Public financing of private freight rail infrastructure to reduce highway congestion: A case study of public policy and decision making in the United States

As goods movement continues to increase it is expected to outpace infrastructure capacity in the United States. Moving a larger share of goods by rail rather than truck is a potentially cost effective part of a solution. Freight rail not only offers a substitute for truck trips but is a cleaner, more energy efficient, and safer alternative. Recently a number of private freight rail projects have received public funding. The public funds are aimed at increasing freight rail capacity with the goal of diverting some goods currently moved by truck to rail. While the benefits of moving goods by rail are relatively clear, it is unclear if public decision makers can effectively identify strategic rail investments that will achieve their policy goals. This study critically examines the analytical methods, models, and data that are commonly used to support decisions to provide public funds for private freight rail projects. This is accomplished through a case study of California’s Trade Corridors Improvement Fund program which provided $680 million for 11 freight rail projects. The study’s contributions include identifying critical analytical flaws and challenges affecting the benefit estimates that public funding decisions rely on. Improvements to current evaluation methods are also identified as are regulatory reforms and policy interventions that may offer more effective and reliable outcomes.     

Rail freight efficiency and competitiveness in Australia

In 1994/95, the Australian rail freight task was approximately 100 billion tonne kilometres (btkm). This freight task included some 37 btkm for the haulage of iron ore in Western Australia, 28 btkm for coal haulage in Queensland and New South Wales and about 16 btkm for interstate rail freight. This paper mainly concerns how improvements can be made to the efficiency and competitiveness of interstate rail freight services through the upgrading of sections of mainline track that currently have severe speed‐weight restrictions. Recent improvements in rail freight efficiency are discussed, with emphasis on two indicators: average unit revenues (cents per net tonne km), and average energy efficiency (net tonne km per MJ). Rail freight efficiency is high for the Western Australia iron‐ore operations, Queensland coal operations and Adelaide‐Perth general freight operations. However, between Australia's three largest cities of Melbourne, Sydney and Brisbane, some 36% of the mainline track fails to meet basic fast freight train standards with a ruling grade of 1 in 66 and no curve radius less than 800 m. The contraints on efficient rail freight operations imposed by severe terrain, and how the effects of terrain may be reduced by improved track alignment, are discussed. Some economically warranted rail track investment measures are outlined, including those identified for a National Transport Planning Taskforce. These measures have the potential to reduce liquid fuel use by over 250 million litres a year. Factors affecting competitive neutrality between road and rail freight that are outside of the present scope of Australia's National Competition Policy are broadly considered. These factors include the extensive upgrading of the National Highway System with full Federal funding, and low levels of road cost recovery from heavy trucks operating over long distances.     

Estimating the marginal cost of railway track renewals using corner solution models

Economic theory advocates marginal cost pricing for efficient utilisation of transport infrastructure. A growing body of literature has emerged on the issue of rail marginal infrastructure wear and tear costs, but the majority of the work is focused on costs for infrastructure maintenance. Railway track renewals are a substantial part of an infrastructure manager’s budget, but in disaggregated statistical analyses they cause problems for traditional regression models since there is a piling up of values of the dependent variable at zero. Previous econometric work has sought to circumvent the problem by aggregation in some way. In this paper we instead apply corner solution models to disaggregate (track-section) data, including the zero observations. We derive track renewal cost elasticities with respect to traffic volumes and in turn marginal renewal costs using Swedish railway renewal data over the period 1999–2009. This paper is the first attempt in the literature to apply corner solution models, and in particular the two-part model, to disaggregate renewal cost data in railways. It is also the first paper that we are aware of to report usage elasticities specifically for renewal costs and therefore adds important new evidence to the previous literature where there is a paucity of studies on renewals and considerable uncertainty over the effects of rail traffic on renewal costs. In the Swedish context, we find that the inclusion of marginal track renewal costs in the track access pricing regime, which currently only reflects marginal maintenance costs, would add substantially to the existing track access charge. EU legislation requires that access charges reflect the ‘costs directly incurred as a result of operating the train service’, which should include a marginal renewal cost component. This change would also increase the cost recovery ratio of the Swedish infrastructure manager, thus meeting a policy objective of the national government.     

