The Future of Intermodalism METRANS 2nd Annual Transportation Conference

Long Beach, CA Feb. 2,2001

Richard M. BiterActing Director

Secretary’s Office of IntermodalismU.S. Department of Transportation

U.S.Department of TransportationSecretary’s Office of Intermodalism2

Outline

The Secretary’s Office of Intermodalism The development of a National Intermodal Freight

Policy Intermodal Freight Technology Working Group

Initiative

U.S.Department of TransportationSecretary’s Office of Intermodalism3

Secretary’s Office of Intermodalism

Created in 1992 by the Intermodal Surface Transportation and Efficiency Act (ISTEA)

“to coordinate Federal policy on intermodal transportation and initiate policies to promote efficient intermodal transportation in the United States”

U.S.Department of TransportationSecretary’s Office of Intermodalism4

Mission

Serve as DOT’s principal advocate and advisor on intermodal transportation

Establish and maintain effective lines of communication with all segments of the transportation community

Provide technical information and assistance to State DOT’s, MPO’s, transportation providers, and system users for intermodal transportation planning and project issues

Coordinate the implementation of the DOT Strategic Plan and other DOT initiatives which promote intermodal transportation

U.S.Department of TransportationSecretary’s Office of Intermodalism5

Our Role

Convener Assemble resources within the Department to resolve

cross-cutting issues Sponsor

Endorse policy/program interpretations that advance intelligent transportation decision making and intermodal solutions

Innovator Champion rapid developments within the intermodal

industry in logistics, intelligent transportation systems, and innovative finance

U.S.Department of TransportationSecretary’s Office of Intermodalism6

National Commission on Intermodal Transportation

Established in ISTEA to “make a complete investigation and study of intermodal transportation in the U.S.

15 member appointed Commission Issued Final Report in September 1994 Report identified 12 specific recommendations that were

grouped in three major categories Policies needed to capture the synergistic potential of the Nation’s

transportation system Investment issues Restructuring government institutions to improve intermodal

transportation

U.S.Department of TransportationSecretary’s Office of Intermodalism7

Major Focus Areas

Innovative finance Intermodal policy Project work Technology System capacity International trade Borders and Corridors Education and training

U.S.Department of TransportationSecretary’s Office of Intermodalism8

World and U.S. Economies Growing Between 1992 to 2001 average growth for World Economy = 3.4%. U.S. Economy = 3.6%

Trade Increasing also: Between 1992 to 2001 average growth for World Economy = 6.7% U.S. exports = 6.7%; imports = 9.9%

Economic Growth and Trade Continue to Increase

Source: IMF “World Economic Outlook”-April 2000

U.S.Department of TransportationSecretary’s Office of Intermodalism9

Freight Trends and Issues: ThemesPresentation of trends and issues is organized around three sets of themes

Markets/Logistics (demand) From national markets to global markets From a manufacturing to a service economy From push to pull logistics systems

Carriers/Transportation Systems (supply) From modal fragmentation to cross-modal coordination From system construction to system optimization From DoD stovepipes to “Focused Logistics”

U.S.Department of TransportationSecretary’s Office of Intermodalism10

Themes (continued)

Public Policy From economic deregulation to safety regulation From modal to multi-modal surface transportation policy From low visibility to environmental accountability From federal central planning to State and local

empowerment

U.S.Department of TransportationSecretary’s Office of Intermodalism11

Supplier Supplier Supplier

Distributor

Customer

Manufacturer

Supplier Supplier Supplier Supplier

3PL

MarketerDesigner

Inventory

InformationSystem

Transport System

“PUSH”METHODS OF

CONTROL(relative

importance)

Inventory

InformationSystem

Transport System

“PULL”METHODS OF

CONTROL(relative

importance)

Point-of-sale dataRecycled products

From Push to Pull Logistics Systems

U.S.Department of TransportationSecretary’s Office of Intermodalism12

The Challenge

Over the past 20 years, highway travel demand has increased an average of over 3.0 percent per year

During that same time, highway capacity has increased at a rate of 0.3 percent per year.

