National Academies Press: OpenBook

Impacts of Policy-Induced Freight Modal Shifts (2019)

Chapter: Front Matter

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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2019. Impacts of Policy-Induced Freight Modal Shifts. Washington, DC: The National Academies Press. doi: 10.17226/25660.
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Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

N A T I O N A L C O O P E R A T I V E F R E I G H T R E S E A R C H P R O G R A M NCFRP RESEARCH REPORT 40 Subscriber Categories Freight Transportation • Planning and Forecasting • Motor Carriers • Railroads Impacts of Policy-Induced Freight Modal Shifts Rensselaer Polytechnic Institute Troy, NY Jack Faucett Associates, Inc. Bethesda, MD Research sponsored by the Office of the Assistant Secretary for Research and Technology 2019

NATIONAL COOPERATIVE FREIGHT RESEARCH PROGRAM America’s freight transportation system makes critical contributions to the nation’s economy, security, and quality of life. The freight trans- portation system in the United States is a complex, decentralized, and dynamic network of private and public entities, involving all modes of transportation—trucking, rail, waterways, air, and pipelines. In recent years, the demand for freight transportation service has been increas- ingly fueled by growth in international trade; however, bottlenecks or congestion points in the system are exposing the inadequacies of cur- rent infrastructure and operations to meet the growing demand for freight. Strategic operational and investment decisions by government at all levels will be necessary to maintain freight system performance and will, in turn, require sound technical guidance based on research. The National Cooperative Freight Research Program (NCFRP) is a cooperative research program sponsored by the Office of the Assistant Secretary for Research and Technology under Grant No. DTOS59- 06-G-00039 and administered by the Transportation Research Board (TRB). The program was authorized in 2005 with the passage of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU). On September 6, 2006, a contract to begin work was executed between the Research and Innovative Technology Administration, which is now the Office of the Assistant Secretary for Research and Technology, and the National Academies of Sciences, Engineering, and Medicine. NCFRP carries out applied research on problems facing the freight industry that are not being adequately addressed by existing research programs. Program guidance is provided by an oversight committee composed of a representative cross section of freight stakeholders appointed by the National Academies. The NCFRP Oversight Committee meets annually to formulate the research program by identifying the highest priority projects and defining funding levels and expected products. Research problem statements recommending research needs for con- sideration by the NCFRP Oversight Committee are solicited annually but may be submitted to TRB at any time. Each selected project is assigned to a panel, appointed by TRB, which provides technical guid- ance and counsel throughout the life of the project. Heavy emphasis is placed on including members representing the intended users of the research products. NCFRP produces a series of research reports and other products such as guidebooks for practitioners. Primary emphasis is placed on disseminating NCFRP results to the intended users of the research: freight shippers and carriers, service providers, suppliers, and public officials. Published research reports of the NATIONAL COOPERATIVE FREIGHT RESEARCH PROGRAM are available from Transportation Research Board Business Office 500 Fifth Street, NW Washington, DC 20001 and can be ordered through the Internet by going to http://www.national-academies.org and then searching for TRB Printed in the United States of America NCFRP RESEARCH REPORT 40 Project NCFRP-44 ISSN 2572-3685 (Print) ISSN 2572-3693 (Online) ISBN 978-0-309-48090-1 Library of Congress Control Number 2019952999 © 2019 National Academy of Sciences. All rights reserved. COPYRIGHT INFORMATION Authors herein are responsible for the authenticity of their materials and for obtaining written permissions from publishers or persons who own the copyright to any previously published or copyrighted material used herein. Cooperative Research Programs (CRP) grants permission to reproduce material in this publication for classroom and not-for-profit purposes. Permission is given with the understanding that none of the material will be used to imply TRB, AASHTO, FAA, FHWA, FMCSA, FRA, FTA, Office of the Assistant Secretary for Research and Technology, PHMSA, or TDC endorsement of a particular product, method, or practice. It is expected that those reproducing the material in this document for educational and not-for-profit uses will give appropriate acknowledgment of the source of any reprinted or reproduced material. For other uses of the material, request permission from CRP. NOTICE The research report was reviewed by the technical panel and accepted for publication according to procedures established and overseen by the Transportation Research Board and approved by the National Academies of Sciences, Engineering, and Medicine. The opinions and conclusions expressed or implied in this report are those of the researchers who performed the research and are not necessarily those of the Transportation Research Board; the National Academies of Sciences, Engineering, and Medicine; or the program sponsors. The Transportation Research Board; the National Academies of Sciences, Engineering, and Medicine; and the sponsors of the National Cooperative Freight Research Program do not endorse products or manufacturers. Trade or manufacturers’ names appear herein solely because they are considered essential to the object of the report.

