1. Update of the Freight Rail Bottom Line Report: Continuing Study of Freight Rail Supply Meeting Demand Briefing for AASHTO Freight States
Alexander King
WSP USA
September 20, 2017
Oakland, CA

2. AASHTO Study Tasks and Status
Work Item 1: Critique of SCORT Study Proposal
Work Item 2: Review of the 2002 Freight Rail Bottom Line Report
Work Item 3: Analysis of Railroad Share of Freight Movement
Work Item 4: Impacts of Expected Railroad Share of Transport Market
Work Item 5: Industries most impacted by Rail Capacity
Work Item 6: Parameters for State-Railroad PPPs for Capacity Projects
Work Items 7 and 8: Draft and Final Report
We’re Here
Began
June 2015
End in
2017

3. Potential Roles of Final Report
Manifesto, a call to action
A guidebook
A discussion of current issues
Some mix of 1 through 3

4. Key Questions
Why should the public sector be involved with freight rail projects?
What sort of projects should these be? (also supports the why)
When should the public sector be involved with freight rail projects?

5. Why: The Freight Issue Growth of Freight Volumes
Growth in Highway Congestion
1.4 percent annual growth. Trucking retains the highest modal share of freight transportation, but will require significant investment.
Source: FHWA
Source: FHWA FAF-4

6. Why: Shifting Just 1 Percent of Truck Freight to Rail Results in $55 Billion in Benefits
1% Mode-shift
(Millions in $2015)
3% Mode-shift
5% Mode-shift
Shipper Savings
$8,573
$25,720
$42,867
Pavement maintenance savings
$3,000
$9,000
$15,000
Marginal congestion savings
$1,073
$3,219
$5,366
Emissions savings
- CO2 emissions savings
$2,345
$7,034
$11,723
- NOX emissions savings
$14
$43
$71
- PM emissions savings
$520
$1,560
$2,600
- VOC emissions savings $0
Emissions subtotal
$2,879
$8,637
$14,394
Safety savings
- Injury crash savings
$888
$2,664
$4,439
- Fatality crash savings
$2,286
$6,859
$11,432
- Property damage only crash savings
$103
$308
$514
Safety subtotal
$3,277
$9,831
$16,385
Total Discounted Benefits
$18,802
$56,406
$94,011
Total Undiscounted Benefits
$55,488
$166,465
$277,442

7. What: Public Involvement in Freight Rail Has Become More Diverse
Timeline of Public Sector Involvement in Freight Rail Projects
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
Federal Legislation
3R Act
LRSA
LRFA
45G Tax Credit
TIGER
FAST ACT
4R Act
Sec 130
Major Public/Private Partnerships
Rail Preservations
Alameda Corridor
Heartland Corridor
Crescent Corridor
National Gateway
CREATE
Colton Crossing
Tower 55
Route Miles of U.S. Rail Network

8. What: Different Types of PPPs Will Benefit Different Shippers
Intermodal
Unit Train
Source: By BriYYZ from Toronto, Canada
Manifest
Source: Jeff Schultz
Transit Time and Service Variability
Boxcar in Manifest Service
Covered Hopper in Unit Train Service
Double Stack Train Service
Average Loaded Trip Time (Days)
8.77
5.33
3.21
Percentage of Shipments Arriving within 24 Hour Window
32.42
41.90
89.2
Total Cycle Time (Days)
26.88
15.27
6.14
Source: Transportation Research Record, 1995
Source: Craig Sanders of the Akron Railroad Club

9. What: Projects by Which Different Types of Shippers Would Benefit
Small/ Manifest Shippers (e.g. smaller manufacturing, building supply)
Intermodal Shippers (e.g. retail, automotive)
Shippers with Heavy Reliance on Rail (e.g. coal, some grain)
Corridor preservation, short line projects
Improvements to low density rail lines
Better mainline access, such as improvements to, access to sidings and spurs
Transload
Projects that aggregate demand, share industrial access, such as industrial parks
Yard improvements
Intermodal terminals, terminal capacity
Clearance projects
Access to terminals
Mainline capacity
Access to competing railroads
Industrial locations with access to multiple Class I railroads
Short lines that can physically and legally interchange with multiple Class I railroads
Many of these projects are things that multiple industries would want, but differences in emphasis

10. What: Public Sector Can Help Adjust to Changes in Rail Services
Source: STB Waybill Sample

11. When: Parameters of State – Railroad Public/Private Partnerships
What the public sector would invest in
What the private sector would invest in
Public/ Private Partnership
Opportunities

12. When: Framework Relating PPPs to Public Benefits and Private Returns
Similar to Framework Presented in NCRRP 1

13. When: Introduced concept of risk, gradations of private return
Private Financial Returns
Project is Profitable with Low Risk
Investment should Pay for Itself but Is Risky
Railroad Makes Money Providing the Service, but Investment Would Never Pay for Itself
Railroad Loses Money on Every Ton Shipped
PPP
Potential

14. When: Role of PPPs for Class I, Class II/Class III Railroads, Based on Project Need
Must Fund
Optional
Types of Project
Maintenance and plant renewal for infrastructure and rolling stock, needed repairs
Operational improvements, extensions to customers, new IT, other projects
Public Sector Role – Class I Projects
None
Potential PPP opportunity
Public Sector Role – Class II and Class III Projects

15. When: Could the Project Have Been Funded by Private Money Alone?
How necessary is the project for the railroad to function properly?
How risky is the project?
Reported service problems?
Known bottlenecks?
Growth on the corridor?
Part of core network?
Likely level of competition?
What is the uncertainty regarding future traffic levels?

16. When: Benefit Assessment Questions
What Types of Evaluations?
How much effort should be spent?/What can or cannot be quantified?
Scoring
Performance Measures
BCA
Economic Impact
What drives benefits?
-Changes in rail traffic
-Truck/rail diversion
-Operating improvements
Parameters
Who does the scoring?
-Jobs
-Income
-Investment
-Gross regional product
Where is the data to come from?
-Applicant?
-Other?
-How to verify?
When is the economic impact a “good value?”
Combined Assessment

17. Case Studies Case Study Public Benefits Why This Made Sense as a PPP
Crescent Corridor
Avoided truck traffic, lower need for highway investment
Lower costs to rail users
Better access to intermodal transportation
Project would have been unlikely to be privately funded due to risks of high up-front costs for returns that would only develop over the long-term
Heartland Corridor
Improved service and transportation options to Port of Virginia customers
Improved accessibility to intermodal service to customers served by corridor
Project would have been unlikely to be privately funded due to risks of high up-front costs for uncertain returns
CCX Intermodal North Carolina
Iowa, Oregon, Washington
Port of Tucson

18. Questions/Comments
Alex King