Freight: Railroads June 2011

Freight: Railroads June 2011

Technical Memorandum I-15 Corridor System Master Plan Freight: Railroads Prepared for: I-15 Mobility Alliance June 2011 Prepared By: Barry Banks- WSA David Hurst- WSA Alex Barnum- WSA Contributors: Dan Andersen Bardia Nezhati, PE, PTOE In Association with

Table of Contents Freight Overview... 1 Railroads... 5 I-15 Railroads... 6 Current Volumes... 9 Future Forecast (2035)... 12 Freight Railroad Initiatives and Issues... 14 Freight Railroad Trends and Issues affecting the I-15 Corridor... 16 Appendix A... 21 Freight Data Methodology and Output... 21 Freight Data Methodology... 22 Freight Output by State... 30 Arizona... 30 California... 33 Nevada... 37 Utah... 39 List of Acronyms... 43 Works Cited... 45 List of Exhibits Exhibit 1: Total Freight Tonnage (millions) and Value ($millions)... 1 Exhibit 2: United States Population by Region... 2 Exhibit 3: Mode Decision Making for Freight... 3 Exhibit 4: U.S. Freight Revenue Ton-Miles 2007... 5 Exhibit 5: 2009 Class I Railroad Tons Originated... 6 Exhibit 6: Primary U.S. Freight Rail Corridors... 7 Exhibit 7: Types of Railcars... 8 Exhibit 8: Service Delivery Example... 9 Exhibit 9: Current Train Volumes vs. Capacity... 11 Exhibit 10: Level of Service Descriptions... 11 Exhibit 11: Future (2035) Trains per Day... 12 Exhibit 12: Future (2035) Corridor Volumes Compared to Current Capcity (without improvements)... 13 Exhibit 13: Future (2035) Train Volumes Compared to Capacity (with improvements)... 13 Exhibit 14: Southern California Rail Network... 17 Exhibit 15: Southern California Intermodal Terminals... 18 Exhibit 16: BNSF and UP Lines Eastbound from Colton... 19

Freight Overview Freight and goods movements in the United States are vital to a healthy economy and sustainability. A reliable network is essential to move freight between states by truck, rail, or any other mode. Recent economic downturns have negatively affected the nation and the world. The economic troubles have limited the spending capability of U.S. consumers, thus lowering the demand of goods. However, demand for goods is recovering, and goods movement continues to be essential to support the growing population of the United States. In 2007, nearly 18.6 billion tons of goods worth approximately $16.5 trillion were moved on the nation s transportation network, which equates to 51 million tons of goods valued at more than $45 billion a day moved throughout the country on all transportation modes (FAF 2010). This is estimated to increase to 26.7 billion tons by 2040 with a projected value of $39.3 trillion. This is shown in Exhibit 1. Exhibit 1: Total Freight Tonnage (millions) and Value ($millions) 30,000 $40,000 25,000 20,000 $35,000 $30,000 $25,000 15,000 $20,000 10,000 5,000 $15,000 $10,000 $5,000 2007 2040 $ 2007 2040 Export Import Domestic Source: FAF 2010 As shown in Exhibit 1, most of the freight traffic in the U.S. is domestic movement between states. In 2007, 89 percent of all goods tonnage was domestic with imports at seven percent and exports at four percent. This ratio is projected to decrease for domestic tons in 2040 as imports and exports increase to nine and seven percent, respectively. The value of goods follows the same trend with domestic freight at 81 percent of the total value of goods in 2007, while imports were at 12 percent and exports were seven percent. Imports and exports are An estimated 129 million tons of goods worth $168 billion are expected to travel along I-15 annually by 2040. 1

