OIM 413 Logistics and Transportation Lecture 1: The Transportation Planning Process

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1 OIM 413 Logistics and Transportation Lecture 1: The Transportation Planning Process Professor Anna Nagurney John F. Smith Memorial Professor and Director Virtual Center for Supernetworks Department of Operations & Information Management Fall 2018 c Anna Nagurney 2018

2 Some Background Transportation provides the infrastructure for the movement of people and goods, and the ties that bind global economic activities. Transportation planning is essential in the complex Network Economy since without appropriate transportation networks goods that are produced cannot be delivered in a timely manner and people cannot reach their intended destinations.

3 Transportation and Logistics According to SelectUSA, spending in the US logistics and transportation industry totaled $1.4 trillion in 2016 (7.5 percent of US gross domestic product (GDP) that year).

4 Transportation and Logistics Some of the innovations in transportation: electric vehicles ride sharing companies such as Uber and Lyft bike sharing programs driverless vehicles drones.

5 Supply Chains In order to serve Professor customers Anna Nagurney efficiently, OIM 413 Logistics multinational and Transportation and- Lecture 1 Integrated supply chain networks link producers and consumers through multiple transportation modes, including air and express delivery services, freight rail, maritime transport, and truck transport.

6 A General Supply Chain

7 Examples of Supply Chains Professor Anna Nagurney OIM 413 Logistics and Transportation - Lecture 1

8 Challenges Today The challenges faced today in transportation and logistics are numerous and include: congestion, inadequate services, and deteriorating and inadequate infrastructure.

9 US Infrastructure According to the 2017 American Society of Civil Engineers (ASCE) report on the infrastructure in the US, which is issued every four years, the United States earned a grade of only D +. About $1 trillion in investments are needed in the US in terms of infrastructure (roads, airports, energy systems, dams, etc.).

10 Most Congested US Metropolitan Areas in 2017

11 The Costs of Congestion According to the latest Inrix report, congestion cost US drivers nearly $305 billion in 2017, an average of $1,445 per driver. Los Angeles was at the top of the list of the world s most gridlocked cities for the sixth straight year, with drivers spending 102 hours in congestion in 2017 during peak time periods, followed by Moscow and New York (tied at 91 hours), Sao Paulo (86 hours), and San Francisco (79 hours). Boston was the 7th most congested city in the United States. The US accounted for 10 of the top 25 cities worldwide with the worst traffic congestion.

12 The Costs of Congestion There is also a freight capacity crisis in parts of the US especially in the Northeast. The United States economy depends on trucks to deliver nearly 70 percent of all freight transported annually in the U.S., accounting for $671 billion worth of manufactured and retail goods transported by truck in the US alone.

13 Congestion and Freight Peak-Period Congestion on High-Volume Portions of the National Highway System: 2035 Federal Highway Administration

14 Traffic Congestion is Increasing Globally Traffic Congestion in India remixconcepts.blogspot.com

15 Urbanization and Congestion Today, over half of the world s population lives in cities and the United Nations is predicting that by the year 2050, 7 out of 10 people will be living in an urban area. According to INRIX, the Ford Motor Company expects that the number of vehicles on the roads will grow from about 1 billion today to between 2-4 billion during this period of time If traffic continues to increase at 3 times the rate of employment and GDP growth as it did in 2013, then the 10-day long traffic jams in China and the 2 to 3 hour (each way) daily commutes that drivers face in certain parts of the world, including Sao Paolo, Brazil, could occur in Europe and even in North America.

16 Transportation Networks Needed Also in Disasters Networks are the fundamental critical infrastructure for the movement of people and goods in our globalized Network Economy. Transportation networks also serve as the primary conduit for rescue, recovery, and reconstruction in disasters.

17 Recent disasters have vividly demonstrated the importance and vulnerability of transportation The biggest blackout in North America, August 14, 2003; Indonesian tsunami and earthquake, December 26, 2004; Hurricane Katrina, August 23, 2005; Minneapolis I35 Bridge collapse, August 1, 2007; The Sichuan earthquake on May 12, 2008; The Haiti earthquake that struck on January 12, 2010 and the Chilean one on February 27, 2010; The triple disaster in Japan on March 11, 2011; Superstorm Sandy, October 29, 2012, second costliest hurricane in US history.

