1. LEONARD TRANSPORTATION CENTER FORUM PANEL: THE FUTURE OF GOODS DISTRIBUTION AND INLAND PORTS IN THE INLAND EMPIRE May 4, 2007 Southern California’s Freight Movement Challenge

2. Southern California National Freight Gateway

4. Value of Imports Moving Through the Los Angeles-Long Beach Ports by Congressional District

5. Southern California Transportation Today: Texas Transportation Institute, 2005 Urban Mobility Report

6. SCAG Region 2030 Forecast Population & Employment Growth (Millions) 20002030 Increase Population 16.8 22.9 37% Employment 6.8 10.5 54% Like adding two Chicagos…

7. Population growth to 2030

8. Employment growth to 2030

9. Federal policy supports global trade Export manufacturing jobs to overseas sources of cheap labor Import manufactured goods from overseas Price of imported goods fails to internalize transportation, environmental, and social costs The Recipe

10. Competitive Position

13. In Million TEU’s 44% US Import Market Share 25% US Export Market Share Source: POLA, POLB LA-Long Beach Projected Container Growth

14. USDOT Freight Demand Forecast to 2020 1,437 6,165 (TEUs in thousands) 2020 2004 Houston 1,010 2,152 Miami 2,043 3,382 Oakland 4,478 15,835 NY/NJ 1,809 5,566 Virginia 1,798 4,396 Tacoma 1,776 2,557 Seattle 1,662 9,420 Savannah LA/LB 59,420 13,101 From presentation by Jeff Shane, Under Secretary for Policy, USDOT, April 3, 2006 1,860 6,639 Charleston

15. 051015 LA-Long Beach Ports Port of Oakland TEUs (millions) Local Out-of-region CA Goods Mvmt. Action Plan and SANBAG Serving the Nation Local vs. Interregional Freight

16. 0%20%40%60% O/D is Local Transloaded; O/D outside Region 37% 40% 23% Transported In original container to/from External O/D Leachman and Associates LLC -Port and Modal Diversion for SCAG Where’s It All Going?

17. Transloading of weekly shipments from Asia affords large, nation- wide retailers an 18-20% reduction in their total pipeline plus safety stock inventory compared to direct shipping from Asia. The Transloading Advantage Assuming a 6% average error in nationwide one-week-ahead sales forecasts Leachman & Associates LLC

18. So. Cal inland transloading & distribution facilities: 1.5 B sq.ft. of roof = 15% of nation, 60% of west coast Ontario/ Mira Loma, San Bernardino and Riverside Counties. Ontario Airport for scale

19. Where will the next 1.5B sq. ft. go?

20. LOGISTICS: Economic Opportunity… (Dr. J. Husing) Good Entry Level Pay Defined Skill Ladder On The Job Learning Blue Collar Heavy Use of Information Technology Has To Be In Southern California

21. Logistics: Highest Blue Collar Avg. Pay Level

22. FOUND: A Replacement For Manufacturing

23. Left Unaddressed, Landside Congestion and Unhealthful Air Will Bring Port Growth to a Halt By 2025: Trucks: Projected to nearly double Trains: nothing will move without improvements

24. And key findings of the Leachman Port and Modal Elasticity Study are: 1.Inadequate landside freight capacity will strangle port growth absent major improvements 2.Port traffic is more likely to be diverted by failure to address landside congestion than from modest container fees used to improve reliable throughput

25. Source: Gill V. Hicks Associates, more recent data: 2005=54,600, 2030=142,000 Daily Truck Traffic to/from LA/LB Ports Will Grow Dramatically

26. Inland Empire: Highest HHDT on-system mileage in California

27. Train Delays on Existing Trackage Forecast Train Delay (Year 2000 passenger trains and no system capacity improvements) YearTrain TypeAverage Delay per Train BNSF Freight31.9 minutes UP Freight 30.4 minutes 2000 YearTrain TypeAverage Delay per Train BNSF Freight206.3 minutes UP Freight 196.9 minutes 2010 Source: Leachman and Associates Mainline Rail Study for SCAG

28. Intermodal Yard Capacity and Demand (Millions of Lifts 1 ) 2001200520102020 Total Demand 3.274.296.9515.01 Capacity4.565.88 2 5.88 Surplus(+) Deficit (-) +1.29+1.59-1.07-9.13 1 One lift = 1.85 TEUs 2 BNSF’s Commerce facility to added 200,000 Dec. 2002 and Pier 400 added 1.12 million lifts 2004 Source: Gill V. Hicks and Associates

29. Community Impacts: grade crossing delay…

30. The Pollutants Freight Movement Creates are Jeopardizing Our Health  The Region continues to have the worst air quality in the U.S.

