Evaluating Alternatives for Landside Transport of Ocean Containers (2015)

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27 Approach The diversity of inland container transport options and technologies demands clear goals and flexible, performance-based evaluation criteria. Both the technology options and their claimed advantages are many and varied, as are stakeholder concerns and priorities. These evaluation criteria might be used to assess container transport technologies for research and development support or to choose among system candidates for actual implementation. Accordingly, the research team developed a set of proposed performance-based criteria reflecting the transporta- tion, emissions, energy utilization, and congestion relief goals and cost implications of alterna- tive inland transport options. Container Transport System Goals An analytic discussion of criteria begins with goals: what are alternative container transport technologies and systems intended to achieve? A 2007 presentation on container transport and port-area technology clusters6 offered this ambitious goal: “To move much more cargo . . . . . . with far less pollution . . . . . . more securely . . . . . . with better cargo tracking . . . . . . at a higher throughput per acre . . . . . . with less traffic congestion . . . . . . using less energy . . . . . . and the energy should be generated from renewable sources . . . . . . without driving up the price” Although such an achievement might seem near-miraculous, some advocates of alternative systems claim nearly all these benefits, with the consequence that some community representatives may be expecting those kinds of results. A more pragmatic, but still ambitious, list of objectives is included in the 2006 Port of Long Beach ATTEC RFP:7 • Reduction in truck trips to/from the ports • Reduction in truck trips on I-710, Alameda St., and SR-103 C H A P T E R 3 System Goals and Evaluation Criteria 6 “Building a Maritime Technology Cluster at the San Pedro Bay Ports,” presentation by William Lyte, Kennedy/Jenks Consultants, 2007 7 “Request for Proposals (RFP) to Provide Transportation Technology Evaluation Comparison and Services to the Port of Long Beach Planning Division,” 2006

28 Evaluating Alternatives for Landside Transport of Ocean Containers • Reduction in truck Vehicle Miles of Travel (VMT) • Changes (presumably reductions) in noise and aesthetic impacts • Reduction in criteria and toxic pollutants • Reduction in truck accidents • Reduction in health care costs The 2009 Port of Los Angeles and Long Beach Request for Concepts and Systems (RFCS)8 laid out a narrower goal with four specific objectives: Goal: Moving containers between marine terminals and near-dock intermodal facilities by an alternative mode of transport that generates zero-emissions at no cost to the Ports and ACTA [Alameda Corridor Transportation Authority]. Objectives: • Developing an integrated system with innovative technologies and creative financing plans through the Public-Private Partnerships (P3) framework. • Reducing air pollution attributed to drayage trucks. • Reducing traffic congestion and improving traffic safety in and around harbor districts. • Maintaining or improving current cargo velocity and productivity. These goals and objectives correspond closely to what Roop, in a 2006 presentation,9 called “21st Century Freight Transportation Challenges”: • Public safety • Environmental impact • Air • Noise • System capacity • System maintenance and preservation • Adverse impact on quality of life • Oil dependency • Security These and other discussions of system and technology goals and objectives have common threads: • Reducing emissions, congestion, noise, truck miles traveled, energy use, and community impacts. • Maintaining or improving capacity, reliability, throughput, productivity, velocity, security, and safety. • Maintaining or reducing container transport costs and prices without subsidy from the port. Transportation Criteria Systems and technologies can only reduce emissions and other adverse impacts through mar- ket forces if these systems and technologies also meet the second and third objectives. Unless the capacity, service, and cost are better than conventional transport systems (e.g., truck drayage and on-dock rail transfer), market forces alone will not enable alternative systems to attract enough patronage to have a significant impact. The 2009 LA/LB RFCS presented a financial challenge. Until then, most technology and sys- tems proposals implicitly assumed substantial financial support from the ports or some other 8 “Zero Emission Container Mover System, Request for Concepts & Solutions,” Port of Long Beach, Port of Los Angeles, Alameda Corridor Transportation Authority, 2009 9 “Exploring A 21st Century Alternative for Container Transport,” presentation by Stephen S. Roop, Ph.D., Texas Transporta- tion Institute, to the IANA Operating Committee, 2006

System Goals and Evaluation Criteria 29 non-commercial source. By requesting system proposals that would fulfill the environmental and transportation objectives at no cost to the ports, the RFCS effectively declared the ports to be interested in a self-supporting “turnkey” system, rather than in financing technology and system development, construction, and operation. The alternative to market forces would be regulation or law requiring use of alternative container transport technologies in place of truck drayage or conventional rail service. The Ports of Long Beach and Los Angeles have already intervened in the market through the Clean Truck Program, requiring the use of lower emission trucks for drayage service at port terminals. Such interventions are inherently risky however—the mobility of containerized trade and the ability of customers to shift cargo flows from any port that imposes higher costs or reduces service quality. Containerized cargo flows can be roughly divided into three classes: • Local flows moving intact to or from consignees or shippers in the port area. • Transloaded flows moving to or from import or export transloading facilities in the port area prior or subsequent to inland movement in domestic equipment. • Intermodal flows moving intact by rail to or from more distant inland points. These flows are progressively more discretionary and divertible. Should an alternative con- tainer transport system impose non-market costs, some cargo is likely to move to other ports. The amount of diversion and its impact on systems goals would depend on the price or service elasticity of demand, the extent of non-market costs, and the comparative advantages of competing ports. There is a critical distinction between line-haul technologies, freight movement applications, and complete transport systems. Each container movement option consists of a line-haul technol- ogy (e.g., LIMs or hybrid highway tractors) which then must be embedded in an end-to-end container transport system linking marine terminals with inland terminals (Figure 3-1). Many of the line-haul technologies proposed to date are modifications of people-mover systems in operation around the world, but, as noted in the 2010 Keston Institute report, it is not clear that success in a passenger application is directly transferable to a heavy industrial application such TERMINALI TERMINALI LIN E- HA UL TE CH NO LO GY CO NT AI NE R TR AN SP OR T S YS TE M CO NT AI NE R PO RT CO MP LE X CO MM UN ITI ES AN D RE GI ON Figure 3-1. Container transport system context.

