# Presentation: 421241

## Planning for Urban Freight Movement 

- Talking Freight Series
- Susie Lahsene
- Port of Portland

## Trends Affecting Urban Freight

- Globalization
- Transportation deregulation
- Business Practices
- Logistics/Supply chain mgmt
- Warehouse/distribution development
- Industry/carrier mergers
- Urban development
- Markets
- Economic base
- Urban land use
- Transport planning/investment

## Globalization

**Markets around the globe-products moving longer distances with more frequency**
**Freight mobility pressure added to urban environment- the site of ports and transport connections to reach other markets**

## Federal Transportation Deregulation

- Aviation Deregulation of 1978
- Motor Carrier Act of 1980
- Staggers Rail Act of 1980
- Ocean Shipping Act of 1984
- Ocean Shipping Reform Act of 1998

**Notes:**
The 1980s was the decade of economic deregulation.  Specific economic regulation issues – at both the federal and state levels – remain to be addresses, but they will yield diminishing returns to overall industry productivity.  

## U.S. Trade Increasing 

- U.S. Trade Increasing

- Source:  U.S. Department of Commerce and U.S. Bureau of Economic Analysis, 2003

**Notes:**
Because of this business model, trade is an increasingly important part of our economy – both nationally and regionally.

Trade is increasing as a percentage of U.S. Gross Domestic Product.  Moving primarily by truck and rail, but also water and air.

Although there has been a slight dip in trade between 2000 and 2002, 2002 levels are above the trend line from 1980 to 2000 (SCOTT DRUMM).

##  Freight Tonnage Increases by 2020 

-  Freight Tonnage Increases by 2020

**South Region****89%**

**Northeast Region****79%**

**Central Region****89%**

**West Region****100%**

- Source: FHWA Freight Analysis Framework Project Reebie Associates 1998 data (1st Approximation)WEFA economic data and forecasts

## Business PracticesHistory of Industrial Competitiveness

- _1800s_
- Firms stressed ability to decrease cost of production of each unit

- _Early 1900s_
- As production started to catch up with demand, businesses recognized the importance of sales

- _Late 1900s & 2000_
- Sophistication of product offerings, globalization and increased customer expectations make logistics key to companies’, regions’ competitiveness

**Notes:**
Talked a little about logistics...
really the natural progression in the evolution of industrial competition

## Distribution & Logistics: The New Business Model

- The use of the transportation system, information technology, and distribution facilities to assemble and move raw materials and products to regional, national and international markets
- Why ?
- Increased competition for global markets
- Increasing offshore production and movement of parts and goods
- Business cost savings already realized through production efficiency
- Supply chain management offers opportunity for  additional cost savings

**Notes:**
Not traditional warehousing - Value-added operations, high velocity facilities and cross-dock/transloading  operations

New business model 

The right quantity, right products, right place, right time, right condition, and right cost

## Columbia Sportswear

- 1. Inbound Movement
- Apparel, footwear, and accessories arrive via ship from Asia at T-6, transported by truck to the Rivergate DC; some move through Seattle and Tacoma.
- Air shipments arrive both at PDX and Sea-Tac.
- Ocean/air shipments arriving in Puget Sound transported by truck to Rivergate.

**1**

**Notes:**
Should we separate truck inbound movements, which do not come through a port of terminal?
Should “Inbound Movement” be renamed “Imports”?

## 2. Value Added Services
Ocean containers unstuffed; airfreight unpacked.  Products sorted/stored by SKU.
Once all SKUs for a customer's order arrive, shipment packed for delivery.
Customers provide routing instructions; shipments prepared for truck or air shipment accordingly.
The Rivergate DC also handles returns.

- 2. Value Added Services
- Ocean containers unstuffed; airfreight unpacked.  Products sorted/stored by SKU.
- Once all SKUs for a customer's order arrive, shipment packed for delivery.
- Customers provide routing instructions; shipments prepared for truck or air shipment accordingly.
- The Rivergate DC also handles returns.

**2**

**Notes:**
Should we separate truck inbound movements, which do not come through a port of terminal?
Should “Inbound Movement” be renamed “Imports”?

## 	3. Reload Facility
Freight forwarders transport shipments by truck to reload facility for air shipment.
LTL carriers take shipments by truck from DC to the LTL’s local hubs in Portland for consolidation with other loads to same cities.

- 	3. Reload Facility
- Freight forwarders transport shipments by truck to reload facility for air shipment.
- LTL carriers take shipments by truck from DC to the LTL’s local hubs in Portland for consolidation with other loads to same cities.

**3**

**Notes:**
Should we separate truck inbound movements, which do not come through a port of terminal?
Should “Inbound Movement” be renamed “Imports”?

