Assessment of Fuel Economy Technologies for Medium and Heavy ...

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Background: Improvements to intermodal transport, such as rail capacity improvements and bottleneck relief, intermodal (truck-rail) terminals, and financial/pricing incentives, could potentially encourage shippers to make greater use of rail in place of truck, increasing the efficiency of freight movement on a ton-mile basis. Work in progress for U.S. DOT on transportation GHG reduction strategies includes a literature review of the potential GHG benefits of shifting freight from truck to rail through intermodal improvements. 38 Reductions in fuel consumption on the order of 60 percent per ton-mile are typical for shifts from trucking (trailers or containers) to long-haul intermodal rail, with reductions decreasing with shorter distances. Savings can vary significantly, however, depending upon the distance of the movement and type of cargo. Estimates of total potential freight mode-shifting have been aspirational in nature, rather than based on empirical data, due in large part to the complex nature of competition between trucks and rail. The potential for mode-shifting is limited to certain types of commodities—those that are heavy, low-value, and do not have an acute need for reliable and timely delivery—e.g., building stone and waste, as well as certain movements—in particular, long-haul movements where the efficiency benefits of rail outweigh the additional handling/logistics costs and time at either end, generally shipments longer than 1,000 miles. Furthermore, market demand both affects and is dependent upon the quality of service. Rail service improves significantly as demand between market pairs increases – increased traffic (trains per day) increases the level of service that railroads provide to customers, and means that improved access is possible since (shippers need access to rail facilities to ship via rail). In short, shippers choose a mode that minimizes their total logistics cost. There are numerous ways to estimate diversion, but each has its flaws. In general, simple techniques (e.g., the ‗Delphi Method,‘ comparative market analysis, and elasticity methods) rely on simplifying assumptions and sketch planning techniques while complicated techniques (such as FHWA and the Federal Railroad Administration‘s Intermodal Transportation and Inventory Cost Model 39 and econometric models) require significant data resources, time resources, and computation power. Furthermore, complicated techniques are very sensitive to inputs and the inputs are often modeled. For example, public truck flow data, by commodity, do not exist while rail data is sampled, proprietary, and requires traffic modeling for model estimation, all of which decrease the reliability of results. Despite the difficulties of estimating the size of diversion impacts, it is generally accepted that this phenomenon exists and that there are a consistent set of variables that impact the outcome. Actions that can affect a truck-rail mode shift include investment in rail and intermodal terminal infrastructure, direct operating subsidies for railroads, land use regulations (for example, to preserve rail sidings for rail-oriented businesses), and taxes to increase the cost of truck travel, as previously discussed. 38 Cambridge Systematics, Inc., Transportation’s Role in Reducing Greenhouse Gas Emissions, Forthcoming, prepared for Federal Highway Administration. 39 Federal Highway Administration and Federal Railroad Administration, Intermodal Transportation and Inventory Cost Model, Highway-to-Rail Intermodal User’s Manual, March 2005. - 22 -
Findings: The following studies either estimated diversion potential from rail investment in specific corridors. Mid-Atlantic Rail Operations (MAROps) study: 40 The MAROps study used the comparative market approach to estimate the diversion potential in the Mid-Atlantic region. The comparative market approach looked at every market pair in the country and compared rail travel distance to truck travel distance (a measure of the circuity of rail), commodity, traffic density (tons of good shipped), and, finally, mode-share of truck and rail. Mid-Atlantic markets were identified that, given similar operating conditions to other markets nationally, could carry more rail traffic, which would reduce truck traffic on the parallel highway corridor. The study estimated the potential diversion from projects representing a $12 billion investment in the Mid-Atlantic rail network to be somewhere between 0.67 and 1.8 million truck trips annually, or 237 to 638 million VMT (4 to 11 percent of total regional truck VMT) in 2035 (unpublished result). This diversion would save 42 to 114 million gallons of diesel fuel in trucks (based on today‘s 5.59 mpg fuel economy), not accounting for increased rail traffic. This implies a range of $7,000 to $18,000 per diverted truck trip in the Mid-Atlantic and between $110 and $290 in investment per gallon of fuel saved based on 2008 dollars and 2035 traffic. Norfolk Southern Crescent Corridor: 41 The Crescent Corridor will provide premium service intermodal trains to compete with I-81 long-haul truck markets between the New York area and the Southeast. This market is underserved by rail today and has significant potential for growth. Improvements include new track, upgrading signals, and removing choke points. Norfolk Southern estimates that a $2.5 billion investment will result in the diversion of 1,000,000 truck trips annually. Over an assumed 30 year life of the project, this implies a cost of $83 per truck trip ($2.5 billion / (1 million trips * 30 years), and a savings of more than 170 million gallons annually. The Northeast-Southeast-Midwest Corridor Marketing Study: 42 This study used the Reebie Associates‘ Diversion Model, a detailed statistical model, to estimate diversion from truck to rail based on reductions in rail operating costs stimulated by public investment in rail infrastructure. The study found that a long-term (13 to 17 years), corridor-wide (the entire I- 81 corridor), public investment in rail intermodal infrastructure of $7.9 billion could divert approximately 812 million truck VMT. The study did not estimate the probable reduction in fuel consumption but the findings imply that truck fuel consumption would be reduced by 145 million gallons annually (812 million VMT/5.59 mpg), implying $54 in investment costs per gallon of fuel saved in 2003 dollars. 40 Cambridge Systematics, Inc., Mid-Atlantic Rail Operations Study, prepared for the I-95 Corridor Coalition, forthcoming. 41 http://www.nscorp.com/nscportal/nscorp/Media/News%20Releases/2009/greencastle.html (Accessed September 16, 2009) 42 Reebie Associates, The Northeast-Southeast-Midwest Corridor Marketing Study, prepared for Virginia Department of Rail and Public Transportation, December 2003. - 23 -
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