Guidebook for Assessing Evolving International Container Chassis Supply Models (2012)

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Guidebook for Assessing Evolving International Container Chassis Supply Models | NCFRP Report 20 | 59 Implications of Evolving Chassis Supply Models for Public Policy and Planning Organizations Key Messages From an operational perspective, public agencies have limited direct influence over how chassis supply models will evolve—this will largely be determined commercially among supply chain actors. Nevertheless, the implications of consequence to public policy and planning organizations include the potential for increased truck movements on roads to reposition, pick up, or drop off chassis; greater pressures on intermodal connectors, and increased land footprint requirements for storage. Other potential impacts within the purview of the public transportation oversight community are a host of externalities, including road congestion, pollution, road safety issues, and land-use challenges. It is not the alternative chassis supply model, per se, that will directly influence increased truck moves/miles. The most important off-terminal land-use implications with respect to evolving chassis supply models concern chassis storage location. Intermodal terminals, markets, and volumes vary significantly by geography; each planning entity should strive to understand its unique catchment areas and market drivers that will influence future chassis supply in the region.

60 NCFRP Report 20 | Guidebook for Assessing Evolving International Container Chassis Supply Model s | 60 6.1 Public Policy and Planning Organizations Public policy and planning organizations, including federal and state transportation departments, mu nicipal planning organizations (MPOs) and port authorities are important stakeholders in the evolution of chassis supply models. Each level of government and organization has different mandates and jurisdictional authorities, but they have a common mission to provide for the public wellbeing and to promote economic development and regional competitiveness. This is achieved through planning and investment in public transportation infrastructure, including highways and intermodal connector s, safety, environmental and other regulations and land-use planning. Profile of Public Policy and Planning Organizations Consulted Seventeen public policy and planning organizations were consulted in the preparation of this Guidebook, including five state departments of transportation (DOTs), eight MPOs and ch ambers of commerce, and four port authorities. It should also be noted that many state DOTs reached out to MPOs within their state to assist in the development of a comprehensive response. The U.S. Chamber of Commerce and other federal transportation agencies were also contacted about their understanding of the changes in chassis provisions. Public agencies were selected based on geography, scale, and demonstrated expertise in freight planning and innovation. Public organizations consulted represent coastal and gateway cities, large and small, north and south, and urban and suburban agencies. The level of understanding of the evolving chassis landscape in the U.S. varied. Only one respondent indicated a very good un derstanding of evolving chassis issues (a port authority, the closest stakeholder to the issue); two responded indicating no understanding of chassis issues at all (state DOTs), and others were generally in between although skewed toward a lesser understanding. One thing is clear: evolving chassis supply issues in the U.S. are not univer sally well understood by public policy and planning organizations. 6.2 Implications of Evolving Chassis Supply Models for Public Policy and Planning Organizations The public policy and planning implications of evolving ch assis mo dels could include th e potential for increased truck movements on roads to reposition, pick up, or drop off chassis and greater use of intermodal connectors, and increased land - footprint requirements for chassis storage. Other potential impacts within the purview of the public transportation oversight community are a host of externalities, including road congestion, po llution, road safety issues, and land-use challenges, resulting from increased truck moves/miles. It is, however, not possible to predict the extent of these impacts as future chass is supply models and related chassis storage approaches remain in a state of flux. Public agencies have limited direct control over how chassis supply models will evolve—this will largely be determined commercially among supply chain actors. Nevertheless, the role of public policy and planning organizations can have an influence on evolving chassis supply models. The influence of each level of government and the potential imp li ca tions of evolving chassis supply models are outlined below.

