# Presentation: 699996

## MARYLAND FREIGHT SUMMITFreight in the Mid-Atlantic Region 

***Jeffrey F. Paniati***
*** ******Associate Administrator for Operations***
***Federal Highway Administration***

*September 10, 2007*

- The DoubleTree Hotel
- Annapolis, Maryland

## Evolution of Logistics

- 1970’s - Logistics Revolution.
- 1990’s - Just in Time/Time Certain Delivery.
- 21st Century - Supply Chain Management Networks.
**Fast and Reliable**
- 	transportation is the
- 	cornerstone of these
- 	strategies.

**Notes:**
Over the past several decades, business has significantly changed the way it operates.  It has moved toward a lean inventory model that is dependent on fast and reliable transportation.  Think about that for a moment – fast and reliable transportation – not exactly our current experience. 
Today the relationship of transportation to the business process is much more critical than ever before. 
In the old model manufacturers produced mass quantities of a few products and shipped them when they had filled a truck or train load – you could buy a new model Chevy Impala in black, red, white or blue. 
Today you can customize each order.  You can go on the internet customize your product and have it delivered right to your door or dealer within days.  In some cases, the entire enterprise came about under this model – Dell computer – there is no warehouse of Dell computers, each is made to order.
Firms want to minimize inventory costs and maximize responsiveness.  They do not want to carry inventory because of costs of insurance, space, and chance of  products becoming obsolete.  Businesses have shed inventories and shifted to just-in-time or time certain delivery systems.  In this new model the transportation system is the warehouse.  In this transition seamless transportation services have become a strategic lever for many industrial and service based industries.  
For example, large car manufacturing facilities operate with less than 12 hours of inventory.  Any disruptions to their supply chains causes huge problems.  
Fast and Reliable transportation is the cornerstone for implementing the current business model.  

## Globalization

**Notes:**
Coupled with these new business strategies and integrated supply chains is globalization.
In this new century – the world is a global market place 
Globalization has stretched supply chains way beyond community boundaries to the far reaches of the globe
Globalization effects your community and how it get goods
Maryland not only trades with its neighboring states in the Mid Atlantic, but with the rest of the world.
In addition to growing volumes, the transportation system moves goods over increasing distances. 
When you look at MD’s top trading partners you see  a strong connection with the other Mid Atlantic states as well as foreign countries. 
Freight flows don’t follow political boundaries.  They stretch across multi state corridors and, for many commodities, across countries 
The structure of the  Mid Atlantic is such that there a number of states close together that are small in geographic size but high in population density and inter-related economies.
Looking beyond the boundaries of your county or state is critical to understand and respond to freight in the Mid Atlantic region     

**Notes:**
At FHWA, we’re doing a lot of work to understand how freight is moving in the transportation system, and we now know a lot more about the freight system then than we did 5 -10 years ago.  
Here you see a map of 2002 truck volumes in the Mid-Atlantic region.  This was created from the Freight Analysis Framework or FAF.  The FAF is the most comprehensive database of freight movement in the country.  It blends national level origin and destination commodity moves by mode, weight and value from a broad range of publicly available sources and makes that data available to anyone who wants to use it.  We use it extensively in the Department to understand national trends and volumes in freight movement.
In 2006 we worked closely with four States to develop best practices for how to utilize this national level data at the State and local level, and how to acquire and use freight movement data from local and State sources so that local communities can make better transportation investment decisions that will enable fast and reliable transportation to keep the freight moving.

**Notes:**
We can also project the empirical data you saw from 2002 to out years.  To meet State and local planning horizons, we projected the 2002 data to 2035 - Here you see the tremendous growth in truck volume that we are projecting for the Mid Atlantic Region by 2035.  Keep in mind these projections assume the same physical network we have today.  Keep that in mind for later.  

The American economy is expected to grow almost 3 percent per year in Gross Domestic Product, driven in part by a population increase from 300 million today to 380 million in 2035.  The resulting demand for freight transportation to serve this growing economy, stretched across a continent with links to the rest of the world, is forecast to increase more than 90 percent over the next three decades. 

**Notes:**
The truck data we have can be blended with passenger vehicle data to generate congestion maps and also these looks at truck traffic within overall traffic.  The red indicates annual average daily traffic (AADT) and the gray indicates annual average daily truck traffic (AADTT).  
As you can see here, in metropolitan and urbanized areas such as the Mid Atlantic region passenger traffic is by far the largest portion of traffic on the roads and a major factor in congestion.  Although freight traffic is still a small portion of the overall traffic there is an importation relationship of truck traffic to congestion.  You can clearly see here the affect of the Port of New York and New Jersey. 
Recently a study simulated a 6 lane Interstate – 3 lanes in @ direction
35,000 AADT
If no truck traffic, LOS B (V/C ratio .65)
Between 10% - 20% truck, LOS declines to D (V/C ratio .85)
At 30% LOS declines to E (V/C ratio 1)
This type of facility could theoretically accommodate 54,000 AADT at a V/C ratio of 1.
The number of vehicles remains constant.
The interesting part is they simply simulated that a truck was equal to 2.8 passenger cars.  This doesn’t take into consideration any of the operational differences – acceleration, braking distance, etc. – attendant to CMV operations.
Bottom line an increase in freight traffic impacts the system more than an increase in the same number of passenger vehicles

**Notes:**
We can look at those volumes differently.  When mixed with peak period passenger traffic we can calculate volume to capacity ratios which serve as indicators of congestion levels.
Here you see highway congestion in the Mid Atlantic region for 2002.

