1. The Future of Intermodalism METRANS 2nd Annual Transportation Conference Long Beach, CA Feb. 2,2001 Richard M. Biter Acting Director Secretary’s Office of Intermodalism U.S. Department of Transportation

2. Secretary’s Office of Intermodalism 2 Outline The Secretary’s Office of Intermodalism The development of a National Intermodal Freight Policy Intermodal Freight Technology Working Group Initiative

3. U.S.Department of Transportation Secretary’s Office of Intermodalism 3 Created in 1992 by the Intermodal Surface Transportation and Efficiency Act (ISTEA) “to coordinate Federal policy on intermodal transportation and initiate policies to promote efficient intermodal transportation in the United States”

4. U.S.Department of Transportation Secretary’s Office of Intermodalism 4 Mission Serve as DOT’s principal advocate and advisor on intermodal transportation Establish and maintain effective lines of communication with all segments of the transportation community Provide technical information and assistance to State DOT’s, MPO’s, transportation providers, and system users for intermodal transportation planning and project issues Coordinate the implementation of the DOT Strategic Plan and other DOT initiatives which promote intermodal transportation

5. U.S.Department of Transportation Secretary’s Office of Intermodalism 5 Our Role Convener  Assemble resources within the Department to resolve cross-cutting issues Sponsor  Endorse policy/program interpretations that advance intelligent transportation decision making and intermodal solutions Innovator  Champion rapid developments within the intermodal industry in logistics, intelligent transportation systems, and innovative finance

6. U.S.Department of Transportation Secretary’s Office of Intermodalism 6 National Commission on Intermodal Transportation Established in ISTEA to “make a complete investigation and study of intermodal transportation in the U.S. 15 member appointed Commission Issued Final Report in September 1994 Report identified 12 specific recommendations that were grouped in three major categories  Policies needed to capture the synergistic potential of the Nation’s transportation system  Investment issues  Restructuring government institutions to improve intermodal transportation

7. U.S.Department of Transportation Secretary’s Office of Intermodalism 7 Major Focus Areas Innovative finance Intermodal policy Project work Technology System capacity International trade Borders and Corridors Education and training

8. U.S.Department of Transportation Secretary’s Office of Intermodalism 8 World and U.S. Economies Growing Between 1992 to 2001 average growth for  World Economy = 3.4%.  U.S. Economy = 3.6% Trade Increasing also:  Between 1992 to 2001 average growth for  World Economy = 6.7%  U.S. exports = 6.7%; imports = 9.9% Economic Growth and Trade Continue to Increase Source: IMF “World Economic Outlook”-April 2000

9. U.S.Department of Transportation Secretary’s Office of Intermodalism 9 Freight Trends and Issues: Themes Presentation of trends and issues is organized around three sets of themes Markets/Logistics (demand)  From national markets to global markets  From a manufacturing to a service economy  From push to pull logistics systems Carriers/Transportation Systems (supply)  From modal fragmentation to cross-modal coordination  From system construction to system optimization  From DoD stovepipes to “Focused Logistics”

10. U.S.Department of Transportation Secretary’s Office of Intermodalism 10 Themes (continued) Public Policy  From economic deregulation to safety regulation  From modal to multi-modal surface transportation policy  From low visibility to environmental accountability  From federal central planning to State and local empowerment

11. U.S.Department of Transportation Secretary’s Office of Intermodalism 11 Supplier Distributor Customer Manufacturer Supplier 3PL MarketerDesigner Inventory Information System Transport System “PUSH” METHODS OF CONTROL (relative importance) Inventory Information System Transport System “PULL” METHODS OF CONTROL (relative importance) Point-of-sale data Recycled products From Push to Pull Logistics Systems

12. U.S.Department of Transportation Secretary’s Office of Intermodalism 12 The Challenge Over the past 20 years, highway travel demand has increased an average of over 3.0 percent per year During that same time, highway capacity has increased at a rate of 0.3 percent per year. Over the next 20 years, freight movements are expected to double, with more intense growth in major traffic lanes, hubs, and POE customer expectations will increase; environmental issues will intensify

14. U.S.Department of Transportation Secretary’s Office of Intermodalism 14 What the FAF is: An enabling device highlight strategic mismatches in national/regional freight demand and supply inform F&S legislative development processes on initiatives to address mismatches identify “levers” of change…capacity utilization, technology applications, multi-jurisdictional funding, labor rules a decision support tool for freight and trade interests

15. U.S.Department of Transportation Secretary’s Office of Intermodalism 15 Source: Reebie Associates, Transearch (“Truck” comprises primary shipments.) Air: 22% Truck: 7% Rail Intermodal: 6% Average All Modes: 4% Rail Carload: 2% Inland Water: >0% Higher Lower 5%10%15%20%25% Compound Annual Growth, 1990 to 1998 Level of Service Continuum Modal Growth in Tonnage Demand for reliable, high-speed service is growing

16. U.S.Department of Transportation Secretary’s Office of Intermodalism 16 Total National and International Traffic in 1998 (9.8 Billion tons, $9.1 Trillion )

17. U.S.Department of Transportation Secretary’s Office of Intermodalism 17 Top Gateways for International Freight Exports and imports in tons Exports Imports

18. U.S.Department of Transportation Secretary’s Office of Intermodalism 18 Domestic Truck Freight Flows, All Commodities Highway Freight Density in Tons

19. U.S.Department of Transportation Secretary’s Office of Intermodalism 19 Truck Freight Flows, High-Service Commodities High-value and time-sensitive products, highway freight density in tons

20. U.S.Department of Transportation Secretary’s Office of Intermodalism 20 Rail Freight Flows, All Commodities Rail freight density in tons

