As Predicted

EXECUTIVE SUMMARY

There is a transportation challenge facing the United States which must be addressed in order for the country to continue to grow and prosper, as summarized in the chart below.

The road system cannot keep up with the projected growth in population and shipment weight. With roads already congested, any further increase is not sustainable. While there are many potential solutions to this challenge, an obvious one would include short sea shipping.  Re- introducing short sea shipping will add capacity and redundancy to an already strained system.

In addition to the reemergence of short sea shipping in the United States, the type of cargo movement is also important.  Further breaking out the shipment weights above yields the fact that the import/export markets (orange in the chart below) pale in comparison to the domestic market.

Instead of competing over the relatively small amount of import/export  cargo in the UnitedStates, the focus should be on domestic moves.

FREIGHTS AND FIGURES BACKGROUND

All of the following facts and figures have been taken from the United States Department of Transportation (Federal Highway Administration and Bureau of Transportation Statistics ) “Freight Facts and Figures 2013” publication, except where noted.

United States Population

 

Description

1990

(million)

2012

(million)

Increase

1990 – 2012

Est. 2040

(million) 1

Increase

1990 – 2040

Total U.S. 248.8 313.9 26.2% 380.2 52.8%
Northeast 50.8 55.8 9.7% N/A N/A
South 85.5 117.3 37.2% N/A N/A
  • The population of the United States is expected to grow more than 50% by 2040 (as compared to 1990)
  • The South has been growing at a faster rate than the Northeast

United States GDP

 

Description

1990

(billion)

2012

(billion)

Increase

1990 – 2012

Est. 2040

(billion) 2

Increase

1990 – 2040

Total U.S. $7,883 $13,431 70.4% $27,462 248.4%
Northeast $1,808 $2,709 49.9% N/A N/A
South $2,503 $4,729 88.9% N/A N/A
  • The GDP of the United States is expected to grow by nearly 250% by 2040 (as compared to 1990)
  • As with population, the South has been growing at a faster rate than the Northeast

Weight of Shipments

 

Description

2007

(mils of Tons)

2012

(mils of Tons)

Increase

2007 – 2012

2040

(mils of Tons)

Increase

2007 – 2040

Truck
Domestic 12,587 12,973 3.1% 18,083 43.7%
Export 95 118 24.2% 368 287.4%
Imports 97 92 (5.2)% 335 245.4%
Rail
Domestic 1,745 1,855 6.3% 2,182 25.0%
Export 61 82 34.4% 388 536.1%
Imports 93 82 (11.8)% 201 116.1%
  • Imports decreased from 2007 to 2012, but that trend is not projected to continue
  • The 2012 domestic market is much larger than imports and exports combined, by a factor of more than 60x for truck and 11x for rail

UNITED STATES TRANSPORTATION SYSTEM SUMMARY

In 2002 the U.S. transportation system moved an average of 43.0 million tons per day (across all modes)

  • In 2012 the US Transportation System moved an average of 54.0 million tons per day (across all modes), a 25.6% increase over 2002
  • Against these freight increases, the National Highway System (NHS) has only grown from 161,189 miles in 2000 to 163,741 miles in 2011, a 1.6% increase
  • Despite the increase, congestion has remained relatively the same (See Appendix II)
  • The NHS represents approximately 4% of the total public road miles but carries over 44% of the travel
  • Notably, Class 1, Regional and Local Railroads have shrunk from 170,512 miles in 2000 to 138,518 miles in 2011, and (18.8)% decrease
  • Despite doubling over the past twenty years, commercial trucks only accounted for 9% of highway vehicle-miles travelled in 2011
  • On segments of the NHS with high volumes and large percentages of trucks, at least one of every four vehicles are trucks; the number of these heavily-travelled routes are expected to grow 175% from 2011 to 2040
  • By December 2017, Electronic Logging Devices (ELD) will be mandatory and will track a driver’s day to a maximum of 11 hours behind the wheel, whether moving or not
  • Every four years, the American Society of Civil Engineers grades American infrastructure
  • Since 2001, the overall grade has been a D+ or a D
  • Roads have ranged from D+ to D- since 2001
  • In 2017, the estimated cost to improve our aging and failing infrastructure is
  • $4.57 trillion

