Freight Transportation Resilience in Response to Supply Chain Disruptions (2019)

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89 Holmgren, J. and Ranstedt, L. (2017). “An Extended TAPAS-Z Model and a Case Study of the Transport of Forest Products.” Procedia Computer Science 109C: 343-350. Hong, L., Ouyang, M., Peeta, S., He, X., Yan, Y. (2015). “Vulnerability Assessment and Mitigation for the Chinese Railway System Under Floods.” Reliability Engineering and System Safety 137: 58-68. Horton, J. L. (2015). “Surviving an Interstate Bridge Collapse.” US. DOT Federal Highway Administration. https://www.fhwa.dot.gov/publications/publicroads/14novdec/05.cfm IATA. (2011). “Impact of September 11, 2001 on Aviation.” International Air Transport Association. https://www.iata.org/pressroom/Documents/impact-9-11-aviation.pdf Ivanov, B., Xu, G., Buell, T., Moore,B. Austin, B. and Wang, Y-J. (2008). “Freight Transportation Storm-Related Closures of I-5 and I-90.” Freight Transportation Economic Impact Assessment Report. Washington State Department of Transportation. Olympia, WA. Ivanov, D., Dolgui, A., Sokolov, B. and Ivanova, M. (2017).” Literature Review on Disruption Recovery in the Supply Chain.” International Journal of Production Research 55 (20): 6158-6174. Jalic, M. (2015). “Modelling the Resilience, Friability and Costs of an Air Transport Network Affected by a Large- Scale Disruptive Event.” Transportation Research Part A, 71: 77-92. Joint Chiefs of Staff (JCS). (2013a). “The Defense Transportation System.” Joint Chiefs of Staff Publication JP 4-01. US. Department of Defense. Washington DC. https://www.jcs.mil/Portals/36/Documents/Doctrine/pubs/jp4_01_20170718.pdf JCS. (2013b). “Distribution Operations.” Joint Chiefs of Staff Publication JP 4-09. U.S. Department of Defense. Washington DC. https://www.jcs.mil/Portals/36/Documents/Doctrine/pubs/jp4_09.pdf JCS. (2013c). “Deployment and Redeployment Operations.” Joint Chiefs of Staff Publication JP 3-35. U.S. Department of Defense. Washington DC. https://www.jcs.mil/Portals/36/Documents/Doctrine/pubs/jp3_35.pdf Keever, D., & Soutuyo, J. (2005). “Coordinating Military Deployments on Roads and Highways: A Guide for State and Local Agencies.” Washington, DC.: Federal Highway Administration. https://ops.fhwa.dot.gov/publications/fhwahop05029/fhwahop05029.pdf Kim, T.J., Ham, J.H. and Boyce, D. E. (2002). “Economic Impacts of Transportation Network Changes: Implementation of a Combined Transportation Network and Input-Output Model.” Papers in Regional Science 81(2): 223-246. Klibi, W. and Martel, A. (2010). “Modeling Approaches for the Design of Resilient Supply Networks under Disruptions.” Interuniversity Research Center on Enterprise Networks, Logistics and Transportation. Report CIRRELT-2009-27. Universite Laval, Quebec, Canada. Kramek, J. (2013, July). “The Critical Infrastructure Gap: U.S. Port Facilities and Cyber Vulnerabilities.” Center for 21st Century Security and Intelligence at Brookings. Washington DC. https://www.brookings.edu/research/the-critical- infrastructure-gap-u-s-port-facilities-and-cyber-vulnerabilities/ Livshits, V., You, D., Zhu, H., Jeon, K., Vallabhaneni, L., Camargo, P., Pourabdollahi, Z. (2017). “Strategic Highway Research Program 2. Mega-Regional Multi-Modal Agent-Based Behavioral Freight Model.” http://www.azmag.gov/Portals/0/Documents/MagContent/TRANS_2017-02-13_SHRP2-TRANS_2017-06-06-C20- MAG-Next-Generation-Freight-Demand-Model-Update.pdf Lyons, S. R. (2016, June). “Sailing to the Fight, Marching to Victory.” Army Sustainment Magazine. from https://www.army.mil/article/166113 Mattson, L. and E. Jenelius. (2015). “Road Network Vulnerability Analysis: Conceptualization, Implementation and Application.” Computers, Environment and Urban Systems 49, 136-147.