projected to increase in 2040 at a greater rate than domestic freight. In 2040, domestic goods will total 75 percent, imports at 14 percent, and exports at 11 percent of the $39.3 trillion projected value. Interstate 15 through the four-state area is a primary corridor for not only passengers but also freight and goods movements. The corridor acts as a natural avenue for truck movements out of the ports and agricultural regions of Southern California and onward to major cities such as Las Vegas and Salt Lake City. The I-15 corridor also helps connect the region to the rest of the U.S. Goods traveling to the Midwest, Great Lakes, and Northeast states travel north along I-15 before heading east on I-70 or I-80. With almost 24 million people living in the counties along the I-15 corridor and 16% (Exhibit 2) of the Continental U.S. population living within these four states, I-15 is an economic lifeline to these communities and a vital connection for other regions. Through analysis of areas serviced by freight and goods by I-15, it is estimated that 70 million tons of goods traveled along I-15 at a value of $68 billion in 2007. These values are expected to increase to 129 million tons worth $168 billion by 2040 (FAF 2010). Exhibit 2: United States Population by Region The choice of how goods travel to the various markets within the U.S. is determined by the commodity. If the shipment is an extremely time sensitive item and needs to arrive at the destination quickly, the shipment would travel by air. However, this will be costly to all parties involved. If it can be delivered in a more flexible timeframe and cost is an issue, rail might be the more efficient way to ship the item(s). Exhibit 3 illustrates the dynamic between cost and performance of each freight mode type. Performance deals with the speed 2

of delivery, reliability of the mode to keep schedule, and flexibility of that mode to accommodate the cargo. The size of the bubble in the graphic is also representative of the popularity of that mode. Truckload shipments are the most cost/performance dynamic, and this applies internationally as well. Exhibit 3: Mode Decision Making for Freight (Less then Truck Load) Source: Wilbur Smith Associates Through this chapter, the various modes of freight transportation will be examined and issues and opportunities will be addressed. The goal for freight movement is similar to that for commuters that utilize I-15 on a regular basis: Improve commute time and condition Address existing issues while planning for the future Identify obstacles and events that will affect goods movements along I-15 and connecting routes Outline potential projects and other multi-state efforts that can benefit the freight community Data used or this document come primarily from national sources. Specific facts, projects, and figures were used within the discussion to help understand and explain the issues surrounding goods movement along the I-15 corridor. However, in order to gain a comprehensive view of the area by mode, sources from the FHWA, BTS, and NHTSA were used. 3

Among these, the most utilized was the Freight Analysis Framework (FAF) database. The FAF database was initially released in 2000 and was updated in 2005. The third iteration (FAF-3) contains forecasts for freight flows at five year intervals out to 2040, using 2007 (prerecession) as the base year. However, the 2009 secondary year was adjusted to capture the economic downturn and recognize the change in volume flows. FAF-3 will provide information for 114 domestic regions, including 64 metropolitan areas. The data will cover all 50 states including those portions of states not included in metropolitan areas. For the I-15 CSMP Project, the FAF-3 data were disaggregated to the county of origin and destination (OD) pairs by truck and rail. The most commonly used methods rely upon surrogate variables to proportionally allocate inbound and outbound freight flows to counties within FAF regions. In some cases, freight is simply allocated in proportion to a surrogate variable, while in other cases it is allocated by multiple surrogate variables using a regression model. The methodology used to complete the disaggregation and identify the route this data will take, as related to I-15 specifically, is outlined in Appendix A. In addition, the individual state summaries are also included in Appendix A. 4

