(The Blue Ridge Business Journal posted the following article by Deborah Nason on its website on April 19.)
ROANOKE, Va. — Many constituencies are looking to rail to help address a myriad of problems. One of the biggest issues is an increasingly inadequate highway infrastructure, coupled with an alarming growth in demand for freight transportation services. Other concerns include public safety, the environment, dependence on foreign oil, desire for passenger rail, economic development and homeland security.
The American Association of State Highway and Transportation Officials (AASHTO), in its 2003 Freight-Rail Bottom Line Report, says, “With moderate growth in the economy – about three percent per year – domestic freight tonnage will increase by 57 percent by 2020 and import-export tonnage will increase by nearly 100 percent.”
Bringing the problem closer to home, a December 2003 Reebie Associates report on diverting highway traffic to rail, points out. “On I-81 at most times of day, about every third vehicle is a truck, and this is about double what the road was designed for.” Furthermore, while “the percentage of trucks in the I-81 traffic stream can be reduced by rail diversion . . . the sheer number of trucks in the corridor will continue to grow.”
Discussions on the state of rail frequently make reference to obstructive “choke points,” such as inadequate bridges or information technology, that impede efficiency and progress throughout the entire network. Similarly, a number of societal obstacles are serving as choke points to any progress in improving rail infrastructure and services. These choke points include:
* Lack of federal or state funding (currently and historically);
* Lack of public-private partnerships;
* Lack of strategic planning;
* Lack of a supportive federal policy;
* Lack of public understanding;
* Not a viable option for many businesses.
Lack of funding
There is no dedicated federal funding, nor state funding to support rail, says Karen Rae, director of the Virginia Department of Rail and Public Transportation. “Nobody wants to give up what little highway or transit funding they get, to switch it over to rail. But the demand on the current system exceeds the money we have.” There needs to be a balance against safety issues, she adds, when funding needs to be used to repair bridges, for example.
And money for significant improvements is not likely to come from the rail industry. As the AASHTO report explains, “The rail industry today is stable, productive, and competitive, with enough business and profit to operate but not to replenish its infrastructure quickly or grow rapidly. Market forces will continue to pressure the rail industry to streamline and downsize, to maximize revenues, and to minimize capital costs.”
“We’re dealing with decades of disinvestment in rail,” says Rae. “There is no easy solution, short of an increase in funds from federal, state and local sources.” Still, she has a proactive plan: “First, develop and communicate what the needs are for rail, and second, design an implementation plan.”
“My biggest goal is to get a base in place so that if and when revenues are available, we’ll be ready to go,” she says. “I hate to have it all go to California because we don’t have a plan and a clear set of priority projects to go.”
“In general, rail in Virginia is not a publicly owned entity,” says Fred Altizer, former local VDOT district administrator. “We have no authority to spend money on rail.”
A 2003 report by the National Association of Rail Passengers explains, “The American rail industry falls largely outside the public policy framework for transportation. While all other modes involve substantial public-private partnerships, railroads have existed since their inception almost entirely in the private sector.”
However, the railroad industry is looking for “equity” from the government, in Bev Fitzpatrick’s opinion. “From the railroads’ point of view, if they are going to compete against roads built by the federal government, then they need [financial] help with [rail] infrastructure.” Fitzpatrick, currently a Roanoke City council member, is a former economic developer who has extensively researched transportation issues.
In response to the funding challenge, Senator John Edwards recently introduced a bill to create a public-private partnership called the Virginia Rail Transportation Development Authority (VRTDA). This entity, modeled after the Virginia Port Authority, would be able to attract private capital by issuing revenue bonds to pay for rail infrastructure improvements. The bill was not successful this year; however, Edwards plans to reintroduce it next year.
Catalyst
Edwards sees the VRTDA as a catalyst. “By improving the infrastructure in Virginia, you’re starting a process to improve rail throughout the other states.” He lists other benefits to improving rail infrastructure:
* Savings. “It takes $10 million per mile to construct a highway, versus $5 million per mile to build a railroad.” He also cites rail fuel efficiency, saying that on a national average, railroads get 396 miles per gallon per ton.
* Railroad profits. “Norfolk Southern realizes there’s traffic they can attract if they improve their connections and scheduling.”
* Additional rail uses. Adding a second set of tracks (double tracking) “would help with passenger rail and just-in-time shipments. The railroad companies put freight ahead of everything else, therefore [other uses] must wait while freight trains pass.” Passenger trains do not have their own tracks; instead they share the privately owned freight tracks.
* Public good. Diverting freight to trains, to lower the percentage of trucks on the highway, will have a positive impact on public safety, environmental protection and fuel efficiency.
Fitzpatrick adds that “trains generate a lot less pollution, and it costs a lot less to run a railroad. You use fewer employees, less fuel, and move more goods.”
Planning, policy
VDOT’s Altizer has spent over 34 years in the public transportation field. He shares some of his insights and frustrations over the current state of transportation infrastructure. “In my opinion, Americans don’t do a very good job planning strategically over time. I think public policy reflects this live-for-today philosophy.”