90 Mesa-Arango, R., X. Zhan, S. Ukkusuri, A. Mitra and F. Mannering. (2013). “Estimating the Economic Impacts of Disruptions to Intermodal Freight Systems Traffic.” Purdue University, NEXTRANS Project No. 053PY03, Final Report. https://www.purdue.edu/discoverypark/nextrans/assets/pdfs/Final%20Report%20053PY03%20Estimating%20the%2 0Economic%20Impacts%20of%20Disruptions%20to%20Intermodal%20Freight%20Systems%20Traffic.pdf Mesa-Arango, R., Zhan, X., Ukkusuri, S.V. and Mitra, A. (2016). “Direct Transportation Economic Impacts of Highway Networks Disruptions Using Public Data from the United States.” Journal of Transportation Safety & Security 8(1):36- 55. Meyer, M. and A. Cumming, (2016). “Extreme Temperature Events and Transportation System Resiliency,” Proceedings of the International Symposium on Climate Change and Transportation, EU and USDOT, Brussels, Belgium, June. https://www.nap.edu/download/24648# Meyer, M. (1985). "Reconstructing Critical Facilities: The Case of Boston's Southeast Expressway," Transportation Research Record 1021, TRB, National Research Council, Washington, DC. Meyer, M., M. Flood, J. Keller, J. Lennon, G. McVoy, C. Dorney, K. Leonard, R. Hyman and J. Smith. (2014). NCHRP Report 750: Strategic Issues Facing Transportation, Volume 2: Climate Change, Extreme Weather Events, and the Highway System: Practitioner’s Guide and Research Report. Transportation Research Board of the National Academies, Washington, DC. http://www.trb.org/Main/Blurbs/169781.aspx Nagurney, A., Ke, K., Cruz, J., Hancock, K and Southworth, F. (2002). "Dynamics of Supply Chains: A Multilevel Logistical/Information/Financial Network Perspective." Environment and Planning B29: 95–818. Nakagawa, Y., & Shaw, R. (2004). “Social Capital: A Missing Link to Disaster Recovery.” International Journal of Mass Emergencies and Disasters, 22(1), 5-34. http://www.ijmed.org/articles/235/ NTSB. (2004). “Railroad Accident Brief - DCA01MR004.” Washington, DC.: National Transportation Safety Board. https://www.ntsb.gov/investigations/AccidentReports/Reports/RAB0408.pdf Oke, A., & Gopalakrishnan, M. (2009). “Managing Disruptions in Supply Chains - A Case Study of a Retail Supply Chain.” International Journal of Production Economics (118), 168-174. https://www.sciencedirect.com/science/article/pii/S0925527308002612 O'Neill, B. (2011). “Steps Toward Financial Resilience.”New Jersey Agricultural Experiment Station Finance Message - Rutgers University. https://njaes.rutgers.edu/sshw/message/message.php?p=Finance&m=194 Oregon Seismic Safety Policy Advisory Commission (OSSPAC). (2013). “The Oregon Resilience Plan - Reducing Risk and Improving Recovery for the Next Cascadia Earthquake and Tsunami.” Salem, Oregon: Oregon Seismic Safety Policy Advisory Commission. https://www.oregon.gov/oem/documents/oregon_resilience_plan_final.pdf Outwater, M., Smith, C., Wies, K., Yoder, S., Sana, B., and Chen J. (2013). “Tour-based and Supply Chain Modeling for Freight: Integrated Model Demonstration in Chicago.” Transportation Letters-the International Journal of Transportation Research, 5(2), 55–66. doi:10.1179/1942786713Z.0000000009 Pint, E.M., et al (2017). “Army Installation Rail Operations. Implications of Increased Outsourcing.” Rand Corporation. https://www.rand.org/pubs/research_reports/RR2009.html Ponomarov, S. Y. and Holcomb, M. C. (2009). "Understanding the concept of supply chain resilience." International Journal of Logistics Management. 20(1): 124-143. RAND Corp. (2009). “Adding Resilience to the Freight System in Statewide and Metropolitan Transportation Plans: Developing a Conceptual Approach.” NCHRP Project 08-36, Task 73. Transportation Research Board, Washington, DC. http://onlinepubs.trb.org/onlinepubs/nchrp/docs/NCHRP08-36(73)_FR.pdf Reggiani, A., Nijkamp, P. and Lanzi, D. (2015). "Transport Resilience and Vulnerability: The Role of Connectivity." Transportation Research Part A 81: 4-15. Reis, V. (2014). “Analysis of Mode Choice Variables in Short-Distance Intermodal Freight Transport Using an Agent- Based Model. Transportation Research Part A 61: 100-120.