Railroads In 2007, freight railroads accounted for 42.7 percent of the revenue-ton miles for all commodities transported nationally (see Exhibit 4). In 2009, U.S. freight railroads operated over 1,363,000 freight cars on 169,000 miles of track. Exhibit 4: U.S. Freight Revenue Ton Miles 2007 Source: Bureau of Transportation Statistics There are two basic types of freight railroads that own track and operate in the U.S.: Class I and short line. Class I Railroads are classified as large, line haul, multi-state railroads that had operating revenue of $378.8M or more in 2009. Other railroads of interest include those with much lower operating incomes that serve discrete purposes or smaller areas. The latter includes short line railroads. The following analysis will concentrate on Class I railroads although short line railroads are also of interest in specific areas of the I-15 corridor. In 2009, U.S. Class I railroads operated 24,047 locomotives on 160,781 miles of track, of which over 62,000 miles was high density A track. These same railroads owned over 416,000 freight cars in service. An additional 840,000 freight cars were owned by other parties but were transported by Class I railroads. This includes a very large number of automobile transporter cars. Class I railroads transported 9.88 million intermodal units in 2009, consisting of containers and trailers, and an additional 26 million carloads of bulk commodities. In total, almost 1.7 billion tons was moved by Class I railroads in 2009. The breakdown, by commodity, is shown below in Exhibit 5. Although the predominate tonnage carried by Class I railroads is accounted for by bulk cargo, this can be misleading. Although bulk cargo accounts for the greatest tonnage, general cargo, consisting of containers, autos and break bulk accounts for a much greater volume in comparison to tonnage. 5

Exhibit 5: 2009 Class I Railroad Tons Originated Source: Bureau of Transportation Statistics I-15 Railroads The two largest U.S. Class I railroads are Burlington Northern-Santa Fe (BNSF) and Union Pacific (UP), and these are the only Class I railroads that operate in the four state I-15 study area. Exhibit 6 shows the Primary Freight Rail Corridors in the U.S. The extent of the BNSF and UP system in the four state I-15 study area can immediately be seen. The BNSF mainline track originates in Southern California and proceeds eastward across Arizona and New Mexico to Texas where it joins the BNSF track network serving the Midwest. This BNSF Transcon is an almost entirely double-tracked route from Los Angeles to Chicago. From Los Angeles the line heads east through San Bernardino County, over the Cajon Pass to Barstow, then east to Arizona, New Mexico and Texas. Near Dalhart, Texas, the line connects with other BNSF lines serving the eastern half of the U.S. The UP track in Southern California, Arizona, Nevada and Utah provides service to a very wide portion of the region, including Southern California, Southern Arizona and virtually all of the urban areas in Nevada and Utah. UP's Sunset (or Yuma) line runs from Los Angeles to El Paso, heading through Colton to Palm Springs and southeast to Yuma and Tucson on its way to El Paso. UP's Palmdale line runs from Cajon to Palmdale and Mojave. At Mojave, the Tehachapi Loop line is used by UP and BNSF to access the Central Valley at Bakersfield. UP's line to Las Vegas and Salt Lake City parallels the I-15 corridor at some distance to the west. 6

Exhibit 6: Primary U.S. Freight Rail Corridors Source: AAR National Rail Freight Infrastructure Capacity and Investment Study With 24 percent of all freight cars handled by the Union Pacific originating or terminating in Southern California, the Sunset Route is a key corridor for North American railroads. Less than one quarter of the Sunset Route had a second double-track when Union Pacific acquired it in 1996 as part of the merger with Southern Pacific. Today, more than 60 percent of the 760-mile route is double track. UP's ultimate goal is to double track the entire Sunset Route from Los Angeles to El Paso 1. BNSF and UP are almost equal in terms of operating revenue ($14 billion annually), and each is approximately twice the size of the next largest (CSX and Norfolk Southern). A comparison of BNSF and UP reveals many similarities, as shown below. Per the railroad s reported data 2, the operating miles are the same number because of shared track rights. For example, there is one segment of track near Barstow, California, that is owned by BNSF but is used by both railroads. This track segment has the potential to affect operations of both railroads since it serves a very heavy demand. BNSF UP Miles of road operated 32,205 Miles of road operated 32,205 Miles of road owned 23,228 Miles of road owned 26,687 Freight cars in service 112,779 Freight cars in service 136,345 Locomotives in service 6,357 Locomotives in service 8,614 1 http://www.uprr.com/newsinfo/releases/capital_investment/2005/0630_sunset.shtml 2 www.bnsf.com and www.up.com, 2011 7

