Freight Trends/Issues, Multimodal System Flows and Forecasts, and Policy Implications

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Freight Trends/Issues, Multimodal System Flows
and Forecasts, and Policy Implications
EU/US Forum April 2001 Gary Maring, USDOT

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Objectives

• Highlight emerging freight and logistics
  trends/issues
• Present first approximation of current US
  domestic and international freight flows
• Discuss preliminary trade forecasts to 2020
  (including US/European trade) and analysis of
  potential constraints in the intermodal system
• Identify some of the emerging policy issues
  toward transportation reauthorization in 2002-2003

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Freight Trends and Issues

• Markets/Logistics (demand)
• From national markets to global markets
• From a manufacturing to a service economy
• Carriers/Transportation Systems (supply)
• From modal fragmentation to cross-modal
  coordination
• From system construction to system optimization
• Public Policy
• From economic deregulation to safety regulation
• From modal to multi-modal surface transportation
  policy
• Increased environmental accountability

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Implications of Changing Demand for
Transportation Services

• Increasing demand for reliable, flexible,
  cost-effective, timely, and visible door-to-door
  freight services
• Lower inventory levels and less slack production
  capacity, creates greater dependence on
  transportation services
• Simultaneous increase in robustness and fragility
  of logistics and transportation systems
• Increasing freight traffic and congestion along
  trade corridors, metropolitan areas particularly
  in/around terminals, and border crossings.

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National Highway System Intermodal Connectors -
Infrastructure Constraints

• NHS Connectors
• Poor physical condition
• Poor geometrics
• orphan status
• inadequate coordination of investment strategies

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Public Policy Implications for Freight

• Diminishing productivity returns from
  deregulation
• Pressure for improved safety
• More complex planning and investment environment
  evolving public/private partnerships
• Use of highway trust funds for non-highway
  freight projects
• Increased local community and environmental
  concerns
• New multi-juristictional institutional
  arrangements may be needed
• Greater reliance upon technology for monitoring
  cargo/fleets and for system management

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Freight Transportation PerspectivesState and MPO
focus is regional and local private sector focus
is increasingly national and global
Private Sector(Shippers, Carriers)
Global
National
Regional
Local
Public Sector(States, MPOs)
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Multimodal Freight Data and Policy Analysis
Framework

• Approximation of current national flows by mode,
  including domestic leg of international moves
• Economic trade forecasts to 2020 (domestic and
  international) and estimated modal components
• Assessment of capacity and investment
  implications
• Policy development tool for future legislation

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First Approximation of U.S. Freight Flows

• 1998 Annual Volumes
• County-level flows
• International and domestic flows
• STCC commodity groupings
• Modal components (truck, rail, air, water)
• Sources (Bureau of Transportation Statistics,
  Rail Waybill, PIERS, Reebie Transearch Database,
  Army Corps of Engr., other private data sources)

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Total Domestic Freight Tons and ValueFreight
traffic moving into, out of, and within the U.S.
totaled 9.8 billion tons and 9.1 trillion in
1998- 1st approximation
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Truck Freight Flows, All CommoditiesAll truck
types highway freight density in tons
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Truck Freight Flows, High-Service
CommoditiesHigh-value and time-sensitive
products, highway freight density in tons
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Rail Freight Flows, All CommoditiesRail freight
density in tons
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Rail Intermodal Flows, All CommoditiesRail
freight density in tons
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Inland Waterway Freight Flows, All Commodities
Waterway freight density in tons
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Air-Freight Origins and DestinationsAll
commodities, domestic airport-to-airport traffic,
in tons
Origins
Destinations
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Top Gateways for International Freight Exports
and imports in tons
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Port Example- Charleston
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Highway Flows of International Freight Moving
into and From the Port of Charleston
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Railway Flows of International Freight Moving
into and From the Port of Charleston
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Analyze Economic Trade Forecasts and System
Implications

• WEFA provided economic forecasts of
  International, National, and Regional Activity
• Assigned 2010 and 2020 modal freight flows
• Conduct systems analysis (e.g. capacity,
  investment implications) during coming year
• Support policy analysis toward reauthorization
• Case Studies with regional coalitions and
  industry to improve understanding of transport
  system implications