**Notes:**
As we can with truck volumes, we can project congestion levels.  Here we see the projected 2035 Highway congestion in the region.  
The spread of congestion is staggering.
The growth in freight is significant contributor to congestion, and congestion is affecting timeliness and reliability of freight transportation.  
Long distance freight movements often get caught up in local congestion, and local congestion typically affects both local and distant economic activity. 
When this happens it causes firms to expend funds on inventory either more in the pipeline to ensure it gets there in time or by carrying more.  Funds that could be spent on growing the business, adding new capacity either in physical plants or employees.  Congestion adversely affects economic growth.

## Freight Performance Measures

**Notes:**
As mentioned earlier speed and reliability are  key to goods movement in the new business models.  We have partnered with the trucking community to develop speeds and travel time reliability for 2/3’s of the Interstate system.
Three years ago we began using GPS transponder data from long haul truck load firms.  The information has been sanitized and we have no idea whose trucks they are.  To us they are probes that send a unique identifier, GPS coordinates, and a time stamp.  For the past three years we’ve been collecting information from 250K trucks nationwide and this year we hope to up it to 400K.
On the screen you see the 25 corridors we are currently measuring – we used the FAF to determine the most significant freight routes.  The red lines indicate the five corridors we tested in the pilot phase to see if we could do this and refine the measurement methodology and the blue indicates that 20 corridors we added a year ago.

## Slide 10

**Notes:**

Here’s what the data looks like nationally.  This is August 2006. 
As with the FAF our desire is place this information in the hands of the people making transportation investment decisions.
After our pilot project on the five corridors shown in red we visited eight States to get their input in how they could best use this data to help them understand how their system was performing.
In 2008 we plan to develop a website that will enable system users to log on and determine speed and travel time between an origin and destination, for a time of year, time of day, and a direction of their choosing.
These maps also indicate the problems we are having with congestion.

## Federal Efforts to Reduce Congestion    and Improve Freight Movement

- Urban Partnerships
- Technology and Operations
- Corridors of the Future
- National Freight Policy

## Congestion Pricing – Bringing Supply and Demand into Alignment

- Failure to properly price travel on highways is a root cause of congestion.
- The price of highway travel (gas taxes, registration fees, etc.) bears little or no relationship to the cost of congestion.
- Unlike other public utilities, the public expectation is that the “service” is free or does not change with changes in demand.
- Allocating transportation services
-     via pricing is more efficient than
-     allocating by delay.

## Urban Partnership Agreements – Congestion Pricing

- Integrated “4T” Strategy
- TOLLING (pricing) – Key Element
- Direct user charge based on use of facility; varies based on level of congestion.
- Toll collection via electronic means (no booths).
- Transit
- Telecommuting/Travel Demand Management
- Technology

## Urban Partners

**Miami**

**Minneapolis -St. Paul**

**San** **Francisco**

**Seattle**

**New**
**York**
**City**

## Technology and Operations

- Reduce incident delay.
- Reduce work zone delay.
- Improve traffic signal timing.
- Mitigate bottlenecks.

***Technology and Operations***

## Corridors of the Future

**  ****Accelerate the development of multi-State**
**    ****transportation corridors for one or more modes.**
**  ****Select up to 5 major transportation corridors in need**
**    ****of investment for the purpose of reducing**
**    ****congestion. **
**  ****Applications from either public or private sector**
**    ****entities.**
**  ****Phase 1**
**   **     -  38 “Expressions of Interest” received.
**   ****Phase 2**** **
-   -  8 corridors (14 proposals) selected.
**  ****Final Phase**
-   -  Announcement of Corridors of the Future.
-   -  Actively support corridors.

## Corridors of the Future – Phase 2

***Corridors of the Future – Phase 2***

## National Freight Policy - 7 Objectives

**Improve the operations of the existing freight transportation system.**
**Add physical capacity to the freight transportation system in places where investment makes economic sense.**
**Use pricing to better align freight system costs and benefits and encourage the deployment of new technologies.**
**Reduce/remove statutory, regulatory, and institutional barriers to improved freight transportation performance.**
**Proactively identify and address emerging transportation needs.**
**Maximize the safety and security of the freight transportation system.**
**Mitigate and better manage the environmental, health, and community impacts of freight transportation.**

**Notes:**
One of the key areas we have been actively working on with state DOTs is engaging the private sector
No one entity owns enough of our nation’s freight system to affect change
States, localities, and the private sector have critical roles to play in ensuring the success of the nation’s freight system
When we talk to the private sector we encourage them to talk to State, MPO, and local officials
Effective solutions will require coordinated and collaborative action by both public and private parties. That coordination and collaboration starts with focused communication about a framework for action.
To bring together public and private stakeholders around a common vision, the U.S. Department of Transportation proposed this Framework for a National Freight Policy. 
The framework lays out a vision and objectives, then details strategies and tactics that the Department and its partners - both public and private sector - can pursue to achieve those objectives. To be credible and achievable, the framework requires input and buy-in from the broader freight sector, including both public and private sector interests.  

##   Policy
  Congestion Pricing
  Aggressive Management and Operations
   Collaboration
  Public Private Partnerships
  Coordinated Activity Public and Private
  Multi-State, Regional, Corridor Cooperation
   Performance Based Decisions
  Data/Analysis is Key

-   Congestion Pricing
-   Aggressive Management and Operations
-    Collaboration
-   Public Private Partnerships
-   Coordinated Activity Public and Private
-   Multi-State, Regional, Corridor Cooperation
-    Performance Based Decisions
-   Data/Analysis is Key

- Moving Forward