Rail Study: Northern Wisconsin & Upper Peninsula, MI
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Transcript of Rail Study: Northern Wisconsin & Upper Peninsula, MI
Rail Study: Rail Study: Northern Wisconsin & Upper Northern Wisconsin & Upper
Peninsula, MIPeninsula, MI
Institute of Supply ManagementInstitute of Supply ManagementLake Superior ChapterLake Superior Chapter
March 22, 2007 Superior, WIMarch 22, 2007 Superior, WI
PresentationPresentation
Research TeamResearch TeamRail and other transportation trendsRail and other transportation trendsRail developments in the study areaRail developments in the study areaNorthern Wisconsin and Upper Peninsula Northern Wisconsin and Upper Peninsula
of Michigan Rail Studyof Michigan Rail StudyStudy activitiesStudy activitiesConclusions and RecommendationsConclusions and Recommendations
Growing Rail Freight: Tools for ShippersGrowing Rail Freight: Tools for Shippers Research TeamResearch Team
University of Wisconsin – Superior:University of Wisconsin – Superior: Transportation and Logistics Research CenterTransportation and Logistics Research Center
Richard D. Stewart, Ph.D.Richard D. Stewart, Ph.D. Xiubin Wang, Ph.D.Xiubin Wang, Ph.D. William Bajjali, Ph.D.William Bajjali, Ph.D. Libby Ogard, MBA (Prime Focus)Libby Ogard, MBA (Prime Focus)
Michigan Technological University:Michigan Technological University: Dept. of Civil and Environmental Engineering,Dept. of Civil and Environmental Engineering, Railroad Engineering ProgramRailroad Engineering Program
William J. Sproule, Ph.D.William J. Sproule, Ph.D. Pasi T. Lautala,Pasi T. Lautala, Ph.D. candidate Ph.D. candidate
Student ResearchersStudent Researchers from UW-Superior and Michigan Tech from UW-Superior and Michigan Tech
AcknowledgmentsAcknowledgments CN Railroad and short line railroadsCN Railroad and short line railroads Shippers and shipper associationsShippers and shipper associations Wisconsin and Michigan DOTsWisconsin and Michigan DOTs Economic Development Agencies in the RegionEconomic Development Agencies in the Region
Current State of Truck and Rail Current State of Truck and Rail Transportation NetworkTransportation Network
Rail and truck capacity becoming tight for the first time Rail and truck capacity becoming tight for the first time since 1979since 1979
Rate rising for both modesRate rising for both modes Trucking industry is usingTrucking industry is using rail for intermodalrail for intermodal Coal and grain resurgenceCoal and grain resurgence Industrial products are Industrial products are outpacing US GNPoutpacing US GNP Long lead time for railLong lead time for rail infrastructureinfrastructure improvementsimprovements
Transportation TrendsTransportation Trends
1,050
1,100
1,150
1,200
1,250
1,300
1,350
1999 2000 2001 2002 2003
Thou
sand
s of
Cla
ss 8
Tra
ctor
s
Trucks on Road, 1999 - 2003
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
1960 1980 1990 2000
Class 1 Railroad Cars, 1960-2000
0%
50%
100%
150%
200%
250%
300%
1980 1985 1990 1995 2000
Ton Miles per Mile of TrackTon Miles per Mile of Track
Ton MilesTon Miles
Track MilesTrack Miles
Source: USDOT, National Transportation Statistics
Increase in volumesIncrease in volumes Decrease in:Decrease in:
Infrastructure capacityInfrastructure capacity EquipmentEquipment
0%
50%
100%
150%
200%
250%
1980 1985 1990 1995 2000
Vehicle Miles Vehicle Miles Traveled (VMT)Traveled (VMT)
Lane MilesLane Miles
VMT Per VMT Per Lane MileLane Mile
4,000
5,000
6,000
7,000
2000 2005 2010 2015 2020
Bill
ions
of T
on M
iles
DOTDOT
ATAATA
AASHTOAASHTO
Railroad TrendsRailroad Trends Long period of Long period of
inadequate Return inadequate Return On Investment (ROI)On Investment (ROI)
Record profits and Record profits and investments in 2006investments in 2006
Most capital Most capital intensive industryintensive industry ~15% of capital ~15% of capital
spending for new spending for new capacitycapacity
Raising costsRaising costs Concentration on Concentration on
main corridorsmain corridors
0%
4%
8%
12%
16%
20%
1981 1984 1987 1990 1993 1996 1999 2002
Cost of Capital
Return on Investment
Source: Surface Transportation BoardSource: U.S. Census Bureau; AAR
0%
5%
10%
15%
20%
Rai
lroad
sU
tiliti
esM
iner
als
Elec
toni
csPa
per
Che
mic
als
Prim
ary
Fab.