The National Academy of Sciences was established in 1863 by an Act of Congress, signed by President Lincoln, as a private, non- governmental institution to advise the nation on issues related to science and technology. Members are elected by their peers for outstanding contributions to research. Dr. Marcia McNutt is president. The National Academy of Engineering was established in 1964 under the charter of the National Academy of Sciences to bring the practices of engineering to advising the nation. Members are elected by their peers for extraordinary contributions to engineering. Dr. John L. Anderson is president. The National Academy of Medicine (formerly the Institute of Medicine) was established in 1970 under the charter of the National Academy of Sciences to advise the nation on medical and health issues. Members are elected by their peers for distinguished contributions to medicine and health. Dr. Victor J. Dzau is president. The three Academies work together as the National Academies of Sciences, Engineering, and Medicine to provide independent, objective analysis and advice to the nation and conduct other activities to solve complex problems and inform public policy decisions. The National Academies also encourage education and research, recognize outstanding contributions to knowledge, and increase public understanding in matters of science, engineering, and medicine. Learn more about the National Academies of Sciences, Engineering, and Medicine at www.national-academies.org. The Transportation Research Board is one of seven major programs of the National Academies of Sciences, Engineering, and Medicine. The mission of the Transportation Research Board is to provide leadership in transportation improvements and innovation through trusted, timely, impartial, and evidence-based information exchange, research, and advice regarding all modes of transportation. The Board’s varied activities annually engage about 8,000 engineers, scientists, and other transportation researchers and practitioners from the public and private sectors and academia, all of whom contribute their expertise in the public interest. The program is supported by state transportation departments, federal agencies including the component administrations of the U.S. Department of Transportation, and other organizations and individuals interested in the development of transportation. Learn more about the Transportation Research Board at www.TRB.org.

C O O P E R A T I V E R E S E A R C H P R O G R A M S CRP STAFF FOR NCFRP RESEARCH REPORT 40 Christopher J. Hedges, Director, Cooperative Research Programs Lori L. Sundstrom, Deputy Director, Cooperative Research Programs William C. Rogers, Senior Program Officer Jarrel McAfee, Senior Program Assistant Eileen P. Delaney, Director of Publications Natalie Barnes, Associate Director of Publications Ellen M. Chafee, Senior Editor NCFRP PROJECT 44 PANEL Freight Research Projects Christina S. Casgar, San Diego Association of Governments, San Diego, CA (Chair) Robert Costello, American Trucking Associations, Arlington, VA Mark Andrew Hornung, ALK Technologies, Inc., Princeton, NJ Barbara A. Ivanov, University of Washington, Seattle, WA Anjali Mahendra, Embarq, The World Resources Institute (WRI) Center for Sustainable Transport, Morrisville, NC Thomas E. McQueen, Georgia DOT, Atlanta, GA Thomas J. Tisa, Canadian National Railway, Homewood, IL Birat Pandey, FHWA Liaison Richard Boll, International Trade Administration Liaison Eric C. Shen, Maritime Administration Liaison W. Scott Brotemarkle, TRB Liaison

