Business Logistics 420Public Transportation

Lecture 28:Urban Goods Movement

References

• APTA• US Congressional Reports• MPO Reports

– Tippecanoe County, Indiana– Seattle-Tacoma, Washington

• US DOT– BTS– FTA

Lecture Objectives

• To understand the importance of urban goods movement

• To understand the framework of urban goods movement

• To understand the scope of urban goods movement

• To identify the infrastructure needed for urban goods movement

Why is this important?

• 74% (203 million)of the population in the US is classified as urban, of that amount 66% live in an area with population greater than one million.– This places an enormous burden on the urban

infrastructure to move enough goods into and through cities.

Statistics

• 52 tons of freight are transported for each person, each year.

• Transportation accounts for 66% of the oil and gas used in the US.

• There are only 159,000 miles of NHS road in the country to handle this traffic.

More Stats

• The federal government estimates that congestion causes $40 billion in losses.

• Fed Ex and UPS estimate that each five minutes of delay costs $40 million per year

• Truck delays due to congestion add $7.6 billion annually to the cost of American-made goods.

JIT and Food Distribution

• Urban Areas require vast amounts of food each day.– JIT initiatives increase the number of deliveries– Spoilage dictates that certain goods must be

delivered within certain time frames.– With the exception of self-grown products, all

food is delivered to or through a city

Trends• Transportation accounts for 11% of GDP.

– Even if the percentage remains the same, the cost will rise as population increases.

– Population has been rising by approximately 10% per year, most growth is in urban areas.

– Urban goods costs will continue to rise.

Framework For Study• Definitions:

– Urban goods movement: the study of freight movement into, through, or around an urban area.

– Urban Area: An area (50,000 or more population) so designated by the U.S. Bureau of the Census.

– NHS: National Highway System, interstate and US highway roads that carry the majority of US commerce

Framework (cont.)

• Areas of Focus:– Eastern Cities– Western Cities– Edge Cities

• These are general classifications that will be used to refer to common problems that occur in areas with similar size and design characteristics.

Scope of Study

• Eastern Cities

• Western Cities

• Edge Cities

• Downtown or CBD Areas

Eastern Cities

• Characteristics– These cities developed during the 1700-1800’s

due to their port facilities .– Typical layout consists of narrow, non-grid

streets that service a river or ocean port area.– High population densities radiating from the

original urban area

Eastern Cities

• Problems– Terminal facilities are clustered to serve freight

being moved by water– Streets were designed to serve horse drawn

freight, not truck freight.– Insufficient land to expand transportation

infrastructure, or lessen population density

Western Cities

• Characteristics– Lower population density than Eastern Cities– Growth occurred during the 1950’s, concurrent

with the growth of the Interstate system– Mix of easy interstate access at the periphery,

with insufficient infrastructure in the core of the cities

Western Cities

• Problems– Lack of infrastructure coupled with the lack of

interior space to make improvements– Resulted from the underestimation of demand

during interstate construction, and unforeseen population growth.

– Freight facilities are better than eastern cities, but remain inadequate for the volume of traffic

Edge Cities

• Characteristics– Located outside of cities at the intersection of

Interstates, or other NHS roads– Development is characterized by accumulation

of shopping centers, high-tech industry, and business campuses

– Low resident population density

Edge Cities

• Problems– Inability of road networks to support the inflow

of workers and shoppers.– Lack of an overall design due to unplanned

build-up of industry, and commerce– Lack of sufficient population density to

implement mass transit solutions…freight competes with personal traffic

Infrastructure

• The movement of goods is dependent on the quality, and efficiency of the infrastructure available.

• The transportation infrastructure supports all facets of economic activity in an area.

• The proper blend of new construction, repair, and redesign is vital to the economic development of the US

Infrastructure

• Wholesale and retail sales increase proportionally with an increase in infrastructure spending.

• Improvements in infrastructure translate into cost reductions for business, which means lower costs and higher profits

Statistics

• Federal government reports show a 25% return generated by infrastructure spending.

• NHS roads handle 40% of all freight traffic, but only constitute 4% of roads in the US

• 40% of the 43,500-mile Interstate System, is in "poor" or only "fair" condition

Statistics

• Each year Americans “waste” 1.4 billion gallons of fuel and 1.2 billion person-hours in traffic congestion, these resources would be better spent to increase productivity

• Infrastructure spending has grown at a rate of only 1% per year since the end of the interstate construction era.

Trends• Infrastructure spending has slowed, or even

declined in some years since the end of the interstate construction era.

• Economic and econometric studies have shown positive links between infrastructure development and sales, employment, and new industry development.

Trends• Current government initiatives include a

$5.4 billion federal program to build, repair, or modernize the NHS road network

• New partnerships are being developed between private industry and government agencies to design and implement solutions to the many problems faced by logistics providers.

Infrastructure Components

• Roads– Interstate– US Highways

• Right of Ways (non-road)– Rail– Water

• Terminal Facilities– Loading Docks– Equipment

Roads

• Major component of transportation infrastructure– 46000 miles of interstate– 113000 of other NHS roads– 3.7 million miles of non-NHS road– With rare exception every piece of freight

travels at least part way on the NHS road network

Roads

• Problems– Much of the NHS mileage is rated as fair or

poor.– Attempts to repair these roads cause delays that

adversely impact the very problems that they are meant to address

– None of the NHS roads were designed to carry the volume of traffic that exists today

Right of Ways

• Waterways, and rail ROW are not as noticed as roads, but vital because of US reliance on imported goods and inter-modal transportation– Chicago handles 9.4 million TEU in intermodal

freight per year, this figure has been growing at 5% per year

– Los Angeles handles 5.7 million TEU– Seattle-Tacoma handles 2 million TEU

Right of Ways

• Problems (cont.)– Rail does not suffer from the same congestion

problems, but does suffer the same maintenance issues. Down time for repairs causes delay

– New track is difficult to construct because of the problems associated with securing the ROW

– Redesigning rail nets is difficult due to cost and ROW issues

Right of Ways

• Problems– Port facilities must be modernized and

automated to handle the standardized TEU containers. This means that currently only a few ports can handle international commerce

– Port facilities must have an extensive intermodal capability to move goods inland (by truck or rail)

Terminal Facilities

• Loading docks are easy to overlook, but without them freight cannot be moved.

