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

2. Federal Highway Administration Office of Freight Management and Operations 2 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

3. Federal Highway Administration Office of Freight Management and Operations 3 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

4. Federal Highway Administration Office of Freight Management and Operations 4 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.

5. Federal Highway Administration Office of Freight Management and Operations 5 National Highway System Intermodal Connectors - InfrastructureConstraints NHS Connectors  Poor physical condition  Poor geometrics  “orphan status”  inadequate coordination of investment strategies

6. Federal Highway Administration Office of Freight Management and Operations 6 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

7. Federal Highway Administration Office of Freight Management and Operations 7 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

8. Federal Highway Administration Office of Freight Management and Operations 8 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

9. Federal Highway Administration Office of Freight Management and Operations 9 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)

10. Federal Highway Administration Office of Freight Management and Operations 10 Total Domestic Freight Tons and Value Freight traffic moving into, out of, and within the U.S. totaled 9.8 billion tons and $9.1 trillion in 1998- 1st approximation

11. Federal Highway Administration Office of Freight Management and Operations 11 Truck Freight Flows, All Commodities All truck types; highway freight density in tons

12. Federal Highway Administration Office of Freight Management and Operations 12 Truck Freight Flows, High-Service Commodities High-value and time-sensitive products, highway freight density in tons

13. Federal Highway Administration Office of Freight Management and Operations 13 Rail Freight Flows, All Commodities Rail freight density in tons

14. Federal Highway Administration Office of Freight Management and Operations 14 Rail Intermodal Flows, All Commodities Rail freight density in tons

15. Federal Highway Administration Office of Freight Management and Operations 15 Inland Waterway Freight Flows, All Commodities Waterway freight density in tons

16. Federal Highway Administration Office of Freight Management and Operations 16 Air-Freight Origins and Destinations All commodities, domestic airport-to-airport traffic, in tons Origins Destinations

17. Federal Highway Administration Office of Freight Management and Operations 17 Top Gateways for International Freight Exports and imports in tons Exports Imports

18. Federal Highway Administration Office of Freight Management and Operations 18 Port Example- Charleston

19. Federal Highway Administration Office of Freight Management and Operations 19 Highway Flows of International Freight Moving into and From the Port of Charleston

20. Federal Highway Administration Office of Freight Management and Operations 20 Railway Flows of International Freight Moving into and From the Port of Charleston

21. Federal Highway Administration Office of Freight Management and Operations 21 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

22. Federal Highway Administration Office of Freight Management and Operations 22 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

23. Federal Highway Administration Office of Freight Management and Operations 23 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%

24. Federal Highway Administration Office of Freight Management and Operations 24 Growth by Region: US Inter & Intra-Regional Tonnage by 2020 100% 89% 79%

25. Federal Highway Administration Office of Freight Management and Operations 25 Compound Annual Growth, 1998 to 2010, US Tons Modal Growth Rates to 2010 Higher Lower

26. Federal Highway Administration Office of Freight Management and Operations 26 Modal Share of Growth to 2020 US Traffic, Constant Dollar Value Basis Distribution of Value by Major Mode Distribution of Tonnage by Major Mode

27. Federal Highway Administration Office of Freight Management and Operations 27 Modal Share of Growth to 2020 US Traffic, Ton Mile Basis Distribution of Ton Miles by Major Mode (Miles: County to County Highway)

28. Federal Highway Administration Office of Freight Management and Operations 28 Commodity Share of Growth to 2020 US Tonnage

29. Federal Highway Administration Office of Freight Management and Operations 29 Truck Traffic Growth on Highways, 2020 Density of Incremental US Truck Tons

30. Federal Highway Administration Office of Freight Management and Operations 30

31. Federal Highway Administration Office of Freight Management and Operations 31 Highways 2020: Focus of Growth Rate of US Truck Growth on Top Tonnage Links

32. Federal Highway Administration Office of Freight Management and Operations 32 NAFTA--US/Canada Truck Traffic on US Highway Network, 2020 (Tons)

33. Federal Highway Administration Office of Freight Management and Operations 33 NAFTA--US/Mexico Truck Traffic on US Highway Network, 2020 (Tons)

34. Federal Highway Administration Office of Freight Management and Operations 34 Overseas Inland Trade Growth by Sector and Mode

35. Federal Highway Administration Office of Freight Management and Operations 35 Overseas Inland Trade: Truck Traffic on U.S. Highway Network, 2020 (Tons)

36. Federal Highway Administration Office of Freight Management and Operations 36 Inland Truck Flows - 2020 US-European Trade Network Freight Density for All Commodities, in Tons

37. Federal Highway Administration Office of Freight Management and Operations 37 2020 US-European Trade by Commodity US Imports versus Exports, Tonnage Basis

38. Federal Highway Administration Office of Freight Management and Operations 38 2020 US-European Trade by State All Commodities, Tonnage Basis Origins (Export) Destinations (Import) Low 3rd Middle 3rd High 3rd

39. Federal Highway Administration Office of Freight Management and Operations 39 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

40. North Atlantic Central Northwest Southwest Alliance Cross- Border Trade Sea- Borne Trade Air- Borne Trade Conduct regional case studies, e.g. Southeastern States analysis of Latin American trade implications

41. Federal Highway Administration Office of Freight Management and Operations 41 The Policy Challenge Both passenger and freight demand upon the nation’s 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 freight’s unique concerns Intermodal linkages not seamless; inefficient operational practices Increased focus on safety and environmental issues Economic competiveness issues

42. Federal Highway Administration Office of Freight Management and Operations 42 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

43. Freight National Policy Development and Outreach Workplan - 2001

44. Federal Highway Administration Office of Freight Management and Operations 44 ISTEA Intermodalism Innovative Finance TEA-21 Funding Increases TIFIA State/local freight focus ??? Information Technology Infrastructure Funding (multimodal?) Institutional Development EfficiencyEquityEffectiveness 1991 - 971998 - 032004 - ?? Toward Surface Transportation Reauthorization- Freight elements?

45. FHWA Office of Freight Management and Operations, USDOT www.ops.fhwa.dot.gov/freight Gary Maring gary.maring@fhwa.dot.gov