Guidebook for Assessing Evolving International Container Chassis Supply Models | NCFRP Report 20 | 61 Federal Level At the federal level, safety is a paramount concern. Legislation and rulemaking concerning equipment maintenance and roadability have been enacted, requiring equipment safety checks at intermodal interchange points. The federal government also administers the Highway Trust Fund and investments in National Highway System intermodal connectors, which could be affected by evolving chassis supply models if these lead to increased truck moves. State Level State involvement in international freight movement includes corridor planning, freight system network performance assessment, and highway and roadway funding for connections to the private freight networks. If a change in chassis supply affects the overall highway congestion due to additional truck trips or equipment shuttling between off-terminal equipment depots, state and local planning agencies will be obligated to address increased maintenance and capacity needs. These agencies may consider user fees, taxes, permits, or other revenue-generating mechanisms to fund necessary improvements. Conversely, if congestion can be mitigated and truck trips reduced via chassis configuration, policy makers need to be aware of potential strategies. States surveyed have an overall interest in freight center development and measure volumes in aggregate. They typically rely on MPOs and logistics firms to assess local performance. While most states do not identify chassis issues on an individual basis, they recognize growing trucking activity, and the related role of the chassis, in support of international trade. Metropolitan Planning Organization Level Metropolitan planning organizations (MPOs) and economic development organizations have interests in local community infrastructure and economic development. Their direct responsibility for freight includes the development of planning documents. The Transportation Improvement Plans (TIPs) must be completed every 4 to 5 years and include local project selection, strategies, and short-term priorities for funding by the MPO. The statewide TIP will incorporate the TIPs of various MPOs into the statewide program by reference, and will also incorporate projects within the state falling outside of any specific MPO. MPOs are typically concerned with the development of freight performance measures, the condition of National Highway System (NHS) intermodal connectors, and truck parking and congestion strategies to mitigate environmental concerns. Economic development agencies are also locally focused and concentrate on developing and retaining local business and job creation. Among the MPOs surveyed, there was a general trend to define intermodal more broadly to include containers as well as transload and bulk material handling facilities. MPOs in larger urban areas are concerned with any changes in truck-related traffic and tend to focus on operations and performance measures. Land use is a key issue voiced by many with interest in developing freight villages or clusters to keep freight concentrated. Changes in the number of chassis movements to or from freight terminals and equipment depots would affect all these measures and local planning. Port Authorities Port authorities are public entities that operate in one of two models—as a landlord port or as an operating port. The landlord port is responsible for capital improvements and leases out the terminal to operating companies. These leases can specify environmental restrictions and terminal use provisions. Operating ports provide capital for improvements and also take an active role in the daily operation of the port.

62 NCFRP Report 20 | Guidebook for Assessing Evolving International Container Chassis Supply Model s | 62 The Port Authority of New York/New Jersey, Po rts of Long Beach and Los Angeles, the Port of Oakland, and the Port of Seattle are examples of landlord ports that have long-term contracts with terminal operators such as Ports America, SSA, ITS, and Maher Terminals. The Po rt of Virginia, the South Carolina State Ports Au thority (Charleston) and the Ge orgia Port Authority (Savannah) are examples of operating ports in which public authorities (or those governed by public authorities) own the assets and provide and manage the labor to operate the marine terminals. Port authorities—landlord as well as operating—are engaged in internal discussions regarding chassis model alternatives and potential impacts to the terminals. Operating ports are directly involved in chassis, as terminal handling instruments whose main concern is ensuring that the chassis model supports optimal terminal performance at the lowest cost to the terminal. From this perspective, the transition from the hi st orical ocean carrier–controlled model to various pooling approaches has considerably improved terminal utilization and performance in the same vein as described above. Ocean carriers surveyed as part of this research effort indicated chassis count reductions on the order of 20% to handle equivalent cargo levels after port-wide and region-wide pools were implemented. The landlord port authorities have a strong indirect interest in chassis relating to optimal terminal land use and performance metrics such as gate-in to gate-out turn times, which are concerns of shippers and motor carriers, important constituents of the ports. The ports the researchers interviewed have estimated that terminal tenants devote between a low of 6% and a high of 15% of improved on-terminal land to chassis storage. It is recognized that if chassis are moved to an off-site, near-port location, existing terminal capacity could increase. In the current political and econ omic atmosphere, with fiscal constraints and environmental concerns over expanding harbor footprints, public port authorities are highly motivated to grow port business, which means jobs, without additional investment. The challenge facing landlord ports with respect to the emerging chassis models is how to exert influence without stepping into an operating role. Moreover, as public entities, the ports must be cognizant of the concerns of all stakeholders, not just their tenants. Motor carriers, la bor unions, shippers, and even the local populace will have a voice in any landlord port–led initiative. Port authorities the researchers spoke with are strategizing ho w to harness their various constituencies with their differing priorities to develop workable solutions. 6.3 Specific Public Policy and Planning Issues Emerging from Evolving Chassis Supply Models As chassis supply models in the U.S. continue to evolve, it is difficult and too early to reach any direct conclusions on the r elated potential impact on key areas of interest to public policy makers and planners. As a rule, public authorities need to be wary o f any chassis model evolutions that shift pr ivate, commercial costs onto the public via increased maintenance, congestion, or emissions and the like. This section discusses potential issues emerging from the changing chassis supply landscape, as relevant to these public stakeholder groups. As a point of departure, Figure 6-1 frames the perceived areas of greatest concern for public policy and planning organizations, as identified by the team in co ns ultation with public stakeholders.