A large percentage of the general cargo that passes through Western U.S. ports is shipped by rail. General cargo (both imports and exports) accounts for 92 percent of the tonnage shipped through the Port of Los Angeles (see Exhibit 10 in Freight-Ports Tech Memo). The Port of Long Beach handles more liquid bulk cargo, therefore the percentage of general cargo is less than 73 percent (see Exhibit 13 in the Freight-Ports Tech Memo). Line haul railroad service for both ports is provided by BNSF and UP. Therefore, the amount of the inbound general cargo not carried by truck is almost exclusively rail shipments. The rail coverage is extensive. However, there is no direct freight route from San Diego to Colton. Freight service from San Diego, through the port and border crossings, must use track rights on the Pacific Surfliner route to reach the national freight network. The Surfliner is the passenger rail line operated by Amtrak connecting San Luis Obispo, Santa Barbara, Los Angeles, and San Diego along the Southern California coast. Railcars in Use The following illustrate railcars typically seen in service on the BNSF or UP lines. Car carriers and flatcars used to transport containers and break bulk general cargo are shown in Exhibit 7 along with an open hopper used for mineral products. Exhibit 7: Types of Railcars Facilities and Yards Both BNSF and UP have extensive facilities (in addition to track) throughout the four state study area. These facilities include yards, shops, operations centers, signal systems and rolling stock. Yard and intermodal transfer facilities are located in most urban areas throughout the system to facilitate the bidirectional transfer of cargo between railcars and 8

trucks. Train make-up yards also exist in or near urban areas where loaded railcars are joined together with locomotives for entry to the line haul system. Grade Crossings Both railroads operate and maintain a large number of grade crossings. These are protected by a variety of sign/signals from simple warning signs to fully automated gated crossings. The type of grade crossings present on a particular track segment has a large effect on permissible train speed and capacity. System capacity is discussed in the following section. Service Delivery The term service delivery is used to describe the commodity s journey from origin to destination and the various modes of transportation used. Intermodal transfers are an important component of service delivery since they add time and cost to the shipment. Each type of commodity shipped by rail undergoes a different service delivery process; however, the process can be illustrated with the following example (Exhibit 8) of imported general (containerized) cargo. Exhibit 8: Service Delivery Example Shipper Retailer: IMC, Other Third Third Party Party Ocean Ocean Carrier Carrier Service Railroad Ocean Trucker Carrier Terminal Port Railroad Port Ocean Trucker Carrier Terminal Assets Leasing Company Container DST Car Containers Chassis Source: Wilbur Smith Associates Current Volumes In September 2007, the American Association of Railroads published the National Rail Freight Infrastructure Capacity and Investment Study (AAR Capacity Study). This study is considered the definitive reference for current (2007) operations and future forecasts. The AAR Capacity Study notes that significant differences exist between Eastern and Western Railroads in terms of the typical number of cars per train. This is because 9

geography and topography allow Western railroads to operate longer trains. This is particularly true where trains are serving either bulk or containerized shipments. Containerized shipments can be either an individual intermodal container or trailer on flatcar. A typical Western railroad train carrying this type of load will have up to 50 percent more cars than an Eastern railroad train. The capacity of a specific track segment to handle train volume is generally measured in trains/day, and this capacity depends on several factors: Track configuration single track with sidings, or double/multiple track Track Control System Automated Block Signaling (signals control track block usage), Centralized Traffic Control (automatic, continuous monitoring and control), or Track Warrant Control (manual/permissive control) The train type using the track Group 1 (bulk cargo on slow moving trains), Group 2 (intermodal and car carriers that tend to operate at higher speeds), Group 3 (passenger trains that require a higher margin of safety) Single track with sidings has a capacity of between 16 and 48 trains/day depending on the control system and the mixture of train types using the track. This range extends from 16 trains/day when multiple train types use the track and track warrant control is used to 48 trains/day for single use train types with automatic signaling or centralized control. Double track has roughly double the capacity of single track with the same usage and controls in use. Exhibit 9 shows 2007 primary rail corridor volumes and track capacity (source: 2035 AAR Capacity Study). This analysis indicates that only the UP segment between Southern California and Tucson was operating at a level exceeding 80 percent of capacity (LOS E). Exhibit 10 delineates the classifications of the different levels of service. Volume is the number of trains that use the track per day. Capacity is the maximum number of trains that the track could accommodate per day, as explained above. 10

