SHORT-HAUL SHUTTLE TRAINS COULD DIVERT A MILLION
TRUCKS OFF LOS ANGELES EXPRESSWAYS
Trucks could deliver containers faster to closer, local destinations;
accommodating freight growth with shorter waiting times
CHICAGO–Anacostia Rail Holdings (ARH) www.anacostia.com has released two new reports examining the feasibility and benefits of rail service operating to an inland port for intermodal containers destined within 150 miles of the Ports of Los Angeles and Long Beach.
The reports estimate that some 3.1 million twenty-foot equivalent units (TEUs)–about a third of imports coming into the Ports of Los Angeles and Long Beach–could be addressable by a rail shuttle-inland port in the Inland Empire. A further opportunity exists for up to 1.5 million TEUs if cross-docks (for transloading and onward movement of domestic containers by rail and truck) relocate to the vicinity of the inland port. At full share shift, this could eliminate some 5,100 short-haul truck moves (drayage) from the LA/LB ports every weekday.
On behalf of its subsidiary Pacific Harbor Line (PHL), which serves as the neutral rail-switching operator for the two ports, Anacostia Rail Holdings commissioned the studies to examine how short-haul intermodal operations can help address logistical and environmental issues commonly associated with containerized freight movement.
Looking for ways to improve
Ports worldwide are looking for ways to improve supply chain capacity and performance, lower shipping costs, and reduce port and local road congestion due to trucks. One potential option is to move some of the activities that occur at or near maritime ports (such as intermodal container sorting and delivery) to a truck/rail terminal further inland – known as an “inland port” – using a short-haul, on-dock rail service.
Anacostia Rail Holdings commissioned reports by Oliver Wyman, and Leachman & Associates, two consulting firms with expertise in intermodal, rail operations, and supply chain logistics, to study this critical issue with respect to the Los Angeles Basin.
“This concept has the potential to offer benefits to the ports and the surrounding community in terms of sustainability, unlocking capacity, and reducing congestion,” said Peter Gilbertson, president of Anacostia Rail Holdings. “Although implementing such a service also has challenges, we felt it was important to consider the parameters under which a transportation alternative like this might be viable.”
Port of Long Beach Executive Director Mario Cordero said, “The Port of Long Beach appreciates Pacific Harbor Line’s initiative in exploring outside-the-box solutions that could grow the Port’s market share and address the region’s environmental challenges.”
Major railroads are planning significant investment in intermodal terminals in Southern California at Barstow (BNSF) and in the Inland Empire (Union Pacific). Union Pacific also has announced plans for a new international intermodal service to Phoenix, Ariz. CalSTA has awarded grants to support development of a proposed inland port in Merced County. Caltrans, as part of its long-range freight mobility planning, has discussed inland ports and intermodal as potential options to reduce port truck traffic and achieve decarbonization goals.
To broadly determine the potential feasibility and operating economics for shippers of the rail shuttle-inland port concept, the reports analyze operating costs and available rail capacity, and provide an illustrative analysis of potential societal benefits to the Los Angeles-Long Beach communities such as reducing emissions, congestion, and safer highways.
Cost competitive per container
The reports also analyze several scenarios comparing inland transportation costs per container for direct truck drayage from the ports with the rail shuttle-inland port concept. A rail shuttle-inland port could be cost competitive on a per container basis for all of the scenarios analyzed – as long as the inland port is either integrated with or located near freight logistics and warehousing facilities.
Key challenges to establishing a short-haul rail shuttle-inland port include the extent of capital investment required for new terminals, the availability of rail line capacity, and community impact mitigation requirements.
“The benefits of more freight on rail, and fewer trucks on the roads, are numerous and undeniable,” said Adriene Bailey, the head of Oliver Wyman’s rail practice in North America. “The greatest untapped potential to move more trucks off the highway is to implement intermodal services in shorter haul markets. There are few places that have the density, scale, congestion, and community factors that make short-haul rail more attractive than in the port community of the Los Angeles and Long Beach markets.”