30 Evaluating Alternatives for Landside Transport of Ocean Containers as container freight movement. Only after this question has been answered is it appropriate to move onto the implications for the system as a whole. The task of an inland container transport system is to move containers between marine container terminals on one hand and inland facilities on another. The inland facilities could include • Rail intermodal terminals • Satellite marine terminals • Local importers, exporters, or transloaders Most proposals for inland transport systems have focused on rail intermodal terminals or satellite marine terminals (both sometimes labeled “inland ports”) that generate concentrated high-volume container flows to and from marine container terminals. The focus on rail inter- modal terminals and satellite marine terminals means that, in most cases, no consideration is given to movement beyond those points. For rail intermodal terminals, that approach is usually justified, because movement beyond is by conventional rail, regardless of the mode between rail and port. In the Los Angeles-Long Beach (LA/LB) case study, however, the viability of a fixed-guideway inland transport system depends in part on how much rail intermodal traffic is handled at off-dock versus on-dock transfer facilities. In contrast, movements to local importers, exporters, or transloaders can be spread over a large area. For satellite terminals or “inland ports,” the evaluation scope should probably include the “last mile” trip to and from the actual customer by truck to be comparable to over-the-road drayage. The end-to-end transport system is, in turn, part of the broader container port/terminal/ inland transport complex in which it operates and perhaps interacts with other systems. The port/terminal/inland transport complex is then part of the community and region in which it must coexist, generate economic growth, and minimize adverse impacts. Ultimately, the value of a proposed container transportation system must and will be evaluated at all four levels. A different formulation of the same issue is provided by the TRAIL model (Figure 3-2) developed at the Delft Institute of Technology.10 This figure shows the “means of transport”—the line-haul technology—within multiple layers of responsibility and interaction and specifically notes the need for traffic control, capacity allocation, logistic control, and market interaction, which the research team has attempted to capture in the suggested evaluation criteria. As Figures 3-1 and 3-2 indicate, proposed line-haul technologies for moving containers between terminals must eventually become part of complete systems to be of practical use. With rare exceptions, ports and planning agencies are not in the business of technology development or systems integration.11 Ports or planning agencies would ordinarily need to choose between complete candidate systems rather than choosing a line-haul technology and building a system around it. In the most pertinent example to date, the 2009 RFCS from the Ports of Los Angeles and Long Beach anticipated a Design/Build/Finance/Operate/Maintain project that did not involve either port in technology development or system design. Other stakeholders, however, may be in a position to evaluate competing technologies independent of their incorporation in complete systems. Research and development sponsors may need to evaluate grant proposals for technology development funding. Systems integrators or engineering firms developing complete systems proposals will need to choose between line-haul technology options. Potential investors approached by technology developers will need to evaluate the potential of line-haul technologies to become parts of successful systems. 10 “Operating Models for Dedicated Transportation Systems and Their Implications,” TRAIL Research School, Delft, December 1999 11 The LA/LB Technology Advancement Program (TAP) is an exception, a port-funded program intended to “accelerate the verification or commercial availability of new, clean, technologies through evaluation and demonstration to move toward an emissions-free port” (TAP Annual Report, 2009).

System Goals and Evaluation Criteria 31 Technology evaluation criteria should focus on line-haul performance (e.g., capacity, velocity, operating cost, reliability, availability, safety, and ability to handle different container types and weights) and environmental aspects (e.g., emissions and energy use). Line-haul technology criteria cannot realistically address issues such as traffic congestion, market share, or price because line-haul technology alone cannot determine those outcomes. The more extensive system evaluation criteria serve two purposes: • As a “checklist” for the functions that must be fulfilled by a complete container transport system. • As the basis for evaluation of complete system proposals. An initial “checklist” is illustrated by the 2010 Keston study12 evaluation matrix, a sample of which is shown in Table 3-1. These criteria, such as the availability of a business plan, were used in the Keston evalua- tion to check the completeness of the proposal rather than to compare the merits of competing systems. Political and Social Acceptance Criteria Port capacity, congestion, and emissions are technical problems to be solved, but the technical solution must also be politically and socially acceptable. Moreover, because the interest in alternative container transport systems is driven primarily by environmental and social issues, such issues may take precedence over technical performance or cost metrics. TRANSPORT MARKET MARKET INTERACTION CARGO LOGISTIC CONTROL TRANSPORT UNITS CAPACITY ALLOCATION MEANS OF TRANSPORT TRAFFIC CONTROL INFRASTRUCTURE SOCIAL INTERACTION RESOURCE MANAGEMENT MANAGEMENTTECHNOLOGY SOCIETY RESOURCES Figure 3-2. TRAIL model for transport interactions. 12 “Review of Concepts and Solutions to Provide Zero-Emission Container Movement Systems (ZECMS) to the Ports of Long Beach and Los Angeles,” Prepared by Keston Institute for Public Finance and Infrastructure Policy, University of Southern California, July 2010

