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California State Rail Plan 2007-08 to 2017-18

California State Rail Plan 2007-08 to 2017-18

California State Rail Plan 2007-08 to 2017-18

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Chapter XIX – Freight <strong>Rail</strong> Research and StudiesCHAPTER XIXFREIGHT RAIL RESEARCH AND STUDIESINVESTMENT MODELSPublic investments in the transportation system <strong>to</strong>day are often used as a stimulusfor economic growth, congestion mitigation, and other quality of lifeimprovements. For freight rail specifically, many of the public motivations arecentered on capacity: whether an investment can relieve the highway system, slowthe growth in highway demand, or prevent traditional rail traffic from changingmodes. The latter has become especially important recently and points up thecapacity question in rail as well as highway: as Class I carriers have begun <strong>to</strong>allocate capacity by shedding some traffic for better paying freight, it is thetraditional, heavy loading, hard-on-pavement carload business that is most at riskof being shifted from rail <strong>to</strong> highway.The United <strong>State</strong>s Department of Transportation (USDOT) has published a Guide<strong>to</strong> Quantifying the Economic Impacts of Investments in Large-Scale FreightTransportation Projects. The purpose of this guide is <strong>to</strong> provide a thorougheconomic analysis framework <strong>to</strong> assess the benefits and costs of potential freightinvestments. Application of this guide, and the analytical steps recommended, isintended <strong>to</strong> ensure that freight projects are appropriately considered in national,regional, and state decisions about the future of transportation system investments.In addition, the high costs of these projects emphasize the need for public/privatepartnerships <strong>to</strong> amass the funds necessary for their successful completion.Although this guide recognizes the importance of other social and environmentaleffects, the focus is on economic effects and the secondary passenger benefits tha<strong>to</strong>ften accrue due <strong>to</strong> freight projects. Given this emphasis, the guide covers <strong>to</strong>picssuch as:• National scale of benefits – economic benefits from freight projects impactindustry shippers and receivers across the country (and internationally), notjust the location of a freight project;• Public versus private benefits – when considering the potential forpublic/private partnerships, it is imperative <strong>to</strong> maintain a careful accountingof public and private benefits, which are particularly relevant <strong>to</strong> freighttransportation; and• Logistics and supply chain effects – measuring the economic impact offreight investments requires the analysis of benefits <strong>to</strong> shippers andreceivers of freight in terms of both “first order” direct transportationeffects, and “second order” logistics, distribution, supply chain, and broadereconomy-wide implications.255

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