## 4. Outbound Movement
All three product lines (apparel, footwear, and accessories) shipped out by air or truck.
Air cargo shipped out of PDX primarily using integrated carriers (such as FedEx, UPS, Emery, etc.) for domestic delivery.
Once consolidated, LTL shipments move through carrier’s hub and spoke network throughout North America.
Full truckload shipments move directly from DC to customers’ warehouses or stores.

- 4. Outbound Movement
- All three product lines (apparel, footwear, and accessories) shipped out by air or truck.
- Air cargo shipped out of PDX primarily using integrated carriers (such as FedEx, UPS, Emery, etc.) for domestic delivery.
- Once consolidated, LTL shipments move through carrier’s hub and spoke network throughout North America.
- Full truckload shipments move directly from DC to customers’ warehouses or stores.

**4**

**Notes:**
Should we separate truck inbound movements, which do not come through a port of terminal?
Should “Inbound Movement” be renamed “Imports”?

## Freightliner

- 	1. Inbound Movement
- Subassemblies (axles and engines) arrive by ship from Germany and Finland primarily through T-6.
- Other parts and subassemblies arrive by truck from Mexico and Canada, and by truck/rail intermodal from domestic suppliers.

**1**

**Notes:**
Should we separate truck inbound movements, which do not come through a port of terminal?
Should “Inbound Movement” be renamed “Imports”?

## 	2. Manufacturing
Steel and aluminum sourced locally.
Medium and heavy-duty trucks produced at Swan Island production facility for global distribution.

- 	2. Manufacturing
- Steel and aluminum sourced locally.
- Medium and heavy-duty trucks produced at Swan Island production facility for global distribution.

**2**

**Notes:**
Should we separate truck inbound movements, which do not come through a port of terminal?
Should “Inbound Movement” be renamed “Imports”?

## 	3. Distribution
Finished trucks are distributed to dealers throughout the U.S.
Parts are shipped to regional warehouses.

- 	3. Distribution
- Finished trucks are distributed to dealers throughout the U.S.
- Parts are shipped to regional warehouses.

**3**

**Notes:**
Should we separate truck inbound movements, which do not come through a port of terminal?
Should “Inbound Movement” be renamed “Imports”?

## 	4. Exports
Western Star brand trucks are shipped to Australia and New Zealand predominantly through T-6.

- 	4. Exports
- Western Star brand trucks are shipped to Australia and New Zealand predominantly through T-6.

**4**

**Notes:**
Should we separate truck inbound movements, which do not come through a port of terminal?
Should “Inbound Movement” be renamed “Imports”?

## Fred Meyer

- 	1. Inbound Movement
- Asian imports arrive predominantly through T-6 and are sent to Fred Meyer distribution centers in Chehalis, WA and Clackamas, OR.
- Various grocery items and general merchandise arrive via truck and truck/rail intermodal from domestic suppliers.
- Seasonal goods for Kroger Supermarkets arrives through T-6.

**1**

**Notes:**
Should we separate truck inbound movements, which do not come through a port of terminal?
Should “Inbound Movement” be renamed “Imports”?

## 	2. Reload Facility
Kroger seasonal items are trucked to north Portland transload facility.
Containers are unstuffed and consolidated into domestic containers before being trucked to intermodal facility.
Goods are shipped via rail to Kroger’s distribution center in Nashville, TN.

- 	2. Reload Facility
- Kroger seasonal items are trucked to north Portland transload facility.
- Containers are unstuffed and consolidated into domestic containers before being trucked to intermodal facility.
- Goods are shipped via rail to Kroger’s distribution center in Nashville, TN.

**2**

**Notes:**
Should we separate truck inbound movements, which do not come through a port of terminal?
Should “Inbound Movement” be renamed “Imports”?

## 	3. Warehousing/Distribution
All food and nonfood items from international and domestic suppliers are sent to Clackamas distribution center for distribution to stores throughout the west (except WA and AK stores)

- 	3. Warehousing/Distribution
- All food and nonfood items from international and domestic suppliers are sent to Clackamas distribution center for distribution to stores throughout the west (except WA and AK stores)

**3**

**Notes:**
Should we separate truck inbound movements, which do not come through a port of terminal?
Should “Inbound Movement” be renamed “Imports”?

## 	4. Retail/Local Consumption
Fred Meyer Stores operates a large fleet of trucks and trailers for distribution of goods to its retail stores. 

- 	4. Retail/Local Consumption
- Fred Meyer Stores operates a large fleet of trucks and trailers for distribution of goods to its retail stores.

**4**

**Notes:**
Should we separate truck inbound movements, which do not come through a port of terminal?
Should “Inbound Movement” be renamed “Imports”?

