Randolph R Resor

Short-haul rail intermodal: can it compete with trucks?

Intermodal traffic, that is, truck trailers or ocean containers handled on special rail equipment, is the fastest-growing segment of rail traffic. Between 1990 and 2000, rail intermodal grew at an annual rate of 4.6%—much faster than rail carload freight, which grew at an annual rate of only 1.4%. However, during the same period, truck tonnage grew at an annual rate of 6.9%, and air cargo at a rate of 17.9%. The growing rail intermodal is expected to overtake coal as the single largest source of revenue for freight railroads in the year 2004. But railroad intermodal tonnage is not growing as fast as truck traffic, and market share is consequently falling. This is a problem: with total freight traffic projected to grow 57% by the year 2020, all the increased traffic will have to be accommodated on the highway network. The introduction of double-stack rail cars in the 1980s dramatically reduced rail haul costs, and it made intermodal traffic competitive at distances of 500 mi or so, whereas previously rail could compete with trucks only at distances of about 750 mi or more. Still, most rail intermodal traffic remains long haul. Three-quarters of all truck tonnage moves distances of less than 500 mi, and rail does not compete in this market. Rail haul costs are developed for a number of short corridors, and it is demonstrated that although double-stack usage has lowered line haul costs, terminal and drayage costs remain high. If these costs can be reduced, rail intermodal can be competitive even in short-distance corridors. Several ways to lower these costs, both by industry initiatives and by public investment, are proposed. Without some action by the public sector, short-haul rail intermodal will continue to be noncompetitive, and highway truck traffic will continue to grow.

Allocating Track Maintenance Costs on Shared Rail Facilities

Railroads were originally conceived as public highways on which anyone might operate. This idea rapidly demonstrated its impracticality, and for many years railroads in most of the world have controlled both infrastructure and operations. However, the European Union is moving toward an open access model for railroads in which track ownership (and related functions, such as train dispatching) is required to be separate from train operations. Separate ownership and operations will require some method for establishing access charges. The fundamental issue is how costs are to be shared among multiple users of a single rail line. At the simplest level, costs can be assigned based on the volume of traffic. But what measure should be used—gross tonnage, train hours, or number of trains? TrackShare is a cost-allocation model that has been developed to meet this need. The process of applying TrackShare to the National Railroad Passenger Corporation’s (Amtrak’s) Northeast Corridor to determine the cost of operating rail freight traffic is described.

Public–Private Partnerships: When Are They Appropriate for Transportation Infrastructure?

Proposed restrictions on federal funding for surface transportation projects are forcing state and local governments to consider alternative funding and financing mechanisms. The Transportation Investment Generating Economic Recovery and Transportation Infrastructure Finance and Innovation Act and other programs have successfully leveraged private dollars, but other programs are still needed to fund the surface transportation infrastructure gap. The U.S. Department of Transportation has been exploring new programs for innovative financing; one is public–private partnerships (P3s). P3s allow private firms to participate in the financing of an infrastructure project and take either part or all of the business risks and earn a market return on their investment as compensation. Conclusions from this analysis are the following. First, although accurate revenue forecasts are essential if a project is to be a success, making accurate estimates of revenues has proved difficult. Second, the success of any P3 depends on accurate measurement and sharing of risk. Deals that place all risk on the private sector are likely to fail. Projects in which the public sector takes more of the business risk are more likely to succeed. Third, public outreach, explanation, and strategic communication are essential, especially if the privatization will result in significant pricing changes for users. Fourth, due diligence and a thorough cost–benefit analysis are essential for public and private parties. Private firms typically have more experience in P3s and project financing. The public sector must have similar information and may need to contract out the cost analysis procedures. Fifth, if a project generates a revenue stream, then a private firm is more likely to embrace a P3 agreement.

