiliboM thgierF * emit yreviled degnahc fo tsoC * gninnalP latnemnorivnE * laredeF * ).cte ,sruoh wen( stsoc lanoitarepO * gninnalP laicnaniF * etatS * edom yb stsoC * gninnalP rodirroC ladomretnI * lacoL * * Roadway/Bridge Maintenance Planning * Costs to modes (i.e., delay in transfers) * Sustainable Transportation Planning * Operational Performance * Safety Planning and Analysis * Freight Mobility Planning * Emergency Preparedness Planning * Security Planning * Transportation and Land Use Planning Integration )sedom refsnart neewteb( stsoc lanoitarepO * gninnalP latnemnorivnE * laredeF * yaled htiw detaicossa stsoC * gninnalP rodirroC ladomretnI * etatS * * Local * Terminal and Border Access Planning * Roadway/Bridge Maintenance Planning * Operational Performance * Collaborative Partnership in Planning Process * Federal * Economic Development Planning * Labor costs/savings * State * Roadway/Bridge Maintenance Planning * Cost of loss of options * Local * Federal * Economic Development Planning * Increase in costs of goods shipments stsoc esnopser yrtsudnI * ytivitcennoC lanoigerretnI * etatS * * Local * Congestion Management * Safety Planning and Analysis * Federal * Emergency Preparedness Planning * Implementation costs emit ot stsoc larudecorP * gninnalP ytiruceS * etatS * stsoc yaleD * and EnforcementnoitalugeR * lacoL * * Terminal and Border Access Planning * Hazardous Materials Planning * Safety Planning and Analysis * Freight Mobility Planning * Emergency Preparedness Planning * Security Planning * Transportation and Land Use Planning Integration * Capacity-building costs (education) stsoc tnemyolpmE * tnemecrofnE dna noitalugeR * laredeF * scirtem deifidom fo tsoC * gninnalP laicnaniF * etatS * emarfemit gnikam-noisiced regnol fo tsoC * gninnalP rodirroC ladomretnI * lacoL * * Terminal and Border Access Planning * Hazardous Materials Planning * Sustainable Transportation Planning * Collaborative Partnership in Planning Process Improved Shipping Times Enhanced Security Multi-Stakeholder Decisionmaking Changes to Fuel and Emissions Standards Technological Innovations Increased Renewable Energy Usage Widespread Congestion Pricing Increased Use of Intermodal Systems Industry Consolidation Table 4.3. Scenarios and functions.

36 of intermodal transportation systems and by the potential development of congestion management pricing programs. Individuals transporting freight within an intermodal sys- tem will be required to learn how to transition those goods from one mode to the next safely and efficiently. These train- ing costs fall under the vehicle fixed cost category because they determine the wage that employees will earn. Special- ized equipment costs also are captured in the vehicle fixed cost category because once any new equipment or technol- ogy is placed on the vehicle, the operation and maintenance of that equipment is likely to generate minimal costs. Thus, the bulk of the cost associated with equipment upgrades would be considered one-time and fixed. Staff turnover cost must also be considered. • Route Cost: An important cost category that could become increasingly important to analyze when debating a potential intermodal transportation system is the time it would take to transfer goods from one mode to the next. An increase in time would result in an increase in costs for freight trans- portation companies. These costs are captured under the time components within the route variable cost category. The research team therefore increased this cost data figure from very important to crucial. 4.2.3.4 Environmental Planning • Company Cost: Environmental planning is anticipated to be affected by several of the scenarios developed by the research team. The research team placed a new dot under the variable company cost category because the development of vehicles that run on renewable energy, such as ethanol or batteries, will add additional steps to the process of record- ing the number or vehicles by type. This cost is captured at the company overhead level. In addition to vehicles that run on new energy sources or at a higher emission rate, envi- ronmental planning can be affected by a congestion pricing Table 4.4. Anticipated future freight cost data needs. ts o C de xiF ts o C elb air a V ts o C eg are v A ts o C de xiF ts o C elb air a V ts o C eg are v A ts o C elb air a V ts o C eg are v A Congestion Management Operation/Services Safety Planning and Analysis Freight Mobility Planning Emergency Preparedness Planning Transportation Equity Planning Economic Development Planning Transportation and Land Use Planning Integration Environmental Planning Regulation and Enforcement Financial Planning Intermodal Corridor Planning Terminal and Border Access Planning Security Planning Hazardous Materials Planning Roadway Pavement and Bridge Maintenance Planning Interregional Connectivity Sustainable Transportation Investment Functions Company Vehicle Route                                                        = Crucial  = Very Important Vertical lines = New Critically Horizontal lines = Increased Critically  = Important

37 strategy. Potential company costs associated with this strat- egy are the relocation costs of freight companies moving away from corridors with congestion pricing. • Vehicle Cost: The fixed costs associated with vehicles uti- lized to transport freight are anticipated to increase because of the potential of having to purchase new vehicles that comply with changes to fuel economy and engine emission standards. As with freight mobility planning, the develop- ment of intermodal transportation systems could also mean increased costs related to specialized equipment needed to transfer freight from one mode to the next. For these rea- sons, the research team increased this cost category from very important to crucial. 4.2.3.5 Financial Planning • Company Cost: Public-sector financial planning could be affected by the development of a congestion pricing strat- egy as a means to increase revenue. 4.2.3.6 Intermodal Corridor Planning • Vehicle Cost: An obvious impact on intermodal corridor planning would be the development of an intermodal trans- portation system, which could increase costs associated with the installation or upgrade to specialized or new equipment. As already mentioned, any additional training or education of staff members would also be captured by the vehicle fixed cost category. • Route Cost: The time it takes to load goods from one mode onto the next is an important component of the route variable cost category. More time taken to transfer goods equates to additional costs for freight transportation com- panies, which was the basis of the decision to make this cost category crucial. 4.2.3.7 Hazardous Materials Planning • Company Cost: A potential scenario that could affect haz- ardous materials planning and freight transportation com- panies would be increased security measures. These costs are allocated to a couple of different categories. Specialized handling or safety equipment falls under fixed and aver- age company costs, and the cost of installing this equip- ment also falls within both cost sections. Furthermore, any additional insurance that freight transportation com- panies would be required to purchase (for their employees or for the hazardous freight itself) is a cost allocated to both fixed and average company costs. In Table 4.4, these new potential costs are represented by new dots located in these categories. • Route Cost: Increased security measures would include a more comprehensive review of any freight deemed to be hazardous. The potential increase in the time it takes to scan, analyze, and/or inspect this type of freight can result in an increase in the time it takes for that material to be moved from one location to another. Therefore, the research team increased the importance of route variable cost from important to crucial when considering hazard- ous materials planning. 4.2.3.8 Roadway Pavement and Bridge Maintenance Planning • Route Cost: Future roadway pavement and bridge main- tenance planning decisions are likely to be influenced by decisions to incorporate intermodal transportation sys- tems to existing infrastructure, as repairs and updates will be needed. As a result, the route time is likely to be affected for freight transportation companies in two ways: (1) the actual construction or renovation of the infrastructure can potentially cause delays in the delivery of freight, and (2) the transfer time of freight from one mode to another can potentially increase costs. Accordingly, the research team upgraded the route variable cost category from very important to crucial. 4.2.3.9 Interregional Connectivity • Route Cost: As public agencies take steps to increase the connectivity of different regional areas, the potential exists for faster movement of freight from one area to another. As these new interregional corridors are opened, however, traffic could inundate the new route, leading to an increase in the number of hours spent on a specific route and reduc- ing the average speed. These costs are captured in the route variable cost category, which is considered crucial, but some of these cost categories will also affect route average costs.