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March/April 2007 · Vol. 70 · No. 5
March/April 2007
Understanding Freight Bottlenecks
by Karen White and Lance R. Grenzeback
FHWA is studying traffic jams that increase the trucking industry's transportation costs.
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| (Above) Trucks and passenger vehicles often mix on roads like this one in urban environments and exacerbate highway bottlenecks. Photo: Cambridge Systematics, Inc. |
Many Americans feel the impact of traffic bottlenecks during their daily commutes. Also caught up in these slowdowns are pickup, delivery, and long-haul trucks. A 2004 report by the Federal Highway Administration (FHWA), Traffic Congestion and Reliability: Linking Solutions to Problems, estimated that about 40 percent of traffic congestion in general, as opposed to freight congestion specifically, is caused by bottlenecks, resulting in stop-and-go traffic flow and long backups. Nonrecurring congestion is the other component, caused by transitory events such as construction work zones, traffic incidents such as crashes and breakdowns, extreme weather conditions, and suboptimal traffic controls.
Recurring congestion is most apparent at highway "bottlenecks"—specific physical locations on highways where traffic backs up because volumes exceed the available capacity of the roadway. Bottlenecks on highways that serve high volumes of trucks are "freight bottlenecks." They are found on highways serving major international gateways such as the Ports of Los Angeles and Long Beach, CA; at major domestic freight hubs such as Chicago; and in major urban areas where transcontinental freight lanes intersect congested urban freight routes.
FHWA's recent study, An Initial Assessment of Freight Bottlenecks on Highways, revealed that freight bottlenecks cause upwards of 243 million truck hours of delay annually. The direct user cost from delay is about $7.8 billion per year.
The effect on individual shipments and transactions is usually modest, but over time user costs can add up to a higher cost of doing business for firms. Although there is no generally agreed-upon impact on the Nation's economy, economists agree that the economic losses include costs to hold additional inventories, increased environmental costs, increased fuel and maintenance for trucks, and other costs associated with the delays and unreliability of freight shipments. Without focused attention, the costs associated with freight bottlenecks on highways can only be expected to grow.
Trucking Is Key to the National Freight System
The national freight system, composed of a wide range of transportation infrastructure facilities, supports the operations of truck, rail, air, and ships. In 2002 trucks transported more than $13 billion of the Nation's goods, and this number is projected to increase to more than $37 billion by 2035. According to FHWA's Office of Freight Management and Operations' (HOFM) Freight Analysis Framework (FAF), trucks now carry 60 percent of freight volume and 67 percent of freight value. As the American Trucking Associations reminds the public, virtually everything that is eaten, drunk, or bought travels by truck at some point on its journey to the consumer. Trucks not only serve as a primary method of transportation but also as a key link for rail and water shipments. Upwards of 37 percent of all rail freight units are intermodal containers or trailers, most requiring a truck move at the beginning and end of the trip.
Trucking has participated in the Nation's economic growth as deregulation in the early 1980s and computerization in the early 1990s have kept transportation costs down. The Council of Supply Chain Management Professionals measures transportation costs as a component of the total logistics costs. The major components of total logistics costs are administration (management and insurance, for example), transportation (by truck, rail, air, and water), and inventory carrying costs. The council's research shows that total logistics costs rose through the 1960s and 1970s to a high of about 16 percent of nominal gross domestic product (GDP) in 1980, then declined through the 1980s and 1990s. In 2005, total logistics costs were about 9.5 percent of nominal GDP, the fifth straight year that they were below 10 percent. However, this trend is expected to reverse, as logistics costs have increased by more than 25 percent in the last 2 years.
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| Source: FHWA. |
The Relationship Between Congestion and Freight Movement
The projected increases in freight truck tonnages, without increased capacity or operational changes, will increase congestion. Congestion means increased travel times, increased costs, and less reliable pickup and delivery times for truck operators. To compensate, motor carriers typically add vehicles and drivers, and shippers increase inventories. Over time, most of these costs are passed along to consumers. FHWA estimates that increases in travel time cost shippers and carriers an additional $25 to $200 per hour depending on the product. The cost of unexpected truck delays can add another 50 percent to 250 percent per hour, according to The Freight Story: A National Perspective on Enhancing Freight Transportation, a publication of HOFM.