The 3.5 million6 Commercial Licensed Drivers employed today are estimated to grow to 5 million in 2040, assuming all factors are constant (load weights, distances, etc.), despite the reality of today’s driver shortage. Truck transits are the backbone of the American transit system representing 84% of all the transits in the U.S. of less than 750 miles, despite being less than 10% of the highway vehicle miles travelled.

Tufts University and the Institute for Global Maritime Studies projected the severity of truck traffic in 2020 in the map7 on the following page. All the projections from the government indicated that things will only continue to deteriorate by 2040.

The Department of Transportation commissioned Reeve & Associates to perform a study8 analyzing the effect that door-to-door shipping has on the transportation infrastructure around the country.  This study estimates that the annual potential U.S. Short Sea Market can draw from the more than 78,200,000 trailer loads (48’ or 53’) moved between U.S. destinations more than 500 miles apart and within 250 miles of a port, along the U.S. coasts.

Four corridors and their average annual truckloads are:

  • Gulf to New York/New Jersey: 10,000,000 truckloads
  • South Atlantic to New York/New Jersey: 6,000,000 truckloads
  • Florida to New York/New Jersey: 3,500,000 truckloads
  • Gulf to Florida: 5,700,000 truckloads

These four high volume corridors total approximately 25,000,000 48’/53’ truckloads each year equaling a container volume of more than 63,000,000 TEUs annually.  Appendix I contains maps generated from Tufts University and the Institute for Global Maritime Studies 7 for several of the corridors above.

OBSERVATIONS

The National Highway System has essentially remained the same since its designation in 1995, in terms of number of miles. Railroad miles have actually decreased.  There are a few stark realities about the future if the country is going to be able keep up with the projected 2040 50+% population increase and 40+% increase in truck cargos against an essentially flat road system and declining rail system.

Either the NHS will have to build 65,500 miles of new interstates (along with finding the money and land to pay for it), as well as an additional 1.5 million drivers and rail will have to expand 34,600 miles (with likely similarly congested corridors) OR something else needs to happen in order to handle expected capacity.

The Federal Highway Administration wrote in 2012;  Assuming no change in network capacity, increases in truck and passenger vehicle traffic are forecast to expand areas of recurring peak- period congestion to 34% of the NHS in 2040 compared to 10% in 2011. This will slow traffic on 28,000 miles of the NHS and create stop and go congestion on an additional 46,000 miles ”.

Based on the above facts, the “Inconvenient (Transportation) Truth” is that our national transportation network is at full capacity right now. We can’t put any more cargo thru the existing system. There does not appear to be a plan for the projected future growth in population and GDP. Further, we simply do not have the money to repair the existing system let alone pave our way to future prosperity.

Our thesis is that the American Marine Highway is a significant enabler and needs to be part of the future solution.  The AMH’s natural unlimited abundance of transit capacity costs nothing to create and little to maintain. We have to refocus and relearn how to use the AMH.

The largest domestic market in the world needs new transportation capacity. This is not about capturing more import/export  market share; it is about domestic cargo movement.

We have the answer. It long past time to return to the sea.

APPENDIX I

APPENDIX II

Does building more roads create more traffic?

By M. Beck (Sr. Lecturer, Infrastructure  Management, Univ. of Sydney) and M. Bliemer

(Professor, Transport and Logistics Network Modelling, Univ. of Sydney) Citymetric.com 4/15/15

Congestion is a major source of frustration for road users and has worsened over time in most cities. Different solutions have been proposed, such as introducing congestion charging (a favourite of transport economists) or investing in public transport. The solution put forward most often is to build more roads. But does this approach actually work?