32 Evaluating Alternatives for Landside Transport of Ocean Containers Figure 3-3 diagrams the generic progression from technical and economic data through objec- tive technical judgment to the crucial incorporation of social values and criteria.13a Another formulation is offered by Dimitrijevic and Spasovic13b with specific application to auto- mated guided vehicle systems in container ports. They suggest four categories: • Financial impacts, including construction costs, maintenance costs, operation costs, revenues, and increase or reduction of fares for transit systems. • Socioeconomic impacts, including land values, reduction of congestion, employment during and after project implementation, and induced employment. • Environmental impacts, including change in noise levels, change in vehicle emissions, change in land use, and energy consumption. • System performance, including compatibility with existing system, increase in capacity, technology reliability, and change in accident rates. Triple Bottom Line These concepts and the deliberate incorporation of environmental and social/community values are critical. The driving force behind port and community interest in alternative con- tainer transport technologies is their promise of emissions reduction and congestion relief, not cost savings or increased capacity. The “overall worth” of a solution must be evaluated on what has sometimes been called the triple bottom line (TBL), i.e., “TBL: economics, environment, and community impact.” Mazmanian, Pisano, Little, and Linder14a describe Source: “Review of Concepts and Solutions to Provide Zero-Emission Container Movement Systems (ZECMS) to the Ports of Long Beach and Los Angeles,” prepared by Keston Institute for Public Finance and Infrastructure Policy, University of Southern California, July 2010. Table 3-1. Sample Keston completeness matrix. 13a Hammond, K.R and L. Adelman. 1976. “Science, Values, and Human Judgment,” Science, 194:4263, 389–396. 13b “Innovative Transportation Technologies—an Alternative for Providing Linkages Between Port Terminals and Inland Freight Distribution Facilities,” Branislav Dimitrijevic and Lazar Spasovic, 2006. 14a “Governance and Financing Policy in Southern California: Transformative Changes to Achieve Climate Change Goals,” Dan Mazmanian, Mark Pisano, Richard Little, Alison Linder, 2009.

System Goals and Evaluation Criteria 33 the TBL concept in its application to the Southern California goods movement system as an approach that “ . . . combines economic growth, environmental and health safeguards, and an improved quality of life for all the people in the region into the ultimate gauge of the region’s prosperity.” Although those words may sound utopian, planning agencies, air quality boards, and sur- rounding communities can effectively halt port initiatives that do not successfully balance the three bottom lines. The TBL concept is a major touchstone for this analysis, because it relates directly to the broadened scope of port authority responsibility and the interest of those authorities in inland transport. Until recent decades, ports focused almost exclusively on moving cargo and creating jobs, and their success was measured in economic terms. The effective span of their responsi- bilities has been expanded by regional and local concerns for environmental and community impacts. As discussed later in the LA/LB case study, port infrastructure projects can no longer proceed without satisfying environmental and community impacts criteria, as well as having favorable economics. The TBL concept captures this change. As noted earlier TBL goals are interdependent. Environmental goals of emissions and energy use reduction depend on the environmental characteristics of the technology and system chosen and on the ability of that system to attract container traffic from other systems and modes. Con- gestion and noise reduction also depend on the ability of the system to attract trips from highway drayage. The economic and service characteristics of the proposed technology and system may thus be as important or more important to environmental and community impact goals than the emissions or energy use of the technology itself. Criteria versus “Desirables” and Proxies Many of the source materials reviewed for the research list or imply desirable technology or system characteristics that do not translate into selection criteria. These characteristics are essentially proxies for corresponding technical or social factors. In these cases, the research team attempted to determine the underlying objective and corresponding technical criteria. For example, documents and presentations expressed a preference for simple, proven, or well- established technologies. The apparent assumption is that use of simple, proven, or well-established technologies is more likely to reduce risk, reduce cost, and shorten implementation time. Risk, Figure 3-3. Criteria development schematic. Y1 OVERALL WORTH SOCIAL VALUES Y2 Y3 W1 W2 W3 X1 X2 X3 Xn SOCIAL JUDGEMENTS ECONOMIC/ TECHNICAL JUDGEMENTS ECONOMIC/ TECHNICAL DATA

34 Evaluating Alternatives for Landside Transport of Ocean Containers cost, and implementation time are, therefore, the corresponding technical criteria. Other sources promoted the port’s “competitive edge” or the competitive position of the region, which typically translates into throughput capacity, cost, transit time, and reliability. Summary Criteria To reach the goals and satisfy the detailed criteria set out above, a container transport system would have to be buildable, affordable, and successful at diverting trucks from the highway alternative. Transportation Criteria: The transportation criteria for a successful inland container trans- port system include • Technical feasibility for construction and operation within the port/sponsor’s timeframe. • Sufficient capacity to support port growth and divert a significant number of trips from highway drayage. • Commercially competitive price and service (including safety, reliability, and security). • Cost-effectiveness in construction and operation. • No or minimal/supportable need for subsidy. A system that fails at any one of these criteria is either technically or economically infeasible, or will not attract enough traffic to fulfill the environmental and community goals. Environmental Criteria: Environmental criteria for a successful container transport system include • Reduced criteria pollutant emissions relative to highway drayage. • Reduced energy use relative to highway drayage. • Reduced GHG/carbon footprint relative to highway drayage. Criteria pollutant emissions, energy use, and GHG/carbon footprint may all be reduced together for some alternatives, but may change separately for alternative fuels and other technologies. Increased efficiency (e.g., fewer vehicle miles or hours for the same throughput) would also improve environmental performance. Community Impact Criteria: To reduce adverse community impacts, a container transport system should • Reduce traffic congestion (e.g., reduce truck trips and/or miles traveled). • Reduce noise (by reducing truck trips or using quieter technology). • Reduce neighborhood disruption (e.g., reduce activity and infrastructure in commercial and residential areas). These community criteria would be addressed simultaneously by systems that divert trucks from local and regional roads and highways. Technical Feasibility Technology Readiness Level (TRL) A critical component of the evaluation process will be the readiness of each option for imple- mentation. Technology Readiness Levels (TRLs) provide a relatively straightforward means to compare diverse technologies and approaches from a common baseline and would be useful in this application. The TRLs for integrated technology planning are summarized in Figure 3-4. These TRLs were first formally applied to container transport technologies in the 2010 Keston report. The progression from TRL1 through TRL9 reflects the emergence of a potential