18 Hurricane Katrina in 2005 Hurricane Katrina has been called an American tragedy, in which essential services failed completely.

19 The Triple Disaster in Japan on March 11, 2011

20 Superstorm Sandy and Power Outages Manhattan without power October 30, 2012 as a result of the devastation wrought by Superstorm Sandy.

21 2017 Was the Costliest Year for Natural Disasters in the United States 2017 set a record for losses from Natural Disasters. Hurricane Harvey, which made landfall in Texas in August 2017, was the most costly disaster of 2017, causing losses of $85 billion. The New York Times reports that, together with Hurricanes Irma (hitting Florida) and Maria (devastating Puerto Rico), the 2017 hurricane season caused the most damage ever, with losses reaching $215 billion.

22 The Impact of Disasters Disasters have brought an unprecedented impact on human lives in the 21st century and the number of disasters is growing. From January to October 2005, an estimated 97,490 people were killed in disasters globally; 88,117 of them because of natural disasters.

23 Transportation Planning Process We will first focus on urban transportation planning since cities are complex and such systems are large-scale. We can extrapolate what we learn from such transportation networks to other transportation systems. Phase I - Base Year Inventory Make inventory of existing network + existing traffic patterns. Origin/Destination (O/D) travel demand tables counters on roads inventory of planning factors is it industrial? what is the income distribution? types of employment.

24 Transportation Planning Process Collection of data to be used in model to predict the traffic flow pattern. The data must be extrapolated if it is to be used for predicting future traffic patterns.

25 US Interstate Highway Network

26 Transportation Planning Process Phase II - Model Building Interested in finding out relationships among parameters of the system. 3 categories of relationships 1. Trip Generation Models # of trips generated in a certain area and/or attracted to a certain area. O x, D y : O x = # of trips produced (generated) at zone x (production zone) D y = # of trips attracted to zone y (attraction zone)

27 2. Trip Distribution Models Given O x s and D y s find the origin/destination (O/D) travel demand table. Will then know how many travelers from O x will go to D y ; for all x, y pairs. O x y 1 x 1 y 2 x 2 y 3 D y

28 Transportation Planning Process Travel Demand: d xy = ko x D y f (c xy ) c xy : travel cost from zone x to zone y d xy increases as c xy decreases. 3. Traffic Assignment Models Given O/D table d xy s, find how this travel demand is distributed among different routes and modes of transportation.

29 Transportation Planning Process Relates traffic flow pattern to O/D pairs and characteristics of networks. Can be applied to: communication networks, including the Internet energy networks (oil, gas, etc.) electrical networks economic and financial networks.

30 Other Networks that Behave Like Congested Transportation Networks The Internet, electric power networks, and even multitiered financial networks behave like transportation networks!

31 Another Type of Traffic Congestion!

32 Transportation Planning Process Three Stage Model for Transportation Planning Trip Generation {Ox} {Dy} trip ends Trip Distribution {dxy} O/D demand pattern Traffic Assignment link load pattern update for congested networks

33 Transportation Planning Process Phase III - Travel Forecasts Extrapolation - to predict parameters for which we have data from Phase I. Data from Phase I may be crude. Phase IV - Network Evaluation Goal is to compare networks. What is the traffic that will be generated by the 3 or 4 networks - evaluation of both costs + benefits.

34 Amherst Area View from Mt. Sugarloaf Travel Monkeys Gallery

35 References Beckmann M., McGuire C.B., Winsten C.B. (1956) Studies in the Economics of Transportation. Yale University Press, New Haven, Connecticut; also published as Rand-RM-1488-PR, Rand Corporation, Santa Monica, CA, May 12, Sheffi Y. (1985) Urban Transportation Networks: Equilibrium Analysis with Mathematical Programming Methods. Prentice-Hall, Englewood Cliffs, New Jersey urban trans networks.pdf Nagurney A. (1999) Network Economics: A Variational Inequality Approach, second and revised edition. Kluwer Academic Publishers, Boston, Massachusetts Nagurney A. (2002) Network Economics (Fulbright Lectures) lectures/fulmain.html

36 Additional Reading For additional background material, see the Virtual Center for Supernetworks website: Pocket Guide to Transportation (2018), Bureau of Transportation Statistics (available online)