Planning for Urban Freight Movement
Talking Freight SeriesSusie LahsenePort of Portland
Trends Affecting Urban Freight
Globalization Transportation deregulation Business Practices
• Logistics/Supply chain mgmt• Warehouse/distribution development• Industry/carrier mergers
Urban development• Markets• Economic base • Urban land use• Transport planning/investment
Globalization
Markets around the globe-products moving longer distances with more frequency
Freight mobility pressure added to urban environment- the site of ports and transport connections to reach other markets
Federal Transportation Deregulation
Aviation Deregulation of 1978 Motor Carrier Act of 1980 Staggers Rail Act of 1980 Ocean Shipping Act of 1984 Ocean Shipping Reform Act of 1998
Trade As A Percentage of GDP
0.0
1,000.0
2,000.0
3,000.0
4,000.0
5,000.0
6,000.0
7,000.0
8,000.0
9,000.0
10,000.0
1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002
GD
P i
n B
illi
on
s (1
996
Do
llar
s)
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
Per
cen
t o
f G
DP
U.S. Trade Increasing U.S. Trade Increasing
Source: U.S. Department of Commerce and U.S. Bureau of Economic Analysis, 2003
Freight Tonnage Increases by 2020
South Region89%
Northeast Region79%
Central Region89%
West Region100%
Source: FHWA Freight Analysis Framework Project Reebie Associates 1998 data (1st Approximation)WEFA economic data and forecasts
Business PracticesHistory of Industrial Competitiveness
1800sFirms stressed ability to decrease cost of production of each unit
Early 1900sAs production started to catch up with demand, businesses recognized the importance of sales
Emphasis on PRODUCTION
Emphasis onSALES
Emphasis onLOGISTICS
Late 1900s & 2000Sophistication of product offerings, globalization and increased customer expectations make logistics key to companies’, regions’ competitiveness
Distribution & Logistics: The New Business Model
The use of the transportation system, information technology, and distribution facilities to assemble and move raw materials and products to regional, national and international markets
Why ?• Increased competition for global markets• Increasing offshore production and movement of parts and
goods • Business cost savings already realized through production
efficiency • Supply chain management offers opportunity for additional
cost savings
Columbia Sportswear
1. Inbound Movement• Apparel, footwear, and accessories arrive via ship from Asia at T-6,
transported by truck to the Rivergate DC; some move through Seattle and Tacoma.
• Air shipments arrive both at PDX and Sea-Tac.• Ocean/air shipments arriving in Puget Sound transported by truck
to Rivergate.
1
2. Value Added Services• Ocean containers unstuffed; airfreight unpacked. Products
sorted/stored by SKU.• Once all SKUs for a customer's order arrive, shipment packed for
delivery.• Customers provide routing instructions; shipments prepared for
truck or air shipment accordingly.• The Rivergate DC also handles returns.
2
3. Reload Facility• Freight forwarders transport shipments by truck to reload
facility for air shipment.• LTL carriers take shipments by truck from DC to the LTL’s local
hubs in Portland for consolidation with other loads to same cities.
3
4. Outbound Movement• All three product lines (apparel, footwear, and accessories) shipped out
by air or truck.• Air cargo shipped out of PDX primarily using integrated carriers (such as
FedEx, UPS, Emery, etc.) for domestic delivery.• Once consolidated, LTL shipments move through carrier’s hub and spoke
network throughout North America.• Full truckload shipments move directly from DC to customers’ warehouses or
stores.
4
Freightliner
1. Inbound Movement• Subassemblies (axles and engines) arrive by ship from
Germany and Finland primarily through T-6.• Other parts and subassemblies arrive by truck from Mexico
and Canada, and by truck/rail intermodal from domestic suppliers.
1
2. Manufacturing• Steel and aluminum sourced locally.• Medium and heavy-duty trucks produced at Swan Island
production facility for global distribution.
2
3. Distribution• Finished trucks are distributed to dealers throughout the U.S.• Parts are shipped to regional warehouses.
3
4. Exports• Western Star brand trucks are shipped to Australia and New
Zealand predominantly through T-6.
4
Fred Meyer
1. Inbound Movement• Asian imports arrive predominantly through T-6 and are sent to
Fred Meyer distribution centers in Chehalis, WA and Clackamas, OR.
• Various grocery items and general merchandise arrive via truck and truck/rail intermodal from domestic suppliers.
