Scheduling railway freight delivery appointments using a bid price approach

This paper proposes a method for establishing aggressive but achievable delivery appointment times for railroad shipments, taking into account individual customer needs and forecasted available train capacity. The concept of scheduling appointment times is directly patterned after current motor carrier industry practice, so that customers can plan for rail or truck deliveries in the same way.A shipment routing problem is decomposed into a deterministic “dynamic car scheduling” (DCS) process for shipments already accepted and a stochastic “train segment pricing” (TSP) process for forecasting future demands which have not yet called in and for which delivery appointments have yet to be scheduled. Both are formulated as multi-commodity network flow (MCNF) problems, where each shipment is treated as a separate commodity. Gain coefficients represent recapture probabilities that a specific customer will accept a carrier’s service offer.A comparison with a widely used revenue management formulation is given. A Lagrangian heuristic for obtaining a primal solution is also described. The problem is solved within a 1% gap using the subgradient algorithm.     

Hedonic versus homogeneous output specifications of railroad technology: Belgian railroads 1950–1986

The purpose of this paper is twofold. First, using data on Belgian railroad operations, we provide the first application of hedonic output aggregation to the railroad industry. Second, we compare the traditional homogeneous output approach with the use of these hedonic aggregates and carefully evaluate differences in estimates of input substitution possibilities, returns to scale, and productivity growth. It is found that ignoring the role of operating characteristics in cost analyses implies substantial bias in estimates of railroad technology.     

A Value-at-Risk (VAR) approach to routing rail hazmat shipments

Hazardous materials (hazmat) accidents are rare though the consequences could be disastrous. Given the possibility of low probability – high consequence event, a risk-averse routing hazmat shipment is necessary. We propose a value-at-risk (VaR) approach to route rail hazmat shipments, using the best train configuration, over a given railroad network with limited number of train services such that the transport risk as measured by VaR is minimized. Freight train derailment reports of the Federal Railroad Administration were analyzed to develop expressions that would incorporate characteristics of railroad accidents, and then to estimate the different inputs. The proposed methodology was used to study several problem instances generated using the realistic network of a railroad operator, and to demonstrate that it is possible to develop different routes for shipments depending on the risk preference of the decision maker.     

A cost and expected consequence approach to planning and managing railroad transportation of hazardous materials

Although hazardous materials (hazmat) account for around 140 million tons of all railroad freight traffic in the US, it has not received much attention from academic researchers. This is surprising especially when one considers the volume of hazmat moved by railroads in both North America and Europe. In this paper we develop a bi-objective optimization model, where cost is determined based on the characteristics of railroad industry and the determination of transport risk incorporates the dynamics of railroad accident. The optimization model and the solution framework is used to solve a realistic-size problem instance based in south-east US, which is then analyzed to gain managerial insights. In addition, a risk-cost frontier depicting non-dominated solutions is developed, followed by conclusion.     

The relationship between property values and railroad proximity: a study based on hedonic prices and real estate brokers' appraisals

We study the relationship between the price of residential property value and proximity to railroads in Oslo, by two different methods, namely a) through a hedonic price study where the statistical relationship between property prices and railroad proximity is estimated, and b) through a multi-attribute utility investigation of real estate agents' evaluation of such a relationship. We find in both cases that there are strong effects of proximity to railroad lines on property prices, at distances less than 100 meters from the lines. In the statistical study log-linear relationships fit the data best, and our estimates indicate that a doubling of the distance from the railroad line, within a 100 meter bound, increases the property price by about 10%. With real estate agents only a linear relationship is probed. This yields an increase in the price of an average relevant housing unit by about 182,000 NOK, due to a increase in the distance to a railroad track from 20 to 100 meters. The equivalent figure from the statistical study is in the range 120–150,000 NOK. The two figures are thus of the same magnitude.     

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.     

The evolution of U.S. rail freight pricing in the post-deregulation era: revenues versus marginal costs for five commodity types

There have now been over three decades of experience with rate-making freedom for all modes of intercity freight transport in the United States. Most evidence suggests that regulatory change has been beneficial for the rail industry and its users. Despite evidence of positive impacts of regulatory reform of U.S. freight transport, there is limited evidence related to long-term pricing trends by commodity in the deregulated era. Moreover, U.S. shipper groups have called for increased regulation of U.S. railroads, citing increased rates and profits, and monopoly pricing to “captive shippers.” This study estimates U.S. railroad revenue-marginal cost ratios for seven different commodities between 1986 and 2008. Interestingly, we find no significant increase in revenue-cost margins for commodities thought to be “most captive” (coal and chemicals), while finding large increases for some commodities thought to be “non-captive.” These results may provide insight into the impacts of regulatory reform in other countries, where there are similar concerns of equitable pricing and financial viability. They suggest that a move toward a more market-based pricing system can enhance railroad viability without harming those with fewer transport options.     

