1 / 41

Minnesota Regional Railroads Association

Railroads – They’re Not Just About Freight Anymore. Presentation To The. Minnesota Regional Railroads Association. Charles H. Banks President. R.L. Banks & Associates, Inc. Economics • Engineering • Service Planning Washington, DC. July 16, 2007. Key Messages:.

davis-king
Download Presentation

Minnesota Regional Railroads Association

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Railroads – They’re Not Just About Freight Anymore Presentation To The Minnesota Regional Railroads Association Charles H. Banks President R.L. Banks & Associates, Inc. Economics • Engineering •Service Planning Washington, DC July 16, 2007

  2. Key Messages: The Capacity of All Freight Transportation Options Is Becoming Severely Constrained and Will Only Get Worse. Large, Steady Increases in International Intermodal, PRB Coal, Domestic Biofuels Production, Solid Waste and Passenger Business Will Increase Demands on Already Crowded, Rail Transport Infrastructure. Competition for Public Funding will be Intense!

  3. The US Freight Railroad Future is Very Bright Due to Circumstances, Forces and Trends: Increased Pricing Power (Capacity Constraints and More Disciplined Pricing) Sustainable Growth in Five + Key Markets Motor Carriers Face Tough Challenges Less Susceptible to Diesel Fuel Price Increases Less Susceptible to Environmental Challenges Overview

  4. Modal Market Shares of Intercity Freight Revenue (%) Source: Class I Railroad Statistics, Association of American Railroads, 2006.

  5. 50 40 30 Market Share 20 10 0 Rail Truck Pipeline Water Modal Market Shares of Intercity Ton-Miles (%) 2001 Source: AAR overview of U.S. Freight Railroads.

  6. Fuel Prices Driver Shortage/Recruitment Hours of Service 11 Hours in any 14 Hour Window with 10 Consecutive Hours Off (Before and After) Road Congestion Motor Carrier Challenges Source: U.S. Department of Transportation, Federal Motor Carrier Safety Administration, fmcsa.dot.gov.

  7. Truck Movements – 1998… Source: U.S. Department of Transportation, Federal Highway Administration, Office of Freight Management and Operations, Freight Analysis Framework.

  8. Truck Movements - 2020 Source: U.S. Department of Transportation, Federal Highway Administration, Office of Freight Management and Operations, Freight Analysis Framework.

  9. National Gridlock Ahead… Sources: U.S. Department of Transportation FHWA & Bureau of Transportation Statistics.

  10. Mode Choice Matters…

  11. Source: http://www.enginesys.com/ir/financial.cfm

  12. Inland Waterways Not Many Miles and No Supply Side Growth Navigable Channels 11,000 Miles since 1980 Great Lakes-St. Lawrence Seaway 2,342 Miles since 1980 Supply Negatively Impacted by Katrina 400 Barges Destroyed or Damaged Barge Transportation Navigable channels: U.S. Army Corps of Engineers.Great Lakes-St. Lawrence Seaway: Great Lakes-St. Lawrence Seaway System, "Seaway Facts," available at http://www.greatlakes-seaway.com/en/aboutus/seawayfacts.html as of May 11, 2004. CRS Report for Congress, U.S. Agriculture After Hurricanes Katrina and Rita: Status and Issues, October 5, 2005.

  13. Oil, Gas and Refined Product Pipelines Networks Are Extensive ...But http://images.pennnet.com/mapsearch/all_pipe.jpg

  14. Miles of Gas Pipelines: 1,051,774 Miles (1980) 1,424,200 Miles (2003) Percent Change = 35.4% Increase Miles of Oil Pipelines: 218,393 (1980) 160,868 (2003) Percent Change = 26.3% Decrease Pipeline Infrastructure:Not Consistently Growing Pipelines: Bureau of Transportation Statistics, bts.gov Cost: American Gas Association, Gas Facts (Arlington, VA: Annual issues).

  15. 562 Common Carrier Railroads (2006) $48 Billion in Industry Revenues (2006) Over 90% Privately Owned Class I’s = 1% of Freight Railroads but: 68% of Railroad Mileage 89% of its Employees 93% of Freight Revenue Railroads Source: Association of American Railroads, Railroad Facts, 2006 Edition.

  16. Railroads…Are They Still Around? • Diminished Supply vs. Burgeoning Demand Source: Association of American Railroads, Railroad Facts (Washington, DC: various issues).

  17. Railroad Productivity and Congestion are Increasing Nationwide

  18. Canadian Dollars

  19. Canadian Dollars

  20. In General, the Art Of Government Consists In Taking as Much Money as Possible From One Class Of Citizens to Give to the Other. --Voltaire

  21. Latest From the Administration: National Security Concerns Have “Forced” the Bush Administration to Rethink Its Free-market Philosophies on Energy Issues --Grenwire Report “The President Concluded That There Are Other Factors That Require Us to Intrude in This Marketplace…” --Al Hubbard, Chair National Economic Council & White House Energy Policy Coord. Marketplace Interference

  22. President’s Proposal Alternative Fuel Standard No “Fix” For the Nation's "Addiction To Oil” On January 23, President Bush Announced Energy Goals in His State of the Union Address Reduce Gasoline Demand By 20 Percent In 10 Years Set a Mandatory Renewable and Alternative Fuels Standard (AFS) of 35 Billion Gallons In 2017 Formal Package Sent to Congress The Proposed AFS Is the RFS Plus Hydrogen, Coal-To-Liquids and Other Alternatives Marketplace Interference

  23. 106 Existing Ethanol Plants 54 More Under Construction with Dozens More Planned 90% Produce < 40 Million Gallons 40 Million Gallon Threshold As Plants Get Larger, Railroad Economics Become More Favorable Trends in Ethanol Plant Size Source: American Coalition of Ethanol website.