NCFRP Research Report 40 provides public policymakers with the factors that shippers and carriers consider when choosing freight modes and provides an analytical methodology to quantify the probability and outcomes of policy-induced modal shifts. To conduct the project, the research team secured access to the Commodity Flow Survey (CFS) microdata—the most comprehensive freight dataset in the United States—complemented it with confidential shipper data and modal data, and used state-of-the-art econometric modeling techniques. The result is the most extensive research effort on freight mode choice in the United States to date. In recent public policy debates, much emphasis has been placed on proposals to shift freight from highways to rail (e.g., European policies to shift traffic from highways to rail and waterways, public investment in rail intermodal facilities, proposals to subsidize rail operations, truck size and weight restrictions, truck model age restrictions at ports, and tax subsidies). This emphasis is based on goals of reducing emissions and highway congestion. However, prudent planning requires an understanding of the basics of mode choices, what could change those choices, and what the impacts will be. Modal shift initiatives also require a full understanding of the impacts prior to enacting the plans, especially the availability of modal capacity. Negative consequences are frequently misunderstood or overlooked. Without such understanding, public officials could make uninformed decisions that have decades-long impacts on transportation infrastructure and business supply chain procurement as well as the economic competitiveness of the country. In NCFRP Project 44, Rensselaer Polytechnic Institute was asked to (1) describe the factors that influence the current distribution of domestic freight modal share for stages of repre- sentative supply chains across industrial sectors; (2) identify, analyze, and discuss the factors influencing shippers and carriers to shift or not shift modes (e.g., access to service, modal capacity, equipment, time sensitivity, commodity, security, cost, public policy, and labor issues); (3) describe recent significant examples of freight modal shifts and their causations; (4) identify, analyze, and discuss the externalities as well as unintended consequences of policy-induced modal shifts; (5) develop an analytical methodology to evaluate the effects and likelihood of specific policy-induced modal shifts and quantify the total public impacts; and (6) conduct three case studies of representative current or proposed policy-induced modal shifts using the analytical methodology. F O R E W O R D By William C. Rogers Staff Officer Transportation Research Board

AUTHOR ACKNOWLEDGMENTS The research reported herein was performed under NCFRP Project 44 by the Rensselaer Polytechnic Institute and Jack Faucett Associates, Inc. Rensselaer Polytechnic Institute was the prime contractor. Dr. José Holguín-Veras, Professor of Civil and Environmental Engineering at Rensselaer Polytechnic Institute, was the Project Director and Principal Investigator. Dr. Cara Wang (Rensselaer Polytechnic Institute) was the Co-Principal Investigator. Michael Lawrence, at Jack Faucett Associates, was a Co- Principal Investigator. The authors of this report are José Holguín-Veras (Rensselaer Polytechnic Institute), Cara Wang (Rensselaer Polytechnic Institute), Lokesh Kumar Kalahasthi (Rensselaer Polytechnic Institute), Shama Campbell (Rensselaer Polytechnic Institute), Michael Lawrence (Jack Faucett Associates), Jonathan Skolnik (Jack Faucett Associates), Ira Silvergleit (Jack Faucett Associates), Carlos A. González-Calderón (Universidad Nacional de Colombia at Medellin), Jeffrey Wojtowicz (Rensselaer Polytechnic Institute), Diana Ramirez-Rios (Rensselaer Polytechnic Institute), Mario Arrieta-Prieto (Rensselaer Polytechnic Institute), Oriana Calderón-Quevedo (Rensselaer Polytechnic Institute), and Sofia Perez-Guzman (Rensselaer Polytechnic Institute). The work was done under the general supervision of Professors Holguín-Veras and Wang. The unique nature of this project—which involved the unprecedented use of confidential Commodity Flow Survey (CFS) microdata and other confidential data files for freight demand modeling—presented tremendous challenges not typically found in transportation research. The team had to secure approval to conduct the research, obtain security clearances for all researchers that would use the data, travel to secure Research Data Centers to use the data, follow strict disclosure procedures to release the results, and strictly follow Internal Revenue Service and U.S. Bureau of the Census guidelines for data protection. In following these lengthy and delicate procedures—an absolute necessity to protect the confidentiality of the data—the team was fortunate enough to enjoy the full support of the staff of multiple agencies, who provided invaluable guidance to the team, in some cases from the very start of the project. The team gratefully acknowledges the contributions of Ronald Duych, Rolf Schmitt, Joy Sharp, Michael Sprung, and Edward Strocko from the Bureau of Transportation Statistics; Lynn Riggs, James Hinckley, Chester Ford, and Scot Dahl from the U.S. Census Bureau; and Shirley H. Liu from the Census Bureau’s Research Data Center. Without the support and guidance of these individuals, the team would not have been able to navigate the complex process of securing access to the confidential data used in the project. The team would also like to thank the Census Bureau for providing access to the CFS and Longitudinal Business Database confidential files; the staff from the Bureau of Transportation Statistics for helping the team understand the data constraints; the FHWA’s Freight Office for sharing data about highway net- works; the FRA, with special acknowledgment of Karen McClure; the Surface Transportation Board; the Caliper Corporation and its president, Howard Slavin, for providing access to complementary datasets that made this research possible; and to the private-sector representatives who provided an insightful perspective on freight mode choice—John Gray, from the Association of American Railroads, and the distinguished private-sector leaders who participated in the in-depth interviews. Lastly, a report of this breadth is always a joint effort; Rensselaer Polytechnic Institute and Jack Faucett Associates would like to acknowledge and thank the rest of the individuals, not explicitly mentioned here, who contributed to NCFRP Project 44 with feedback and support. Additional support for this project was provided by the Volvo Research and Education Foundations Center of Excellence for Sustainable Urban Freight Systems and the Center for Infrastructure, Transpor- tation, and the Environment at the Rensselaer Polytechnic Institute.