Exhibit 9: Current Train Volumes vs. Capacity Source: AAR National Rail Freight Infrastructure Capacity and Investment Study Exhibit 10: Level of Service Descriptions Source: AAR National Rail Freight Infrastructure Capacity and Investment Study 11

Future Forecast (2035) Future projections for train volumes were analyzed using the US DOT s Freight Analysis Framework (FAF) Version 2.2, per the AAR s Capacity and Investment Study. Since this version of the FAF used 2005 as a base year, there may be some differences between this data and the FAF 3 data used for other sections of the I-15 Study. Exhibit 11 shows the estimated number of trains per day using the primary freight rail corridors in the year 2035. Exhibit 11: Future (2035) Trains per Day Source: AAR National Rail Freight Infrastructure Capacity and Investment Study Exhibit 12 shows the estimated 2035 train volume using the primary rail corridors without any planned improvements. Exhibit 13 shows the same volumes with all network improvements incorporated. These improvements include track, siding, control system and yard improvements to increase system efficiency and capacity by 2035. While it is beyond the scope of this report to describe the type and extent of improvements needed to the national rail system, these two exhibits indicate the importance of implementing these improvements. It has been noted that future train traffic between Southern California and Northern Utah could potentially grow slower than what was shown in the AAR Report. In the past, many trains running this corridor were headed from Southern California to the Midwest. However, Union Pacific has since been routing these trains from Southern California to El Paso, TX, to the Midwest. In 2007, 30 to 35 trains per day ran between Southern California and Northern Utah. That number has since decreased to about 15 trains per day. While some of that is definitely due to the economic downturn, much of it is due to Union Pacific using the highly efficient Sunset line (Kuhn). 12

Exhibit 12: Future (2035) Corridor Volumes Compared to Current Capcity (without improvements) Source: AAR National Rail Freight Infrastructure Capacity and Investment Study Exhibit 13: Future (2035) Train Volumes Compared to Capacity (with improvements) Source: AAR National Rail Freight Infrastructure Capacity and Investment Study 13

Freight Railroad Initiatives and Issues There are a number of significant trends and issues that will affect future capacity and efficiency of the nation s freight rail network. Among them are: Investment Capacity The ability of Class I railroads to implement necessary improvement depends on sufficient profitability to continue to make capital investments. The AAR 2035 National Rail Capacity Study notes that Class I railroads need to roughly triple their investment to achieve the capacity necessary by 2035. Achieving the 2035 capacity identified in the previous section will require approximately $135 billion in capital investment over the next 25 years, over $5 billion per year. Unfortunately, railroads have been affected by the current recession, and it will be difficult to meet this level of investment until the economy recovers. According to current reports about railroad maintenance budget and capital projects, railroads plan to spend $12 billion in 2011 (Progressive Railroading 2011). This total is across all railroads (Class I, passenger, short-line, etc) and includes maintenance, expansion projects, and locomotive purchases. However, it is an increase over 2010 and shows a desire to improve system capacity to meet future demand. Increased Efficiency The AAR Capacity Study notes that the Class I railroads intend to generate the necessary revenue through growth and productivity improvements. Many of the operating improvements necessary to generate growth in revenue ton-miles are within the capability of the railroads and are being implemented. The onset of the recession caused a drop in demand for rail shipments. As a result, there was a 17 percent drop in freight rail traffic between 2007 and 2009. The latest data from 2010 indicates that BNSF and UP national carloads have increased approximately 7 percent in comparison with 2009. System Capacity Improvements System capacity improvements will allow more trains to operate on the system. The configuration of individual track segments, the location and length of sidings, the track control system in use and any geometric limitations will have a definite effect on capacity. Similar to automobiles operating on a freeway, a single point of congestion affects throughput on the entire facility. As the railroads continue to upgrade their physical system, the I-15 Alliance might be helpful in resolving the state or local issues that arise and in advocating for continued federal investment in railroad infrastructure. Longer Trains As noted earlier in this section, trains operating on Class I railroads in the west tend to be longer than those operating in the east. Since 2009, BNSF, in particular, has begun operating even longer trains in the west than before. In August 2009, the BNSF News reported that the railroad had operated a 12,000 ft. long train with 7 locomotives from the Southern California docks to Clovis, New Mexico. Such train sets allow the railroad to achieve operating efficiencies and cost savings over smaller make-ups. This arrangement appears to be particularly efficient when large amounts of common cargo are being transported to a single 14