A recent study in the United States identified Los Angeles, Honolulu and San Francisco as the top three most gridlocked cities in the United States. All of these cities use almost exclusively road-based solutions to transport citizens. Meanwhile, China has increased its expressway network from 16,300 km in the year 2000 to around 70,000 km in 2010. Yet the average commute time in Beijing increased by 25 minutes between 2012 and 2013 to 1 hour and 55 minutes.

So why do residents of these cities not live in a driving utopia, despite their huge amounts of road capacity?

Induced demand

The first thing to get your head around is a concept called induced demand.

Think about the street where you live. If a new road makes driving to work quicker, you may benefit from that.

But this reduced travel time might be enough to encourage two other people in your street to start driving; and two more people in the next street; and two more people in the street after that; and so on. Very quickly, the drive to work takes just as long as it ever did.

In transportation, this well-established response is known in various contexts as the Downs- Thomson Paradox, The Pigou-Knight-Downs Paradox or the Lewis-Mogridge Position: a new road may provide motorists with some level of respite from congestion in the short term, but almost all of the benefit from the road will be lost due to increased demand in the longer term.

To add insult to injury, while more roads may solve congestion locally, more traffic on the road network may result in more congestion elsewhere. In Sydney, for example, the WestConnex may improve traffic conditions on Parramatta Road, but may worsen congestion in the city as a whole.

Weakest links

Congestion is determined by the weakest links in the road network. If road capacity expansion does not involve widening of these bottleneck links, congestion may simply move to another part of the network without solving the congestion problem. Moreover, it could potentially make congestion across the network even worse.

The Braess Paradox is a famous example in which building new roads in the wrong location can lead to longer travel times for everyone, even without induced demand, because new roads may lead more car drivers to the weakest links in the network. The reverse may also be true: removing roads may even improve traffic conditions.

This paradox occurs because each driver chooses the route that is quickest without considering the implications his or her choice has on other drivers. Car drivers only care about the number of vehicles in the queue in front of them and do not care about vehicles queueing behind them. This is a classic problem in game theory, very similar to the type f or which John Nash was awarded a Nobel Prize.

What does the data say?

One US study has shown a strong relationship between the amount of new road length and the total number of kilometres travelled in US cities, a finding the authors of that study termed “the fundamental law of road congestion”.

Similar findings are reported in Spain and in the United States, where even major road capacity increases can actually lead to little or no reduction, in network traffic densities. It has also been found to exist in Europe, where neglecting induced demand has led to biases in appraising of environmental impacts as well as the economic viability of proposed road projects.

In Sydney, there is similar evidence from traffic volumes crossing the harbour. The Sydney Harbour Bridge was carrying a stable traffic volume of around 180,000 vehicles per day from 1986 to 1991. The Sydney Harbour Tunnel opened in 1992, and the total volume of traffic crossing the harbour increased in 1995 to almost 250,000 vehicles per day. This 38 per cent increase in traffic can be attributed to induced demand and not to population growth (which was around 4 per cent during this period)

Empirical observations have also confirmed the existence of the Braess Paradox. For example, in 1969 a new road was built in Stuttgart, Germany, which did not improve the traffic conditions. After closing the road again, congestion decreased.

Similar observations in which road closure led to improved traffic conditions have been observed in New York City. where upon closing 42nd street (a major crosstown street in Manhattan) it was observed that traffic was significantly less congested than average.

A recent experimental study confirmed that this paradox still exists by showing that expanding road capacity can result in worse traffic conditions for everybody.

The theory of induced demand is accepted by a large majority, but not by everyone – the authors of a 2001 paper argued that induced demand does not exist. However, UK researchers Goodwin and Noland have criticised this study.

In isolation, building more roads can certainly improve traffic conditions, but these effects may only be local and short run. Roads alone do not solve congestion in the long term; they are only one (problematic) tool in a transport management toolkit.