"We believe we are now in the midst of a long-term tightening of domestic freight capacity and domestic freight demand," says John Larkin, a market analyst with Stifel Nicolaus. No statistics describe the cost of congestion to the Nation's freight transportation system as a whole; however, the Texas Transportation Institute's (TTI) 2005 Urban Mobility Report shows large and steady increases over the last 20 years in the cost of congestion for automobile and truck drivers in U.S. metropolitan areas. In that report, TTI estimates the annual cost of $63 billion for the 85 urban areas that TTI tracks.
According to the American Association of State Highway and Transportation Officials' Multimodal Freight Policy team, "The increase in congestion and congestion costs reflects the fact that over the last 20 years vehicle miles of travel (VMT) on U.S. roads have nearly doubled while lane miles have increased only about 4 percent." It is unlikely that highway capacity will expand rapidly in the coming decades.
As noted in FHWA's Status of the Nation's Highways, Bridges, and Transit: 2002 Conditions and Performance Report to Congress, "The performance of the highway system has a direct bearing on the effectiveness and efficiency of truck transportation." The report also notes that "although commercial vehicles account for less than 10 percent of all [VMT], truck traffic is growing faster than passenger vehicle traffic and having major effects on intercity highways. On about 20 percent of the interstate system mileage, trucks already account for more than 30 percent of traffic."
This share is predicted to grow. HOFM's Freight Analysis Framework (FAF) estimates that between 2002 and 2035, freight tonnage will increase by more than 48 percent. To carry this freight, truck VMT is expected to grow faster than automobile VMT.
A combination of factors reveals that the United States cannot expect a continuation of the low freight rates and easy mobility that helped fuel the economic expansion of the 1980s and 1990s. As demonstrated by researchers Nadiri and Mamuneas, returns on current highway investment are below the rates of returns during the build-up of the interstate system. The railroad industry has a limited ability to respond to the growing freight market because of its own capacity constraints. Therefore, one potential solution is to attack congestion strategically by reclaiming capacity from the existing freight system and targeting strategic highway and railroad expansion.
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| Source: TTI. |
Bottleneck Typology And Methodology
For FHWA's 2005 study, An Initial Assessment of Freight Bottlenecks on Highways, an important first step before measuring the impact of freight bottlenecks was developing a typology to guide the methodology and avoid double counting of delay, which would artificially inflate the numbers. Using prior literature and available measurement techniques, FHWA defined bottlenecks using three features: type of capacity constraint, type of roadway, and type of freight route. There are six constraint types: lane drop (narrowing from three to two lanes or from two to one, including lane merges or exit ramps), interchange, intersection/sign, roadway geometry, rail grade crossing, and regulatory barrier. There are four roadway types: freeways, arterials, collectors, and local roads. The four types of freight routes are intercity truck corridors, urban truck corridors, intermodal connectors, and truck access routes.
Generally, FHWA measured the freight bottleneck impact for each combination of constraint, roadway, and freight route. Some combinations were not used; for example, neither signalized intersections nor rail grade crossings exist on freeways. Because of data limitations, the typology was not exhaustive. For instance, the analysis does not include roadway construction zones or emergency closures for crashes and other incidents.
The methodology to measure the bottlenecks involved three steps: locating the bottlenecks, determining truck volumes at those sites, and estimating the truck hours of delay. The FHWA researchers located the bottlenecks by scanning FHWA's Highway Performance Monitoring System (HPMS) for highway sections that are highly congested, as indicated by a high volume of traffic in proportion to the available roadway capacity and measured by the volume-to-capacity ratio.
Specifically, the HPMS 2002 Universe database was scanned for lane drop, signalized intersection, and steep-grade bottlenecks on rural sections of interstates, rural arterial roads, and urban arterials. The researchers used the HPMS Sample database to identify interchange bottlenecks in urban areas and to provide detailed information for calculating the capacity of highway sections.
Next, data from HOFM's FAF were used to describe the types of freight caught up in the bottlenecks. The FAF then was used to approximate the number of trucks making national, regional, and local trips. The hours of delay at each bottleneck were based on predictive equations constructed using the Queue Simulation simplified queuing-based model.
The FHWA 2005 study, An Initial Assessment of Freight Bottlenecks on Highways, developed national annual truck hours of delay by constraint, roadway, and freight route type. Ultimately, the researchers found that freight bottlenecks accrued 243 million hours of delay annually. Based on a delay cost of $32.15 per hour per truck, the conservative value used by FHWA's Highway Economic Requirements System (HERS) model for estimating national highway costs and benefits, the direct user cost of the bottlenecks is about $7.8 billion per year.