destination. There are both challenges and limitations associated, as well, but this appears to be another tool the railroads will use when feasible to achieve greater efficiency. Expanding Market Share The nation s Class I railroads have the ability to increase their share of the line haul goods movement market. This could come from drastically increased fuel costs coupled with the inherent advantage of railroads in cost per revenue ton-mile. It is not certain that a tipping point for fuel cost exists since there are many other factors, however the theory is sound. The Class I railroads are also beginning to service more short-haul trips. This represents an expansion into the short-haul market, as opposed to a reduction in their services to the longhaul market. Therefore, these trips are in addition to the long-haul trips that the Class I railroads continue to carry out. Class I operators are exploring the potential for more short rail movements to increase frequency and meet the needs of some customers. If this trend is beneficial to both carrier and shipper, then it could be adopted elsewhere and cause a reduction in truck traffic which currently moves the goods. Loss of Short Line Carriers There is a current trend toward fewer and fewer short line railroads. Some public agencies in the I-15 Alliance have expressed concern over the loss of these short line railroads and the consequent reduction in services available to stakeholders in certain states. Federal Standards Railroads are a for-profit enterprise and do not like uncertainty. To the extent that federal regulations and standards are consistent with the railroad s needs, federal standards should not affect profitability or the ability of the railroads to make the significant investments needed. In the 2011 session of Congress, there are two proposals in the senate to try increase competition in the freight rail sector. The authors of these bills feel that options for rail shippers are becoming increasingly limited, leading to unreasonable increases in costs for shippers. The Associate of American Railroads, which represents the large Class I railroads, opposes these two measures. One of the measures has passed committee 14-1. Two years ago (2009), the same type of measure was put forth and passed committee but never made it to the senate floor. The House of Representatives is not considering (in 2011) any similar measures (Transport Topics 2011). Green Railroad Initiatives There are a number of sustainability initiatives being undertaken by the Class I railroads. More and more railroads are making the move to implement their own green strategies by reducing emissions, cutting fuel use or boosting the energy efficiency of their locomotives, and improving engineer and employee training. For example, UP has been using a dieselbattery hybrid switch locomotive to reduce emissions in the rail yards. Ten "Green Goat" locomotives are used in California, most of them in the Los Angeles area 3. Similarly, BNSF operated the rail industry s first ethanol unit train service and remains an industry leader in 3 http://www.uprr.com/she/emg/index.shtml 15

