1. Randy Mullett Vice President - Government Relations & Public Affairs, Con-way Inc. A Transportation Research Board SHRP 2 Symposium April 16, 2010 Innovations in Freight Demand Modeling and Data A Private Sector View

2. Con-way Today – who we are 2 US$4.3 Billion Industry Leader in Freight Transportation, Logistics Con-way Freight Con-way Truckload Menlo Worldwide Logistics 30,000 employees worldwide Over 500 operating locations 11,500 trucks, 35,000 trailers, 20 million sq ft warehouse space globally 150,000 customer pickups and deliveries daily in N. America Nearly one billion miles annually moving freight on USA highways Consume 150 million gallons of diesel fuel annually

3. Relevant Trucking / Intermodal Realities Trucking is a very fragmented industry. Over 500,000 trucking companies in the US 97% have fewer than 20 trucks 70% of all goods by weight and 83% by value in the US move by truck Modal shares are expected to stay fairly constant 80% of US communities are served only by truck Freight movements over 500 miles are only 13.4% of the market

4. Freight - A System of Systems Water, Rail, and Truck systems connect to maximize efficiency while meeting supply chain requirements for velocity, cost, and service.. Integrity of the intermodal system is dependent on the integrity of the individual modal systems Weakness in one causes modal shift and decreases efficiency of the entire US freight transportation system Constraints (Infrastructure, Regulation, Security, Labor, Energy) have similar effects New Externalities - Sustainability, Energy, Climate Change

5. Framework for Today’s Conversation One cannot separate economic growth from transport growth. Freight demand modeling can be very valuable to decisions on capacity building & highway infrastructure. Freight demand modeling and logistics modeling are very different. Freight transport is fluid in nature and logistics planners are very reactive and opportunistic Private sector freight decisions are made based on current and near term time frames. Data Matters!

6. Private Sector / Supply Chain Perspective What are the drivers of the supply chain? Cost Transit Time / Service Reliability Sustainability Availability Decisions are made on the present and near term but public sector freight planning and subsequent projects can take decades. Investments are being made in optimization software, simulation programs, and asset utilization technologies

7. My Concerns Prediction and forecasting are difficult to validate with many years passing between policy adoption and project completion. Logistics modeling optimizes for efficiency, cost, customer service, inventory levels, etc. Freight modeling does not, creating conflict. Current freight models appear to be inconsistent in the ways they control for variability imposed by externalities. Commodity flows do not adequately address intra-metro freight movement.

8. How is data shared and what is really out there? How is date exchanged? ANSI ANS X12 UN / EDIFAC XML EDI / e-commerce is dominate among large players Common elements valuable for commodity flows Origin / Destination Commodity Quantity Conveyance MRP / DRP system records Dispatch system / GPS records

9. Challenges to Private Sector Data Acquisition What’s in it for me? Linguistic hurdles – common terms and definitions. Common data exchange protocols and collection methodology. Competitive concerns and data ownership. Fragmented transportation industry segments. Exempt vs. common or contract carriage. What elements are needed / wanted.

10. What does the future hold? Continued pressure to maximize supply chain efficiency combined with more freight than the current system can handle and sustainability / energy concerns will result in: Redesigned supply chains and distribution systems Modal shifts to accommodate supply chain adaptations Near sourcing Pressure to increase US truck size and weight Increased energy and environmental regulation Technology innovations Without significant investment, US transportation inefficiencies will result in a competitive disadvantage relative to other world markets

11. What I Would Ask of You For today’s presenters - State early in your presentation, how your research improves one of the basic types of techniques used in freight planning, forecasting, and modeling, either by making a strength stronger or a weakness less so for the particular technique of interest. For all of us – Continue the dialogue. For the organizers and sponsors – Formalize a group of private sector and public sector representatives to explore gaps and propose solutions to address them.

12. Contact Information Randy Mullett Con-way Inc. 575 7 th St, NW Washington, DC 20004 202-637-0994 Mullett.randy@con-way.com