National Association of Counties

Transcription

1 National Association of Counties April 28, 2011 American Railroads The Next 25 Years A Presentation by: Charlie Banks President: R.L. Banks & Associates, Inc [1]

2 Contents How Did We Get Here? Reinforcing / Supporting Trends Counterveiling Forces The Future of Freight: Growth, Congestion and Community Impacts! [2]

3 How Did We Get Here? Industry Consolidation (Dozens of Mergers) Reduced Costs Increased Pricing Power Deregulation (Staggers Act of 1980) Traffic Growth Intermodal (Especially International) Coal (Powder River Basin and Export) Passenger Services (Commuter, Intercity, LRT) Ethanol and Other Biofuels Municipal Solid Waste Oil (Going Forward, Bakken and Others) [3]

4 Fuel Prices (Greater Impact on Truck, Auto, Air) Increased Highway Congestion Increased Cost of Driving (Going Higher) Truck Driver Turnover and Average Age New Hours of Service Regulations - Truckers Increased Trucking Log Rules and Enforcement Environmental Movement [4]

5 Volatility of Oil Prices Increasing Global Demand Instability in the Middle East & North Africa Increasing Price Affects Transportation Costs BUT Oil Consumption is Not Directly Related to Price Related to Unemployment Oil-Dependent Society Railroads Offer Efficient & Logical Solutions [5]

6 Oil Consumption is Largely Price Insensitive Unemployment (Percent) Jan-08 Mar-08 Source: Energy Information Administration AND Bureau of Labor Statistics May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 Average Daily Consumption (Tens of Millions of Gallons) Average Monthly Gas Price (Dollars / Gallon) [6]

7 Airline Tickets: Fluctuates with Oil Prices $400 Avg. Airline Ticket $350 $300 $250 $200 $150 Avg Price Per Barrel $100 $50 $0 1/15/2008 3/15/2008 5/15/2008 7/15/2008 9/15/ /15/2008 1/15/2009 3/15/2009 5/15/2009 7/15/2009 9/15/ /15/2009 1/15/2010 3/15/2010 5/15/2010 7/15/2010 9/15/ /15/2010 1/15/2011 3/15/2011 Source: Energy Information Administration, Bureau of Labor Statistics AND Bureau of Transportation Statistics [7]

8 Amtrak Ticket Prices - Insensitive to Oil Prices $400 Avg. Airline Ticket $350 $300 $250 $200 $150 Avg Price Per Barrel Avg Amtrak Price $100 $50 $0 1/15/2008 3/15/2008 5/15/2008 7/15/2008 9/15/ /15/2008 1/15/2009 3/15/2009 5/15/2009 7/15/2009 9/15/ /15/2009 1/15/2010 3/15/2010 5/15/2010 7/15/2010 9/15/ /15/2010 1/15/2011 3/15/2011 Source: Energy Information Administration, Bureau of Labor Statistics AND Bureau of Transportation Statistics [8]

9 Prescription for National Gridlock 180% 160% Vehicle Miles Traveled 140% 120% Number of Highway Vehicles 100% 80% Licensed Drivers 60% 40% Residents 20% 0% Miles of Road Source: U.S. Department of Transportation, FHWA and the Bureau of Transportation Statistics [9]

10 Distribution of Operating Revenue - AAR Railroad Facts [10]

11 How Far Can a Semi Go on $500 of Diesel Fuel? [11]

12 How About a Train? [12]

13 National Rail Freight Infrastructure Capacity & Investment Study U.S. DOT estimated that rail freight would increase 88 percent from 2007 to 2035 AAR commissioned study: 55% of Class I rail miles near / at / above capacity by 2035 (no increase in passenger rail or truck to rail mode shift) $135 Billion in improvements needed to meet U.S. DOT s forecast Class I s can cover $96 Billion of this need $39 Billion would need to come from railroad investment tax incentives, public-private partnerships, or other sources [13]

14 Counterveiling Forces Limited Commercial Sites with Rail Acces Shorter Rail Contract Periods Unfunded Mandates Positive Train Control (PTC): an Integrated Command, Control, Communications and Information System Great in Theory; Poor in Practice; Lousy ROI Will Constrain Capacity and Frustrate Rail Customer Growth Bridge Management Program Five Outcomes; All Unfortunate [14]

15 The Future of Railroads: Growth, Congestion and Community Impacts! More Freight Trains, Network Congestion and Community Impacts More Passenger Trains (HSR and Other) Mitigation through Capital Improvements Mitigation through Relocation Projects Mitigation through Quiet Zones More Transloading, Industrial Parks and Freight Villages [15]

16 The Future of Railroads: Growth, Congestion and Community Impacts! More Line Sales to Fewer Buyers More Switching Contractrd Out to Short Lines Greater Focus on Intermodal and Short Hauls Non-Engineering-Driven Solutions Reduce Differential Speeds More Pubic - Private Partnerships Public Sector Faces Uphill Climb [16]

17 Thank You! Charlie Banks President: R.L. Banks & Associates, Inc [17]