ethanol transportation solutions 4. Many railroads, as well as other commercial and public transportation users, have joined the EPA's SmartWay Transportation Partnership, which is a collaborative effort to increase energy efficiency while reducing greenhouse gasses and air pollution. Public-Private Initiatives Although the nation s Class I railroads operate as for profit enterprises, situations do occur where it is in the public s interest to invest in railroad infrastructure. In 2004 the I-95 Coalition commissioned a Mid-Atlantic rail Operations Study (I-95 Corridor Coalition Mid- Atlantic Rail Operations Study Interim Benefits Assessment, February 2004) that identified a number of Coalition benefits that would accrue from public investment in railroad infrastructure. One significant project that emerged was the Shellpot Bridge in Wilmington, Delaware. When this freight rail bypass bridge failed it suddenly became important to the State of Delaware, the City of Wilmington and Norfolk Southern Corporation to return the bridge to service. The State of Delaware financed the repair in exchange for tolls to be paid by Norfolk Southern until the state-issued bonds were re-paid. (http://www.bepress.com/rne/vol7/iss1/6/) This example illustrates the potential available through such innovative public-private arrangements when the benefits to the railroad and the public coincide. Freight Railroad Trends and Issues affecting the I-15 Corridor Most of the national issues and trends cited above also affect UP and BNSF service in the 4 state study area, and some have the potential to affect the I-15 corridor. Southern California Los Angeles Ports to Colton and the Cajon Pass The greatest interaction between freight railroads and the highway network, including I-15 and its connectors, occurs in Southern California. The nature of freight movement to and from the ports of Los Angeles and Long Beach means that a large percentage of this movement occurs by rail. Rail shipments from the ports are of two basic types: long distance movements to remote markets, and short haul movements to warehouses and distribution centers in Southern California s Inland Empire. Exports through the ports follow the same pattern in reverse. As discussed earlier, only two Class I railroads operate in the study area, BNSF and UP. Freight rail trains emanating from the ports utilize the Alameda Corridor to connect to the mainline and other distribution lines. BNSF operates one double-track mainline that extends from just east of downtown Los Angeles to Barstow. UP utilizes track rights on this BNSF line from Los Angeles to Daggett to connect to connect to the UP line to Las Vegas and Salt Lake City. UP also utilizes the San Gabriel and Alhambra lines to connect with the UP Yuma line at Colton. The entire network from the Alameda Corridor terminus to Colton (south of the Cajon Pass) is shown in Exhibit 14. 4 http://www.bnsf.com/communities/responsible_care/pdf/environmentsummary.pdf 16

Exhibit 14: Southern California Rail Network Source: SCAG Inland Empire Railroad Mainline Study, June 2005 The same track network is used by trains delivering goods to inland warehouses and distribution centers and for transcontinental shipments. Most of the inland intermodal facilities are located in Riverside County where the short haul loads are transferred to trucks or warehouses. There are two issues that affect this track network and distribution system: capacity and locomotive emissions. Track capacity issues are being addressed by the railroads by construction of new track and more efficient routing of trains. The primary movements affecting the I-15 corridor are trains exiting the Southern California network on the BNSF mainline over Cajon. In 2010 approximately 115 freight and 6 passenger trains, daily, were forecasted to utilize this corridor. By 2025 this volume is expected to increase to approximately 175 freight and 8 passenger trains (SCAG 2005). The location of intermodal terminals in Exhibit 15 shows that freight moving from the ports to inland transshipment points and warehouses is concentrated near and along I-15 in Ontario, San Bernardino and Riverside, CA. While much of these goods are delivered to local destinations in Southern California by truck, a good deal is shipped by long haul truck along I-15. The goods that subsequently move by truck along I-15 are accounted for in the FAF and in the analysis completed as part of this master plan. The local shipments are accounted for in the CALTRANS, SCAG and SANBAG models. The benefits of electrification of the Southern California network were studied in 2008 by CALTRANS; however, specific policies and regulations have not yet been adopted. The 2008 CALTRANS study estimated that locomotive emissions in the South Coast Air Quality 17