Woo
dM
achi
nery
Food
Tran
sp.
Coa
l
Declining Rail Car CapacityDeclining Rail Car Capacity
Class 1 Railroad CarsClass 1 Railroad Cars 1960 – 1,658,292 1960 – 1,658,292 1980 – 1,168,1141980 – 1,168,114 1990 - 658.9001990 - 658.900 2000 – 560,1542000 – 560,154 Net loss 1,098,138 carsNet loss 1,098,138 cars
Short Line Railroad CarsShort Line Railroad Cars 1960 – 32,114 1960 – 32,114 1980 – 102,1611980 – 102,161 1990 - 103,5271990 - 103,527 2000 – 132,4482000 – 132,448 Net Gain 100,334 carsNet Gain 100,334 cars
Overall the rail industry has lost 997,904 rail cars in past 40 years. (BTS 2003)
New rail cars have more capacity per car, 1 rail car > 3 Semi-trucks.
Railroads have improved use of cars… but fewer cars = less system versatility and resilience to handle smaller markets
Source: AAR
U.S. Railroad Performance: 1964-2002U.S. Railroad Performance: 1964-2002(Index 1981 = 100)(Index 1981 = 100)
0306090
120150180210240270300
'64 '66 '68 '70 '72 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02
Revenue
Volume
Productivity Increases
Price
Staggers Act Passed Oct. 1980
Two Scenarios:Two Scenarios:1) Downward Spiral1) Downward Spiral
Rail Carriers Shippers
Lower rail volumes
Service deterioration
2) Upward Spiral?2) Upward Spiral?
Higher rail volumes
Increased investments and service
DOTEDA
Others
Rail Carriers ShippersCo-operation
Research
MRUTC
Univ.
Northern Wisconsin and UP Michigan Northern Wisconsin and UP Michigan Rail Study - BackgroundRail Study - Background
Federally funded rail study Federally funded rail study Initiated by regional shippers and economic Initiated by regional shippers and economic
development agenciesdevelopment agencies Dissatisfaction and concern for continuing rail Dissatisfaction and concern for continuing rail
service in the regionservice in the region Transfer from regional to national carrierTransfer from regional to national carrier Commodity mixCommodity mix Shipping quantitiesShipping quantities Diversion of rail traffic to other modesDiversion of rail traffic to other modes
Objectives and Methodology Objectives and Methodology Objectives: Objectives:
Find methods to increase regional Find methods to increase regional shippers’ use of rail servicesshippers’ use of rail services
Create potential for regional economic Create potential for regional economic benefits and growthbenefits and growth
Methodology: Methodology: Practical approach Practical approach
Collect stakeholder input Collect stakeholder input Encourage cooperation between groupsEncourage cooperation between groupsIdentify and develop beneficial tools and processesIdentify and develop beneficial tools and processes
Growing Rail FreightGrowing Rail Freight Study Study: Action Plan: Action PlanI.I. Evaluate rail infrastructure and hold Stakeholder meetingsEvaluate rail infrastructure and hold Stakeholder meetings
Assess the current rail service and condition of rail lines Assess the current rail service and condition of rail lines Share ideas for addressing concerns – communicateShare ideas for addressing concerns – communicate
II.II. Shipper/carrier/government associationsShipper/carrier/government associations Develop new or expand existing associationsDevelop new or expand existing associations
III.III. Survey to ascertain rail issuesSurvey to ascertain rail issues Examine possible solutions and recommendations based on findingsExamine possible solutions and recommendations based on findings
IV.IV. Develop data base of supply chain providers and other Develop data base of supply chain providers and other support businesssupport business Catalog and disseminate companies and education programsCatalog and disseminate companies and education programs
V.V. Create Model of Rail Development GIS SystemCreate Model of Rail Development GIS System Stimulate future and expanded rail usageStimulate future and expanded rail usage Regional economic developmentRegional economic development
Shipper MeetingsShipper Meetings Preceded by interviews with Rail and ShippersPreceded by interviews with Rail and Shippers
Shippers, Rail, Government Agencies active participantsShippers, Rail, Government Agencies active participants
9 meetings at 8 locations 9 meetings at 8 locations