  24. Is it an Improvement Over My Current Commute ? Does it Provide Me a Competitive, Overall Trip Time ? Is the Service Reliable ? Is the Fare Reasonable ? What is the Distance/Time Between My Origin and My Origin Station ? Is it Easy to Access My Station (Parking, Bus, Walk and Bicycle) ? How Long/Far is it Between My Last Station and My Final Destination ? Is a Bus Available at My Last Station with a Low- or No-Cost Transfer ? Can I Return to My Origin Station other than at Rush Hour ? Are There Frequent Trains and Extended Operating Hours ? Are There Modern, Clean, Comfortable Passenger Cars with Amenities (Laptop Outlets, Phones, Bike Racks, Etc.) ? Are There Amenities at/near Stations (Day Care, Bank, Dry Cleaning, Etc.) ? Commuter Rail Success Factors(Passenger Perspective)

  25. Are Start-Up and Annual Expenses Affordable ? Does it Meet Land Use and Other Goals ? Does it Augment Transportation Options ? Does it Mitigate Need to Expand Highways ? Does it Help Growth Center Development ? Is it an Economic Development Catalyst ? Does it Provide New Options to Non-Auto Users, Links Workers with Jobs ? Commuter Rail Success Factors(Community Perspective)

  26. Passenger Trains are a Good Public Investment, Offering: Reduced Highway Congestion Lower Overall Emissions of Greenhouse Pollutants Substantial Fuel Economy Capital Requirements at a Fraction of Highway Expansion Highway Expansion is not Even Available in Many Areas Reduced Fossil Fuels Dependence-Security Imperative ? Less Likelihood of Serious Injury to Passengers (Train vs. Car) But… Per Car, CSX Earns About $100 (Passenger) Versus $1,000 (Freight) Per Train, CSX Earns $80,000-$100,000 (80-100 Cars) Versus an Average of $1,100 per Passenger Train, Taking Up the Same Slot ! Can Passenger RailAdd to the Bottom Line ?

  27. Total Project Length (31.2 Miles) Total Capital Investment ($42 Million) Track at $1.25 Million per Mile ($39 Million) Some new CWR and 30% of Ties Replaced (51% of cost) All Track Upgraded to Class III All Grade Crossings Rehabilitated CTC Installed Bridges Upgraded to Handle 286,000 lb. Cars Downtown Station ($3 million) Equipment: 3 Rebuilt Locomotives, 4 Cab Cars and 7 Coaches State to Pay O&M Costs First Seven Years, then Local Cities Nashville & Eastern (Music City Star)

  28. (Maintenance of Traffic) Interstate 80 Total Project Length (36.3 Miles) Capital Investment ($63.2 Million) Track Improvements ($41.5 million): Rail Replaced Turnout Replaced Crossties Replaced Ballast and Surfacing Added Crossing Gates and Predictors Installed Drainage Work Powered Turnouts and Accompanying Signals Equipment: 2 Car Locomotive-Hauled Trainsets, $2.5 Million per Trainset Estimated Daily Riders (1,121) Estimated Yearly Ticket Revenue ($500,000) Estimated Annual O&M Cost ($7.5 Million) Estimated Annual Operating Deficit ($7 Million): Federal, Stateand Local Funding Iowa Interstate (Des Moines)

  29. Total Project Length (42.7 Miles) Capital Investment ($34.4 Million) Track and Signal Rehabilitation and Improvements ($11.1 Million) Increased Track Capacity ($5.4 Million) Grade Crossing Improvements ($2.3 Million) Stations ($3.5 Million) Equipment: Five Diesel Multiple Unit Rail Cars, ($10 Million) Estimated Daily Riders (200-300) Estimated Yearly Ticket Revenue ($300,000) Estimated Annual O&M Cost ($4.3 Million) Estimated Annual Operating Deficit ($4 Million) Norfolk Southern (Peoria – Bloomington)

  30. Total Project Length (48 Miles) Capital Investment ($66.5 Million) Track and Infrastructure Improvements ($21 Million): Some Second Main Track One Flyover Across UP Construction of Layover Facility Signal System ($44 Million) Power and Electric Lock Turnouts Nine Stations ($5.7 Million) Equipment: Three Diesel Multiple Unit Rail Cars ($12 Million) Estimated Daily Riders (317) Estimated Annual O&M cost ($4.7 Million) San Joaquin Valley Railroad(Cross Valley Rail Corridor)

  31. Extension of Champlain Flyer (Eight Miles) Capital Investment ($40.3 Million) Track and Infrastructure ($23.7 Million) All new Continuous Welded Rail New Turnouts Tie Replaced (47%) Surfacing and Ditching Stations ($800,000) Equipment: Diesel Multiple Unit ($15.8 Million) Estimated Daily Riders (590-650) Estimated Yearly Ticket Revenue ($500,000) Estimated Annual O&M cost ($3.1 Million) Estimated Annual Operating Deficit ($2.9 Million): Federal, Stateand Local Funding New England Central Railroad(Burlington Vermont)

  32. The Business of Government is To Keep Government Out of Business—that is Unless Business Needs Government Aid--Will Rodgers

  33. Politics is the Art of Looking For Trouble, Finding It Everywhere, Diagnosing It Incorrectly, and Applying the Wrong Remedies. ---Groucho Marx

  34. R.L. Banks & Associates, Inc. Suite 1010 1717 K Street, NW Washington, DC 20036 Tel: 202.296.6700 Fax: 202.296.3700 www.rlbadc.com

More Related