LEONARD TRANSPORTATION CENTER FORUMPANEL: THE FUTURE OF GOODS DISTRIBUTION
AND INLAND PORTS IN THE INLAND EMPIREMay 4, 2007
Southern California’s Freight Movement
Challenge
Southern CaliforniaNational Freight Gateway
Value of Imports Moving Through the Los Angeles-Long Beach Ports
by Congressional District
Southern CaliforniaTransportation Today:
Texas Transportation Institute, 2005 Urban Mobility Report
SCAG Region 2030 Forecast Population
& Employment Growth (Millions)
20002030 Increase
Population 16.8 22.9 37%
Employment 6.8 10.5 54%
Like adding two Chicagos…
Population growth to 2030
Employment growth to 2030
• Federal policy supports global trade
• Export manufacturing jobs to overseas sources of cheap labor
• Import manufactured goods from overseas
• Price of imported goods fails to internalize transportation, environmental, and social costs
The Recipe
Competitive Position
Competitive Position
Competitive Position
1999 2005 2010 2020 2030
9.5
13.2
18.3
36.0
44.7
6.99.0
12.3
23.4
Original Est.
Revised Est.
In Million TEU’s
44% US Import Market Share25% US Export Market Share
Source: POLA, POLB
LA-Long Beach Projected Container
Growth
USDOT Freight DemandForecast to 2020
1,4371,437
6,1656,165
(TEUs in thousands)
20202020
20042004
HoustonHouston1,0101,010 2,1522,152
MiamiMiami
2,0432,043 3,3823,382
OaklandOakland
4,4784,478
15,83515,835
NY/NJNY/NJ
1,8091,8095,5665,566
VirginiaVirginia
1,7981,7984,3964,396
TacomaTacoma
1,7761,776 2,5572,557
SeattleSeattle
1,6621,662
9,4209,420
SavannahSavannahLA/LBLA/LB
59,42059,420
13,10113,101
From presentation by Jeff Shane, Under Secretary for Policy, USDOT, April 3, 2006
1,8601,860
6,6396,639
CharlestonCharleston
0 5 10 15
LA-Long BeachPorts
Port of Oakland
TEUs (millions)
Local
Out-of-region
CA Goods Mvmt. Action Plan and SANBAG
Serving the NationLocal vs. Interregional
Freight
0% 20% 40% 60%
O/D is Local
Transloaded; O/DoutsideRegion
37%
40%
23%
TransportedIn original container to/fromExternal O/D
Leachman and Associates LLC -Port and Modal Diversion for SCAG
Where’s It All Going?
Transloading of weekly shipments from Asia affords
large, nation-wide retailers an 18-20% reduction in their total
pipeline plus safety stock inventory compared to direct
shipping from Asia.
The Transloading Advantage
Assuming a 6% average error in nationwide one-week-ahead sales forecasts
Leachman & Associates LLC
So. Cal inland transloading & distribution facilities:1.5 B sq.ft. of roof = 15% of nation, 60% of west
coast
Ontario/ Mira Loma, San Bernardino and Riverside Counties. Ontario Airport for scale
Where will the next 1.5B sq. ft. go?
