Rail Solutions and America s Future Prosperity Michael O Malley, July 12, 2008

Transcription

1 1 Rail Solutions and America s Future Prosperity Michael O Malley, July 12, 2008

2 Freight Railroads Deliver Every Day In 2005, U.S. freight railroads hauled enough: Wheat to make more than 400 loaves of bread for every man, woman and child in America Corn to feed 27 million dairy cows for a year Coal to supply electricity to every U.S. household Fertilizer to spread over the combined land area of Illinois, Iowa, Wisconsin, Kansas and Nebraska Newsprint to fill 11.4 billion newspapers more than half of all the papers printed in the U.S. each year Lumber to build approximately 1.1 million homes 2

3 CSX Connects the Southeast with the Nation and the Globe CSX alone includes: 21,000 route miles 1,700+ trains/day 5 million+ carloads 4,500+ locomotives 120,000+ freight cars 34,000 employees Mobile Pascagoula... Gulfport.. Charleston Savannah.Brunswick.. Wilmington Newport News Serves 70 ocean, lake and river ports. Port Manatee 3

4 Population Growth will Drive Future Consumption U.S. Population in Millions U.S. Consumption in Trillions $3.4 $4.1 $4.7 $ Source: Global Insight. Consumption is expressed in 2000 dollars. 4

5 The Southeast is at the Heart of this Growth Cumulative Population Growth Population Growth in Major Metropolitan Areas 10% or greater 5% 9.9% 2% - 4.9% Less than 2% Source: Global Insight 5

6 Transportation Demand is also on the Rise Industrial Production Population Consumption Transportation Demand Global Trade 6

7 Gateway Choices are Evolving Seattle/Tacoma NY/NJ Oakland Moderate growth continues in northern California and Pacific Northwest LA/LB Port of LA and Long Beach will continue to see strong growth from imports Source: Global Insight and World Trade Service Houston Virginia Charleston Port of New York and New Jersey will see continued strong growth Tampa Savannah Jacksonville CAGR GT 10% Strong import growth is also forecasted along the CSX southeastern network 5-10% LT 5% 7

8 Congestion is getting worse Today 2020 CSX Territory Source: USDOT FHWA Freight Analysis Framework 8

9 Highway Capacity has not Kept Pace 260% 220% 180% 140% 100% Highway Infrastructure Versus Miles Traveled Indexed: 1980=100% 60% Vehicle Miles Traveled Lane Miles Source: Department of Transportation, National Transportation Statistics 9

10 Rail Investments Look More Appealing Investment required by 2035 Freight Rail Passenger Rail Highways $ 5 Trillion $ 135 Billion $ 198 Billion Source: Rail 2007 AAR/Cambridge Study; Highway 2007 DOT Surface Transportation Study 10

11 Rail Investments Deliver Public Benefits Relatively small public investments in the nation s freight railroads can be leveraged into relatively large benefits for the nation s highway infrastructure, highway users, and freight shippers. -- AASHTO States are increasingly making public investments in freight rail (VA, FL as prime examples) Cambridge Systematics estimates $135 billion in freight rail capital needs by 2035, with railroads expected to deliver nearly $100 billion in private funds Question for federal and state policymakers: How to fill that gap? 11

12 Other Benefits of Moving Goods by Rail Rail is the most environmentally friendly way to move goods over land Rail is 3 to 5 times more efficient than trucks, moving a ton of freight 423 miles on a single gallon of fuel Shifting just 10 percent of long-haul freight from the highway to rail would reduce annual greenhouse gas emissions by more than 12 million tons Shifting long-haul freight from the highway to the railway provides significant safety benefits and drastically reduces highway maintenance expenses 12

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14 Four Pillars of Passenger Rail Access Safety Can freight and commuter operations safely coexist? Liability Is CSX appropriately protected against potential liability for injuries to passengers? Capacity Will sufficient capacity exist to accommodate growing commuter and freight demands? Compensation Are financial terms appropriate? 14

15 CSX is Committed to Infrastructure Investment CSX invests heavily in its network approximately $5 billion between now and 2010 Southeast Corridor (Chicago-to-Jacksonville) Winter Haven Integrated Logistics Center In 2007, CSX spent $1.7 billion, or 15 percent of its revenues, on capital expenditures to meet future transportation needs In upcoming federal authorization bill, pursuing public/private partnership to fund the National Gateway 15

16 The National Gateway Chicago Cleveland Pittsburgh NYNJPA St Louis Baltimore Portsmouth Memphis Wilmington Birmingham Atlanta Charleston Savannah CSXT NETWORK Full stack clearance (existing or planned) New Orleans Tampa Jacksonville National Gateway Not cleared for full double stacks 16 Miami

17 The National Gateway and Public Benefits $3.2 billion in public benefits Reduces congestion: One train carries the load of more than 280 trucks. Reduces highway maintenance costs and improves safety: Removes 20 million trucks from the nation s highways over 10 years Promotes economic development Provides competitive freight route from growing Mid-Atlantic ports to the Midwest and Southeast 17

18 National Gateway Provides Strong Return on Investment Federal = $181 Million State = $181 Million CSX = $362 Million Total Project Cost = $724 Million Federal State CSX $8 in public benefits for every $1 of public funds invested 1818

19 Conclusions To continue to prosper, America needs a robust and efficient transportation system Failure to meet our future transportation needs will limit job creation and result in lower productivity Through greater use of public-private partnerships, freight rail can deliver, but Policymakers need to adjust their mindset to match today s realities ($4/gallon gasoline, congested highways, etc.) 19