System Goals and Evaluation Criteria 35 application of basic research knowledge and its subsequent development and testing before implementation in the intended application and environment. • So-called “paper” concepts that have not been tested with physical or computer models or prototypes would usually be in TRLs 1 and 2. A few of the alternative container transport technologies in the literature are in those categories. • TRLs 3 and 4 correspond to demonstrations of physical feasibility through laboratory experi- ments or testing. Many of the container transport proposals are in these categories because their basic principles (e.g., magnetic levitation, linear induction) have been demonstrated to be feasible in tests or other applications. • TRLs 4 and 5 continue the process with the development and testing of models or prototypes. A few of the line-haul technology proposals have attained this level, notably proposed appli- cations of “people-mover” systems to container movement operations. These proposals have typically demonstrated that the proposed guideway and propulsion system design can move a vehicle (or a vehicle with a container) from point to point. • TRLs 6 and 7 reflect a shift from a laboratory or proving ground environment to first a “relevant environment” and then the “operational environment.” The term “environment” in this context would encompass both the physical conditions at a container port (e.g., distance, grade, weather, and right-of-way constraints) and the operating conditions (e.g., variability of container types, sizes, and weights and the need for switching between routes). None of the alternative technology proposals has reached TRL 7. The Keston report and subsequent Port documents14b note that most of the proposals did not take the realities and complexities of the port’s working environment into consideration. • TRLs 8 and 9 correspond to complete “systems” (in this case the line-haul system) tested, demonstrated, and operated in the working environment. No proposed alternative technologies are at this level as yet. Source: “Request for Concepts and Solutions for a Zero Emission Container Mover System—Findings and Recommendations,” memorandum from Eric C. Shen, August 2, 2010. Figure 3-4. Technology readiness levels. 14b “Request for Concepts and Solutions for a Zero Emission Container Mover System—Findings and Recommendations,” memorandum from Eric C. Shen, August 2, 2010.

36 Evaluating Alternatives for Landside Transport of Ocean Containers Preliminary review of technology and the recent round of system proposals indicate that different parts of the concepts are frequently at different TRLs. The line-haul technologies may be at one TRL while a complete system built around the technological concept might be at a much lower TRL. Accordingly, the evaluation criteria should separately assess the TRLs for • Line-haul technology • Guideway • Vehicles • Control system • Transfer system • Integration within the system and with other systems System Readiness Level TRLs by themselves are only part of the story. Line-haul technologies must be embedded in complete working systems to deliver any benefits. The working system in turn includes multiple technologies linked together. For each TRL there would be a corresponding System Readiness Level (SRL) as suggested in Table 3-2. Most proposed technologies to date have focused on the line-haul technology (i.e., means of propulsion), the guideway design, and the vehicle. Few have delved deeply into control issues, the means of transfer at terminals, or the issues raised by integration with other port operations. Of the TRLs illustrated in Figure 3-4, the highest level (TRL9) is “Actual system proven by successful operations.” In this context, TRL9 indicates a line-haul option that is or has been in successful operation in a relevant environment. Building on the line-haul example, achieving TRL9 does not mean starting over at SRL1. A TRL 7, 8, or 9 line-haul technology would likely be accepted as a technologically and operationally feasible component of a complete transport system, corresponding to SRL5. The overall SRL could not get beyond Level 5, however, until all major components had achieved at least TRL7. Level TRL SRL 9 Line-haul technology proven by successful operation. Transport system proven by successful operation. 8 Line-haul technology qualified through test and demo. Transport system qualified through test and demo. 7 Prototype line-haul technology demonstrated in operational environment. Prototype transport system demonstrated in operational environment. 6 Model or prototype line-haul technology demo in relevant environment. Model or prototype transport system demo in relevant environment. 5 Line-haul technology component validationin real environment. Transport system component validation in real environment. 4 Line-haul technology component validation in lab environment. Transport system component validation in lab environment. 3 Analytical/experimental proof of line-haul technology concept. Analytical/experimental proof of transport system concept. 2 Line-haul technology concept and/or application formulated. Transport system concept formulated. 1 Basic line-haul technology principles observed and reported. Basic transport system principles observed and reported. Table 3-2. Line-haul technology readiness and system readiness.

System Goals and Evaluation Criteria 37 For an alternative container transport system, SRL5 would mean that at least the line-haul technology, the terminal designs, and the control system had also reached TRL7 or higher. SRLs 6 through 9 would be attained by progressively modeling and demonstrating the ability of proven components to work together as a system in the relevant, real, and operational envi- ronments. Two components of most alternative container transport systems are proven and in operation (TRL9): • Transport from vessel to marine terminal container yard or system loading point (or vice versa). • Pickup and delivery by truck at inland terminals. The nature of container transport systems rules out laboratory or physical modeling for SRLs 6 through 9. Demonstration of system capabilities is more likely to be achieved through computer simulation and small-scale real-world demonstrations. The notion of a “relevant” environment is critical. As the Keston evaluation noted, some of the proposals incorporated line-haul technologies that have been successfully applied or accepted as feasible in passenger transit applications. Most of those proposals, however, did not address the realities of container port operations and none of the proposed technologies had been tested in comparable applications. Implementation Timeline The timeline for system development and implementation is relevant both because sooner may be better if net social benefits are to be gained, and because shorter (but still realistic) timelines may have less risk. Each system application has an implicit or explicit timeline. In the Baltimore case study, the sponsors wanted a transport system in place by 2016. At a minimum, the implementation and development timeline evaluation would include • Years to line-haul technology readiness • Years to system readiness • Years to system operation • Potential for phased implementation The general rule is that net present values of benefits are greater the sooner they are realized. Because it is common for real technology costs to fall over time, however, there may be an opposite timing issue. It could be better to wait some given number of years because the total net social benefits are higher with substantial reduction in capital costs from waiting. The potential for phased implementation would reduce investment risk and thresholds. A system that could start small and increase capacity incrementally could better match its benefits to its costs by being more readily sized to uncertain future demand. Moreover, a phased approach would avoid tying up port or public capital in excess near-term capacity. Transportation Economics Although the impetus for alternative technologies stems from concerns over emissions and congestion, the ability of such technologies to attract and hold significant market share depends on their service capabilities and economics. System Capital Cost Fixed-guideway transport technologies tend to have high capital costs for right-of-way, guideway, vehicles, and control systems. These high capital costs are then typically offset by low unit operating