State regulation of railroads

The scope of state authority to regulate railroads tends to be broader in states with relatively concentrated populations and in states where economic sectors likely to ship by rail, especially mining, are relatively small. Regulatory scope is generally not related to the size of the railroad industry, number of railroads, or ideological-cultural factors.     

Transport coordination debate and the Japanese National Railways problem in postwar Japan

As the “railroad problem” in Japan became serious, there was a widespread debate calling for the implementation of a policy of transport coordination. Much debated themes were “inherent advantage,” “equal-footing,” “comprehensive transportation system,” and “economizing in transportation.” However, this not only had the effect of hampering the modernization of economic regulations for Japan's railroad industry, but also caused the Japanese National Railways's cumulative deficit to expand and placed a heavy economic burden on the public.     

Railroad noise: economic valuation and policy

In developed countries noise annoyance is an important source of environmental concern. Research on noise annoyance caused by railroad traffic is relatively underdeveloped. Here, a causal chain model is presented in which railroad traffic density, noise emission, noise immission and noise annoyance are causally related. Noise level, habituation and railroad usage are determinant factors. Noise annoyance causes social and economic costs, such as property value depreciation. Policy measures, aimed at reducing social and economic costs, are incorporated in various stages of the causal model. These measures can be subdivided into noise regulation and direct prevention measures. Stricter threshold values lead to higher total costs, but may lower social costs per capita. Economic feasibility of policy measures is usually analyzed by means of a cost-benefit case study. Methods of analysis used are diverse and ad hoc. Therefore, results of different case studies are not easily compared in terms of research synthesis.     

Fuzzy modeling approach to the rail freight car inventory problem

Techniques to improve freight car fleet use are of considerable interest to the railroad industry. In this paper, we present a fuzzy inventory control approach applied to the sizing of empty cars on a rail network. We address the problem of deciding the optimal inventory level and the optimal ordering quantity for a rail freight car fleet system in which demand and travel time are uncertain variables represented as triangular fuzzy numbers. Based on the fuzzy economic order quantity (EOQ) formula, a modified fuzzy EOQ model is set up and the optimal policy is developed using the signed distance method to defuzzify the fuzzy total cost. Computational results made for the Serbian rail network case verify the proposed model as well as the efficiency of the approach.     

The impact of U.S. rail regulatory reform on railroad management and organizational structure

The management structure of U.S. railroads has been historically characterized as static and bureaucratic. Many writers have attributed this to years of restrictive government regulation. This paper tests the hypothesis that observable characteristics and organizational structure of railroad management have changed in conjunction with recent regulatory reform. Management characteristics are analyzed in both 1977 and 1983. Major findings are that managers in 1983 are significantly younger and better educated with fewer years of company and industry service. Railroad organizational structures are also reviewed before and after deregulation to assess whether management structures are becoming leaner and less mechanistic.     

Dynamic blocking for railyards: Part II. Heterogeneous traffic

Traffic through a railroad yard is said to be heterogeneous if all the destinations are not served with the same frequency. This paper presents a study of railroad yards when traffic is heterogeneous and stationary, that is, without rush hour (or rush day) phenomena. Destinations (blocks) are grouped into categories that are served with the same frequency. The number of blocks and the frequency corresponding to each class are the only traffic characteristics that need to be known to analyze a given yard. With this information it is easy to determine the minimum number of tracks needed, and the number of switches per car; a numerical example is provided. The minimum number of required tracks is always larger than that for homogeneous traffic, but under the right conditions, the number of switches can be smaller. An approximation for large numbers of blocks is used to isolate the traffic factors that make the number of switches either large or small.     

Management's role in U.S. rail passenger decline, 1920–1941

Opinions vary as to whether the decline of American railroad passenger service can be attributed primarily to consumer choice or partly to structural impedances to the supply. Results are reported from testing the hypothesis that railroad management supplied service inappropriate in the new motor era: that management catered to a small, high-priced market, whereas it should have catered to a mass, low-priced market. An aggregate demand model with non-linear elasticity characteristics is estimated on railroad traffic between a sample of American cities for 1933. The model is sensitive to speed, fare and headway variables under the control of railroad management and reveals that there was a unique fare for a service of a given speed that maximized gross revenues. The observed fare for most of the 187 cases in the study was near or below the optimal fare, showing that rail managers judged their markets well, at least in the short run.     