1 Summary 8 Chapter 1 Introduction P A R T A Overview of Freight Mode Choice and Influencing Factors 13 Chapter 2 Historical Patterns in Freight Mode Share 15 Historical Mode Shares 16 Current Mode Shares 20 Emissions and Energy Impacts of Freight Mode Share Patterns 33 Chapter 3 Factors That Influence Freight Mode Choice 33 Macro Mode Share Factors 43 Insights from the IDIs 53 Review of Efforts to Induce Changes in Freight Mode Shares P A R T B Freight Mode Choice Modeling 59 Chapter 4 Overview of Available Methodologies 59 Econometric Models 62 Supply Chain Models of Freight Mode Choice 65 Summary of Relevant Literature 68 Freight Modes, Scope, and Variables from the Literature 71 Chapter 5 Modeling Approach Selected 71 Best Choice: Shipment-Level Models 72 Second Best Choice: Aggregate (Market-Share) Models 73 Issues with Supply-Chain-Based Models P A R T C Model Estimation 77 Chapter 6 Data Preparation 77 Shipment Data: 2012 CFS Microdata 78 Establishment Data: 2012 LBD 78 Modal Data C O N T E N T S

80 Chapter 7 Model Formulations 80 Variables Used 81 Overview of Model Results 82 Model Formulations 86 Limitations 87 Chapter 8 Model Results 87 Shipment-Size Models 87 Market-Share Models 89 Shipment-Level Models: Unweighted 94 Shipment-Level Models: Weighted—Domestic Cargo (Dom-Weight) 97 Shipment-Level Models: Weighted—Total Cargo (Total-Weight) P A R T D Case Studies and Numerical Experiments 103 Chapter 9 Freight Mode Shift Case Studies 103 Identification and Selection of Case Studies 104 Methods for Identifying Mode Shift Case Studies 114 Case Study Selection Methodology 118 Selected Case Studies 151 Chapter 10 Numerical Experiments 152 Descriptions of the Real-Life Cases That Inspired the Numerical Scenarios 154 Market-Share Models 164 Shipment-Level Models 177 References 185 Abbreviations Note: Photographs, figures, and tables in this report may have been converted from color to grayscale for printing. The electronic version of the report (posted on the web at www.trb.org) retains the color versions.

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In recent public policy debates, much emphasis has been placed on proposals to shift freight from highways to rail. This emphasis is based on goals of reducing emissions and highway congestion. However, prudent planning requires an understanding of the basics of mode choices, what could change those choices, and what the impacts will be.

The TRB National Cooperative Freight Research Program's NCFRP Research Report 40: Impacts of Policy-Induced Freight Modal Shifts provides public policymakers with the factors that shippers and carriers consider when choosing freight modes and provides an analytical methodology to quantify the probability and outcomes of policy-induced modal shifts.

This is the final report of the NCFRP Program, which ends on December 31, 2019. NCFRP has covered a range of issues to improve the efficiency, reliability, safety, and security of the nation's freight transportation system.

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