# Presentation: 487437

## Mobility Thru Efficient Transport Operations

- Anthony R. Kane
- ITE 2000
- April 3, 2000
- Irvine, CA

**Notes:**
Good Morning
Pleasure to be here and a pleasure for FHWA to work with ITE on this conference as part of out continuing effort at focusing a sharpened national dialogue on operations and an enhanced focus on operations in practice.

## TOPICS

- Future Challenges
- Meeting The Challenges with Efficient Operations
- Critical Success Factors

_**TOPICS**_

**Notes:**
This morning I will briefly focus on 4 areas:
 The changing face of transportation over the last 1⁄4 century
 Some of the challenges we face in the future as transportation professionals as we try to meet customer needs.
 Operations as a focus to help meet some of those changes.
 Simple and easy to understand critical success factors for an operations focus.

## SIGNIFICANT CHANGE

- 					1975			2000
- Vehicles				130m			240m
- Vehicle Trips/HH			4			6.4
- Work Veh. Occ.			1.3			1.1
- Transit, Carpool,Vanpool		20%			15%
- % Work in CBD			60%			35%
- Severe/Extreme Urban Travel		10%			36%

**Notes:**

In the last 25 years – less time than many of us have spent in our careers –             we have seen significant change – for urban travel.
 we have seen a rapid use in motorization and travel far surpassing population growth
 Increased daily trips per household
 Reduced vehicle occupancy – more drive alone trips – versus transit, carpool or vanpool trips at the same time transit in absolute numbers has been growing in recent years
 And increased suburban destinations; more easily supporting user needs thru auto travel
 The results are not uncommon to anyone – increased congestion both in intensity and duration – with the TTI ratings of urban travel and measured delay drastically increased.

## SIGNIFICANT CHANGE

_**1970’s**_**	****	****	****       ****	****  **_**Now**_
- Regulated Transit			  Regulated Transit
- Regulated Air, Truck, Rail		  Deregulated
- Warehoused Goods			  JIT Delivery
- No Cell phones, Internet, GPS	  Wide-scale Use
- National Trade			  Global Trade

**Notes:**
 We have seen tremendous change in part of regulatory environment for transportation – air, trucking, & rail deregulation have certainly seen market driven changes resulting in improved efficiency – bottom lines of carriers & enhanced service/fares to customers. An area still open for deregulation is the urban transit market – entry to the market for routes, services, fares is still closed – given current demand for transit, it may only work in select niche markets.
 We have also seen a dramatic change in the technology available to the freight sector and in the logistics business – the freight sector has managed tremendous efficiency gains within the more steady state public sector provision of transportation – technology advances & deregulation together have seen tremendous operational efficiencies for the air, truck & rail sectors!

## FUTURE CHALLENGES/TRENDS

- Information Technology , E-Business, Global Economics
- GM, Ford, Daimler - Chrysler Parts/Suppliers Co-op
- Truckload Carrier Alliance (6 Carriers; JB Hunt, etc.)
- 	(Transplace.com)—pooled logistics, group purchases
- Urban Package Delivery Opportunities
- Urban Transit Opportunities

**Notes:**
II.
Let me now switch to some Future Challenges and Trends
We have had an explosion of alignments of businesses; buyers and sellers into ever widening markets – we can electronically create markets that were never possib;e before.
Auto companies are merging in world companies, and world companies are teaming together to create efficiencies in their supply chains – new transport patterns of parts will emerge
A particularly interesting new venture is Transplace. Com – a merger of the non-asset based logistics services of 6 T.L. carriers – JB Hunt et.al
	$6 billion in revenue -- $650 million in logistics revenue for these 6 firms
 pooled logistics; to increase equipment utilization and reduce the 12% empty travel miles; have 20 % more freight with same # drivers and equipment; lower operating cost by 10% -- without any government effort to increase efficiency of system!!
Truck load and Intermodal first order of business, then LTL and package and home delivery—
Public IPO – next year
Let’s imagine more possibilities –
Urban are package delivery co-ops – decrease trucks on roads! Business to business linkages for private trucking as well as for hire.
In a deregulated transit market – alignment of multiple providers (taxis, jitneys, small buses) to provide more efficient personal transport.
Etc., etc., we can all think of more possibilities – DOT.COMs for transportation. 

## FUTURE CHALLENGES/TRENDS

- Aging Population, Smaller Household Size, Immigration
- Changing Customer Needs
- Enhanced Quality of Life Focus
- Sustainable Transport
- Liveable Communities
- Sustained Economic Growth; Dispersed Growth
- Outer Beltways
- Aging Roadways
- Pressure for Enhanced Operations
- Continued Congestion, Aggressive Drivers

**Notes:**
Our customers base will change with special needs (message understanding, trip purposes, all must be met)
We’ll continue to see local governments driven by citizens’ concerns and in turn ballot measures, on quality of life issues – hundreds passed in last major election cycle—
At the same time, I’d like to hope our sustained economic growth will continue to challenge out transport needs – in addition to the major reconstruction of the urban freeway systems (50 yr. structure lives!) We’ll see pressure for new outer beltways  (recent Fannie Mae survey of 149 leading urban planners, historians and architects) and, a compelling need for and demand by users – customers – for more efficient operation of the systems.
Aggressive Driver – congestion and time driven. The solutions are tougher enforcement and congestion relief.