31. Diesel Particulates… …comprise 71% of the major air pollutants contributing to cancer risk in the South Coast Air Basin

32. Source: SCAQMD, Multiple Air Toxics Exposure Study II, March 2000 Estimated Risk of Cancer from Airborne Toxics: Excluding Diesel Cancers per million

33. Estimated Risk of Cancer from Air Toxics: All Emission Sources Source: SCAQMD, Multiple Air Toxics Exposure Study II, March 2000 Cancers per million

34. South Coast 82% Rest of California 18% South Coast 52% Rest of Nation 48% Population-Weighted Exposure Above NAAQS Based on 2000-2002 AIRS Data PM2.5 Disproportionate Exposure South Coast Air Basin Source: California Air Resources Board

35. SCAB Cases/Year due to PM2.5 * Premature Deaths 5,400 Hospitalizations 2,400 Asthma & Lower Respiratory 140,000 Symptoms Lost Work Days 980,000 Minor Restricted Activity Days5,000,000 1999-2000 Air Quality Data Source: California Air Resources Board Recent CARB Assessment of PM Health Effects

36. PM2.5 Carrying Capacity (443) 8-Hour Ozone Carrying Capacity (114) NOx Emissions Trend By Source Category and Carrying Capacity

37. How Are We Going to Attain PM2.5 Reduction Targets? TONS PER DAY 2014 Baseline Reduction Needed NO VOC SO PM2.5 x x 654 527 43 102 (31%) (11%) (57%) (14%) 203 59 24 14 Percent

38. Draft 2007 AQMP Tons/Day Target AQMD Stationary Measures CARB’s Strategy Unknown 203 -6 -125 -72 2014 PM 2.5 Attainment

39. Draft 2007 AQMP Tons/Day NO Target AQMD Stationary Measures CARB’s Strategy AQMD Additional Measures Unknown 383 -8 -139 -57 -179 2023 OZONE Attainment x

40. Model Year GroupEMFAC2002 (g/mi) EMFAC(wd) (g/mi) Ratio (Ewd/E2002) Pre-1975 to 1990 29.1 to 17.5 24.00.8 to 1.4 1991 to 200217.5 to 14.0 21.61.2 to 1.5 2003 to 20067.015.22.2 2007 to 20094.09.22.3 2010+ (w/OBD)1.03.2 (2.7) Reflects Base Emission Rates and Deterioration at 500,000 miles Source: California Air Resources Board 2006 HHD Diesel Truck NOx Emission Factor Comparison

41. Reduction Responsibility By Agency

42. $306090120150180210240270300330360390420450480 FEUs in millions 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 2004 Annual Volume Container Fee (per FEU) in dollars Total Volume Trans Loading Volume $200 Minimal Decrease in Total Volume Slight Increase in Trans Loading Volume Assumption: Fees on inbound loaded containers only SOLUTIONS? Container Fees Used to Finance Congestion Relief

43. SOLUTIONS? Dedicated High-Speed, Clean, Grade Separated Freight Corridors and Inland Ports

44. Solutions will require: High-Level commitment to collaborate among regional, state, and federal agencies (e.g., the MOU) Extensive private sector involvement and financing Community involvement (ultimately, support) A Win-win outcome: - attainment of healthful air quality - mitigation of community impacts - private sector value in return for investment

45. Challenges Summarized Finance – requires new funding, users and beneficiaries must contribute Environment – timely AQ attainment despite 3x increase in shipping & freight throughput Performance – assure infrastructure benefits Communities – acceptance and support essential to progress Institutions – unclear implementation responsibilities, limited federal recognition Implementation – in one decade, not three

46. Efforts completed or in progress Multi-county Goods Movement Action Plan CTCs, SCAG, Caltrans State Goods Movement Action Plan California BTH, CalEPA Emission Reduction Plan for Ports and Goods Movement in California California Air Resources Board San Pedro Bay Ports Clean Air Action Plan Port of LA, Port of LB Freight Movement Executive Roundtable Execs. From shippers, railroads, trucking, CTCs, SCAG Inland Empire Goods Movement Coalition / So. Cal. Leadership Bi-county private sector group in alliance with LA and Orange Co. interests I-15 Comprehensive Study (complete) SANBAG, RCTC, Caltrans I-710 Project Development MTA, Caltrans, Gateway Cities Port and Modal Elasticity Study (complete) Leachman & Associates for SCAG Mainline Rail Study (complete) Leachman & Associates for SCAG Logistics & Distribution: An Answer to Regional Upward Social Mobility (complete) Dr. John Husing for SCAG Alameda Corridor East grade separations SANBAG, RCTC, Ontrac, ACE Construction Authority

47. What we ask… Participation in a collaborative process, convened by the transportation agencies, ports, communities, and the State and federal governments, to formulate and efficiently implement a strategy to address the challenges and grasp the opportunities facing the nation’s largest international freight gateway

48. PRINCIPAL CONVENORS ROUNDTABLE / - USDOT Congestion Strategy Facilitation Team Administration SCAG FEDERAL STATE SCAG Ports Multi-County Freight Infrastructure Planning Dialogue / Facilitation/ Brainstorming State GMAP Process Information management/sharing Coordination of regional environmental studies Transportation/ Blue print/ Open-space Program Regional Institutional implementation arrangements Transportation/ Air Quality Partnership Transportation/ W.Q. Partnership Transportation/Blue print/community partnerships Ontario Center/ I-10 Blue-print Demonstration Project Projects in Process CTCs Southern California National Freight Gateway Collaborative Strategy Way of working: Scoping Respectfully stitching together the quilt Promoting cooperation & collaboration regarding initiatives