What Attributes Are the Most Important When Starting A New Transportation Service

Many have postulated what generates transportation corridor development, especially regarding new service options.  Often, these discussions involve many users seeking someone to help them solve “their” problem. For example, the shipper will want service alternatives that are reliable and/or at a lower cost than their current operation.  Carriers want more cargo on their network.  Public sector groups want to see more economic activity,  expressed as freight traffic, through their region. (The same could be applied to intermediaries, such as labor, freight forwarders, brokers, etc.).  There seems to be no single word that encompasses the “why” regarding how transportation services start and continue over time. 

In organizing my thoughts on this topic, I came up with two alternative lists to distill what maybe needed for a transportation service to begin and remain successful.   I really don’t know which list is better, so they are presented here for your consideration. 

First, the 7 C’s.  (I was thinking of something catchy.  I think this works..)

  1. Capital-It takes money to get something started.  There are barriers to entry, costs of renting/purchasing equipment, etc., as transportation may require large upfront costs before the first shipment occurs.
  2. Carrier-A carrier (or multiple carriers) must be willing to offer that service, possessing the right equipment, skills, etc. to satisfy a shipper’s needs.
  3. Connectivity-The trade lane must service a network, or be tied to networks, so that the cargo does not stop at a midpoint.  For example, there are many ports in the U.S., but not all are served by multiple Class I railroads.  This could put these ports at a disadvantage for rail dependent cargos.  (There are other connectivity issues related to pipelines, roadways, shipper locations, channel characteristics, etc., so don’t think I am only picking on railroads!).
  4. Cargo-There has to be cargo operating in both ways (to spread out the revenue costs for the carrier) or someone is willing to pay for the empty movement, but cargo must be available and willing to pay for that freight service. 
  5. Collaboration-For the carrier, shipper and other engaged parties, the service must be seen as an important relationship, not a “one-off” item, to encourage shippers and carriers to be confident the service will continue into the future.  This may also require a champion to ensure that everyone is working toward the same goal. (Yes, Champion is a “C” word, but in this context, it is a visionary pushing for collaboration.)
  6. Costs-There is no free lunch.  Costs must be set at a level where carriers benefit while shippers receive their desired service levels, and where possible, there are little significant cost on other users/groups.
  7. Climate-Does the business climate support this service?  Can the service handle any disruptions or adopt to changing conditions?  Given discussions on resiliency, climate may be a good word when discussing risks outside of operational activity.

My alternative term is OARS (like row your boat?)

  1. Operations – The right equipment, permits, labor agreements, etc., to make a transportation service run,
  2. Assets – This category includes the actual transportation equipment and infrastructure (roadways, vessels, trucks, cranes, docks, etc.), and the labor (truck driver, train, customs, services…),
  3. Reliable– Everyone has to commit to making the service “work”, where service risks are minimized, and revenue streams can be managed so that everyone benefits.  
  4. Support– Everyone involved understands their role, and works to ensure the cargo, equipment, service, etc., work as expected.  In some ways, this final category may be the hardest to maintain over the long term as markets/costs, can change over time.

In reviewing these two lists, there exist many nuanced concepts, but one “C” word seems to be an unspoken, but vital, element: commitment.  This requires a commitment to provide the service (carrier), use the service (shipper), and to support the service (public sector/other agents). 

 

My Presentation at the Society for Benefit-Cost Analysis

For those who do not know, I am a PhD Candidate in Applied Economics at the University of Antwerp, so trying to understand the state of the art regarding Benefit-Cost Analysis is important to my research work. (I joined the Society for Benefit Cost Analysis last year.)

The Society for Benefit-Cost Analysis held their annual meeting in Washington, DC last week. There were some great presentations, (although I missed quite a few because of overlapping panels), but I did find James Scouras‘ presentation titled “Analytical Challenges Surrounding Analyses of Nuclear War”, very engaging.

I made a presentation on my PhD work Thursday afternoon, Session 3G, “Transportation on Waterways: Keeping Afloat using BCA”. Our Discussant, Joe Devlin, said the session should have been called “Big boats are fickle, fragile, and frustrated”.