“Long-range planning is hard to do in Virginia,” he says, “because the planning role and function lies with local government, and the economic pressure is extreme sometimes. If you have a need for revenue sources, [it is difficult to] keep land available for future transportation, because of the pressure to sell…. Anything you want to plan for, you have to reserve the corridor, and that affects the value of the land and how it can be developed.”
“We’re used to building highways every time we have a transportation problem,” says Michael Testerman, president of the Virginia Association of Railway Patrons. Speaking of improving rail infrastructure and service, he says, “It’s not as simple as looking at this as a single project. This requires a change in national policy.”
Testerman is also vice-chair of RAIL Solution, which bills itself as “Citizens working for high speed inter-modal trains to carry freight and passengers as an alternative to massive widening of I-81 in Virginia and Tennessee.”
RAIL Solution proposes a “Steel Interstate,” defined as “a separate double-track railway to serve the I-81, I-40, I-75 corridors between the northeast and the mid-south.” Train speeds would range from 80 to 110 miles per hour. “The Steel Interstate is designed for time-sensitive transportation and is reserved exclusively for next-generation … freight trains and passenger trains.” Testerman estimates that this solution would divert “at least 40 percent of existing I-81 truck traffic, plus absorb all foreseeable growth.”
“People don’t understand that they might need [improved] passenger and freight rail,” says Councilman Fitzpatrick. “People complain about I-81 and trucks, but most of their goods come by truck.”
“The TransDominion Express is one of our Chamber’s largest issues because of what it will do for commerce and economic development,” says Barbara Hartley, Vice President of Business Advocacy for the Lynchburg Regional Chamber of Commerce, and a member of the TransDominion Express steering committee. “A large part of this initiative is education – it is easier to sell people on an idea than on a product,” she says. “We’re educating people on the idea that not only do they need alternative transportation for today, but they have to improve infrastructure for tomorrow.”
Hartley also promotes rail for its economic development benefits.
Fitzpatrick takes another view. “Passenger rail is not necessarily a money-maker, but there’s a social benefit to the community. It makes us more a part of Virginia,” he says. “Western Virginia is being left behind more and more. If our area is going to stay connected, we need more ways to get to the halls of power.”
Viable option?
Bob Archer, president of Blue Ridge Beverage, says that in 1985 his business received 95 percent of its products by rail; now that number is just one percent. He attributes this change to the deregulation of the trucking industry that occurred in the ’80s and ’90s.
“I’m very much in favor of making the rail industry more [business] friendly,” he says, “but the railroads have to want it also.” It is a bottom-line decision for Archer. “Whatever happens, it has to be efficient and cost-effective for businesses to use [the rail option] at all.”
“If the cost of fuel continues to rise,” he adds, “that may have a large impact . . . Then it might make rail more attractive.”
John Smith is Director of Logistics for the Packaging Resources Group division of MeadWestvaco. He says his division does a large amount of export, shipping products from Covington to Norfolk. “We’re a large shipper, of all modes,” says Smith. “We use about 50/50 rail and truck.”
“What would really help us,” he says, “is having an intermodal hub – that’s where the region really needs help.” The Intermodal Association of North America defines “intermodal” as “transport of freight by two or more modes of transportation” such as ship-rail or rail-truck.
“When they rebuild I-81, and put tolls on, it will cost us a fair amount of money,” says Smith. “We need to find other ways to get our goods to the marketplace. When you put higher logistics costs on a product, it makes us less competitive.”
No rail sidings
“Many of our customers do not have rail sidings or do not buy enough to fill a rail car; therefore we need to use trucks. Intermodal transportation [such as rail-truck] would save on fuel and move vehicles off highways. It combines the efficiency of rail with the delivery efficiency of trucks,” says Smith.
“Intermodal transportation is the fastest growing segment of the rail industry,” says Fitzpatrick. “But unless you have a commitment from the trucking industry to use [an improved rail system], you won’t have a change.
“A lot depends on the customer and the pressures of just-in-time delivery. Today, the transportation industry is a ‘rolling warehouse.'”
Nobody knows this better than Richard Lawson Jr., vice president of H.L. Lawson & Son Inc. Just-in-time delivery is a large part of his company’s business, which receives, stores and arranges delivery of commodities. The company often repackages or processes products for their next move along the supply chain.
Rail is very important to Lawson’s company, accounting for 40 percent of product transportation. Improved freight rail would be a great boon for his business. “Being able to ship in bulk via rail to our facility in Roanoke would offer [potential customers] two very visible advantages,” namely:
* “An ability to receive just-in-time products efficiently.” He gives an example: “We would receive widgits, or raw materials, in large quantities, store them, and every day redistribute them in handfuls to their destinations.”
* “An overall savings in distribution by using the ‘bulk rate’ of rail. The railroad is the most economical way, in many instances, to ship anything to us.”
Lawson would also like to see an intermodal hub in Roanoke. “It would bring a tremendous amount of export to Roanoke.” He also sees a larger effect. “If rail service were improved, it would . . . greatly improve the marketability of distribution through our region. It could make the area a more attractive place to do business because transportation, from a distribution standpoint, makes the region more competitive with other parts of the nation.”