Highway interchange bottlenecks accounted for more than 50 percent of the delay—about 124 million hours of delay at a cost to shippers of $4 billion. The majority of those bottlenecks sit squarely on the crossroads of the Nation's transcontinental and regional truck routes. Of the 227 bottlenecks identified, 35 cause more than 1 million truck hours of delay each.
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| Source: Council of Supply Chain Management Professionals. The index is based on the value in 1984. All subsequent years are shown as a percent change from the 1984 base. |
Solutions
To respond to the critical needs of moving freight on a mature capacity- constrained transportation network, the U.S. Department of Transportation (USDOT) brought together public and private stakeholders to create a Framework for a National Freight Policy. At the 2006 Transportation Research Board (TRB) Annual Meeting, USDOT Under Secretary for Policy Jeffrey Shane unveiled the Department's framework. The framework grew out of discussions among shippers, carriers, academics, and government policymakers under the auspices of TRB's Freight Industry Roundtable. Following those meetings, Shane stressed that "the days of the Federal Government building infrastructure through grants and entitlements are over. The public and private sectors must work together to achieve freight policy solutions."
The Framework for a National Freight Policy is envisioned as a "living document, in contrast to many Federal policies," Shane said. The goal is to define and refine the elements of the framework continuously to "guide both public and private freight policy efforts over the coming years." The framework consists of seven major objectives: improve the operations of the existing freight transportation system; add physical capacity to the freight transportation system in places where investment makes economic sense; use pricing to better align all costs and benefits between users and owners of the freight system and to encourage deployment of productivity-enhancing technologies; reduce or remove statutory, regulatory, and institutional barriers to improve freight transportation performance; proactively identify and address emerging transportation needs; maximize the safety and security of the freight transportation system; and mitigate and better manage the environmental, health, energy, and community impacts of freight transportation.
| Bottleneck Type | National Annual Truck Hours of Delay, 2004 (Estimated) | ||
|---|---|---|---|
| Constraint | Roadway | Freight Route | |
| Interchange | Freeway | Urban Freight Corridor | 123,895,000 |
| Subtotal 123,895,000* | |||
| Steep Grade | Arterial | Intercity Freight Corridor | 40,647,000 |
| Steep Grade | Freeway | Intercity Freight Corridor | 23,260,000 |
| Steep Grade | Arterial | Urban Freight Corridor | 1,509,000 |
| Steep Grade | Arterial | Truck Access Route | 303,000 |
| Subtotal 65,719,000‡ | |||
| Signalized Intersection | Arterial | Urban Freight Corridor | 24,977,000 |
| Signalized Intersection | Arterial | Intercity Freight Corridor | 11,148,000 |
| Signalized Intersection | Arterial | Truck Access Route | 6,521,000 |
| Signalized Intersection | Arterial | Intermodal Connector | 468,000 |
| Subtotal 43,114,000‡ | |||
| Lane Drop | Freeway | Intercity Freight Corridor | 5,221,000 |
| Lane Drop | Arterial | Intercity Freight Corridor | 3,694,000 |
| Lane Drop | Arterial | Urban Freight Corridor | 1,665,000 |
| Lane Drop | Arterial | Truck Access Route | 41,000 |
| Lane Drop | Arterial | Intermodal Connector | 3,000 |
| Subtotal 10,624,000‡ | |||
| Total 243,352,000 | |||
* The delay estimation methodology calculated delay resulting from queuing on the critically congested roadway of the interchange (as identified by the scan) and the immediately adjacent highway sections. Estimates of truck hours of delay are based on two-way traffic volumes. However, the methodology did not calculate delay on the other roadway at the interchange. This means that truck hours of delay were calculated on only one of the two intersecting highways or two of the four legs on an interchange, probably underreporting total delay at the interchange. The bottleneck delay estimation methodology also did not account for the effects of weaving and merging at interchanges, which aggravates delay, but could not be calculated from the available HPMS data. Estimates have been rounded to the nearest thousand.
‡ The HPMS sampling framework supports expansion of volume-based data from these sample sections to a national estimate, but does not support direct estimation of the number of bottlenecks. Estimates of truck hours of delay are based on two-way traffic volumes. Estimates have been rounded to the nearest thousand.