Anacostia Rail Holdings, Pacific Harbor Line, and the studies’ authors believe this work demonstrates that inland ports linked by an intermodal rail shuttle to the Ports of Los Angeles and Long Beach could have a role to play in long-term economic growth for Southern California. “We look forward to others using the study findings to conduct location-specific business cases,” Bailey added.
The reports cannot presume what terms would be acceptable to private sector stakeholders, including Class I railroads, drayage firms, and real estate owners, other than to acknowledge their need for a re-investable return on their assets and avoidance of displacement of any existing business. Similarly, the studies do not presume any specific policy position by public sector stakeholders such as the Ports, Caltrans, Metrolink, and state and federal government funding agencies and local governments. Finally, Pacific Harbor Line does not presume that it would be the operator of any such service.
About Anacostia Rail Holdings, Oliver Wyman, Leachman & Associates
Anacostia Rail Holdings
Anacostia Rail Holdings (ARH) is a privately held holding company that owns and operates freight railroads throughout the United States. Anacostia Rail Holdings provides freight services to major metropolitan centers and small communities operating on more than 600 miles of track. Anacostia Rail Holdings is the parent company of Pacific Harbor Line (PHL), which operates the rail network within the Ports of Los Angeles and Long Beach. www.anacostia.com
Oliver Wyman is a global leader in management consulting. With offices in more than 70 cities across 30 countries, Oliver Wyman combines deep industry knowledge with specialized expertise in strategy, operations, risk management, and organization transformation. The firm has more than 6,000 professionals around the world who work with clients to optimize their business, improve their operations, and risk profile, and accelerate their organizational performance to seize the most attractive opportunities. Oliver Wyman is a business of Marsh McLennan [NYSE: MMC]. For more information, visit www.oliverwyman.com.
Leachman & Associates
Leachman and Associates, LLC provides consulting and software for operations management and logistics analysis to corporations and governments. Dr. Rob Leachman, President and CEO is also a Professor of Industrial Engineering and Operations Research at the University of California at Berkeley. Dr. Leachman is the author of more than 90 technical publications and has been a member of the UC-Berkeley faculty since 1979. https://ieor.berkeley.edu/people/robert-leachman/
For further information contact:
Professor Robert Leachman
Peter A. Gilbertson
REPORT QUALIFICATIONS/ASSUMPTIONS & LIMITING CONDITIONS
Oliver Wyman and Leachman and Associates were commissioned by Anacostia Rail Holdings and Pacific Harbor Line to assess at a high level the operational, service, and economic feasibility of the rail shuttle-inland port concept for Southern California. The conclusions of the consultants do not necessarily reflect the position of Anacostia Rail Holdings or Pacific Harbor Line. Oliver Wyman, Leachman and Associates, Anacostia Rail Holdings and Pacific Harbor Line shall not have any liability to any third party in respect of this report or any actions taken, or decisions made as a consequence of the results, advice or recommendations set forth herein. This report does not represent investment advice or provide an opinion regarding the fairness of any transaction to any and all parties. This report does not represent legal advice, which can only be provided by legal counsel and for which you should seek advice of counsel. The opinions expressed herein are valid only for the purpose stated herein and as of the date hereof. Information furnished by others, upon which all or portions of this report are based, is believed to be reliable but has not been verified. No warranty is given as to the accuracy of such information. Public information and industry and statistical data are from sources Oliver Wyman and Leachman and Associates deem to be reliable; however, Oliver Wyman, Leachman and Associates, Anacostia Rail Holdings and Pacific Harbor Line make no representations as to the accuracy or completeness of such information and have accepted the information without further verification. No responsibility is taken for changes in market conditions or laws or regulations and no obligation is assumed to revise this report to reflect changes, events, or conditions, which occur subsequent to the date hereof.