New routes on old railways: increasing rail’s mode share within the constraints of the existing railway network

This paper describes an integrated methodology for identifying potential ‘quick wins’ for mode shift from road to passenger rail transport. Firstly, a procedure for analysing rail’s relative competitiveness in the market for passenger transport between large urban areas is developed and then applied to a UK case study. The purpose of such analysis is to allow the identification of flows where rail is currently relatively uncompetitive (in terms of journey time in particular) and to assess the reasons for this poor performance, so that the issues which suppress rail use may be addressed. In parallel, a framework, methodology and tool for the assessment of existing and potential capacity (trains, seats, TEUs, etc.) is developed for both passenger and freight traffic, to identify and address network constraints. An illustrative example of the use of these demand and capacity assessment tools is then presented, with the tools used to identify and evaluate flows where rail demand is suppressed by poor service quality and where spare capacity exists which would allow the passenger rail service to be improved without requiring significant investments in infrastructure. The effects of such improvements on demand are predicted, and the cost implications of operating such additional services are discussed. The analysis suggests that there may be significant potential for increasing rail’s mode share by providing additional inter-urban services where rail currently offers an inferior service.     

A model to design a national high-speed rail network for freight distribution

High-speed rail is often touted as a means to reduce congestion on the United States’ highways by removing passenger car traffic. But highway congestion can also be reduced by reducing the amount of freight traffic. So, given the advances in high-speed rail, the potential exists for developing a national high-speed network for freight distribution. To design such a network considering highway traffic and transit times, we present an uncapacitated network design model with a post-processing step for the capacity constraint. To illustrate how our modeling approach could be used by policy makers to evaluate the impacts of a high-speed rail network, we apply our models with preliminary data on high-speed rail operating parameters for freight applications and from current data on shipments from a major truckload carrier and the US Census Bureau.     

Meeting an 80% reduction in greenhouse gas emissions from transportation by 2050: A case study in California

This paper investigates how California may reduce transportation greenhouse gas emissions 80% below 1990 levels by 2050 (i.e., 80in50). A Kaya framework that decomposes greenhouse gas emissions into the product of population, transport intensity, energy intensity, and carbon intensity is used to analyze emissions and mitigation options. Each transportation subsector, including light-duty, heavy-duty, aviation, rail, marine, agriculture, and off-road vehicles, is analyzed to identify specific mitigation options and understand its potential for reducing greenhouse gas emissions. Scenario analysis shows that, while California’s 2050 target is ambitious, it can be achieved in transport if a concerted effort is made to change travel behavior and the vehicles and fuels that provide mobility. While no individual ‘‘Silver Bullet” strategy exists that can achieve the goals, a portfolio approach that combines strategies could yield success. The 80in50 scenarios show the impacts of advanced vehicle and fuels technologies as well as the role of travel demand reduction, which can significantly reduce energy and resource requirements and the level of technology development needed to meet the target.     

Probabilistic analysis of the release of liquefied natural gas (LNG) tenders due to freight-train derailments

Liquefied natural gas (LNG) has emerged as a possible alternative fuel for freight railroads in the United States, due to the availability of cheap domestic natural gas and continued pursuit of environmental and energy sustainability. A safety concern regarding the deployment of LNG-powered trains is the risk of breaching the LNG tender car (a special type of hazardous materials car that stores fuel for adjacent locomotives) in a train accident. When a train is derailed, an LNG tender car might be derailed or damaged, causing a release and possible fire. This paper describes the first study that focuses on modeling the probability of an LNG tender car release incident due to a freight train derailment on a mainline. The model accounts for a number of factors such as FRA track class, method of operation, annual traffic density level, train length, the point of derailment, accident speed, the position(s) of the LNG tender(s) in a train, and LNG tender car design. The model can be applied to any specified route or network with LNG-fueled trains. The implementation of the model can be undertaken by the railroad industry to develop proactive risk management solutions when using LNG as an alternative railroad fuel.     

Challenges raised by freight for the operations planning of a shared-use rail network. A French perspective

Operating rail infrastructures that are shared among different uses is complex. In Western Europe, the predominance of passenger traffic over freight has traditionally led to thorough scheduling of capacity use, with an increasing tendency to anticipate through the design of regular-interval timetables. The paper discusses the specific challenges posed by fitting freight into the timetabling process for a mixed-use rail network, based on current French experience. The analysis is carried out from the perspective of the infrastructure manager. It is mainly supported by the results of a series of about 30 interviews, carried out in 2012 and 2013 with the parties involved in the timetabling process. The paper provides a comprehensive understanding of the process in terms of organization, rules and practices, with an emphasis on the characteristics of freight traffic compared with passenger traffic. The author highlights three key management issues for the French infrastructure manager when dealing with freight: (1) the uncertainty surrounding the mid-long term development of the rail freight market at the national level; (2) the heterogeneity resulting from the diversity of commodities, convoys and profiles and behaviors of the capacity applicants; (3) the volatility of some freight traffic resulting in a great amount of activity in the later stages of the timetabling process. If uncertainty about the future appears to be a highly sensitive issue in the French context, heterogeneity and volatility of freight traffic can be perceived as management challenges that may be experienced, to a greater or lesser degree, on other rail networks.     