## HIGHWAY TRANSPORT COSTS

- Overall Investment				$1 Trillion
- Annual Freight Bill			$400-500 Billion
- Annual Private User Costs		$750 Billion
- 	(Auto,Taxi,Bus)
- Annual Delay				$900 Billion
**	**** ****$1 Trillion, $1 Trillion, $1 Trillion**

**Notes:**
As we view the challenges before us, let’s view them from an economic perspective
A rough order of magnitude estimate of the investment price tag on our nations’ roadways is a $trillion – if each state DOT kept a balance sheet on their assets you might have CA with a $100 billion corporation (based on assets): The CA stockholders – the users – should demand sound asset management.
Government spends another $120 billion/year => 50 billion capital; $70 billion maintenance, operation, debt service, etc.
In $’s and cents terms the annual operating expenditures of users are even more startling
On the commercial side, the freight bill is about 1⁄2 trillion $’s – personal use amounts to 3⁄4 trillion $’s and delay – a very rough estimate – is almost a trillion – that’s recurring and  non-recurring delay on all road systems for all travel.
You are all familiar with the $60-70 Billion # for high level roadway delay in 68 cities – TTI numbers.
We need to focus on enhancing operations to create better efficiencies in the $2 trillion annual user costs and the $1 trillion investment!!!  -- a trillion here, a trillion there, pretty soon you get real $’s.

## OPERATIONS SOLUTIONS

_**Roadway System**_**: Ramps, Signals, Incidents, Weather, Maintenance, Work Zones**
_**Traveller**_**:  Routes, Time, Transit Service**
_**Collection**_**: Tolls, Fares**
_**Safety & Enforcement**_**: Speed, Signals, IVI**
_**Freight**_**: Logistics (Private); Registration, Fees, Weight, Safety, Border (Government)**

**Notes:**
III.
As we look to Operations Solutions – we have a wide variety of tools & techniques – same of which have a greater private sector role
With the roadway system, we can certainly make gains in heavy and routine maintenance from an impact on the motorist perspective – and, all ranges of new construction and reconstruction can also gain from a greater focus on LCC (Life Cycle Costs - including user costs) reduction
Safety enforcement => red light running => significant $’s gains and fatality reduction
If we look out long range, I’m sure all our user fees (and therefore revenue concerns) will be based on electronic based collection – your monthly bill could have a standard mileage charge, a peak period charge, and charges for speeding and red light running!!
And, as we saw with Transplace. Com – the private freight sector will make great strides in reducing operating costs on their own; But, public agencies can help significantly! – create better efficiencies in weighing, safety inspections, credentialling, fee payments. 

## OPERATIONS BENEFITS ---VISION

**Enhanced Quality of Life**
**Enhanced Safety**
**Enhanced Productivity**
**Enhanced Accessibility & Mobility**
**Enhanced Public/Private Cooperation**
**Enhanced Customer Satisfaction**

**Notes:**
As we work on Issues of Vision, & Constituencies, & Instructional Change, Funding, RD&T & Benchmarks; and as we deal with the myriad of transport challenges on front of us, let’s discuss operations in the context of how better operations can enhance:
Quality of Life
Air quality benefits
 Safety benefits => reduced injuries & fatalities
 Bottom line savings for companies – increased ROR
 Improved mobility and accessibility
 Better public/private cooperation
Bottom Line => Enhanced customer satisfaction

## CRITICAL SUCCESS FACTORS

- Operations Philosophy of Prevention and Activism --- _Plan_
- Aggressive Use of New Tools and Techniques ---_ Deploy_
- 			     --- _Benchmarks_
- Share Knowledge --- _Share_

**Notes:**
IV.
Let me close with 2 slides on Critical Success Factors
 Better, more comprehensive Planning that focuses on operations – active not reactive – reengage the metro & statewide planning &  programming process – asset management (LCC framework)
  Use the tools available; peer to peer technical assistance.
Deploy
	-  Statewide rural systems
	-  Urban systems
	-  CVISN
 Share knowledge & info within geographic areas and across areas

## CRITICAL SUCCESS FACTORS

- Work Together --- _Institutional Change_
- Regular Improvement Cycles
- _Maintain, Upgrade_
- Maintain a Customer Focus --- _Astonish_

**Notes:**
 Work Together –
Institutional Change
Enhanced Partnerships – public, private, public/private 
 Regular Improvement Cycles
Maintain upgrade
-	Have good performance indicators; benchmark to the best
 Astonish the customer!!
 	It’s what operations is all about

End:  Thank you again for coming, for committing to a good dialogue to help advance the operations focus.