Disruption risk management in railroad networks: An optimization-based methodology and a case study

We propose an optimization-based methodology for recovery from random disruptions in service legs and train services in a railroad network. A network optimization model is solved for each service leg to evaluate a number of what-if scenarios. The solutions of these optimization problems are then used in a predictive model to identify the critical disruption factors and accordingly design a suitable mitigation strategy. A mitigation strategy, such as adding flexible or redundant capacity in the network, is an action that is deliberately taken by management in order to hedge against the cost and impact of disruption if it occurs. It is important that managers consider the trade-offs between the cost of mitigation strategy and the expected cost of disruption. The proposed methodology is applied to a case study built using the realistic infrastructure of a railroad network in the mid-west United States. The resulting analysis underscores the importance of accepting a slight increase in pre-disruption transportation costs, which in turn will enhance network resiliency by building dis-similar paths for train services, and by installing alternative links around critical service legs.     

Integrated operations planning and revenue management for rail freight transportation

In the rail industry, profit maximization relies heavily on the integration of logistics activities with an improved management of revenues. The operational policies chosen by the carrier have an important impact on the network yield and thus on global profitability. This paper bridges the gap between railroad operations planning and revenue management. We propose a new bilevel mathematical formulation which encompasses pricing decisions and network planning policies such as car blocking and routing as well as train make-up and scheduling. An exact solution approach based on a mixed integer formulation adapted to the problem structure is presented, and computational results are reported on randomly generated instances.     

Hybrid predictive control for real-time optimization of public transport systems’ operations based on evolutionary multi-objective optimization

A hybrid predictive control formulation based on evolutionary multi-objective optimization to optimize real-time operations of public transport systems is presented. The state space model includes bus position, expected load and arrival time at stops. The system is based on discrete events, and the possible operator control actions are: holding vehicles at stations and skipping some stations. The controller (operator) pursues the minimization of a dynamic objective function to generate better operational decisions under uncertain demand at bus stops. In this work, a multi-objective approach is conducted to include different goals in the optimization process that could be opposite. In this case, the optimization was defined in terms of two objectives: waiting time minimization on one side, and impact of the strategies on the other. A genetic algorithm method is proposed to solve the multi-objective dynamic problem. From the conducted experiments considering a single bus line corridor, we found that the two objectives are opposite but with a certain degree of overlapping, in the sense that in all cases both objectives significantly improve the level of service with respect to the open-loop scenario by regularizing the headways. On average, the observed trade-off validates the proposed multi-objective methodology for the studied system, allowing dynamically finding the pseudo-optimal Pareto front and making real-time decisions based on different optimization criteria reflected in the proposed objective function compounds.     

Optimal fueling strategies for locomotive fleets in railroad networks

Railroad companies spend billions of dollars each year to purchase fuel for thousands of locomotives across the railroad network. Each fuel station charges a site-dependent fuel price, and the railroad companies must pay an additional flat contracting fee in order to use it. This paper presents a linear mixed-integer mathematical model that integrates not only fuel station location decisions but also locomotive fueling schedule decisions. The proposed model helps railroads decide which fuel stations to contract, and how each locomotive should purchase fuel along its predetermined shipment path, such that no locomotive runs out of fuel while the summation of fuel purchasing costs, shipment delay costs (due to fueling), and contracting charges is minimized. A Lagrangian relaxation framework is proposed to decompose the problem into fueling schedule and facility location selection sub-problems. A network shortest path formulation of the fueling schedule sub-problem is developed to obtain an exact optimal solution to the fueling schedule sub-problem. The proposed framework is applied to a large-scale empirical case and is shown to effectively reduce system costs.     

Bottleneck congestion pricing and modal split: Redistribution of toll revenue

The paper examines the question of the redistribution of toll revenue as seen in a bottleneck congestion model. Our objective is to analyse the impact of this redistribution on total cost and on modal split between railroad and road. Following Tabuchi’s two-mode model (Tabuchi, T., 1993. Bottleneck congestion and modal split. Journal of Urban Economics 34, 414-431.), we integrate a redistribution of toll revenue towards public transport into our study. In this context, we investigate two kinds of road toll regimes: a fine toll and a uniform toll. We will consider two types of railroad fare: when it is set equal to the marginal cost and when it is set equal to average cost. These models allow us to show that toll policy to be more efficient as long as toll revenue is directed towards public transport when the railroad fare is equal to average cost.     

Enhancing intelligent agent collaboration for flow optimization of railroad traffic

Intelligent agents have successfully solved the train pathing problem on a small portion of railroad network [Tsen, 1995, Ph.D. Thesis, Carnegie Mellon University, USA]. As the railroad network grows, it is imperative that the agents collaborate to operate as efficiently as possible. In this paper, the authors demonstrate a collaboration protocol based on a conditional measure of agent effectiveness. Because agent effectiveness is not directly measurable, a suitable metric for agent effectiveness is introduced. Where typically agents run with uniform frequency, the collaboration protocol schedules the agents with a frequency proportional to their expected effectiveness. This protocol introduced a 10-fold improvement in the agent efficiency when tested with a simulation program on a portion of the Burlington Northern railroad.