Over the next 20 years, freight movements are expected to double, with more intense growth in major traffic lanes, hubs, and POE

customer expectations will increase; environmental issues will intensify

U.S.Department of TransportationSecretary’s Office of Intermodalism14

What the FAF is:

An enabling device highlight strategic mismatches in national/regional

freight demand and supply inform F&S legislative development processes on

initiatives to address mismatches identify “levers” of change…capacity utilization,

technology applications, multi-jurisdictional funding, labor rules

a decision support tool for freight and trade interests

U.S.Department of TransportationSecretary’s Office of Intermodalism15

Source: Reebie Associates, Transearch (“Truck” comprises primary shipments.)

Air: 22%

Truck: 7%

Rail Intermodal: 6%

Average All Modes: 4%

Rail Carload: 2%

Inland Water: >0%

Higher

Lower

5% 10% 15% 20% 25%

Compound Annual Growth, 1990 to 1998

Le

vel o

f S

erv

ice

Co

nti

nu

um

Modal Growth in Tonnage Demand for reliable, high-speed service is growing

U.S.Department of TransportationSecretary’s Office of Intermodalism16

Total National and International Traffic in 1998 (9.8 Billion tons, $9.1 Trillion )

0

1

2

3

4

5

6

7

8

9

National International

Tons Value

U.S.Department of TransportationSecretary’s Office of Intermodalism17

Top Gateways for International Freight Exports and imports in tons

Exports

Imports

U.S.Department of TransportationSecretary’s Office of Intermodalism18

Domestic Truck Freight Flows, All CommoditiesHighway Freight Density in Tons

U.S.Department of TransportationSecretary’s Office of Intermodalism19

Truck Freight Flows, High-Service CommoditiesHigh-value and time-sensitive products, highway freight density in tons

U.S.Department of TransportationSecretary’s Office of Intermodalism20

Rail Freight Flows, All CommoditiesRail freight density in tons

U.S.Department of TransportationSecretary’s Office of Intermodalism21

Rail Intermodal Flows, All CommoditiesRail freight density in tons

U.S.Department of TransportationSecretary’s Office of Intermodalism22

Growth by Region: US Inter & Intra-Regional Tonnage Growth to 2020 (Preliminary Findings)

100%

89%

89% 79%

U.S.Department of TransportationSecretary’s Office of Intermodalism23

Total Combined International and Domestic

Truck flows to/from LA Basin (in tons)

U.S.Department of TransportationSecretary’s Office of Intermodalism24

International Truck Flows To/From LA Basin (in tons)

U.S.Department of TransportationSecretary’s Office of Intermodalism25

Domestic Truck Activity To/From LA Basin (in tons)

U.S.Department of TransportationSecretary’s Office of Intermodalism26

Public Policy Trends

Less focus on economic deregulation, but more focus on safety regulation

Disjointed incrementalism: Public sector awareness of the need for multi-modal policy, planning, and investment

Growing demand to re-link transportation investment and economic development

Difficult to engage private sector freight interests in state and MPO planning processes

Increased environmental involvement regarding air quality, sustainability, environmental justice

Inadequate freight planning data and analysis tools

U.S.Department of TransportationSecretary’s Office of Intermodalism27

Public Sector(States, MPOs)

Private Sector(Shippers, Carriers)

Global

National

Regional

Local

Freight Transportation PerspectivesState and MPO focus is regional and local; private sector focus is increasingly national and global

U.S.Department of TransportationSecretary’s Office of Intermodalism28

Public Policy Implications

Diminishing productivity returns from deregulation but potential re-regulation to preserve competition

Pressure for reduced accidents and fatalities More complex planning and investment environment Use of highway trust funds for non-highway freight projects Increased local involvement of transportation activities

(NIMBY) New institutional arrangements needed Greater reliance upon infostructure

U.S.Department of TransportationSecretary’s Office of Intermodalism29

The Challenge exists

Both passenger and freight demand upon the nation’s infrastructure will increase significantly

Freight growth will nearly double to 2020; with higher growth in some corridors and nodes

Current planning/programming/financing methods may not adequately address freight’s unique concerns

