ECIV 790U INTERMODAL FREIGHT TRANSPORT Project Presentation

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ECIV 790U INTERMODAL FREIGHT TRANSPORT Project Presentation. Estimation of Modal Diversion and Economic Benefits due to Rail Service Improvements in South Carolina by Omor Sharif. Introduction. Transportation policy/infrastructure changes in South Carolina - PowerPoint PPT Presentation

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Slide 1Estimation of Modal Diversion and Economic Benefits due to Rail Service Improvements in South CarolinabyOmor Sharif1ECIV 790U INTERMODAL FREIGHT TRANSPORTProject Presentation1Introduction2Transportation policy/infrastructure changes in South CarolinaHow much Modal Diversion will occur?How much Economic Benefits of the changes?The ITIC Model -Intermodal Transportation and Inventory Cost Model2The ITIC Model 3A spreadsheet based computer modelVersion 1.0 of the model was published in 2005 by US Department of Transportation and Federal Railroad AdministrationHighway to Rail Intermodal VersionFollows a logistics managers perspective who choose a mode and shipment sizeTransportation alternatives is chosen based on minimum total logistics costsEstimate the diversion of highway freight traffic to rail intermodal serviceEstimate the economic benefits of changesUnderstand the underlying methodologyApplication of TRANSEARCH Data4Objective ContributionSelecting suitable data sources for the modelDevelopment of Inputs for the model such as Freight Rates, Rail Miles, Dray Miles, Junction FrequencyUnderstanding the modal diversion impact of rail service improvement5Prior ResearchThe model itself refers to many sources regarding previous researchCase studies: using the model by various organizations at federal/state/local governments6Methodology - Cost7Methodology- Data81.Serial Number2.Commodity Description3.Commodity CodeStandard Transportation Commodity Code*4.Pounds per Year*5.Pounds per Shipment*6.Value of CommodityDollars per pound*7.Origination State8.Destination State9.Origin FIPS10.Destination FIPS11.Observed Mode (Truck)*12.Truck rate per mile for 3S2*13.Truck highway miles*14.Truckload per shipment*15.Number of Trailer on Flat Car (TOFC)/Number of Container on Flat Car (COFC) (0)*16.Rail Junction Frequency (0)*17.Observed Rail revenue per hundred weight (cwt) (1)*18.Rail variable cost per cwt*19.Rail miles*20.TOFC pickup miles*21.TOFC delivery miles*Transportation CostFormulas in TSW worksheet:Lb/day = (lb/year) / 365Days between orders = final lbs in the shipment / (lb/day)Transit time (Rail) = Rail Miles / Rail Speed + Dray Miles / Dray Speed + Dwell time at origin and destination terminals (0.5 days at each) + Interchange delays (1.5 days if there is an interchange) [Both rail and dray speed is based on 24 hours]Transit time (Truck) = Truck Miles / Truck Speed [truck speed is based on 10 hours a day]Expected L&D claim per shipment = L&D as percent of gross freight revenue X transport charges per shipmentTransport charges per shipment (Rail) = (Load/unload hours X Hourly wage) + final lb in shipment X rail rev per cwt / 100 Transport charges per shipment (Truck) = Handling cost per shipment + Linehaul cost per shipment = (Load/unload hours X Hourly wage) + (Linehaul miles X Linehaul cost per mile + Linehaul miles X Additional fee per mile + One time additional fee)Number of shipments/yr = final lbs in shipment X lb/yeartransport charges/yr = transport charges per ship X Number of shipments/yr9Non Transportation Logistics CostFormulas in TSW worksheet:Order cost = (Order cost per shipment + Dunnage) X Number of shipments/yr [for truck dunnage is 0]In-transit stock carrying cost = Lb/day X Dollars/lb X Transit time X Interestcycle stock carrying cost = Dollars/lb X inventory carrying cost factor X final lbs in shipment / 2Loss & damage claims = Expected L&D claim per shipment X Number of shipments/yrCapital cost on claims = claim payment days X loss & damage claims X InterestSafety stock carrying cost = safety stock (lb) X Dollars/lb X inventory carrying cost factorTotal Non-Transportation Logistics Costs = Order cost + In-transit stock carrying cost + cycle stock carrying cost + Loss & damage claims + Capital cost on claims + safety stock carrying cost 10A sample analysisTransearch 2008 as Preliminary Data SourceOrigin- South CarolinaDestination- Florida and VirginiaTotal Records- 