• Fork lifts and pallet jacks allow quick unloading of trucks, which allows the trucks to return to the road.

• Warehouses allow for consolidation in loading and unloading; this also allows for efficient usage of trucking resources

Terminal Facilities

• Problems– Lack of terminal facilities can cause delays that

limit the productive time of transport assets.– Inadequate support equipment in terminal

facilities will also delay the loading and unloading of freight.

– Limited access to facilities due to traffic patterns or regulations.

What are the solutions?

• Economic

• Structural

• Policy

• Partnerships

Economic

• There are a number of economic issues that are being addressed as part of the “transportation problem”– Unallocated costs…pollution– Economic effects of investment

Financial

• In addition to the true economic issues there are some solutions that should be classified as financial– Providing capital grants– Loan programs targeted toward capital

improvements

Structural

• The most obvious solution sets consist of infrastructure improvements– New roads, bridges, freight facilities– Maintenance of current infrastructure– Redesign of existing networks to improve

performance

Policy

• The most recent legislation has signaled a new trend in transportation laws

• ISTEA and TEA 21 aim to reverse the decades of government neglect that plagued all aspects of freight movement

• These two bills have also helped to create a cooperative atmosphere between the public and private sector

Partnerships

• The new trend is for partnerships to improve freight and transportation matters.

• The majority of resources currently pledged to these matters are related to ISTEA and TEA 21

• There are still numerous projects undertaken by individual companies or governments (agencies, state or local)

Solutions in Action

• TEA 21

• Seattle-Tacoma Freight Mobility Study

TEA 21

• Create jobs and spur economic growth– Jobs that build the roads, roads that create other

economic opportunity

• Invest to provide future growth– Create trusts to insure funding levels

• Create livable Communities– Movements for smart growth and livable cities

• Environmental and Safety programs

Create Jobs

• TEA 21 created a 5.4 billion dollar program of road construction

• TEA 21 has made other money available to private industry for freight, infrastructure, or transportation projects

• TEA 21 has provided funds for research and development of many of the newest technologies…ITS, GPS, Advanced Vehicle Technologies

Investing in the Future

• TEA 21 provides for funding through 2003

• Beyond 2003 trust fund guidelines have been established to enable spending to grow with the economy– Highway– Air (passenger and freight)– Aquatic

Redesign of Current Systems

• TEA 21 has funded numerous programs that seek to maximize the efficiency of current resources– Smart Growth– Livable Cities– Redesign of road and rail networks

Other benefits

• Environmental programs have been funded by transportation money– Pollution due to freight congestion

• Safety programs– Highway – Drug testing

Why Seattle-Tacoma

• Problem Set is similar to many US cities– Population density is growing beyond forecast– Infrastructure is decaying– Current design is not conducive to current

freight needs

• The MPO (Puget Sound Regional Council) actively sought private sector input– Example of the joint nature of current solutions

Background

• 1992: partnership created by PSRC to address the problems of freight movement in the Sea-Tac corridor

• Seattle had one of the busiest ports in the US, but was having trouble moving freight from the docks onto the road or rail network

• Public and private solutions were offered but no comprehensive plans were advanced because there was no comprehensive vision

Statistics

• Three million people live in the Sea-Tac area

• 1.4 million jobs exist because of the movement of freight

• 2 million TEU move through the Port of Seattle

Solutions

• Establish Contacts

• Seek Input

• Examine the entire freight movement system

• Obtain feedback as each project moves forward

Establish Contacts

• In 1992 an advisory board was formed by the PSRC

• This board was tasked with– Surveying private industry freight handlers for

issues and concerns– Evaluating existing and proposed legislation for

its impact across all aspects of freight movement

Seek Input

• All of the major companies involved in freight movement were questioned– By surveys designed to identify infrastructure

problems– Personal meetings to discuss on-going projects,

and how these projects would be affected by legislation or other proposed government projects

Detailed Examination

• Every aspect of the freight system was examined to determine its value

• This systems approach allowed for a comprehensive strategy to be developed

• The partnership between the public and private sectors allowed all resources to be directed toward a common goal

Feedback

• The PSRC was designed to achieve concrete results

• Specific projects were created through the input of PSRC members

• Feedback was provided by all members

• This feedback was promptly responded to

Lessons

• The current infrastructure cannot handle the current usage patterns– Population growth has overburdened the

existing infrastructure– Industrial trends like outsourcing, or JIT have

changed the patterns of usage– Insufficient spending allowed existing

infrastructure to deteriorate

Lessons

• Money is not the answer– The complex problems of the freight industry

cannot be solved by simply spending more– The repair or construction of facilities causes

delays or detours that defeat the purpose of the work

– No individual project can significantly affect the overall problem

Lessons

• A comprehensive strategy is needed– Every piece of the freight network must be

analyzed– All affected parties need to provide input

• Government agencies

• Private industries

• Stakeholders

• Academics