Estimation of Investment in Track and Structures Needed to Handle 129 844-kg (286,000-lb) Railcars on Short-Line Railroads

Ownership of the U.S. rail industry is divided between eight Class I railroads (those with more than

Do north american railroads understand their costs? Implications for strategic decision making

258.5 million in annual revenue) and about 550 regional and short-line railroads. The eight large railroads own about 70 percent of the 273 700 track-km (170,000 track-mi) and account for about 90 percent of industry revenues. The remaining 30 percent of track kilometers belongs to the regional and short-line railroads, which must operate and maintain them with 10 percent of industry revenues. U.S. railroads function as an integrated network; freight originating on a short-line railroad can be delivered anywhere in the United States, Canada, or Mexico. Equipment is freely interchanged, so the small railroads must handle the same heavy cars as the Class I railroads even though maximum freight car weights have increased in recent years, with cars of 129 844 kg (286,000 lb) becoming common. Many of the smaller railroads own trackage that had been branchlines belonging to the larger companies, and track components and condition are often marginal or inadequate to handle the heavier loads. Yet, if short lines cannot handle heavier cars, they face a loss of revenue and ultimately business failure. ZETA-TECH conducted a survey of short-line and regional railroads to determine the quantities of track materials, bridge repairs, and replacements needed to handle heavier cars. Using standard railroad industry unit costs, ZETA-TECH estimated the cost of this work at

Train Dispatching Effectiveness with Respect to Communications-Based Train Control: Quantification of the Relationship

6.86 billion in 1999 dollars.

Shared-Use Rail Corridors: Survey of Current Practice with Recommendations for the Future

There is considerable evidence that railroads have misunderstood their own cost structures since before the turn of the 20th century. This persistent management failure to recognize costs led, in the early 20th century, to a failure to recognize that certain lines of business (e.g., long-distance passenger trains) were money losers and also led to excessive reliance on petitions for general rate increases instead of commodity- and service-specific rates. The downward rate trend since industry deregulation in 1981, the failure to recognize or profit from the value that shippers place on high-quality service, and a focus on cost-cutting rather than revenue growth suggest that the industry is still uncertain of the relationship between revenue, costs, and service quality. The result has been a loss of rail capacity, through reductions in the train and engine workforce and through abandonment of a large part of the national rail network. Reductions in the workforce and in track capacity have reduced net investment and the industry’s ability to compete for high-value commodities. Meanwhile, equipment productivity has risen far less than worker productivity, and equipment ownership and maintenance costs typically account for 40 to 60 percent of total direct movement costs. Returns must increase if investment in capacity is to be justified financially. Raising rates, the free-market response to capacity shortages, will raise public policy questions as additional traffic is diverted to the highways. A proper understanding of its cost structure will help the railroad industry make the right decisions for the future.

Economics of Wayside Inspection Systems

This analysis presents a methodology for measuring the efficiency of train dispatching as a product of three variables: (a) the type of train control system (measured by latency, defined here as the interval between occurrence of a schedule deviation and initiation of corrective action); (b) the physical capacity of the route (track kilometers per route kilometers); and (c) train minutes per route kilometer (a measure of both capacity and dispatcher competence). A mathematical relationship among these three variables is postulated, and a log-log regression analysis is used to develop coefficients that relate each of the three independent variables to dispatching efficiency. To do this, actual train-movement data and minimum train running times for 28 U.S. Class I railroad line segments are used. Results of the regression analysis indicate a statistically valid relationship among latency, track capacity, traffic volume, and dispatching effectiveness. Dispatching effectiveness, calculated by placing track kilometers per route kilometer, train minutes per route kilometer, and latency at their mean values, was 71.3 percent (the mean latency was about 17 min). At a latency of 3.5 min, average effectiveness is 81.3 percent. Examples of the trade-off between latency and effectiveness and between track capacity and effectiveness also can be calculated. For the average line, when latency is progressively reduced from the current value of 15 min to 3.5 min, dispatching effectiveness increases from 71.3 to 81.3 percent. When track kilometers per route kilometer are increased from the average value of 1.3 to 2.0 (double-tracking the entire railroad, holding all other values constant) dispatching effectiveness can be increased from 71.3 to 89.5 percent—a larger increase than that realized from a reduction in latency, but at much higher cost. To quantify the dollar benefits of such an increase in dispatching effectiveness for U.S. railroads, further analyses were carried out. Based on a previous study of Burlington Northern operations, train delay costs ranged from

Positive Train Control (PTC): Calculating Benefits and Costs of a New Railroad Control Technology

163/hr to

Railroad privatization and deregulation: Lessons from three decades of experience worldwide

266/hr. To simplify calculations, a value of