Guidebook for Assessing Evolving International Container Chassis Supply Models | NCFRP Report 20 | 63 Figure 6-1. Public Stakeholder Perceived Concerns with Respect to Evolving Chassis Supply Models It is interesting to note that local agencies had a higher average level of concern about potential chassis issues than state DOTs. This is primarily due to the concentrated local impact of chassis supply transitions around terminal sites, which creates a more significant planning concern for local agencies. For both state and municipal agencies, the potential need for more truck parking or storage was the paramount concern. At the local level, increased truck trips and parking were the two greatest concerns. At the state level, increased parking, investment in NHS connectors, and potential terminal relocations were of highest importance. From this list of public policy and planning organizations concerns, the following two are particularly notable: Potential for increased truck moves/miles/idling and related externalities (congestion, emissions, noise, and wear and tear on roads). Land-use planning implications. Each concern noted is summarized below. 6.3.1 Potential for Increased Truck Moves A number of chassis supply scenarios could lead to increased truck moves, either bobtail moves (tractor without chassis) or bare chassis moves (chassis without container). It is not the alternative chassis supply model, per se, that will directly infl uence increased truck moves/miles, but rather how chassis are supplied, managed, and stored (in particular, the storage location). For example, as shown in Section 2.2.2, greater truck moves and terminal gate transactions are required in a common routine of picking up an import container from a grounded terminal and returning the empty (live-unload operation) to the same terminal when chassis storage is moved off terminal (see Table 2-1). As noted in the text preceding Table 2-1, this table is based on an illustrative example. The number of truck moves and gate transactions would differ in drop and hook operations, depending on whether the truck returns with a loaded chassis or not, and the nature of the terminal operation (e.g., wheeled vs. grounded). (See Table 6-1.) 0 1 2 3 4 5 Terminal Relocation Needs Nearby Sites Need for Increased Truck Route Designations Terminal Relocation Needs Remote Sites Community Aversion to Intermodal Terminals Fewer Containers Due to Increased Costs Need for Greater Investment in NHS Connectors Public Health and Safety Issues due to Freight Increased Congestion Around Terminals More Truck Trips/Container Handled Need for Increased Truck Parking/Storage Concern with Respect to Potential Planning Impacts Scale 1 (low) - 5 (high) DOTs MPOs

64 NCFRP Report 20 | Guidebook for Assessing Evolving International Container Chassis Supply Model s | 64 Table 6-1. Truc k Moves an d Gate Transactions by Storage Type Chassis Storage Number of Gate Transactions Number of Truck Moves On-Terminal 4 2 Off-Terminal 8 4 Motor Carrier 4 (2 bare chassis) 2 Source: Based on operating assumptions outlined in Table 2-1. In the motor carrier model, the first and last moves between the terminal and motor carrier yards would now be bare chassis instead of bobtail. Towing the bare chassis could have an impa ct on consumption and emissions, congestion , safety, and road wear and tear. It is important to note that if or when changes to chassis dom iciles are made, truckers are keenly aware of fuel and labor cost s, which are their number one and two costs of doing business. Many truckers may reduce empty miles by linking inbound empty boxes to outbound export loads. Several load matching services today are making this information available to the trucking community with proven results in reducing empty miles. Wi th respect to public policy and planning organizations, the ph ysical location at which chassis are stored could also affect l and use and likely have an impact on the num ber of truck moves around terminals and to near -terminal motor carrier yards. Externalities from Increased Truck Moves Although no data exists about the changes in tr ucking patterns caused by a change in chassis models or a shift to domicile ch assis off-terminal sites, the potential increase in truck mo vements could lead to a number of negative externalities, including the following: In creased air emissions: Increased truck moves caused by off-terminal chassis yard storage described above could lead to increased air emissions in two ways. First, through the additional mileage trucks are required to make to drop off/pick up chassis, and second, through additional idling time caused by doubling the number of gate inspections. If off-terminal chassis storage yards are located close to terminals, which may be the most operationally expedient, it could have a particularly significant impact on areas around marine or inland container terminals. In creased congestion: Increased truck moves could also generate additional congestion on roadways around terminals, intermodal connectors, and to and from BCO facilities. Commerce and economic development leaders are concerned about regional competitiveness and the ability to attract manufacturing jobs and commercial businesses. Prospective businesses understand the cost of congestion and the benefit of international and intermodal access. In creased noise: With increased truck traffic would come increased noise from trucking operations. In creased wear an d tear on roads and intermodal connectors : Likewise, additional truck traffic would put more pressure on roads and bridges, including intermodal connec tors in particular. This can result in increased road maintenance and rehabilitation cost, which is of course typically borne in large part by taxpayers. To the extent that changes in ch assis models increase use of NHS connectors, public agencies must be prepared to update long-range plans and seek additional funding sources.

