U.S. Freight System Modernization Necessary to Reduce Bottlenecks, Improve Security

The long-term efficiency and effectiveness of the U.S. freight transportation system is threatened by bottlenecks, inefficient use of some parts of the infrastructure components, vulnerability to disruptions, and crucial environmental and energy concerns, according to a study issued today by the RAND Corporation.

The U.S. freight transportation system moves about $40 billion worth of goods each day, with delays and uncertainty in the performance of the system translating into higher prices for consumers and reduced productivity, according to researchers.

"Improvements to infrastructure are important, but it's also critical to ensure that the existing infrastructure is used efficiently," said Richard J. Hillestad, lead author of the study and a senior principal researcher with RAND, a nonprofit research organization.

Despite the global financial crisis, experts continue to estimate that there will be increased demand for freight transportation in the future, even as the capacity of the nation's highways, port and railroads are nearing their limits in key urban areas and transportation corridors.

The annual average road delay in the United States for rush hour travelers increased from 14 hours per year in 1982 to 38 hours per year in 2005. And the Association of American Railroads predicts that by 2035, more than half of the national rail network will be operating near or above capacity, resulting in significant travel delays and limiting the ability to maintain tracks and equipment. This would limit the opportunity to increase rail's share of freight, which could help tackle environmental concerns and road congestion.

"There's an opportunity now for the United States to develop policies and plans that will improve the flexibility and security of the freight transportation system, which is currently vulnerable to a host of dangers that could cause costly disruptions, whether from a terrorist attack or a natural disaster, such as an earthquake," Hillestad said. "The whole functionality of freight transportation is built on reliability and speed, and those elements need to be protected."

Hillestad and his colleagues reviewed relevant transportation studies and conducted interviews with operators of both U.S. and foreign ports, local and regional transportation planners, railroad executives, trucking and sea-shipping industry representatives, and companies that use the freight transportation system, including large and small retailers, auto manufacturers, raw-material shippers and chemical-product suppliers.

The study concludes that there are four freight transportation and infrastructure issues that are particularly critical to address:

• Increasing the capacity of the United States' national and international freight systems through a combination of operational improvements and selected infrastructure enhancement
• Creating an adaptable, less-vulnerable and more-resilient freight transportation system
• Addressing the energy and environmental issues associated with freight transportation
• Making the case for public and private investment in supply-chain infrastructure and establishing sustainable priorities for funding.

Increasing the nation's freight transportation capacity can be done by using a variety of strategies, not just through a massive program of adding new roads or rail lines. Suggested strategies include regulations, pricing, technology, improved operating practices and selective infrastructure investments. Examples of these improvements include adopting congestion pricing to promote more highway transportation during non-peak hours, encouraging more goods to be shipped by rail instead of truck and expanding some port operations to run 24 hours a day, seven days a week.

To make the system more flexible and less vulnerable to disruption, the report recommends that responsible agencies conduct system-level modeling of the freight transportation system to determine where bottlenecks occur and to understand its vulnerabilities. Encourage shippers to use alternative ports, instead of relying on just the largest, also would reduce strain on the system.

Transportation accounts for 25 percent of the nation's hydrocarbon fuel use; of that amount, about 25 percent is freight transportation. So while passenger vehicles are the primary energy users and emitters of pollution, the freight transportation industry also must consider environmental effects as it develops expansion plans. Methods to reduce pollution include increasing the operational efficiency of freight transportation (which also increases capacity) and such direct mitigation measures as cleaner fuel, better engines and more-aerodynamic vehicles.

Finally, the report suggests that a greater effort needs to be focused on developing sustainable priorities for public investment in the freight transportation system.

The research was supported by the Dow Chemical Company, the U.S. Chamber of Commerce, the Port Authority of New York and New Jersey, Union Pacific Railroad, the Port of Long Beach, and the Port of Los Angeles. The study, "Fast Forward: Key Issues in Modernizing the U.S. Freight Transportation System for Future Economic Growth," is available at www.rand.org

Other authors of the study include Ben Van Roo of RAND and Keenan Yoho, formerly of RAND. Research for the study was conducted under the auspices of the Supply Chain Policy Center of the Transportation, Space and Technology Program within RAND Infrastructure, Safety and Environment.

The mission of RAND Infrastructure, Safety and Environment is to improve the development, operation, use and protection of society's essential physical assets and natural resources and to enhance the related social assets of safety and security of individuals in transit and their workplaces and communities.