21. U.S.Department of Transportation Secretary’s Office of Intermodalism 21 Rail Intermodal Flows, All Commodities Rail freight density in tons

22. U.S.Department of Transportation Secretary’s Office of Intermodalism 22 Growth by Region: US Inter & Intra-Regional Tonnage Growth to 2020 (Preliminary Findings) 100% 89% 79%

23. U.S.Department of Transportation Secretary’s Office of Intermodalism 23 Total Combined International and Domestic Truck flows to/from LA Basin (in tons)

24. U.S.Department of Transportation Secretary’s Office of Intermodalism 24 International Truck Flows To/From LA Basin (in tons)

25. U.S.Department of Transportation Secretary’s Office of Intermodalism 25 Domestic Truck Activity To/From LA Basin (in tons)

26. U.S.Department of Transportation Secretary’s Office of Intermodalism 26 Public Policy Trends Less focus on economic deregulation, but more focus on safety regulation Disjointed incrementalism: Public sector awareness of the need for multi-modal policy, planning, and investment Growing demand to re-link transportation investment and economic development Difficult to engage private sector freight interests in state and MPO planning processes Increased environmental involvement regarding air quality, sustainability, environmental justice Inadequate freight planning data and analysis tools

27. U.S.Department of Transportation Secretary’s Office of Intermodalism 27 Public Sector (States, MPOs) Private Sector (Shippers, Carriers) Global National Regional Local Freight Transportation Perspectives State and MPO focus is regional and local; private sector focus is increasingly national and global

28. U.S.Department of Transportation Secretary’s Office of Intermodalism 28 Public Policy Implications Diminishing productivity returns from deregulation but potential re-regulation to preserve competition Pressure for reduced accidents and fatalities More complex planning and investment environment Use of highway trust funds for non-highway freight projects Increased local involvement of transportation activities (NIMBY) New institutional arrangements needed Greater reliance upon infostructure

29. U.S.Department of Transportation Secretary’s Office of Intermodalism 29 The Challenge exists Both passenger and freight demand upon the nation’s infrastructure will increase significantly Freight growth will nearly double to 2020; with higher growth in some corridors and nodes Current planning/programming/financing methods may not adequately address freight’s unique concerns Need to develop surface transportation reauthorization that fully reflects freight transportation needs

30. U.S.Department of Transportation Secretary’s Office of Intermodalism 30 Three Areas of Improvement Institutional Development  Establish statewide and metropolitan freight advisory groups…coordinate with economic development  Develop multi-jurisdictional freight coalitions Infrastructure Investment  Expand innovative financing options - eligibility issues  Raise freight emphasis during the planning/programming process Information Technology (Infostructure)  leverage technology to optimize system performance

31. U.S.Department of Transportation Secretary’s Office of Intermodalism 31 DOT Strategic Plan “... Advance America's economic growth and competitiveness domestically and internationally through efficient and flexible transportation.”

32. U.S.Department of Transportation Secretary’s Office of Intermodalism 32 ISTEA Intermodalism Innovative Finance TEA-21 Funding Increase State/local freight focus ??? Information Technology Infrastructure Funding (multimodal?) Institutional Development EfficiencyEquityEffectiveness 1991 - 971998 - 032004 - ?? The Evolution of Freight Policy

34. U.S.Department of Transportation Secretary’s Office of Intermodalism 34 Future Challenges - 3 I’s Information Technology - leverage technology to optimize system performance  ITS – full deployment across the region, with links throughout the supply chain  Linkage with border crossings, air, and marine ports of entry - national security, trade processing, credentialing  Data needs - develop real-time operations information system - technology as enabler

35. U.S.Department of Transportation Secretary’s Office of Intermodalism 35 Increasing System Productivity Requires Technology

36. U.S.Department of Transportation Secretary’s Office of Intermodalism 36 Intermodal Freight Technology Working Group (IFTWG) Initiative Public/Private venture initiated through ITS America following Reston Intermodal Technology conference in 98 All modes represented Neutral forum allowing private and public sectors to look at end to end intermodal freight process and search for technology improvements Identified key areas for operational tests

37. U.S.Department of Transportation Secretary’s Office of Intermodalism 37 Information Flow Motor Carrier Port Impediments n Manual entry of documentation Physical Flow TruckGatePort cargo drop-off cargo pickup Ocean Carrier Motor Carrier PortReceiver n Paper-based invoicing and payment n No advanced notification of arrival Dock appointment Notification of arrival Yard plan produced; unloading point and handling equipment assigned Present bill of lading, delivery order Verify truck, driver, appointment, demurrage arrangement Entry pass and clearance Dock receipt issued Vehicle inspected and truck cleared for departure Shipper Motor Carrier Port Mapping Intermodal Freight Process

38. IFTWG Priorities Asset and Cargo Visibility  Improve productivity of container and chassis usage  Improve staging of both assets to have them when needed  Enable shipper to have end-to-end cargo visibiity Terminal Dray Operations  Improve cross town movements  Commercial vehicles staged to pick up containers  Increase speed of dray and number of turns per operator  Less dray congestion Freight Information Highway  Freight asset and cargo information in a standard format  Share information between freight industry segments and with public domain in an open architecture U.S.Department of Transportation Secretary’s Office of Intermodalism

39. U.S.Department of Transportation Secretary’s Office of Intermodalism 39 Intermodal Freight Operational Tests Projects Currently Funded by Federal DOT  Chicago; highway-air cargo electronic manifest and biometric smart card  Seattle area; Port of Tacoma, use of electronic container seals for clearance and tracking through region and across international border  PAR/Cargo Mate project with Port Authority New York/Jersey to test intermodal chassis tagging and tracing for improved asset management Others planned for 2001; possible joint projects with DOD