On including travel time reliability of road traffic in appraisal

In many countries, decision-making on proposals for national or regional infrastructure projects in passenger and freight transport includes carrying out a cost–benefit analysis for these projects. Reductions in travel times are usually a key benefit. However, if a project also reduces the variability of travel time, travellers, freight operators and shippers will enjoy additional benefits, the ‘reliability benefits’. Until now, these benefits are usually not included in the cost–benefit analysis. To include reliability of travel or transport time in the cost–benefit analysis of infrastructure projects not only monetary values of reliability, but also reliability forecasting models are needed. As a result of an extensive feasibility study carried out for the German Federal Ministry of Transport, Building and Urban Development this paper aims to provide a literature overview and outcomes of an expert panel on how best to calculate and monetise reliability benefits, synthesised into recommendations for implementing travel time reliability into existing transport models in the short, medium, and long term. The paper focuses on road transport, which has also been the topic for most of the available literature on modelling and valuing transport time reliability.     

Environmental benefits from better freight transport management: freight traffic in a VAR model

Most macro empirical studies on the price elasticity in the freight transport sector focus on the demand for transport. However, most of the external costs from the freight transport sector are more closely linked with the traffic volumes. In the paper an explicit distinction between traffic and transport demand is made by regarding traffic as an input in the shippers’ production of transport services, while transport demand is derived from firms’ production of output. An empirical analysis based on aggregate time series is carried out in a VAR model, where the stationary long run relationships are estimated using the so-called ‘Johansen Procedure’. The estimated price elasticity with respect to traffic (−0.81) is considerably higher than the elasticity with respect to transport (−0.47).     

A time-dependent freight tour synthesis model

This paper introduces a model of urban freight demand that seeks to estimate tour flows from secondary data sources e.g., traffic counts, to bypass the need for expensive surveys. The model discussed in this paper, referred as Freight Tour Synthesis (FTS), enhances current techniques by incorporating the time-dependent tour-based behavior of freight vehicles, and the decision maker’s (e.g., metropolitan planning agency planner) preferences for different sources of information. The model, based on entropy maximization theory, estimates the most likely set of tour flows, given a set of freight trip generation estimates, a set of traffic counts per time interval, and total freight transportation cost in the network. The type of inputs used allows the assessment of changes in infrastructure, policy and land use. The ability of the model to replicate actual values is assessed using the Denver Region (CO) as a case study.     

Assessing the CO2 impact of current and future rail track in the UK

This paper investigates the CO₂ impact of current and future UK rail track and estimates the material, process and transport emissions associated with construction, maintenance and end-of-life activities for designs at high and low traffic loads. Analysis shows that for current track configurations, track with concrete sleepers has the lowest CO₂ impact, followed by steel, hardwood and softwood. Several potential future rail track designs have been analysed including embedded rail and double and quadruple-headed rail. All future track designs have a lower impact than current designs, but this improvement is more marked at high traffic loads. Up to a 40% reduction in CO₂ impact could be achieved if the UK rail network was to move from conventional track design to a double-headed embedded rail design. Key levers for reducing the CO₂ impact of track are identified as service life extension, traffic load reduction and the selection of low impact track designs.     

Marginal railway track renewal costs: A survival data approach

In this paper, renewal costs for railway tracks are investigated using survival analysis. The purpose is to derive the effect from increased traffic volumes on rail renewal cycle lengths and to calculate associated marginal costs. A flow sample of censored data containing almost 1300 observations on the Swedish main railway network is used. We specify Weibull regression models, and estimate deterioration elasticities for total tonnage as well as for passenger and freight tonnages separately. Marginal costs are calculated as a change in present values of renewal costs from premature renewal following increased traffic volumes. The marginal cost for total tonnage is estimated to approximately SEK 0.002 per gross ton kilometre.     

A study of economic indicators in rail freight traffic cycles 1950–76

This paper examines the characteristics of rail freight traffic cycles from 1950 to 1976. Both the NBER's statistical indicator approach and time series approach are used to identify the leading indicators of rail freight traffic cycles from a set of leading economic indicators published by the Department of Commerce. The concepts and empirical results obtained by these two procedures are compared and contrasted. The interesting findings are: (1) the composite index of 12 leading indicators performs very well as a qualitative and quantitative predictor and (2) the empirical results obtained by the NBER approach are, in general, consistent with those obtained by the time series approach.     