REFERENCES

1 Census.gov: Colby, Sandra L. and Jennifer M. Ortman, Projections of the Size and Composition of the U.S. Population: 2014 to 2060, Current Population Reports, P25-1143, U.S.Census Bureau, Washington, DC, 2014.

2 Organization for Economic Cooperation and Development GDP Long Term Forecast https://data.oecd.org/gdp/gdp-long-term-f orecast.htm

3 United States Department of Transportation Bureau of Transportation Statistics 2002 https://www.rita.dot.gov/bts/sites /rita.dot.gov.bts/files /publications/freight_s hipments_in_am erica/html/entire.html

4 Our Nation’s Highways Selected Facts and Figures 1998: Department of Transportation

Federal Highway Administration

5 ASCE’s 2017 American Infrastructure Report Card:  https://www.infrastructurereportcard. org/

6 American Trucking Association: http://www.trucking.org/News_and_Inf ormation_Re ports.aspx

7 America’s Deep Blue Highway: How Coastal Shipping Could Reduce Traffic Congestion, Lower Pollution and Bolster National Security, Institute for Global Maritime Studies in cooperation with the Fletcher School of Law and Diplomacy, Tufts University, September 2008

8 MARAD: Four Corridor Case Studies of Short Sea Shipping Services (2006)

What Does Decreasing Boxcar Fleet Mean for U.S. Capacity?

Box cars are an aging technology that is still relied upon by many shippers. Steve Raetz, from the Transportfolio blog, described in depth the situation in his recent post. Here’s a portion of the article:

The story of the disappearing boxcars seems to be one that is best understood through the data and in the eyes of individual shippers and the industries that leverage these assets.
The current boxcar fleet consists of 115,000 cars; 65,276 boxcars will retire over the next 15 years. But new technologies, such as newer boxcars with higher freight capacities, are slowly replacing the older versions. At the same time, this isn’t an absolute solution; older infrastructure can’t handle the larger freight cars, especially in the northeast.

  • Railroads own more than 75% of all boxcars; the average age of these boxcars is close to 30 years. Privately-owned boxcars account for 22% of the market, and boxes have an average age of 19 years. It appears that railroad companies do not foresee a need to increase their ownership or increase their orders for new boxcars in the near future. In fact, they provide incentives and reduced rates to those who use private freight cars instead of using the railroad’s fleet.
  • Fewer industries today—especially paper, beer, plywood, and metals—still rely on boxcar use. Products that have traditionally shipped by boxcars are now being moved on newer types of freight cars that are more efficient. Lumber is now shipped on center beam flat cars, which can haul more product per car than boxcar, and are easier to load and unload. Auto manufacturers have moved manufacturing facilities closer to suppliers, making trucks a more economical transportation choice.
  • Boxcar fleets are shipping a decreasing number of shipments. In the last 10 years, rail ton-mile shipments have decreased 42% for lumber/wood, 42% for motor vehicles and parts, and 13.2% in pulp and paper. In addition, railroads find boxcars less attractive than unit trains. Boxcars cost $135,000 each, and they have higher dwell times and lower turns than much more profitable unit trains—large trains with similar equipment that go point to point without stopping.

See more here

The Way Forward: US Commercial Ship Building: A Strategic National Asset

China, Brazil and now India have declared that their commercial shipyards are “Strategic National assets”

“US-built coastal ships are the trucks of the US Marine Highway”

The United States needs a fleet of modern coastal container and trailer ships and modern commercial shipyards that are up to the task. This new fleet is essential to the nation’s economic security and viability. It will be one element of a strategy to address the nation’s freight capacity requirements at a time of crisis in landside infrastructure funding. New ships will replace an aging, inefficient Jones Act container fleet at a time when strict, new environmental standards are enforced for the North American Emissions Control Area. Construction of these vessels and their deployment along America’s coastal corridors will create tens of thousands of new direct, indirect and induced jobs on the water, in the ports, and in our yards. We expect that a new fleet of American container feeder ships, servicing a vibrant US coastal marine highway, will join rail in offering competitive intermodal transportation services for domestic and import/export goods.

