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Rail Freight and Rail Freight and Economic DevelopmentEconomic Development

Glen WeisbrodGlen WeisbrodEconomic Development Economic Development Research Group, Inc.Research Group, Inc.2 Oliver Street, 92 Oliver Street, 9thth FloorFloorBoston, MA 02109 USABoston, MA 02109 USA

www. edrgroup.comwww. edrgroup.com

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Three ThemesThree Themes1. Underlying Trends: changing due to

national & global economic markets.

2. Intermodal Rail Freight Projects:reducing costs & expanding services to improve competitiveness.

3. Economic Development: depends on market access & cost competitiveness.

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1. UNDERLYING TRENDS1. UNDERLYING TRENDS

0%

5%

10%

15%

20%

25%

1992 1993 1994 1995 1996 1997 1998 1999 2000

Value of Mfg

Freight Ton-Miles

Population

Freight Growing Faster than Population

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PA PA ---- Freight OFreight O--D by ModeD by Mode

0%10%20%30%40%50%60%70%80%90%

100%

Truck Rail Water Air Truck-Rail

Courier-Mail

tofromwithin

0%10%20%30%40%50%60%70%80%90%

100%

Truck Rail Water Air Truck-Rail

Courier-Mail

tofromwithin

Tons

Dol

lars

Rail Freight Imbalance:

Ratio: outgoingincoming

Tons = 0.86$Val = 0.38

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Intermodal Importance (US)Intermodal Importance (US)Intermodal accounts for a small part of the tonnage, but a large part of the value moving by rail.

0

200

400

600

800

1000

1200

1400

Domestic Exports Imports

Intermodal

Rail

Billions of Dollars

0

500

1,000

1,500

2,000

Domestic Exports Imports

Millions of Tons

COFC: 83% of all IntermodalImports + Exports > Domestic

by 2035

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PA PA ---- Rail Freight FlowsRail Freight Flows

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Appalachian ExportsAppalachian Exports

FloridaFloridaTexasTexas

FOOD PROCESSING MACHINERYOrigin:• PA • GA• SC• OH

Key Ports:• Laredo TX• New York NY .• Detroit MI

FOOD PROCESSING MACHINERYOrigin:• PA • GA• SC• OH

Key Ports:Key Ports:• Laredo TX• New York NY .• Detroit MI

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PA PA ---- NAFTA Trade via Rail NAFTA Trade via Rail

PA to Canada $758 million (+83% from 2000)Canada to PA $2.698 Billion (+85% from 2000)

PA to Mexico $311 million (+44% from 2000)Mexico to PA $104 million (-21% from 2000)

International Trade Administration 2006

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PA PA ---- Exports to Canada by RailExports to Canada by Rail• Locomotives & Traffic Signals• Organic Chemicals• Iron & Steel and Products• Plastics• Mineral Fuels, Oils & Waxes• Wood and Wood Articles• Boilers, Machinery and Parts• Chemical Products

Contrast to Domestic Rail Flows that feature Coal, Petroleum, Pulp & Paper

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2. RAIL FREIGHT ROLES & PROJECTS

SPACE AIR TRUCK RAIL IMX RAIL CL WATER

HIGHER LOWERSERVICE CONTINUUM (Speed, etc.)

$10K $1.50 $.05 - .10 $.03 $.01 $.005

COST CONTINUUM ($ / LB)

Intermodal Strong in the 750+ mile range.Can it penetrate the 200+ mile markets?

Modal Spectrum: Service & Cost Tradeoffs

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Rail Freight to Reduce Hwy TrafficRail Freight to Reduce Hwy TrafficNCHRP Guide:• Converging interests: private carriers, public agencies• Motor carriers (facing labor shortages, truck delays,

rising fuel prices) see rail freight as a positive option.• Reducing congestion and road/rail conflicts can

enhance public safety & economic development

• Guide for evaluation & public-private partnerships

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170 Miles Seattle - PortlandNorthwest Container Services, Inc.• Daily dedicated service• 60,000 containers/year• Private terminals & equipment• Private, purchased train

Keys to Success:• Single-end dray• Stack economics• Economic geography•Turnkey set of services

Successful Short-Haul

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Regional Rail-Hwy Access Strategies– Vancouver Gateway System– Chicago CREATE

Inland Ports and Feeder Systems– Netherlands: European Container Port Venlo– Virginia Inland Port – Nilai Inland Port (Malaysia)– NY: Port Inland Distribution Network

Rail to Satellite Facilities– Betuwe Line - Netherlands– Alameda Corridor - California

Expanding Regional CapacityExpanding Regional Capacity

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Example: Vancouver BC International Trade Gateway

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Example: Chicago Rail YardsExample: Chicago Rail Yards

• 74 rail yards, 17 for intermodal

• delays at 600 grade crossings

http://http://hometown.aol.com/chirailfan/watchmap.htmlhometown.aol.com/chirailfan/watchmap.html

• Congestion from truck trips moving cargo from yard to yard

• Abandoned & under-utilized rail yards

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Inland PortsInland Ports

• European Container Terminal Venlo – 120 miles from Rotterdam

daily shuttle trains

• Virginia Inland Port – 220 miles from Hampton Roads

daily shuttle trains

• Nilai Inland Port (Kuala Lumpur)– 25 miles from Port Klangdaily shuttle trains

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Port Inland Distribution NetworkPort Inland Distribution Network

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Rail Service to Satellite Facilities

Betuweroute Freight Line 100 miles Netherlands port to GermanyShuttle trains

Alameda Corridor20 miles (future 55 miles) San Pedro Ports to Los AngelesShuttle trains

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• Business growth & attraction depends on many cost, quality and market size factors.

• Freight connections alone do not create economic development.

• But failure to provide access or service can constrains it.

• International trends will create more opportunities for intermodal services.

3. Economic Development

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PA PA –– Rail Intermodal TerminalsRail Intermodal Terminals

(Pittsburgh, Harrisburg, Scranton, Allentown, Philadelphia)

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Local Econ Assessment PackageLocal Econ Assessment Package

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LEAP: Barriers to Econ LEAP: Barriers to Econ DevelDevel

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PA PA –– Rail Freight & DevelopmentRail Freight & Development

• Rail Freight Properties Directory (205 listings)

• Rail Freight Assistance Program (track, bridge, siding, spurs for industrial development)

• Intermodal Warehousing & Logistics Centers

• Int. Port Connections (e.g., reverse logistics for military equip. repair (Phila to Ft. Drum, Dix…), future PIDN to Pittsburgh, etc.

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Future: Public-Private Cooperation

FAC & Rail CarriersPublic AgencyMedia coordinationPublic AgencyRail CarriersMulti-jurisdiction coordination

Public AgencyEnvironmentFreight Advisory CouncilPublic AgencyPublic educationFAC & Rail CarriersPublic AgencyNew market assessments

Rail CarriersPublic AgencyTrans-modal effects of investmentRail CarriersFAC & Public AgencyFreight market projections Public AgencyRail CarriersRail capacity investment needs

Rail CarriersRail capacity limits

SupportLeadershipElement