38 Evaluating Alternatives for Landside Transport of Ocean Containers costs, which may bring average costs into a competitive range. High capital costs can, however, cre- ate an implementation hurdle. A comprehensive look at capital costs would include • Planning and engineering • Right-of-way acquisition and site preparation • Guideway and infrastructure • Terminal and terminal equipment • Control system • Vehicles • Environmental/community review and mitigation cost Scale economies and the average capital cost per line mile, per vehicle, and per unit of capacity should also be addressed. The cost of offsetting or mitigating external costs such as environmental or community impacts is not always considered in capital cost estimates. The need to internalize the costs of traditional externalities is growing, as the CAAP at the San Pedro Bay Ports has already been doing and as is reflected in TBL analysis of alternative technologies. Alternative transport technologies are likely to be of greatest interest in congested, environmentally sensitive areas adjacent to major ports (e.g., the communities surrounding the Ports of Los Angeles, Long Beach, New York, Oakland, or Seattle). Locating new right-of-way and transporting containers through such areas will almost certainly entail mitigation or compensation for local impacts. Scale economies are an essential feature of most fixed-guideway systems. Fixed-guideway systems typically have increasing returns to scale until they approach congestion. Capacity is added in relatively large increments, making production a step function, rather than a curve. Conventional truck drayage has no real operating scale economies; any scale advantages of drayage come from networking and dispatching in larger fleets with broader customer bases. System Operating Cost There are multiple operating cost measures to be considered, including • Line-haul operating cost per container trip and per mile • Right-of-way and guideway maintenance and depreciation cost per container trip and per mile • Terminal operating cost per unit • “Last mile” pickup and delivery cost per unit • Marginal operating cost per unit and per mile • Labor cost (wages and benefits) per move and per mile • Fuel/energy cost per move and per mile • Vehicle maintenance and depreciation cost per move and per mile • Scale economics • Overhead cost per unit (e.g., administration, marketing, and sales) • Average operating cost per unit and per mile • Vulnerability to future cost increases The focus in most of the reviewed literature is on the direct operating cost of the line-haul technology. As the list above indicates, focusing only on the line-haul operating cost would yield an incomplete picture. In particular, intermodal systems that require transfers between line-haul modes (i.e., fixed-guideway) and pickup and delivery modes (i.e., trucks) have transfer costs that must be estimated and incorporated in comparisons. Likewise, many descriptions of alternative technologies do not deal with overhead costs or maintenance and depreciation costs. When comparing different line-haul technologies with similar terminal, pickup/delivery, overhead, and control requirements it may be reasonable to focus on the line-haul differences

System Goals and Evaluation Criteria 39 under an implicit assumption of all things being equal. With the current state of the practice such an approach is tempting because so few proposals offer any details of terminal or pickup/ delivery operations. For the same reason, however, making implicit assumptions that different line-haul technologies have equivalent terminal and pickup/delivery requirements may be unrealistic. The degree to which operating costs are leveraged by specific cost components is a legitimate concern for fixed-guideway systems intended to be in use for decades. Fuel and labor costs are commonly expected to increase faster than other factors, which may put conventional truck drayage using diesel fuel and individual drivers at a long-run disadvantage compared to electrically powered, centrally controlled systems. The fuel difference, however, is being reduced with increased production of inexpensive natural gas for CNG trucks. Total System Cost Total system cost is the most complex criterion, because it must take all individual cost factors into account, and the most basic, because it is the basis for customer cost comparisons. Total system cost must translate to total price to the customer—or to total price plus subsidy needs. Unit cost as a function of volume is determined by scale economies. The following should be considered: • Average total cost per move and per mile • Marginal total cost per move and per mile • Startup costs versus initial volume • Scale economies • Cost recovery and translation of costs to prices The distinction between average and marginal costs is critical when comparing fixed-guideway systems with on-road truck drayage. The high capital costs typical of fixed-guideway systems tend to yield very high average costs at startup volumes and very low marginal costs as long as capacity in the system is unused. In contrast, the average and marginal costs of on-road truck drayage are essentially the same because the unit of production is just another truck trip. Scale economies come into play only when new infrastructure is required in the form of added highway capacity. These distinctions have implications for pricing. For fixed-guideway systems, the issue is whether users are expected to pay for a share of capital cost or just for operations. Transit system construction is typically funded using a mixture of bonds, grants, tax revenue, and loans, and farebox revenue does not cover the full cost of that capital. The price that customers of a fixed- guideway system pay will similarly be affected by the infrastructure funding options available and the policy choices made by system sponsors. For on-road trucking, infrastructure costs are typically reflected in operating costs as fuel taxes, registration fees, and federal excise taxes. These costs are not route-specific and will not change if new highway capacity is added for container movements. The infrastructure cost could be more directly reflected if a toll were charged for the new highway capacity. Transportation Performance Transportation performance is the commercial value created by the system and must justify the total system cost or price in the eyes of the customer. Within the narrow context of movement within 100 miles of a port terminal there is limited scope for transit time or service differences. There are, however, significant potential capacity and reliability differences.

40 Evaluating Alternatives for Landside Transport of Ocean Containers System Service An evaluation of absolute or comparative service capabilities must be multi-dimensional, reflecting the full range of customer and port requirements: • Average terminal-to-terminal transit time • Average ground-to-ground transit time • Average end-to-end transit time • Average round-trip cycle time • Impacts of scale and congestion • Flexibility to adjust to peak/non-peak volumes • Flexibility to adjust to changing pickup and delivery points • Loss and damage potential • Cargo, system, and vehicle security • Adaptability to port circumstances Within the list above, much is often made of the line-haul speed advantages of Maglev tech- nologies that minimize friction. The value of line-haul speed, however, can be offset by terminal operations and waits. The flexibility to adjust capacity to peaks and valleys and changes in origin/destination is an inherent problem with closed fixed-guideway systems. The mobility and flexibility of atomistic systems such as trucking may allow easier adjustment to daily or seasonal volume fluctuations as well as future changes in pickup and delivery points. Cargo, system, and vehicle security is often claimed as a benefit of unmanned, automated operation over dedicated rights-of-way. A pragmatic approach to security claims would likely reveal both positives and negatives. Railroads have found that trains passing through unpatrolled right-of-way can easily become targets for terrorists, vandals, or thieves. Adaptability becomes an issue when port configurations and circumstances change or when a system is implemented at more than one port. Similar adaptability issues face transit system designers who try to minimize costs and development times by using the same technology, vehicles, guideway design, or control methods in multiple cities. If each port must have a unique system design, then all system development costs must be recovered from a single installation. System Capacity The aspects of system capacity listed below cover more than just total annual throughput: • Annual throughput: moves, container miles • Annual moves per line and per track on each line • Peak and average container moves per hour, per line, and per track on each line • Annual terminal throughput capacity • Annual terminal storage capacity • Peak terminal throughput capacity • Average dwell time in system • Number of origin/destination points served • Range of container sizes, types, and weights accommodated • Engineering safety margin • Scale factors The volume of containers moving through ports and terminals is highly variable on a daily, weekly, monthly, and annual basis, so the ability to accommodate peaking is an important criterion. Operation at peak throughput levels typically strains facilities and systems to the point where