My other panelists presented some very interesting work. Tim Skeel discussed how he proposed changing bridge closures in Seattle based on the value of time and normalized shipping activity. (The study examined how to change operations on a bridge built in 1910 for today’s traffic conditions.) He did a very through job on showing how these changes would benefit Seattle commuters, but the Coast Guard was not interested in changing their bridge hours. Tim was followed by Douglas Scheffler, U.S. Coast Guard, on estimating the safety benefits of deploying the Physical Oceanic Real Time System, PORTS. Doug’s presentation showed how to evaluate physical deployment of monitoring systems to assist the maritime community. Oftentimes, safety becomes “assumed away”, as how does one count for what may or may not happen.

My presentation and PhD largely centers around the question of managing investment risk in ports for large infrastructure projects. The topic has interested me for years, as evident by many of my presentations over the years. The discussion could be summed up by the slide, where the horizontal is the public sector space and the vertical is the private sector.

The outline:
Ports need different types of infrastructure investment
There are public and private sector actors involved in port projects
Port Capacity dictates a ports competitive advantage, so growth remains the perpetual goal
Sensitively in the forecast provides some risks to the infrastructure owner
The Port Prioritization Program in Louisiana
My Research Methodology (factor analysis and Monte Carlo Simulations)

After the presentations were finished, Joe Devlin and Henrik Andersson, chair, led a very engaged back and forth between the panelists and the audience. So, thanks to those people who attended the session and engaged in a great dialogue!

There was quite a lot of discussion on this chart from the European Union regarding Cost Benefit Analysis.

I am looking forward to submitting an update on this work next year (although presenting at the Society for Benefit Cost Analysis European Conference sounds interesting…)

So, over the next few months I will begin getting more into the data/analysis as I work on my PhD!

What Will You Drink Today…

A few weeks ago, I made a presentation for a class at the University of New Orleans. As with a lot of my general freight speeches, I start with the following question.

For the few paying attention, most talk about water, tea, soft drinks and coffee. Eventually someone brings up beer or wine, which always gets a laugh, but the irony is most people do not think about their ability to access something safe to drink. As we have expectations regarding its cost, taste, and general characteristics, we have some general idea regarding our willingness to purchase a coke at a vending machine or a soft drink at a fast food restaurant. Oftentimes, we do not think about what it took to get that product, to that place, at that time, for you to make the purchase decision. Someone designed the bottle, made the beverage and filled the bottle, only for it to be carried to that location. It was logistics that took the beverage from the plant to where you are now.

So, as you enjoy your purchase, just stop and think that there was more to this purchase, namely that the distribution/transportation system works so well we do not marvel about drinking something that literally came from around the world, or in some magical place, as in this Coca Cola Ad.

Talking Freight-Dec 19- Notes Posted online

https://www.fhwa.dot.gov/planning/freight_planning/talking_freight/december_2018/

Several months ago, I approached Chip Millard about the question of freight data and geography, and so we worked together to put together this session.  I hope you can register and join in! 

Registration is now available for the December 19 Talking Freight Seminar.


Date/Time: December 19, 2018  1:00 – 2:30 pm ET

Topic: Using Freight Data in the Proper Geographic Contexts: Challenges and Opportunities

Registration: https://ops.fhwa.dot.gov/freight/fpd/talking_freight/index.htm

Description and Presentations: While freight activity utilizes a mix of different networks, from the global to the local, each movement depends on the same transportation system.  In many cases, a study area’s geography may be small when compared the users on the system (a local connector study) or so broad that geography may not matter (national traffic patterns).  Not all freight transportation data can be used at every geographic level; some data can only be used for macro-level geographic analyses, while other data are only appropriate to use at small-scale or micro-level geographies.  For transportation agencies and companies that are interested in conducting freight transportation analyses for larger geographies, such as for an entire state or along an entire multijurisdictional corridor, or for smaller geographies, such as for a metropolitan area or county, conducting those analyses can be challenging because data may not be useful for the required level of analysis without additional, analytical rigor.  There are also different of uses for freight data, ranging from simply education to project prioritization, which are not necessarily the traditional mode, commodity, and origin/destination freight data approach.

There are various transportation data sources in the public and private sector. Some of these sources are freight transportation-specific, like the Freight Analysis Framework, while others contain more general measures (demographic, economic, etc.) or geographic data (roadway networks, traffic counties, etc.) that can be adopted into a freight study.  Many challenges exist when transforming data to the proper geographic scope, where the planner’s needs are aligned with the required planning needs.