Research team an impartial facilitatorResearch team an impartial facilitator
Power Point presentationsPower Point presentations
Questions & answersQuestions & answers
Open dialogOpen dialog
171 participants total171 participants total Well receivedWell received
Public environment to present viewpoints Public environment to present viewpoints Presentations enabled to validate trendsPresentations enabled to validate trends Direct communication between Carriers, DOTs, EDAs and Direct communication between Carriers, DOTs, EDAs and
shippersshippers Benefits for research teamBenefits for research team
Adjusting and reprioritizing study activitiesAdjusting and reprioritizing study activities Encouragement to participate in shipper surveyEncouragement to participate in shipper survey Organizing additional communication opportunitiesOrganizing additional communication opportunities
Immediate outcomes in log transportationImmediate outcomes in log transportation More focus on railroads in transportation More focus on railroads in transportation
discussiondiscussion
Stakeholder Meeting OutcomesStakeholder Meeting Outcomes
FindingsFindings Inadequate dataInadequate data
Current rail facilitiesCurrent rail facilities Future demand & supplyFuture demand & supply
Challenging to motivate stakeholder Challenging to motivate stakeholder participationparticipation
Limited understanding of rail industry Limited understanding of rail industry and operationsand operations
Only negative publicity sees daylightOnly negative publicity sees daylight Need to improve communications and Need to improve communications and
information transferinformation transfer Education – Rail User Tool KitEducation – Rail User Tool Kit
Question 24: If you are unable to provide a back haul shipment for the Question 24: If you are unable to provide a back haul shipment for the carrier carrier making a delivery to you, do you making a delivery to you, do you coordinate with other local coordinate with other local companies to provide a companies to provide a back haul for the carrier?back haul for the carrier?
19%
58%
23%26%
68%
16%8%
58%
34%
0%
10%20%
30%
40%
50%60%
70%
80%
% YES % NO % NORESPONSE
Perc
ent o
f Res
pond
ents
All Respondents Rail Users Non-Rail Users
Action Item III:Action Item III: Survey to ascertain rail issuesSurvey to ascertain rail issues
43 Companies Responded43 Companies Responded
Action Item IVAction Item IVDevelop tools and database of supply chain Develop tools and database of supply chain managers and other transportation support businessmanagers and other transportation support business
1.1. Catalog and disseminate third party provider Catalog and disseminate third party provider companies and education programscompanies and education programs
2.2. Work with extension offices to set up programsWork with extension offices to set up programs
3.3. Provide model of rail costing decision tool for Provide model of rail costing decision tool for shippersshippers
Resulted in the “Rail User Tool Kit”Resulted in the “Rail User Tool Kit”
Rail User Tool KitRail User Tool Kit Includes information on:Includes information on:
Getting startedGetting started Equipment and investmentsEquipment and investments ResourcesResources Case study of a new userCase study of a new user
Copies available:Copies available: In the printed reportIn the printed report On the CD-ROMOn the CD-ROM Online: Online: www2.uwsuper.edu/transwww2.uwsuper.edu/trans
Action Item VAction Item VCreate Model of Rail Development GIS SystemCreate Model of Rail Development GIS System
I.I. Stimulate future and expanded rail usageStimulate future and expanded rail usage
II.II. Regional economic development toolRegional economic development tool
III.III. Modeled on proven systems in other statesModeled on proven systems in other states Pennsylvania Rail Freight Properties DirectoryPennsylvania Rail Freight Properties Directory Online at: Online at: http://www.dot.state.pa.us/
Rail DevelopmentRail Development Geographic Information System (GIS)Geographic Information System (GIS)
Purpose:Purpose: Identify properties along or near existing railroads that Identify properties along or near existing railroads that