Need to develop surface transportation reauthorization that fully reflects freight transportation needs

U.S.Department of TransportationSecretary’s Office of Intermodalism30

Three Areas of Improvement

Institutional Development Establish statewide and metropolitan freight advisory

groups…coordinate with economic development Develop multi-jurisdictional freight coalitions

Infrastructure Investment Expand innovative financing options - eligibility issues Raise freight emphasis during the planning/programming

process

Information Technology (Infostructure) leverage technology to optimize system performance

U.S.Department of TransportationSecretary’s Office of Intermodalism31

DOT Strategic Plan

“...Advance America's economic growth and

competitiveness domestically and

internationally through efficient and flexible

transportation.”

U.S.Department of TransportationSecretary’s Office of Intermodalism32

ISTEA

Intermodalism

Innovative Finance

TEA-21

Funding Increase

State/local freight focus

???

Information Technology

Infrastructure Funding

(multimodal?)

Institutional Development

Efficiency Equity Effectiveness

1991 - 97 1998 - 03 2004 - ??

The Evolution of Freight Policy

U.S.Department of TransportationSecretary’s Office of Intermodalism34

Future Challenges - 3 I’s

Information Technology - leverage technology to optimize system performance

ITS – full deployment across the region, with links throughout the supply chain

Linkage with border crossings, air, and marine ports of entry - national security, trade processing, credentialing

Data needs - develop real-time operations information system - technology as enabler

U.S.Department of TransportationSecretary’s Office of Intermodalism35

Increasing System Productivity Requires Technology

U.S.Department of TransportationSecretary’s Office of Intermodalism36

Intermodal Freight Technology Working Group (IFTWG) Initiative Public/Private venture initiated through ITS

America following Reston Intermodal Technology conference in 98

All modes represented Neutral forum allowing private and public sectors to

look at end to end intermodal freight process and search for technology improvements

Identified key areas for operational tests

U.S.Department of TransportationSecretary’s Office of Intermodalism37

Information FlowMotor CarrierMotor Carrier PortPort

ImpedimentsImpediments

Manual entry of Manual entry of documentationdocumentation

Physical FlowPhysical Flow

TruckTruck GateGate PortPort

cargocargodrop-offdrop-off

cargo cargo pickuppickup

Ocean Carrier

Motor Carrier

Port Receiver

Paper-based invoicing Paper-based invoicing and paymentand payment

No advanced No advanced notification of arrivalnotification of arrival

Dock appointmentDock appointment

Notification of arrivalNotification of arrival

Yard plan produced; unloading point and Yard plan produced; unloading point and

handling equipment assignedhandling equipment assigned

Present bill of lading, delivery orderPresent bill of lading, delivery order

Verify truck, driver, appointment,Verify truck, driver, appointment,

demurrage arrangementdemurrage arrangement

Entry pass and clearanceEntry pass and clearance

Dock receipt issuedDock receipt issued

Vehicle inspected andVehicle inspected and

truck cleared for departuretruck cleared for departure

ShipperMotor Carrier

Port

Mapping Intermodal Freight Process

IFTWG Priorities Asset and Cargo Visibility

Improve productivity of container and chassis usage Improve staging of both assets to have them when needed Enable shipper to have end-to-end cargo visibiity

Terminal Dray Operations Improve cross town movements Commercial vehicles staged to pick up containers Increase speed of dray and number of turns per operator Less dray congestion

Freight Information Highway Freight asset and cargo information in a standard format Share information between freight industry segments and with public

domain in an open architecture

U.S.Department of TransportationSecretary’s Office of Intermodalism

U.S.Department of TransportationSecretary’s Office of Intermodalism39

Intermodal Freight Operational Tests

Projects Currently Funded by Federal DOT Chicago; highway-air cargo electronic manifest and

biometric smart card Seattle area; Port of Tacoma, use of electronic container

seals for clearance and tracking through region and across international border

PAR/Cargo Mate project with Port Authority New York/Jersey to test intermodal chassis tagging and tracing for improved asset management

Others planned for 2001; possible joint projects with DOD