System Goals and Evaluation Criteria 41 small performance variations or exceptions begin to have large impacts and the peak throughput cannot be sustained indefinitely. A common rule of thumb is that attainable routine throughput (sometimes called “capability”) is 80% of maximum capacity. Fixed-guideway systems become operationally and conceptually complex as they are applied to multiple origins and destinations. Most alternative container transport proposals reviewed in this study are point to point, serving a single terminal on each end of the line-haul guideway. Such a system might have a direct application in linking a single marine terminal to a single inland rail terminal or distribution point. The rail service between the Virginia Inland Port (VIP) and the Norfolk International Terminal (NIT) at the Port of Virginia has operated in this manner, with containers from other marine terminals drayed to and from NIT. At the other extreme, the Ports of Los Angeles and Long Beach together have 13 marine terminals and there are three off-terminal rail hubs (and a fourth proposed) to which they might be linked, creating a serious complexity challenge. The ability of a proposed system to accommodate different container weights and types is a factor in its ability to capture market share and in the informational and control tasks entailed in its operation. Marine containers in use come in 20-foot, 40-foot, and 45-foot lengths, and in standard (8’6”) and “high cube” (9’6”) heights. Besides the familiar dry van types, tank, flat rack, open top, and refrigerated containers are in use. Refrigerated units usually require an external 440-volt power supply. There is little ambiguity regarding container types. The loaded container weights in shipping documents, however, are not reliable, and any transport system weight limitations may require special operating precautions. An empty 20-foot container weighs about 5,000–5,500 lb. A fully loaded 45-foot container can weigh as much as 72,800 lb at its rated limit. Given that shippers sometimes load both import and export containers beyond their rated limits while falsifying shipping documents, a significant engineering safety margin is needed in container transport systems. Scalability and Flexibility Scalability and flexibility are recurrent themes in Southern California, where the volume of traffic, the number of marine terminals, and the number of inland terminals together define a very large potential system scope. The ability to start small and gradually expand a system once it is proven successful is at a premium in such instances. A system that required a large minimum scale to succeed would be risky, if feasible at all, with limited resources. Likewise, a system that proved prohibitively costly to expand once started would be a poor fit. Fixed-guideway systems of all types tend to be inflexible in terms of endpoints, volumes, and routes. In a changeable port context, relying on fixed-guideway connections between nodes may create substantial barriers to changing or adding nodes. In this respect, port and inland develop- ment would tend to follow the fixed-guideway configuration. This may be viewed by regional planners as a desirable outcome, akin to using transit systems as regional development tools; however, such a strategy increases risk. Reliability Developing criteria for reliability poses a challenge to evaluators. Reliability is variously measured as on-time performance (percentage), standard deviation from scheduled time, distribution of transit times around a mean or scheduled time, or mean time between failures (MTBF). The list below includes those criteria, but also considers the effect of reliability lapses: • On-time terminal-to-terminal performance standard (time, +/- minutes) • Percent on-time terminal-to-terminal performance/standard deviation of transit time

42 Evaluating Alternatives for Landside Transport of Ocean Containers • On-time end-to-end performance standard (time, +/- minutes) • Percent on-time end-to-end performance/standard deviation of transit time • Mean time between terminal-to-terminal failures • Unit-hours of delay per terminal-to-terminal failure • Total cost per terminal-to-terminal failure • Mean time between end-to-end failures • Mean time to restore service (MTTRS) following a system service interruption • Unit-hours of delay per end-to-end failure • Total cost per end-to-end failure • Ability to withstand local weather variations, including high heat, flooding, tropical storms, or snow and ice, and other natural hazards such as wild fires and earthquakes • Customer management information availability/accuracy As with the transit time, some appropriate metrics and standards for reliability are in the eye of the customer. Customers are presumably interested in end-to-end performance between the marine terminal and an inland point. If terminal buffers are at both ends, the system as a whole may produce acceptable reliability, even if the line-haul technology is relatively erratic. The reliability and predictability of the line-haul technology is critical, however, in the practical capacity of fixed-guideway systems that do not allow vehicles to pass. There is substantial literature on failure patterns in mechanical and electrical systems.15 Under different circumstances, for example, the pattern of failure over time could be constant, linearly or geometrically increasing, or linearly or geometrically decreasing (see Figure 3-5). Different patterns will have dramatically different implications for container transport system reliability and the impacts of failure. The same source notes the common, although not necessarily accurate, conceptual use of the “bathtub” curve (Figure 3-6) to describe a machine’s three basic failure rate characteristics: 15 “Reliability engineering principles for the plant engineer,” Drew Troyer, Noria Corporation website, accessed 7/29/11. Figure 3-5. Examples of possible failure patterns over time. Fa ilu re R at e (% ) Time Constant Geometric Increase Geometric Decrease Linear Increase Linear Decrease