27000+STCC Commodity codes are kept at 4 digit level11An Analysis of the Operational Costs of Trucking:2012 Update By ATRI12(http://www.glostone.com/wp-content/uploads/2012/09/ATRI-Operational-Costs-of-Trucking-2012.pdf)Forecast of 2023 Freight Rate13Inadequate Historical dataLonger forecast horizon makes forecasting difficultExtrapolation techniques have higher success in short time horizonRegression, Time Series Analysis??A value of $2.10 was assumed in the sample analysis for now! Rail MilesSC 2008 Transearch does not provide county outside SC, only BEAPossible Alternative: County-to-County Distance Matrix at CTAhttp://cta.ornl.gov/transnet/SkimTree.htm and use regressionMatrix of distances and network impedances between each pair of county centroids via highway, railroad, water, and combined highway-rail pathsRegression between Intermodal Rail and Highway Miles based on 125 samples14Dray MilesFor combined highway-rail CTA provides Highway and Rail miles here for each pair of county http://cta.ornl.gov/transnet/SkimTree.htmTake Dray miles as a percentage of Rail Miles and use data fittingBest Fit Distribution is Gamma out of seven tested using fitdistrplus package in R (Anderson-Darling statistic: 0.3201 ) based on 125 samplesFitting of the distribution ' gamma ' by maximum likelihood Parameters : estimate Std. Errorshape 1.3586393 0.15588283rate 0.1922481 0.02656798Use GAMMA.INV(RAND(),1.359,1/0.192) * Rail Miles / 100 in EXCEL.15Preparing Input File for analysis (truck itic input.xls)Discard Transearch records when shipment weight is zeroDiscard Transearch records when truck miles is zeroFormat STCC codes as Text in Excel, not as NumbersAdd zero before one digit STCC code (01, 08, 09 instead of 1, 8, 9)Put unknown in rail VC per cwt column and 1 in obs rail rev per cwtJunction Frequency = 1 if Truck Miles > 1000, otherwise 0.16A sample analysisBy Year 2023 Rail is offering the following service improvements- Increase rail speed by 8 mph (30 mph to 38 mph, Truck = 50 mph)Improve reliability from 0.45 to 0.42 (Truck = 0.40)Reduce Loss & Damage Claims 20% to 10% (Truck = 7%)17Results18TRUCK-TO-RAIL INTERMODAL OUTPUT SUMMARY STATISTICSBasePolicy Case ResultsCaseTruckDiversionTruckMovesto RailNumber of Records17,73317,7330Number of Shipments314,473314,4730Tons Shipped6,004,3126,004,3120Truck VMT148,171,808148,171,8080Intermodal Dray VMT000Rail Ton-Miles000Logistics Costs($)4516168294516168290About 17000 records were selected for policy analysis after base case run of about 22000 records. Not many Mis-assigned, mostly excluded because they failed cost < revenue criteria.Exclude when Variable Cost > Revenue $ / 100 lb comparisonNot considered if Variable Cost > RevenueRail Revenue = 0.95 X Cost per mile of 3S2 X 3S2 Miles X 100 / Shipment weight in lbRail Variable Cost = Dray Pickup charge / Shipment weight in lb X 100 + ((Variable Cost per mile X Rail Miles + Total Lift charges at Origin and Destination) / Shipment weight in lb X 100) / 0.909So, short transport distances have higher chances of being excluded.1920Spartanburg, SC to Fort Myers, FL21Thank You!21Sheet1OUTPUTInputSerial Number20036Serial number20036STCC 50DescriptionIn bulk in boxcarsOstate45STCC50Dstate12lbs/yr48689540pounds/yr48689540lbs/shpmt41116.4978445091rail miles749.91$/lb0.56350008653-S2 miles714.2Ostate45chosen mode2Dstate12line haul miles per shipment final714.2Ofips45083annual pickup cost0Dfips31annual delivery cost0Obs modetruck rail ton-miles0Cost/mile 3S22.1translog per cwt chosen mode final3.83043670583S2 miles714.2transport cost per cwt chosen mode final3.67205399093S2 load41116.4978445091payload final41116.4978445091num TOFC/COFC1number of shipments1185Junction Frequency0Intermodal Dray VMT0obs rail rev per cwt13S2 translog cost per cwt3.8304367058rail VC per cwtunknown3S2 transport cost per cwt3.6720539909rail miles749.913S2 annual VMT846327tofc pu18.747753S2 number of shipments1185tofc dlvr18.74775annual rail transport cost1700272.365annual rail non transport cost147410.058703293origin fips45083destination fips31Calculated Rail Rate/cwt3.4653462106New Rail Revenue0annual truck transport cost1789136.7annual truck non transport cost77115.8153428854total annual rail logistics cost1847682.42370329total annual 3S2 truck logistics cost1866252.51534289flag for rail rate less than costs SAVINGS 18570.0916395925

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