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94 APPENDIX A: INLAND WATERWAY/LOCKS SCENARIO 5 Commodity Grain U.S. Corridor Midwest to New Orleans Disruption Lock Outage or Variable Water Levels Commodity: Grains The U.S. is the world’s top grain producer and exporter.10 In 2017, the U.S. produced 585 thousand kilotons of grain, which includes corn, soybean, wheat, barley, and sorghum11. Out of this, approximately, 131.3 thousand kilotons were exported. U.S. Corn accounted for approximately 64%, soybeans accounted for 21% and wheat accounted for 12%12. The remaining 3% is mostly made of sorghum and barley. Domestic grain is an input for various products such as animal feed, ethanol, biodiesel production, as well as vegetable oil and other food products. Market and Corridor Overall, approximately 1.1 million kilotons of cereal grains were transported in the U.S. in 2015. FAF data were used to identify the domestic flow of export grains, including the states with the largest producers (or origins) and the primary destination ports for export. Using the FAF data for interstate moves rather than intrastate moves gives a better market-level view of grain movements in the U.S. Figure A-1 shows the top ten grain origin states by tonnage in 2015 at the state level. The origin of the grain is not necessarily where the grain was grown, it is where any grain was recorded leaving the state. Corn and soybeans are grown mostly in the Midwest; wheat is also grown in interior states and the Pacific Northwest. Figure A-2 shows the top ten states in grain receipts by tonnage in 2015 at the state level. The high tonnage in coastal states like Texas, Louisiana, California, and Washington reflect shipments ultimately destined for export. States close to the inland waterway system typically use barges for grain going to export in the Gulf Coast. States located further west may use rail to transport the grain to ports along the Pacific Northwest or in the Gulf Coast. Domestic grain is generally located closer to processing facilities and will generally use truck for short-hauls and rail for long-hauls. The U.S. origin and destination pair selected for this analysis is the shipment of cereal grains from Illinois to New Orleans for export to European and Asian markets. In 2015, as per FAF4 data, 29% of the grains that left Illinois was destined for New Orleans. 10 http://nationalaglawcenter.org/wp-content/uploads/assets/crs/RL32470.pdf 11 https://apps.fas.usda.gov/psdonline/circulars/grain.pdf 12 USDA Modal share 1978-2014.

95 shows the grain movements by volume between Illinois and New Orleans by mode. Around 7,179 thousand tons of cereal grains were projected to move from Illinois to New Orleans in 2015. Of that, 55% moved by water and 41% moved by rail. Figure A-1: Top 10 Grain Origins by Tonnage at the State Level, 2015

96 Figure A-2: Top Ten Grains Markets by Tonnage at the State Level, 2015 Table A-1: Grain Volumes Between Illinois and New Orleans by Mode Mode Tonnage (kilotons) % of Tonnage Value ($ Million) % of Value Water 3,956 55% $1,070 56% Rail 2,909 41% $ 759 40% Multiple modes 171 2% $45 2% Truck 143 2% $34 2% Total 7,179 100% $1,907 100% Source: FAF4 Supply Chain Cereal grains, such as corn, soybeans and wheat, are grown and harvested seasonally. Corn and soybean harvest typically begins in October and finishes by the end of November. Wheat has two harvest seasons, winter wheat is planted in the fall and harvested in the spring, whereas spring wheat is planted in the spring and harvested in the fall. The significant volumes of grain harvested in the fall requires the movement of a large amount of product in a short period. Grain is typically shipped in bulk. As shown in Figure A-3, grains are stored and consolidated in grain elevators, such as on-farm storage, country and co-op grain elevators, and in sub-terminal grain elevators. Transfers between elevators is done by either truck or rail, depending on the amount and locations. Trucks, trains, and barges compete and complement one another in moving grain to successively larger elevators with shipping distance often determining each mode’s role. Trucks have cost advantages for shorter distances (less than 250 miles) and function primarily as the short haul mode.