Guidebook for Assessing Evolving International Container Chassis Supply Models | NCFRP Report 20 | 65 The costs of these externalities are typically borne by the larger public and can have a negative economic consequence for a region. 6.3.2 Off-Terminal Land-Use Planning Implications The most important off-terminal land-use implications with respect to evolving chassis supply models concern chassis storage. Historically in the U.S., chassis have, for the most part, been stored at the terminal sites. Certain chassis supply models do, or could lead to increased off-terminal storage, which could impose new or changed pressures on land use both on and off terminal sites (Table 6-2). Table 6-2. Potential Implications for Land-Use Footprint for Different Chassis Storage Models Storage Location Implication for Land-Use Footprint On-terminal Chassis land-use footprint greater in wheeled versus grounded terminal. Limited land-use impact outside terminal, until terminal capacity reached, necessitating more land for operations. Off-terminal Consolidated near-terminal depots (single) could have lowest land-use impact. Decentralized chassis storage (many small depots) would likely lead to increased overall chassis storage land-use footprint and potential for greater conflict with zoning and land-use plans as greater number of sites spread-out. Most efficient land utilization (freight throughput per acre) is inside terminals with no chassis storage, grounded operations only. All scenarios would result in an increase in vehicle miles traveled per container move. Motor carrier facility Potential for highest land-use impact outside terminal if motor carriers each acquire storage space. Motor carriers must move or buy nearby sites to expand. As is the case with off-terminal, most efficient land utilization (freight throughput per acre) is inside terminals with no chassis storage, grounded operations only. Table 6-3 provides a simplified summary of generalized implications of alternative chassis supply models on land use and chassis storage footprint.

66 NCFRP Report 20 | Guidebook for Assessing Evolving International Container Chassis Supply Model s | 66 Table 6-3. Al te rnative Chassis Supply Models and Generalized Land-Use Implications Chassis Supply Model Land-Use Implications (Conventional) Ocean Carrier Chassis Model Status quo—chassis stored within the terminal site. Potential for some off-terminal storage when terminal land constrained. As container traffic volumes and terminal throughput grows, increasing container storage requirements could crowd out existing chassis storage areas . Likewise, as wheeled terminal space becomes constrained, pressure increases to shift to grounded container operations. Chassis Pool Models (Co- op, Neutral, Terminal) As above . Near/off-site terminal storage would, in effect, increase the foot print of the terminal activity–related operations, which could have land-use planning implications. Motor Carrier or Logistics Company Owned (or Leased) and Operated Chassis Model Increased chassis storage need at motor carrier sites could lead to increased footprint requirements of motor carriers involved in drayage business. Potential for third-party storage lots of motor carrier owned chassis. 6.3.3 What Should Public Agencies and Planning Organizations Do Going Forward? Public agencies will have different approaches to handling chassis depending on the nature of their involvement and the number of chassis in their respective regions. Since the transition to new chassis models could affect regional traffic flows a nd land use, public officials and planning organizations may benefit from the following: Developing an inventory of chassis support facilities, equipment depots, and truck parking needs and facilities within their region and keeping track of related traffic flows. Identifying how changes in the chassis models will affect truck traffic volume and congestion impacts on local roads and regional intermodal connectors. Reviewing land-use and zoning plans, particularly around intermodal terminals to address or mitigate any emerging issues resulting from changes in chassis supply practices. For state DOTs and MPOs, developing a dialogue with port authorities to become and stay informed with respec t to any changes in how chassis are stored within the terminal complexes. Port authorities are their counterparts serving the general public but with a closer view of the ch assis situation. Encouraging private-sector participation in public planning efforts, particularly over the mitigation of negative externalities such as congestion. In the context of the chassis supply models identified in this Guidebook, staying informed of prevalent mo dels in their region and of which organizations (leasing companies, ocean ca rriers, motor carriers, rail and marine terminal operators) are influencing change. In short, public agencies and planning agencies should stay informed of any chassis-related developments in their respective regions, as changes in chassis supply markets are bound to continue to evolve in the short/medium term.