LOGISTICS: Economic Opportunity…(Dr. J. Husing)
Good Entry Level Pay
Defined Skill Ladder
On The Job Learning
Blue Collar
Heavy Use of Information Technology
Has To Be In Southern California
Logistics: Highest Blue Collar Avg. Pay Level
$40,439$43,871 $45,314
Construction Manufacturing Logistics
Source: Quarterly Census of Employment Wages, CA Employment Development Department, 2004
Exhibit 13.-Average Annual Wage & SalaryBlue Collar Sectors, SCAG Region, 2003
FOUND: A Replacement For Manufacturing
Left Unaddressed, Landside Congestion and Unhealthful Air Will Bring Port Growth
to a HaltBy 2025:
Trucks: Projected to nearly double
Trains: nothing will move without improvements
And key findings of the Leachman Port and Modal Elasticity Study are:
1.Inadequate landside freight capacity will strangle port growth absent major improvements
2.Port traffic is more likely to be diverted by failure to address landside congestion than from modest container fees used to improve reliable throughput
34,000
50,000
92,000
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
2000 2010 2020
Source: Gill V. Hicks Associates, more recent data: 2005=54,600, 2030=142,000
Daily Truck Traffic to/from LA/LB Ports Will Grow
Dramatically
Inland Empire: Highest HHDT on-system mileage in California
Train Delays on Existing Trackage
Forecast Train Delay
(Year 2000 passenger trains and no system capacity improvements)
Year Train TypeAverage Delay per Train
BNSF Freight 31.9 minutes
UP Freight 30.4 minutes2000
Year Train TypeAverage Delay per Train
BNSF Freight 206.3 minutes
UP Freight 196.9 minutes2010
Source: Leachman and Associates Mainline Rail Study for SCAG
Intermodal Yard Capacity and Demand (Millions of Lifts1)
2001 2005 2010 2020
Total Demand
3.27 4.29 6.95 15.01
Capacity
4.56 5.882 5.88 5.88
Surplus(+)Deficit (-)
+1.29 +1.59 -1.07 -9.131 One lift = 1.85 TEUs 2 BNSF’s Commerce facility to added 200,000 Dec.
2002 and Pier 400 added 1.12 million lifts 2004Source: Gill V. Hicks and Associates
Community Impacts: grade crossing delay…
The Pollutants Freight Movement Creates are
Jeopardizing Our Health
The Region continues to have the worst air quality in the U.S.
Diesel Particulates…Diesel Particulates…
…comprise 71% of the major air pollutants
contributing to cancer risk in
the South Coast Air
Basin
Source: SCAQMD, Multiple Air Toxics Exposure Study II, March 2000
Estimated Risk of Cancer from Airborne Toxics: Excluding Diesel
Cancers per million
Estimated Risk of Cancer from Air Toxics: All Emission Sources
Source: SCAQMD, Multiple Air Toxics Exposure Study II, March 2000
Cancers per million
South CoastSouth Coast82%82%
Rest of CaliforniaRest of California18%18%
South CoastSouth Coast52%52%
Rest of NationRest of Nation48%48%
Population-Weighted Exposure Above NAAQS Based on2000-2002 AIRS Data
PM2.5 Disproportionate ExposureSouth Coast Air Basin
Source: California Air Resources Board Source: California Air Resources Board
SCAB Cases/Year due to PM2.5 *
Premature Deaths 5,400Hospitalizations 2,400Asthma & Lower Respiratory 140,000 SymptomsLost Work Days 980,000Minor Restricted Activity Days 5,000,000
•1999-2000 Air Quality Data
Source: California Air Resources Board
Recent CARB Assessment
of PM Health Effects
0
200
400
600
800
1000
1200
2002 2005 2008 2011 2014 2017 2020 2023
Off-Road
On-Road
Area
Point
PM2.5 Carrying Capacity (443)
8-Hour Ozone Carrying Capacity (114)
NOx Emissions Trend By Source Category and Carrying Capacity
How Are We Going to Attain PM2.5 Reduction Targets? How Are We Going to Attain PM2.5 Reduction Targets?