97 Once the grain reaches an elevator connected to the inland water system along the Illinois and Mississippi Rivers, and has amassed enough volume, the grain is transloaded into barges. These river barges travel through locks along the Upper Mississippi River – Illinois Waterway (UMR-IWW) navigation system towards New Orleans, LA. Upon arriving at the Port of South Louisiana, the grains are transloaded again into deep-water vessels for export. Source: WSP Figure A-3: Grain Supply Chain Grain is often sold through futures contract, where the seller agrees to deliver grain at a future date at a predetermined price or at a “basis” price plus an adjustment to be determined in the future. Transportation is the largest cost component in grains basis, and the shipping costs increase during times of low transportation availability. It is generally only worthwhile to move grain from one location to another if the difference in price between the two locations exceeds the transportation costs. The farmer for whom it is expensive to move grain to relevant markets has a lower profit than the farmer that can move grain to markets inexpensively. When grain spot prices are low, farmers can store the grain until they can sell it at a higher price, depending on available storage capacity and on the expected returns from storage. Farmers depend on transportation to get their products to market domestically and globally. There is a high degree of competition among barges, railroads, and trucks in some markets to supply transportation for grains. The modes are also complementary and grain is often transported multimodally.13 The performance of this multimodal supply chain, and in particular the movement of grain down the Mississippi River, depends on the availability of grain-specific facilities such as grain elevators, hopper railcars, and barges; the waterway infrastructure such as docks and locks; the railway infrastructure such as tracks and bridges; and the highway infrastructure such as the roads between farms, country elevators, and sub-terminal elevators. Disruptions to the transportation system can seriously impact the shipping costs and basis.14 For example, channel limitations that may be imposed during high or low water situations, as well as lock closures due to failure or scheduled maintenance, can extend the amount of time it takes for barges to transit, empty, and return up the Mississippi for another trip. This causes delays and a shortage in barge stock available to bring the grain to market. 13 https://www.ams.usda.gov/services/transportation-analysis/modal 14 https://www.ams.usda.gov/sites/default/files/media/AnalysisofGrainBasisBehaviorTransportationDisruptionsSummary.pdf

98 A standard dry bulk barge carries 1,750 tons; a rail bulk car carries 110 tons; a highway tractor-trailer carries 25 tons.15 Replacing a single barge trip requires 16 railcars or 70 trucks. Trucks are owned and maintained by private companies and operate over mostly publicly maintained roads.16 Sending trucks over long distances adds considerable expense and increases congestion on highways. Rail is a better option for long haul grain transportation. Railways and infrastructure are owned and maintained by private companies. Considering the number of rail cars necessary to replace a single barge, the availability of railway hopper cars would be challenged during the harvest season. UMR-IWW Locks The Mississippi River north of the mouth of the Ohio River at Cairo, Illinois is considered the Upper Mississippi River. There are 27 locks and dams that the USACE uses to maintain a minimum nine-foot deep navigation channel. The Lower Mississippi River flows south of the Ohio River to the Gulf of Mexico and does not have any locks. This allows large barge tows that are unconstrained by lock sizes. The Illinois River is connected to the Mississippi River north of St. Louis. The Illinois River also has a minimum channel depth of nine feet, which is maintained by seven locks and dams without auxiliary chambers. Any single lock outage will shut down navigation. The Kaskaskia River is 325 miles long in Southern Illinois. The end of the river connects to the Mississippi River near New Athens, IL. It is navigable for 35 miles and does not have any dams or locks. Figure A-4 shows the locks along the Upper Mississippi River and the Illinois River.17 15 http://www.mvr.usace.army.mil/Portals/48/docs/CC/2013_Flood/Tow%20Facts%20-%20Fuel.pdf 16 https://www.nap.edu/read/21763/chapter/4 17 www.mvr.usace.army.mil/Portals/48/docs/Nav/LocksAndRiver.pdf