System Goals and Evaluation Criteria 43 declining during introduction or initial use; constant during most of its operational history; or increasing as the machine or equipment begins wearing out. In both Figures 3-5 and 3-6, the relevant questions are likely to be (1) whether or not a new technology or system is prone to high initial failure rates, (2) whether or not it can be assumed that high initial failure rates will decline, and (3) what the constant failure rate is likely to be over the system’s useful life. Little or no information is available for advanced-technology fixed- guideway systems in container transport use because no such systems are in operation. Reliability information from transit applications of the same line-haul technologies must be used with caution because the physical demands of container transport are dramatically different from those of moving people. There are also similar issues with new types of truck propulsion, including electric power and hybrid systems using new fuels. The consequences, impact, and cost of unreliability or system failure will vary widely by system type. A conventional truck drayage “system” would only fail as a whole in circumstances such as a universal driver strike or closure of key port roads. Otherwise, failure of one vehicle, one organization, or even closure of one road does not bring the entire system to a halt. For a fixed- guideway system, however, failure of a vehicle, the guideway, the power system, or the control system can bring a given line or the whole system to a halt. In this case, measures of “availability” that describe what percentage of time the system is available for use, rather than how frequently it breaks down, may be more appropriate. For example, some relatively frequent but short-lived outages are probably less troublesome than the failure of a component that might take days or weeks to replace. Many high-voltage electric transformers fall into the latter category. The cost impacts of delay and unreliability may not be linear. For a container moving from a marine terminal to a rail terminal, an hour’s delay in mid-day may have no impact if the train departure is not until 9 PM and the cut-off time is 7 PM. The same hour’s delay would have greater con- sequences if it occurred at 6:15 PM and made the container miss the train. The impact of inclement weather and natural hazards on fixed-guideway technologies can be significant. The proposals made in Southern California did not consider the weather extremes to Figure 3-6. Example of “bathtub curve” failure pattern. Fa ilu re Ra te (% ) Time "Infant Mortality" Pattern Constant Rate Pattern "Wearout" Pattern

44 Evaluating Alternatives for Landside Transport of Ocean Containers be faced in Houston, South Carolina, or New Jersey. Similarly, seismic risk is more significant in Southern California or Seattle than at Gulf or East Coast ports. Potential climate change impacts, notably sea level rise, will affect all ports, and the adaptability of technologies and systems to these still uncertain changes should be a factor in their evaluation and selection. The port-to-inland moves contemplated in this study are typically only part of an international import or export supply chain. To manage that supply chain, participants need accurate timely information about container status and schedules. There should thus be a match between container movements and available information about those movements. For example, timely arrival at an inland terminal is of little value if the inland customer is not promptly notified to arrange for pickup and delivery. Port/Terminal Performance Inland container movement systems are part of the overall port/terminal/inland transport complex and will affect overall performance and capacity. The overall throughput capacity of a container port complex is a function of the throughput capacities of the terminals themselves and the combined capacities of road, rail, barge, and other systems for moving containers to and from those terminals. The addition of an alternative container transport system would ordinar- ily increase total inland throughput capacity, so evaluation criteria would include net capacity increase and scale effects. Circumstances can be imagined, however, where the right-of-way used for an alternative transport system could otherwise be used for a higher capacity but higher emissions system (e.g., conventional diesel truck drayage), and total capacity would have been traded for emis- sions reductions. The integration of alternative transport systems into marine terminals might reduce the available container yard space and therefore reduce marine terminal throughput capacity. Capacity per se is not always used. In the absence of regulation or compulsion, the system must be commercially competitive for customers to use it in significant numbers. Impact on Other Systems Impact criteria would include • Space requirements and cost • Port/terminal capital requirements • Impact on port/terminal operating cost • Net impact on terminal throughput The impact on overall cost of moving cargo through a given port is a factor in both customer acceptance and port competition. A costly container transport system that led customers to divert trade to other ports would be self-defeating. Fatal Flaws A key issue in many engineering evaluations is the presence of “fatal flaws,” unavoidable or intrinsic aspects of the proposed solution that are not feasible, do not solve the problem, or create new problems worse than the original. Identification of a true fatal flaw stops the analysis, because, by definition, there is no point in continuing. In practice, identification of a suspected fatal flaw usually generates efforts to overcome or remedy the flaw. Examples of fatal flaws for container transport systems or technologies might include

System Goals and Evaluation Criteria 45 • Inability of a line-haul vehicle to safely carry the heaviest expected container load. • Inability of a guideway design to pass over or under an unavoidable obstacle (e.g., a river, building, or freeway). • A physical guideway requirement that cannot be met in the available right-of-way (e.g., height restriction or curvature). • Lack of sufficient capacity to alleviate congestion elsewhere. • Inability to solve community impact issues (e.g., trucks at system terminals). • Commercial or economic infeasibility (e.g., requirement for a subsidy that cannot be met). In a sense, the LA/LB and Baltimore case studies encountered fatal flaws. In the LA/LB case, fixed-guideway options proved to be far too costly and provided too little capacity to yield substantial highway congestion relief and offered minimal emissions improvement over “clean” truck drayage. In the Baltimore case, fixed-guideway systems were too costly and could not appreciably reduce the community impact of a new rail intermodal terminal. In both cases, therefore, fixed-guideway systems could not solve the problem or reach the goals. Environmental Performance Environmental performance, the second part of the “triple bottom line,” is typically assessed in terms of emissions and energy use, but looking beyond technology characteristics to full system impact will bring other environmental factors into play. Ports in EPA “non-attainment” areas for air quality will require consideration of system emissions impacts in the context of regional conformity analysis as well as the port’s own emissions inventory. There may be other environmental impacts such as for water runoff or noise impacts from the construction and operation of the new system, all of which must be analyzed. The actual criteria for environmental concerns will vary by location and context. The National Environmental Protection Act (NEPA) process usually entails either an Environmental Assessment (EA) or an EIS. The U.S. EPA describes these as follows:16 “An EA is described in Section 1508.9 of the CEQ NEPA regulations. Generally, an EA includes brief discussions of the following: • The need for the proposal • Alternatives (when there is an unresolved conflict concerning alternative uses of available resources) • The environmental impacts of the proposed action and alternatives • A listing of agencies and persons consulted.” “An EIS, which is described in Part 1502 of the regulations, should include • Discussions of the purpose of and need for the action • Alternatives • The affected environment • The environmental consequences of the proposed action • Lists of preparers, agencies, organizations and persons to whom the statement is sent • An index • An appendix (if any)” The contents, and thus the criteria, vary from project to project. 16 US EPA website, accessed 7/26/11

