Goals, Measures, Commitments, and Results for Commerce, the Environment, and the Community

1. Goals, Measures, Commitments, and Results
for Commerce, the Environment, and the
Community
Michael Sussman, President
OnTrackAmerica and Strategic Rail Finance
AASHTO, Standing Committee on Rail Transportation, 2014, Denver, Co.

2. Rail Line Abandonment 2005-2013
546
370
614
575
375
289
324
177
118
700
600
500
400
300
200
100
0
2005 2006 2007 2008 2009 2010 2011 2012 2013
Number of Miles
Total since 2005 =
3,390 miles

3. Ford Supply Chain (Inbound Freight)
 “Inbound Freight” is production material shipped into
Ford Manufacturing Plants
 Approximately 58% of total inbound freight is shipped via
Truck, 22% Rail, 20% Water

4. Even Steel is Moving by Truck
 It’s not just consumer goods
that are moving by truck
 Here is how the largest steel
company in the world spends
its transportation budget 
 ArcelorMittal ships more
outbound steel by truck 55%
than by rail 43%

5. Planned State Freight Modal Share
(Million Tons) Is this a sustainable future?
2011 2030 Increase
Washington
Truck 335.5 602.7 +267.1
Rail 127.0 220.0 +93.0
Florida
Truck 677.6 949.5 +271.9
Rail 58.0 77.6 +19.6
South Dakota
Truck 382.0 558.0 +176.0
Rail 131.0 167.0 +36.0
Pennsylvania
Truck Planning a 74% tonnage increase by 2040
Rail Planning a 45% tonnage increase by 2040

6. The world’s largest
automated and
refrigerated facility
York County, PA
Built without rail service;
requested later (too late)

7. Convenient to I-83, Not to a Railroad:

8. Bumper to Bumper Truck Traffic
on I-83

9. The Downside of Intermodalism:

10. Increased Local Truck Traffic
 Even if an existing rail line is close by

11. Using Valuable Rail ROW for Truck-served
Facilities

12. Small Towns in America like York, PA are Getting
Big City Truck Traffic

13. ToysRUs warehouse built on
Morristown & Erie Railroad, NJ in 1996

14. Went all truck
in 2005

16. Typical State Rail Plan Elements
 Inventory of existing system
 History of railroads in the state
 General description of freight flows in/out of state
 Freight trends projected to 2040 based on 3rd-party data
 Higher truck growth projected than rail
 Project wish list… adds up to much more than anyone can
afford
 Short description of existing funding sources
 This is a good foundation for the next step…
Transportation Action Planning

17. What is wrong with this?
 Treats transportation expense as a cost, not an
investment
 Considers freight demand as a problem, not an
opportunity
 Relates to projections as an inevitable future
 Relates to freight rail as just another transport mode
 Does not consider the business plans of
transportation and logistics providers

18. Transportation Action Planning Process Elements 1-5:
 Involves all stakeholders in the entire process from
inception to implementation.
 Advances stakeholder collaboration beyond outdated “anti”-
trust limitations, and toward the level of trust now needed to
address critical infrastructure issues.
 Requires stakeholder participants to commit to a specific
set of participation requirements to ensure a productive
planning process.
 Does not proceed until participants have identified the
specific opportunities to be advanced for that region’s
commerce.
 Establishes a new set of “Freight Transportation Land Use
Strategies” for the state.

19. Transportation Action Planning Process Elements 6-9:
 Includes the creation of an “action plan”, complete with
targets, dates, action steps, and responsible parties.
 Converts plans into results by asking stakeholder
representatives to commit their entities to take the plans’
action steps.
 Considers diverse interests as the building blocks of wise
plans, not an impediment to agreement.
 Utilizes a facilitation team to guide discussions, lead
participants thru negotiations, stimulate idea refinement,
and synthesize and digest participant input for maximum
efficiency of the whole process.

20. Pinpointing Commercial Opportunities within a
Transportation Action Plan
 Identify current freight movement by shipper and lane through
granular analysis
 Distinguish through-traffic from in-state origination and
destination
 Identify opportunities to support specific new economic
development initiatives
 Identify existing and potential shippers’ needs to economically
reach a greater marketplace

21. 10 Steps of a Transportation Action
Plan
 Get Seated
 Assess
 Measure
 Target
 Strategize
 Plan
 Commit
 Enact
 Capitalize
 Act

22. Sample Action Plan Metrics p.1
Example Metrics for Commerce
 Total costs to ship ($/ton/mile)
 Service reliability
 Direct rail, truck, and water service
 Economical, equitable access to maximum market geography
Example Metrics for Land Use
 Footprint per tonnage shipped
 Impact on transportation system congestion
 Industrial and commercial concentration/sprawl

23. Sample Action Plan Metrics p. 2
Example Metrics for the Environment
 Air emissions per ton-mile
 Water quality impact
Example Metrics for Communities
 Jobs and economic revitalization
 Noise, vibration, and light pollution
 Public safety
 Public tax burden per ton-mile by mode

24. State Rail Loan Program Repayment History
STATE OR
AGENCY
NUMBER OF
LOANS
DOLLARS LENT DEFAULTS
Wisconsin 2013 105 $117,000,000 0
Illinois 2013 5 $6,434,157 0
Michigan 2012 37 $15,300,000 0
Idaho 2013 3 $3,770,475 0
Iowa 2011 108 $69,761,000 0
Minnesota 2013 225 $95,700,000 0
Kansas 2013 46 $16,903,380 0
Mississippi 2007 35 $12,000,000 0
Ohio 2013 40 $33,464,731 1
Montana 2013 4 $2,078,004 0
SBA 2013 34 $14,400,000 1
TOTALS (as of year
650 $380,337,988 2
indicated)
Data gathered By Strategic Rail Finance

25. Thank you for all of your
good work!
Michael Sussman, President
Leo Penne, OTNA Board Member
OnTrackNorthAmerica
Philadelphia, PA
msussman@ontracknorthamerica.org
SCORT 2014 Annual Meeting
Denver, Colorado

26. Questions I would like to ask you!
 What entity in your state could be enlisted to enact
freight transportation land use strategies?
 What legal and regulatory barriers need to be addressed
to allow increased coordination between your agency
and the private sector?
 What has to happen for road, rail, and water to be valued
and supported objectively and apolitically?
 What challenges do you face in enrolling the state in
getting behind rail as a conscious modal choice?