have the potential to be rail servedhave the potential to be rail served Act as a central storehouse – so all parties could easily Act as a central storehouse – so all parties could easily
access pertinent informationaccess pertinent information Present the relevant information in an easy-to-use, Present the relevant information in an easy-to-use,
convenient, and graphic-rich wayconvenient, and graphic-rich way Internet-based GIS system was selectedInternet-based GIS system was selected
Reach the largest possible audienceReach the largest possible audience Ease of use, familiar online toolsEase of use, familiar online tools Utilize the latest IT methodsUtilize the latest IT methods
GIS Focus Area:GIS Focus Area: 3 GIS base maps were used as a starting point
– 2 commercial ones, and WisDOT data
Teams of student researchers went out in the field to verify what rail sidings and spurs actually existed or did not exist
About 120 sites were identified and examined
Over 60% of the sidings & spurs in this area were found to have significant discrepancies compared to base maps
Ashland SubdivisionAshland Subdivision
Ladysmith - to - Rhinelander sectionLadysmith - to - Rhinelander section
How Bad Can It Be…?How Bad Can It Be…?
The only useable track in The only useable track in the whole areathe whole area
Example: Example: Town of MellenTown of Mellen
We found that these two sidings no longer exist at all…
Base maps indicate the purple-shaded track:
…and these sidings and spurs do exist, but are not shown at all on the base maps.
Rail Study: an Education Process Rail Study: an Education Process
Student involvements:Student involvements: Graduate student at Michigan TechGraduate student at Michigan Tech
PhD candidate studying railway issuesPhD candidate studying railway issues Undergraduates at UW SuperiorUndergraduates at UW Superior
More than 10 undergraduate students in the new More than 10 undergraduate students in the new Transportation and Logistics major were involvedTransportation and Logistics major were involved
Students learned GPS and GIS applications, data Students learned GPS and GIS applications, data analysis, and general transportation planning and analysis, and general transportation planning and operation in relation to regional economyoperation in relation to regional economy
Students participated in work report preparation, Students participated in work report preparation, editing, and field toursediting, and field tours
Research Teams in the FieldResearch Teams in the Field
ConclusionsConclusions Stakeholder meetings effective forum to Stakeholder meetings effective forum to
educate and discuss issueseducate and discuss issues Importance of multi-way facilitated Importance of multi-way facilitated
communications communications New as well as current customers vital to rail New as well as current customers vital to rail
health - health - Rural areas with natural resource based Rural areas with natural resource based
economies dependent on rail serviceeconomies dependent on rail service Rail service in Northern Wisconsin and UP Rail service in Northern Wisconsin and UP
Michigan can not be taken for granted Michigan can not be taken for granted
RecommendationsRecommendations1.1. Improve communications – Long and short term plans for Improve communications – Long and short term plans for
carriers and shipperscarriers and shippers
2.2. Rail Carriers expand outreach to seek customer inputRail Carriers expand outreach to seek customer input
3.3. Tools are needed to support Supply Chain ManagementTools are needed to support Supply Chain Management
4.4. Support shipper’s and rail carriers interaction with Support shipper’s and rail carriers interaction with regional communitiesregional communities
5.5. Formally recognize the external costs of transportationFormally recognize the external costs of transportation
6.6. Explore the feasibility of adding Transload CentersExplore the feasibility of adding Transload Centers
7.7. Shortline or regional railroad optionsShortline or regional railroad options
8.8. Promote economic development by enhancing rail Promote economic development by enhancing rail accessaccess
Thank You!Thank You!Questions?Questions?UW-Superior Website: Tool Kit and StudyUW-Superior Website: Tool Kit and Study www2.uwsuper.edu/transwww2.uwsuper.edu/trans