A decision support approach for condition-based maintenance of rails based on big data analysis

In this paper, a decision support approach is proposed for condition-based maintenance of rails relying on expert-based systems. The methodology takes into account both the actual conditions of the rails (using axle box acceleration measurements and rail video images) and the prior knowledge of the railway track. The approach provides an integrated estimation of the rail health conditions to support the maintenance decisions for a given time period. An expert-based system is defined to analyse interdependency between the prior knowledge of the track (defined by influential factors) and the surface defect measurements over the rail. When the rail health conditions is computed, the different track segments are prioritized, in order to facilitate grinding planning of those segments of rail that are prone to critical conditions. In this paper, real-life rail conditions measurements from the track Amersfoort-Weert in the Dutch railway network are used to show the benefits of the proposed methodology. The results support infrastructure managers to analyse the problems in their rail infrastructure and to efficiently perform a condition-based maintenance decision making.     

Estimating potential reductions in externalities from rail-road substitution in Trans-European freight transport corridors

This paper develops a method for analysing and estimating savings in externalities that could be achieved by substituting truck with rail freight services in a given Trans-European freight transport corridor. The externalities affected include energy consumption, emissions of greenhouse gases, noise, congestion, and traffic incidents/accidents. The European Commission transport policy aims to provide an institutional framework for the medium- to long-term sustainable development of the transport sector. An important aspect of this policy is to stimulating the modal shift from truck to rail freight transport in inland Trans-European corridors.     

The value of travel time savings in freight transport: a meta-analysis

Transportation - The value of freight travel time savings (VFTTS) is a monetary value that is considered an important input into cost–benefit analysis and traffic forecasting. The VFTTS is...     

Do Road Planners Produce More ‘Honest Numbers’ than Rail Planners? An Analysis of Accuracy in Road‐traffic Forecasts in Cities versus Peripheral Regions

Abstract

Based on a review of available data from a database on large‐scale transport infrastructure projects, this paper investigates the hypothesis that traffic forecasts for road links in Europe are geographically biased with underestimated traffic volumes in metropolitan areas and overestimated traffic volumes in remote regions. The present data do not support this hypothesis. Since previous studies have shown a strong tendency to overestimated forecasts of the number of passengers on new rail projects, it could be speculated that road planners are more skilful and/or honest than rail planners. However, during the period when the investigated projects were planned (up to the late 1980s), there were hardly any strong incentives for road planners to make biased forecasts in order to place their projects in a more flattering light. Future research might uncover whether the change from the ‘predict and provide’ paradigm to ‘predict and prevent’ occurring in some European countries in the 1990s has influenced the accuracy of road traffic forecasts in metropolitan areas.     

An empirical analysis of freight transport traffic modes in Brazil, 1996–2012

This paper analyses the performance of freight transportation modes in Brazil – namely air, water, rail and road – from February 1996 to August 2012 by investigating their long memory properties using fractional integration and autoregressive models on monthly tonnage data. Two important features are analysed: the degree of dependence of transportation traffic across time and its seasonal structure over the period. Furthermore, the stability of parameters across the sample period is investigated, incorporating potential structural breaks in the data, which describe discontinuity in freight transportation traffic. Some policy implications are derived.     

Investigating the market for inter-modal freight technologies

Freight carried by rail has traditionally been mainly low value bulk commodities. The market for transport of such commodities appears at best static and is forming a smaller proportion of the total demand for freight transport. There is thus an urgent need for rail operators to develop practical and cost effective inter-modal systems, which offer high quality services to consignors of consumer goods whose premises are not usually connected to the rail network. Much long-haul traffic of this type is international. In continental Europe, a number of inter-modal technologies—including swapbodies and piggyback—have long been in use. Development of similar technologies for use within the more constrained loading gauge of Great Britain, has received a great boost from the impending opening of the Channel Tunnel. The alternative technologies are discussed, before turning to ways of stimating the market for them. A large part of the paper is devoted to reporting on a computerised survey using our LASP (Leeds Adaptive Stated Preference) technique. The reason for using hypothetical Stated Preference data is the inadequate nature and extent of data on actual choice decisions, particularly in circumstances in which confidential freight rates are individually negotiated and little general merchandise goes by rail. By bringing together the results of this survey with information on costs and quality of service, the likely future market for inter-modal freight technologies is assessed. It is seen that the potential for inter-modal services within Britain is very limited, although there should be a good opportunity on the major corridor from London to Scotland through the West Midlands and the North West. When the Channel Tunnel is opened, however, the potential for services between Britain and continental Europe will be enormous, provided that an adequate quality of service can be offered.