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The Missing Transportation Mode

Sometimes the Simplest Solutions are the Hardest to See

Today the United States has two well-recognized surface transportation modes—rail and road— and a third, which largely is forgotten. Missing is the marine mode.

Less than .003% of the U.S. Department of Transportation budget is proposed to be spent on the marine mode. A tiny fraction of that amount was allocated in FY 2010-2011 to starting up and supporting the American Marine Highway program and zero funding is budgeted for the program in FY 2012. Remarkably, America’s most underutilized and efficient transportation system asset is barely visible on the Federal funding screen.

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Two Ways To Revitalize US Shipbuilding

Government incentives have jump-started new technologies, and fostered the revitalization and retooling of entire U.S. industries. .Recent examples include substantial Federal rebates for electric cars, credits for LEED certified building systems, Renewable Energy Credits (REC) for Green Energy generation, loan guarantees for solar and wind turbines farms, the development of greener engines, and, most dramatically, Federal support for the auto industry and the Wall Street bank bail-outs.

Billions of dollars of new investment capital has been attracted by government supported start-ups and recapitalized industries whose products and services benefit society as a whole while sustaining and creating thousands of new jobs. Although Federal and State treasuries might defer taxes at the start of a program as an inducement to invest new capital into a venture, the pay-back from wage earners paying taxes often is multiples of upfront tax deferrals.

We believe that a vibrant U.S. shipbuilding sector is mission critical to America’s transportation and manufacturing future. It certainly is essential to the future of U.S.-flag shipping. For these reasons we strongly support efforts to revitalize the industry.

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Ship Building and National Security

National Security is Critical but ensuring our Economic Survival is Essential

The United States needs a modern commercial shipbuilding sector to secure the nation’s national and economic security. We must be prepared to face a catastrophic event or an overseas conflict that requires U.S. built commercial vessels to transport provisions, equipment, ammunition and vehicles; as well as trained and qualified United States Merchant Mariners to operate the vessels—all in name of national and economic security. However we may be close to not being able to meet these needs.

It is a recognized fact that a vibrant United States shipbuilding industry is a key component of the national security plan for the United States. Without modern shipyard facilities and ship building capacity we will not be able to build and refit U.S. Naval and Coast Guard ships that protect our coasts and offer our armed forces the ability to project military power in the far corners of the world. But as a commercial island trading nation, a strong Navy is only part of the shipbuilding story.

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Modal Shifts to Relieve Global Gridlock

In the forward to a recent National Governors Association report, Pennsylvania Governor Ed Rendell offered the following assessment of our nation’s infrastructure: “Despite its importance, America’s infrastructure has not kept pace with our country’s growing and shifting demands and the changing world around us. A growing pattern of underinvestment and uncoordinated planning has led to a range of concerns that are felt across the country; including wide spread congestion, unsafe bridges … More broadly, we have created a system that leaves us dependent on imported oil, vulnerable to rising energy prices, and ill-equipped to address the challenges of climate change”.1

The executive summary goes on to add that “America’s current infrastructure investments are also not keeping pace with our global competitors.” It goes on to cite that China invests 9 to 12 percent of GDP, India and the European Union invests 5 percent and Japan consistently invests 10 percent of GDP. The U.S. spends only about 2.6 percent of its GDP on infrastructure. The American Society of Civil Engineers in 2009 awarded our own country’s infrastructure a D rating and estimated that we need at least $2.2 trillion over five years to bring our infrastructure up to a passable B level.

Lack of infrastructure spending exacts a heavy toll with over $200.0 billion in annual net economic losses due to congestion including 2.9 billion gallons of wasted fuel and 4.2 billion man hours of time. The situation is so dire that 94 percent of the American public has expressed a growing concern about the condition of the nation’s infrastructure. 

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