This webinar will discuss how different transportation entities are examining freight transportation using geography as the research goal, and are trying to make freight data “fit into” the study area.   The presenters will focus on the challenges they have faced in conducting freight analyses at both large and small-scale geographies, and provide insights concerning where data gaps exist and/or future research needs regarding program management, operations, performance metrics, or general planning needs.

Using Freight Transportation Data to Understand the Differences between Metropolitan Areas within a State

A series of presenters will provide an overview of a state DOT’s efforts to understand freight flows within their state through research programs to address freight data gaps. 

SPEAKERS:

  • Joel Worrell, Florida Department of Transportation
  • Thomas Hill, Florida Department of Transportation
  • Holly Cohen, Florida Department of Transportation

Utilizing Freight Transportation Data to Help Prioritize Projects along Key Freight Corridors (SmartScale) and Address Truck Parking Needs

This presentation will discuss how Virginia DOT has identified large and small-scale project needs along key freight corridors within the state.

SPEAKER:

  • Erik Johnson, Virginia Department of Transportation

Using Freight Transportation Data to Examine Last Mile Freight Transportation Needs

This presentation will examine how freight traffic volume information can be integrated into regional and local land use planning.

SPEAKERS:

  • Michael Brown, Metro Analytics
  • Chandler Duncan, Metro Analytics

 If you have not yet participated in Talking Freight, I encourage you to do so. These monthly seminars, sponsored by the Federal Highway Administration, are held via web conference, which means that you view the PowerPoint presentations over the Internet while listening to the presenters over your computer or the telephone. There is no cost involved and you do not have to leave your desk to participate. More information about Talking Freight is available at http://www.ops.fhwa.dot.gov/freight/fpd/talking_freight/index.htm  Links to past presentations and recordings are available on http://www.fhwa.dot.gov/freightplanning/talking.htm


Defining Mississippi’s Transportation System

On Tuesday, October 30, I had the privilege of attending/presenting at the 2018 Mississippi Transportation Institute Conference.  There were many great speakers, including a thoughtful Tim Flick, who spoke on leadership, and the energetic Janie Waters, who discussed change while leading everyone in the Hokie Pokie.  With so many quality presentations, I was honored to have been invited to speak, much less during lunch.  After being introduced by Northern District Commissioner Mike Taggert (in my opinion, a great asset for the State of Mississippi), I presented the following presentation.  ( my presentation: lambert-MTI 2018)

Defined transportation as a benefit:

  • to passengers and users,
  • to support the economy through freight movements,
  • to other sectors in the Mississippi economy.

Often, these benefits are not linked to the role that the transportation system serves an integral part of the state’s commitment to its citizens. The average citizen benefits from a robust highway system, as transportation makes our modern life accessible, but the system does have a direct cost, such as through taxes, or indirect costs, such as closed bridges, vehicle damage, etc., to the citizens of Mississippi.

Here are some of the references I used in preparing my remarks:

Southern Legislative Conference Comparative Data Reports on Transportation 2018 Report
Mississippi Department of Transportation Statewide Transportation Plan Mississippi Department of Transportation Fiscal Year 2017 materials
Mississippi Department of Transportation Freight Plan

1987 was the last concerted effort in Mississippi for a comprehensive statewide highway network program, which was the same year I graduated from Louisiana State University.  Since that was also the last year the State raised the gas tax, I am paying the State of Mississippi the same per gallon of gas from when I drove across the state after my graduation in 1987 as I did this week when I purchased gas to drive to the conference.

The problem is not one of identifying projects, but in securing funding for these projects,  While the state has recently taken steps to address this need, it took shutting down bridges to get some attention on this issue.  Maybe the citizens of Mississippi just need to eat more Domino’s Pizzas to fix the state’s potholes!

Introduction

Hello and welcome to my little slice of the internet.

When I was growing becoming a transportation econoimst was the farthest thing from my mind, but such is life!

This website is more for me to focus/share my thoughts on trade and transportation topics, from planning to policy to economic and data analysis, into a single place, but I hope you enjoy the ride.

Even as the floodwaters in 2016 were  receeding around my house, I’m still taking pictures of trucks!  I know, its a sickness 🙂