46 Evaluating Alternatives for Landside Transport of Ocean Containers Emissions Emissions of criteria air pollutants (e.g., NOx, HC, PM, SOx) and greenhouse gases (CO2) are usually measured in grams or tons per year. As indicated below, emissions are generated by the line-haul technology, the terminal operations, and the last-mile pickup and delivery. Impact criteria for each pollutant would include • Unit and total line-haul emissions • Unit and total terminal emissions • Unit and total last-mile emissions • Unit and total end-to-end emissions • Impact on port-area emissions inventory • Impact on regional conformity analysis • Impact on community health Some alternative transport systems have been advanced in response to specific Southern California interest in ZECMS. Although the line-haul technology proposals typically have no local line-haul (“tailpipe”) emissions because of the use of electric power, few have addressed the emissions from terminal operations or last-mile pickup and delivery, or the broader implications of using coal-fired or other sourced electricity generated off site. Both ports and regional agencies have goals for port-area emissions inventories and for the related regional freight transportation role in the emissions profiles of the region. Adjacent communities are justifiably concerned over the health impacts of port-related transportation. The translation from emissions exposure to community health impacts also brings the effect on human lives and livelihood to the foreground. Energy Use The type and amount of energy used by the candidate transport system are the major deter- minants of its emissions profile and carbon footprint and are evaluation criteria in their own right. Minimizing energy use, switching to less environmentally damaging or sustainable energy sources, and reducing dependence on petroleum imports are all national goals. The applicable metrics for energy type and amount would apply to each major system component as well as to the end-to-end system total, as suggested by the list below: • Line-haul energy consumption by fuel type, per unit and per mile • Terminal energy consumption by fuel type, per unit and per mile • “Last mile” energy consumption by fuel type, per unit and per mile • End-to-end energy consumption by fuel type, per unit and per mile Other Environmental Factors Various site-specific environmental factors could affect the relative merits of competing system proposals. Ports are marine environments, with all the attendant environmental concerns. As Figure 3-1 illustrated, they are also part of a larger community and regional context. The list below is not complete, because environmental concerns are essentially open-ended, but the list illustrates the range of possibilities: • Noise • Visual pollution • Oil and hazmat spill risks • Water and sediment quality

System Goals and Evaluation Criteria 47 • Benthic zone impacts • Fishery and wildlife impacts Mitigation Requirements Environmental mitigation costs appear as a criterion under the capital cost category, but mitigation should also be considered as an environmental evaluation criterion. One issue is the extent to which adverse environmental consequences can or cannot be effectively mitigated and must be accepted or offset instead. Operating emissions are the obvious environmental impacts, but acquisition of right-of-way and construction of guideway and terminals can also have envi- ronmental consequences that must be mitigated. The construction process for any infrastructure will have adverse environmental consequences, generally increasing with infrastructure scale. Community Impacts Construction and operation of a container transport system through port-area communities will have both positive and negative impacts in addition to the environmental impacts and will affect the third part of the Triple Bottom Line: social or community cost. Congestion Impact Interest in container transport alternatives is driven by the expected potential for congestion relief as much as by the expected emissions benefits. Congestion impacts can be of several types: • Reduction in truck volume on freeways and arterials • Change in trucking activity location • Change in peak/off-peak truck volume • Impact of new transport guideways on surface circulation • Increase in average speeds by time of day on freeways and arterials A key factor for fixed-guideway systems with inland terminals is community antipathy to the expected concentration of truck activity at those points. Construction of new, separated right-of-way can also affect nearby surface street circulation for better or for worse. As the case studies developed, the pivotal connection between congestion relief, capacity, and commercial viability became increasingly obvious to the research team. The potential for congestion relief depends on the system’s ability to attract container trips from highway drayage. That potential depends in turn on • The addition of enough new net capacity to accommodate noticeable diversion volumes. • Commercial viability to induce customers to switch from highway drayage to the new system. Community Safety Community safety criteria, summarized below, can be divided into assessments of (1) inci- dent frequency or likelihood and (2) hazmat and non-hazmat groups. The potential effect will vary with the accident, the cargo involved, and the location within the surrounding community. Managing community safety requires special measures such as buffer zones, fencing, or sound walls that add to the capital cost. • Risk of non-hazmat incident • Impact of non-hazmat incident

48 Evaluating Alternatives for Landside Transport of Ocean Containers • Risk of hazmat incident • Impact of hazmat incident • Community safety requirements Security Assessment Community security issues include • Cargo/vehicle theft • Vandalism • Terrorism System and customer security was considered earlier. From a community point of view, any potential for vandalism places a burden on local law enforcement and could create a public eye- sore or nuisance. Attempted vandalism can also turn deadly if vandals are injured or killed on an electrified guideway or by moving equipment. There are likely to be community concerns over a container transport system becoming a target for terrorists with attendant dangers to the public. Other Community Impacts The generic community impact criteria listed below cover a wide range of possible issues, from obstruction of ocean views to round-the-clock noise from passing container vehicles: • Right-of-way requirements • Environmental justice • Compatibility of guideway design • Impacts on neighborhood quality of life • Impacts on historical sites, schools, hospitals, and other sensitive land uses Communities also vary widely in their issues and sensitivity. The proposed Southern California Intermodal Gateway (SCIG) terminal project, for example, is complicated by the presence of a school and a medical facility on adjacent property. Community impact issues proved to be decisive in the Baltimore case study, where regardless of technology, fixed-guideway systems could not reduce the community impact of a new rail intermodal terminal.