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WEFA Economic Assumptions

• Assumes that level of economic output will
  approach potential GDP, the level of output that
  could be achieved if resources were fully
  utilized
• Assumes no exogenous shocks
• The long range outlook relies on supply factors
  such as population growth, labor force, captial
  stock, productivity growth, fiscal policy,
  foreign developments, etc.
• A base trend forecast assumption was produced
  also a high and low assumption

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Freight Forecast Growth Rates-Trend

• US Domestic
• 1998-2020 2.9 (Cumulative 87)
• 1998-2010 3.4
• 2010-2020 2.4
• US International
• 1998-2020 3.4 (Cumulative 107)
• 1998-2010 4.0
• 2010-2020 2.9
• International Sectors
• US/Canada 1998-2020 3.1
• US/Mexico 1998-2020 3.5
• US/Europe 1998-2020 3.1 (US export 2.7, US
  import 3.4)
• US/ROW 1998-2020 3.4

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Growth by Region US Inter Intra-Regional
Tonnage by 2020
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Modal Growth Rates to 2010
Higher
Lower
Compound Annual Growth, 1998 to 2010, US Tons
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Modal Share of Growth to 2020US Traffic,
Constant Dollar Value Basis
Distribution of Tonnage by Major Mode
Distribution of Value by Major Mode
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Modal Share of Growth to 2020US Traffic, Ton
Mile Basis
Distribution of Ton Miles by Major Mode (Miles
County to County Highway)
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Commodity Share of Growth to 2020US Tonnage
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Truck Traffic Growth on Highways, 2020 Density of
Incremental US Truck Tons
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(No Transcript)
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Highways 2020 Focus of GrowthRate of US Truck
Growth on Top Tonnage Links
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NAFTA--US/Canada Truck Traffic on US Highway
Network, 2020 (Tons)
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NAFTA--US/Mexico Truck Traffic on US Highway
Network, 2020 (Tons)
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Overseas Inland Trade Growth by Sector and Mode
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Overseas Inland Trade Truck Trafficon U.S.
Highway Network, 2020 (Tons)
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Inland Truck Flows - 2020 US-European
TradeNetwork Freight Density for All
Commodities, in Tons
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2020 US-European Trade by CommodityUS Imports
versus Exports, Tonnage Basis
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2020 US-European Trade by StateAll Commodities,
Tonnage Basis
Low 3rd
Origins (Export)
Middle 3rd
Destinations (Import)
High 3rd
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Next Steps--Capacity and Investment Analysis

• Assign future freight flows to modal networks
• Conduct highway system capacity analysis to
  understand the nature of emerging constraints,
  e.g. nodes, corridors, gateways, metropolitan
  congestion
• Develop illustrative multimodal case studies in
  selected regions of the country e.g. Alameda,
  Chicago rail and intermodal access, Mid Atlantic
  rail, SE States Latin American Trade Study
• Conduct what-if analyses e.g. intermodal,
  coastal shipping
• Assess future investment requirements for
  Biennial Report to Congress

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Conduct regional case studies, e.g. Southeastern
States analysis of Latin American trade
implications
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The Policy Challenge

• Both passenger and freight demand upon the
  nations infrastructure will increase
  significantly
• Freight volumes will nearly double to 2020 with
  higher growth in some corridors and nodes
• Current planning and financing methods do not
  adequately address freights unique concerns
• Intermodal linkages not seamless inefficient
  operational practices
• Increased focus on safety and environmental
  issues
• Economic competiveness issues

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U.S. National Outreach/Policy analysis

• Share freight analysis findings, forecasts, and
  system impacts with stakeholders and assess
  policy implications
• Hold a series of outreach forums on multimodal
  freight finance, planning and environment,
  operations safety to assess current practice
  and formulate future policy options
• Develop a Freight Story and conduct national
  freight summit Dec. 2001 to lay groundwork for
  policy initiatives
• Report to Congress on system condition,
  performance, and future investment requirements
  in 2002
• Develop surface, marine, air transportation
  reauthorization legislative strategies in 2002
  that fully reflect the needs of freight and
  passenger considerations

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Freight National Policy Development and Outreach
Workplan - 2001
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Toward Surface Transportation Reauthorization-
Freight elements?
Efficiency
Equity
Effectiveness
1991 - 97
1998 - 03
2004 - ??
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FHWA Office of Freight Management and Operations,
USDOT

• www.ops.fhwa.dot.gov/freight
• Gary Maring
• gary.maring_at_fhwa.dot.gov