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Randy Mullett Vice President - Government Relations & Public Affairs, Con-way Inc.

Innovations in Freight Demand Modeling and Data A Private Sector View. Randy Mullett Vice President - Government Relations & Public Affairs, Con-way Inc. A Transportation Research Board SHRP 2 Symposium April 16, 2010. Con-way Today – who we are.

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Randy Mullett Vice President - Government Relations & Public Affairs, Con-way Inc.

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  1. Innovations in Freight Demand Modeling and Data A Private Sector View Randy Mullett Vice President - Government Relations & Public Affairs, Con-way Inc. A Transportation Research Board SHRP 2 Symposium April 16, 2010

  2. Con-way Today – who we are • US$4.3 Billion Industry Leader in Freight Transportation, Logistics • Con-way Freight • Con-way Truckload • Menlo Worldwide Logistics • 30,000 employees worldwide • Over 500 operating locations • 11,500 trucks, 35,000 trailers, 20 million sq ft warehouse space globally • 150,000 customer pickups and deliveries daily in N. America • Nearly one billion miles annually moving freight on USA highways • Consume 150 million gallons of diesel fuel annually

  3. Relevant Trucking / Intermodal Realities • Trucking is a very fragmented industry. • Over 500,000 trucking companies in the US • 97% have fewer than 20 trucks • 70% of all goods by weight and 83% by value in the US move by truck • Modal shares are expected to stay fairly constant • 80% of US communities are served only by truck • Freight movements over 500 miles are only 13.4% of the market

  4. Freight - A System of Systems • Water, Rail, and Truck systems connect to maximize efficiency while meeting supply chain requirements for velocity, cost, and service. . • Integrity of the intermodal system is dependent on the integrity of the individual modal systems • Weakness in one causes modal shift and decreases efficiency of the entire US freight transportation system • Constraints (Infrastructure, Regulation, Security, Labor, Energy) have similar effects • New Externalities - Sustainability, Energy, Climate Change

  5. Framework for Today’s Conversation • One cannot separate economic growth from transport growth. • Freight demand modeling can be very valuable to decisions on capacity building & highway infrastructure. • Freight demand modeling and logistics modeling are very different. • Freight transport is fluid in nature and logistics planners are very reactive and opportunistic • Private sector freight decisions are made based on current and near term time frames. • Data Matters!

  6. Private Sector / Supply Chain Perspective • What are the drivers of the supply chain? • Cost • Transit Time / Service • Reliability • Sustainability • Availability • Decisions are made on the present and near term but public sector freight planning and subsequent projects can take decades. • Investments are being made in optimization software, simulation programs, and asset utilization technologies

  7. My Concerns • Prediction and forecasting are difficult to validate with many years passing between policy adoption and project completion. • Logistics modeling optimizes for efficiency, cost, customer service, inventory levels, etc. Freight modeling does not, creating conflict. • Current freight models appear to be inconsistent in the ways they control for variability imposed by externalities. • Commodity flows do not adequately address intra-metro freight movement.

  8. How is data shared and what is really out there? • How is date exchanged? • ANSI ANS X12 • UN / EDIFAC • XML • EDI / e-commerce is dominate among large players • Common elements valuable for commodity flows • Origin / Destination • Commodity • Quantity • Conveyance • MRP / DRP system records • Dispatch system / GPS records

  9. Challenges to Private Sector Data Acquisition • What’s in it for me? • Linguistic hurdles – common terms and definitions. • Common data exchange protocols and collection methodology. • Competitive concerns and data ownership. • Fragmented transportation industry segments. • Exempt vs. common or contract carriage. • What elements are needed / wanted.

  10. What does the future hold? • Continued pressure to maximize supply chain efficiency combined with more freight than the current system can handle and sustainability / energy concerns will result in: • Redesigned supply chains and distribution systems • Modal shifts to accommodate supply chain adaptations • Near sourcing • Pressure to increase US truck size and weight • Increased energy and environmental regulation • Technology innovations • Without significant investment, US transportation inefficiencies will result in a competitive disadvantage relative to other world markets

  11. What I Would Ask of You • For today’s presenters - State early in your presentation, how your research improves one of the basic types of techniques used in freight planning, forecasting, and modeling, either by making a strength stronger or a weakness less so for the particular technique of interest. • For all of us – Continue the dialogue. • For the organizers and sponsors – Formalize a group of private sector and public sector representatives to explore gaps and propose solutions to address them.

  12. Contact Information Randy Mullett Con-way Inc. 575 7th St, NW Washington, DC 20004 202-637-0994 Mullett.randy@con-way.com

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