## U.S. Metropolitan CentersFifty Largest

- U.S. Metropolitan CentersFifty Largest

## Manufacturing CentersEmployment Density by County

## Wholesaling/Distribution CentersEmployment Density by County

## International Freight GatewaysExports & Imports (Tons), 1998

**Exports**

**Imports**

- International Freight GatewaysExports & Imports (Tons), 1998

- Source: FHWA Freight Analysis Framework Project Reebie Associates 1998 data (1st Approximation)WEFA economic data and forecasts

## Metropolitan Freight CentersMajor Population Areas

## Freight Transportation Demand Growing in Most Urban Areas

- Portland origin/destination freight volume to double by 2030

**Thousand Short Tons**

**Thousand Short Tons**

**Notes:**
forecast calls for frt vols to/from the region to 2x by 2030
learned from our consultants that frt volumes tend to grow faster than population and that is the case here.  While frt is projected to 2% annually, pop growth for the same time period is 1.2%.

## Commodity Share of Portland/Vancouver Region Tonnage 

- Commodity Share of Portland/Vancouver Region Tonnage*** ***

**(Percent Share of Total Tonnage in 1997)**

- Eight commodity categories comprise 74% of all tonnage shipped in the region on all modes.

## Freight Mobility Largely Dependent Upon Trucks

**1996**

**2030**

**Notes:**
 Today, more than 60% of the frt on a tonnage basis is carried by a truck at some point of its journey in the region
In 2030, still the case that about twice as much freight will move on a truck, at some point, than on any other mode

## Pass Through Tonnage Doubles  

- The Portland region handles increasing pass through traffic for elsewhere in the country.

- Thousand Tons

**Notes:**
1997-2030 growth rates average 1.2% (pipe) to 2.9% (truck) with overall passthrough growth averaging 2.3% over the entire period, in tons.

## ChallengesMeeting Urban Access Needs for Container Growth

## ChallengesMaintaining Industrial Land Adjacent to Freight Corridors

**Notes:**
Some of the challenges facing us now in addressing industrial smart growth include these four;

Land availability:  there is limited quality industrial land supply, near transportation infrastructure, within urban areas.
Market forces act to drive land use to highest value, and commercial and residential land values usually out pace industrial in dollar amount.  Therefore there is market pressure to convert.  We usually say land should be planned for the highest value and best use, but highest value may be different than best use to the region.  For instance, there are key locations along transportation corridors, such as  freeway interchanges, which ought to go to industrial use but which come under extreme pressure for commercial conversion, for big box, outlet malls or other commercial.
A third challenge:
The political will on the part of public officials to hold the ground on best use for the public good, versus the highest use for property owner, is a challenge.  As well, the usual political drivers push for higher paying jobs, more jobs, higher density jobs and greater property tax base considerations.  These drivers might be short sighted  as they often ignore the complexity of the choice and are oftentimes contradicting of one another.  Essentially what this consideration demands is a thoughtful understanding of a region’s economy.  

An example is warehousing and distribution, critical to movement of goods in and out of the region and a use which serves most other industries, but due to fact that some warehouses don’t have high job density, they may be thrown out of the local selected mix in local land planning decision making, yet they are integral to the success of the region.

The challenge is to take a longer term view, and keep the industrial component of smart growth in focus over time.  This takes keeping those linkages between transportation planning, land use planning and real world business, always in focus.

## ChallengesMaintaining Good Access to Warehousing and Distribution Centers

## ChallengesFor Most Urban Areas Capacity Increases Represent a Hurdle

## Implications

-  Industry specialization and reliance on efficient transportation means industries may choose to relocate if transportation costs affect their ability to compete
- Congestion has real costs and affects business productivity
**Hard costs**
- Extra time for pick-up and delivery/reduced production time
- Extra vehicles to meet “just-in-time” demands of customers and scheduling problems caused by longer delivery times
**Soft costs**
- Business credibility
- Expansion decisions

## Urban Freight Planning Tools

- Freight modeling
- Regional/local transportation plans
- Investment strategies
- Economic Base analysis
- Forecasting
- Comprehensive plans
- Land use location analysis
- Land use and tax policy assessment
- Design standards
- Access management policies

## Urban Freight Planning Approach in Portland 

- Planning/Policy/Research
- Reflect freight in region’s transportation and land use plan
- Key Freight Corridors
- Industrial lands and intermodal facilities
- Other freight facilities
- Local transportation plans reflects freight routes
- Policy emphasis on maintaining access to intermodal facilities and industrial sanctuaries
- Research on industry freight needs
- Freight bottlenecks
- Supply-chain geography
- Economic relationship to freight investments
- Freight Advisory committees
- Regional, City and Statewide-linked by membership

## Urban Freight Planning Approach in Portland

- Forecasting/Analysis
- Commodity flow forecast for six county region
- 41 Industrial sectors- tonnage, mode and growth
- Truck Model
- Identification of freight bottlenecks
- Port Transportation Improvement plan (PTIP)
- City Freight plan
- Region priority freight needs
- Investments
- Oregon Transportation Investment Act-legislative program with freight emphasis
- Region allocation for federal funds
- Port request for demonstration projects