TONS PER DAY
2014 Baseline Reduction Needed
NO
VOC
SO
PM2.5
x
x
654
527
43
102
(31%)
(11%)
(57%)
(14%)
203
59
24
14
Percent
Draft 2007 AQMPDraft 2007 AQMP
Tons/Day
Target
AQMD Stationary Measures
CARB’s Strategy
Unknown
203
-6
-125
-72
2014 PM 2.5 Attainment
Draft 2007 AQMPDraft 2007 AQMP
Tons/Day
NO Target
AQMD Stationary Measures
CARB’s Strategy
AQMD Additional Measures
Unknown
383
-8
-139
-57
-179
2023 OZONE Attainment
x
Model Year Group
EMFAC2002 (g/mi)
EMFAC(wd) (g/mi)
Ratio (Ewd/E2002)
Pre-1975 to 1990
29.1 to 17.5
24.0 0.8 to 1.4
1991 to 2002 17.5 to 14.0
21.6 1.2 to 1.5
2003 to 2006 7.0 15.2 2.2
2007 to 2009 4.0 9.2 2.3
2010+ (w/OBD)
1.0 3.2 (2.7) 3.2 (2.7)
Reflects Base Emission Rates and Deterioration at 500,000 milesSource: California Air Resources Board 2006
HHD Diesel Truck NOxEmission Factor Comparison
Reduction Responsibility By Agency
VOC
84%
16%
Total Reduction =116 TPD
CARB/USEPA
District
NOx
98%
2%
Total Reduction = 383TPD
CARB/USEPA
District
$30 60 90 120 150 180 210 240 270 300 330 360 390 420 450 480
FEUs in millions
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
200
4 A
nn
ua
l Vo
lum
e
Container Fee (per FEU) in dollars
Total VolumeTrans Loading Volume$200
Minimal Decrease in Total Volume
Slight Increase inTrans Loading Volume
Assumption: Fees on inbound loaded
containers only
SOLUTIONS?Container Fees Used to Finance Congestion Relief
SOLUTIONS?Dedicated High-Speed, Clean, Grade
Separated Freight Corridors and Inland Ports
Solutions will require:• High-Level commitment to collaborate among
regional, state, and federal agencies (e.g., the MOU)
• Extensive private sector involvement and financing
• Community involvement (ultimately, support)
• A Win-win outcome:
- attainment of healthful air quality
- mitigation of community impacts
- private sector value in return for investment
Challenges Summarized• Finance – requires new funding, users and
beneficiaries must contribute• Environment – timely AQ attainment
despite 3x increase in shipping & freight throughput
• Performance – assure infrastructure benefits
• Communities – acceptance and support essential to progress
• Institutions – unclear implementation responsibilities, limited federal recognition
• Implementation – in one decade, not three
Efforts completed or in progress• Multi-county Goods Movement Action Plan
CTCs, SCAG, Caltrans• State Goods Movement Action Plan
California BTH, CalEPA• Emission Reduction Plan for Ports and Goods Movement in California
California Air Resources Board• San Pedro Bay Ports Clean Air Action Plan
Port of LA, Port of LB• Freight Movement Executive Roundtable
Execs. From shippers, railroads, trucking, CTCs, SCAG• Inland Empire Goods Movement Coalition / So. Cal. Leadership
Bi-county private sector group in alliance with LA and Orange Co. interests• I-15 Comprehensive Study (complete)
SANBAG, RCTC, Caltrans• I-710 Project Development
MTA, Caltrans, Gateway Cities• Port and Modal Elasticity Study (complete)
Leachman & Associates for SCAG• Mainline Rail Study (complete)
Leachman & Associates for SCAG• Logistics & Distribution: An Answer to Regional Upward Social Mobility
(complete) Dr. John Husing for SCAG
• Alameda Corridor East grade separations SANBAG, RCTC, Ontrac, ACE Construction Authority
What we ask…
• Participation in a collaborative process, convened by the transportation agencies, ports, communities, and the State and federal governments, to formulate and efficiently implement a strategy to address the challenges and grasp the opportunities facing the nation’s largest international freight gateway
PRINCIPAL CONVENORS
ROUNDTABLE
/
-
USDOT Congestion Strategy
FacilitationTeam
AdministrationSCAG
FEDERAL STATESCAGSCAG
Ports
Multi-County Freight Infrastructure Planning
Dialogue/ Facilitation/ Brainstorming
State GMAPProcess
Information management/sharing
Coordination of regional environmental studies
Transportation/Blue print/ Open-space Program
Regional Institutional implementation arrangements
Transportation/ Air Quality PartnershipTransportation/
W.Q. Partnership
Transportation/Blue print/community partnerships
Ontario Center/ I-10 Blue-print Demonstration Project
Projects in Process
CTCs
Southern California National Freight GatewayCollaborative Strategy
Way of working:
• Scoping• Respectfully
stitching together the quilt
• Promoting cooperation & collaboration regarding initiatives
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