• Seasonal goods for Kroger Supermarkets arrives through T-6.
1
2. Reload Facility• Kroger seasonal items are trucked to north Portland transload
facility.• Containers are unstuffed and consolidated into domestic
containers before being trucked to intermodal facility.• Goods are shipped via rail to Kroger’s distribution center in
Nashville, TN.
2
3. Warehousing/Distribution• All food and nonfood items from international and domestic
suppliers are sent to Clackamas distribution center for distribution to stores throughout the west (except WA and AK stores)
3
4. Retail/Local Consumption• Fred Meyer Stores operates a large fleet of trucks and trailers
for distribution of goods to its retail stores.
4
U.S. Metropolitan CentersFifty Largest
Manufacturing CentersEmployment Density by County
Wholesaling/Distribution CentersEmployment Density by County
Exports
Imports
International Freight GatewaysExports & Imports (Tons), 1998
Source: FHWA Freight Analysis Framework Project Reebie Associates 1998 data (1st Approximation)WEFA economic data and forecasts
Exports
Imports
Source: FHWA Freight Analysis Framework Project Reebie Associates 1998 data (1st Approximation)WEFA economic data and forecasts
Metropolitan Freight CentersMajor Population Areas
Freight Transportation Demand Growing in Most Urban Areas
Portland origin/destination freight volume to double by 2030
Thousand Short Tons
0
100,000
200,000
300,000
400,000
1996 2030
Thousand Short Tons
16.2%
11.4%
9.3%8.5%8.3%7.9%7.4%
4.7%
26.4%Gas, fuel, petroleum/coal products
Nonmetallic mineral products
Cereal grains
Wood products
Gravel and crushed stone
Logs and other wood in the rough
Foodstuffs and alcoholic beverages
Base chemicals
All other commodities
Commodity Share of Commodity Share of Portland/Vancouver Region TonnagePortland/Vancouver Region Tonnage
(Percent Share of Total Tonnage in 1997)
Eight commodity categories comprise 74% of all tonnage shipped in the region on all modes.
Freight Mobility Largely Dependent Upon Trucks
0%
10%
20%
30%
40%
50%
60%
70%
Percent of Freight by Mode Used(measured in short tons)
Rail
Truck
Water
Air
1996 2030
Pass Through Tonnage Doubles
The Portland region handles increasing pass through traffic for elsewhere in the country.
Tho
usan
d T
ons
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
1997 2000 2010 2020 2030
Pipeline
Rail
Truck
Barge
Tho
usan
d T
ons
ChallengesMeeting Urban Access Needs for Container
Growth
ChallengesMaintaining Industrial Land Adjacent to Freight Corridors
ChallengesMaintaining Good Access to Warehousing and Distribution
Centers
ChallengesFor Most Urban Areas Capacity Increases Represent a Hurdle
Implications Industry specialization and reliance on efficient
transportation means industries may choose to relocate if transportation costs affect their ability to compete
Congestion has real costs and affects business productivity
• Hard costs Extra time for pick-up and delivery/reduced production
time Extra vehicles to meet “just-in-time” demands of
customers and scheduling problems caused by longer delivery times
• Soft costs Business credibility Expansion decisions
Urban Freight Planning Tools Freight modeling Regional/local transportation plans Investment strategies Economic Base analysis Forecasting Comprehensive plans Land use location analysis Land use and tax policy assessment Design standards Access management policies
Urban Freight Planning Approach in Portland
Planning/Policy/Research• Reflect freight in region’s transportation and land use plan
Key Freight Corridors Industrial lands and intermodal facilities Other freight facilities
• Local transportation plans reflects freight routes• Policy emphasis on maintaining access to intermodal facilities
and industrial sanctuaries• Research on industry freight needs
Freight bottlenecks Supply-chain geography Economic relationship to freight investments
Freight Advisory committees• Regional, City and Statewide-linked by membership
Urban Freight Planning Approach in Portland
Forecasting/Analysis• Commodity flow forecast for six county region
41 Industrial sectors- tonnage, mode and growth
• Truck Model• Identification of freight bottlenecks
Port Transportation Improvement plan (PTIP) City Freight plan Region priority freight needs
Investments• Oregon Transportation Investment Act-legislative program with freight
emphasis
• Region allocation for federal funds
• Port request for demonstration projects