Source: Cambridge Systematics.
One example of the first goal is California's PierPASS program. PierPASS is a nonprofit organization created by marine terminal operators at the Ports of Los Angeles and Long Beach. PierPASS shifts truck travel to nonpeak hours by charging a congestion fee for loads moved during peak hours (Monday through Friday, 3:00 a.m. to 6:00 p.m.). The fees are used to pay for the additional cost of nighttime operations and as incentives for nonpeak highway usage. According to the PierPASS Web site, "Since the start of the program, between 30 percent and 35 percent of container cargo at the ports has moved during the new offpeak shift on a typical day." PierPASS recently celebrated the two millionth truck diverted from Los Angeles daytime traffic.
Another example fitting the second framework objective of economic capacity expansion is Ohio's experience showing that focused examination of truck traffic patterns and targeted investments can improve truck freight flows. The Ohio Department of Transportation (ODOT) analyzed major highway freight bottlenecks across Ohio, identified specific choke points within these bottlenecks, and estimated the type, value, and origins and destinations of the truck freight caught in them. The I-70/I-71/S.R. 315 interchange—one of three closely spaced bottlenecks along the corridor through downtown Columbus—had typical choke points. ODOT found that precisely tailored improvements, such as redesigning a single ramp or repositioning a merge lane, coupled with improved corridor traffic management, reduced delays in a cost-effective way for truck freight moving through such interchanges.
The Freight Model Improvement Program (FMIP) and the Freight Performance Measures (FPM) are two programs within HOFM that are working to fulfill the framework's goal to proactively identify and address emerging transportation needs. The FMIP is working to build a consensus among the transportation communities to identify needs in freight modeling and on ways to meet those needs. FMIP is targeted primarily on models for estimating and forecasting movements of commodities, trucks, trains, and vessels. A secondary goal is to use those models and forecasts to estimate public revenues, environmental consequences, economic consequences, and other societal costs and benefits. The other program, FPM, is to identify needed transportation improvements and monitor their effectiveness. Currently, through a partnership with the American Transportation Research Institute, FHWA is monitoring the operational conditions (speed, travel index, and buffer index) on virtually all interstate highways.
Creation of the Framework for a National Freight Policy by USDOT in conjunction with private freight stakeholders is a key element to elevate the discussion and explicitly recognize the interdependence of private and public decisions on freight movement.
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| Source: Cambridge Systematics, Inc. |
Looking Forward
In his TRB presentation, Shane summarized, "To some measure, we are victims of our own successes. In a strong and growing economy inextricably linked to the global marketplace, the demand for freight mobility is challenging the national transportation system's capacity."
According to HOFM Director Tony Furst, "Now, all stakeholders, public and private, local, State, and Federal, shippers and carriers, must take a look at this framework [National Freight Policy] and take ownership of the specific items and act on them. This is the only way that we will be able to overcome the issues we are faced with."
Nowhere is this more evident than at the vital links of interstate interchanges. FHWA's study, An Initial Assessment of Freight Bottlenecks on Highways, begins the process of measuring the impact of freight bottlenecks. In the next year, FHWA plans to refine these methods to better serve the Nation's freight needs.
Karen White, Ph.D., is an economist with the Industry & Economic Analysis Team in FHWA's Office of Policy. She oversees and participates in a broad variety of transportation policy studies, such as strategic multimodal freight analysis, impacts of highways on economic productivity, highway finance, highway cost allocation, and public-private partnerships. She received doctorate and master's degrees in economics from the University of Houston and bachelor's degrees in economics and finance from the University of Texas at Austin.
Lance R. Grenzeback is senior vice president at Cambridge Systematics, Inc. His areas of practice are transportation policy, planning, and economics. He specializes in freight policy and intermodal planning, transportation operations and intelligent transportation systems, and finance and economic development. He had a lead role in development of FHWA's Freight Analysis Framework, the first comprehensive assessment of national freight flows. He received a master's degree in city planning and economics from Harvard University and a bachelor's degree in government from Harvard College.
For more information, contact Karen White at 202-366-9474 or karen.white@fhwa.dot.gov, or Lance Grenzeback at 617-354-0167 or lgrenzeback@camsys.com.
Other Articles in this issue:
New Lime Test for Hot Mix Asphalt Unveiled
Better Options For Older Adults
Understanding Freight Bottlenecks
March/April 2007 · Vol. 70 · No. 5