Management District were equivalent to 350 large factories, so this initiative may be studied further as the region struggles to attain conformity with federal air quality standards. Exhibit 15: Southern California Intermodal Terminals Source: CALTRANS Electrification of the Freight Rail Network from the Ports of Los Angeles and Long Beach to the Inland Empire, May 2008 Southern California Cajon Pass to Daggett and Colton to Yuma The BNSF mainline track in this segment is also used by UP. At Daggett the track splits with the BNSF mainline continuing east to Arizona, New Mexico and Texas and the UP turns north to Las Vegas and Salt Lake City. Although this track segment has very high capacity, it also has very high demand. Exhibit 16 shows this track network. This track segment has two mainline tracks which are reverse signaled under centralized traffic control. Some short segments have three tracks or sidings for storage of slower moving trains during peak periods. Future capacity of this shared, BNSF-owned track is a significant challenge since both railroads rely on this segment for all shipments that don t operate on the UP Yuma line. Additional capacity improvements might include additional three track segments or longer sidings for storage of longer trains (see below). 18

Exhibit 16: BNSF and UP Lines Eastbound from Colton Source: SCAG Inland Empire Railroad Mainline Study, June 2005 California-Nevada-Utah As noted during the I-15 Mobility Alliance Freight Committee meeting on March 16, 2011, traffic has decreased recently on the UP mainline track that parallels I-15 to the west. The reported volume is approximately down to 15 trains per day. Ostensibly, this is due to more efficient routing of trains with goods that have destinations in the Midwest on alternate routes rather than a lessening demand for service to Las Vegas, Salt Lake City and points east. This line remains of significant interest to both the I-15 and I-80 corridors since it parallels I-15 and connects with the UP east-west mainline at Salt Lake City. During this decrease in activity, it would be a good time to address projects than could benefit I-15 and the region in the future. Projects like extending track sidings, replacing rails and ties, and upgrading yard facilities at freight origins and destinations could increase the routing potential along this track. Freight which could be rerouted onto the rail from I-15 includes some commodity items from the I-80 corridor and various minerals and chemicals. These types of cargo are historically shipped by rail and forecasted to increase in volume into 2040, according to the FAF data. Currently, coal and nonmetallic mineral products are huge export products from Utah going to Southern Nevada and Southern California by rail. According to FAF data, 1.28 million tons of coal are shipped to Southern California, and 1.4 million tons are shipped to Southern Nevada. 250,000 tons of nonmetallic mineral products are shipped to Southern Nevada. Basic chemicals, gravel, and milled grain products are also shipped by rail, making up over 50,000 tons of shipments to Southern California and Southern Nevada. Currently, 19

rail shipment from Southern Nevada are limited to sand 24,000 tons going to Southern California and 9,000 tons going to the Wasatch Front. The main rail shipments from Southern California to Southern Nevada and Northern Utah include 30,000 tons of base metal articles to Southern Nevada and 6,000 tons of base metals to Northern Utah. The following commodities may be good candidates for switching to rail, as they are currently major truck shipments within the I-15 mega-regions yet in some cases could go by rail: From Utah: Basic chemicals, non-metallic minerals and some types of milled grain products; From Clark County: non-metallic minerals, non-metallic mineral products, and natural sands; From Southern California: non-metallic mineral products, some types of milled grain products, and some types of coal or petroleum products. Rail Shipments to/from Mexico via Inland Ports The tonnage and value of rail shipments to and from Mexico are addressed in Tables 1-4 (beginning on page 17) of the Freight-Ports Technical Memorandum. These shipments are quite small in comparison with the U.S. Class I railroads domestic shipments, but are expected to grow as indicated in the ports technical memorandum. They are accounted for in the FAF. 20

Appendix A Freight Data Methodology and Output 21

Freight Data Methodology The IHS Global Insight TRANSEARCH database may be considered the best available commercial data product for nationwide county-level commodity flows. However, this product is costly to purchase. By contrast, the U.S. Federal Highway Administration s (FHWA) Freight Analysis Framework (FAF) database is free. Differences do exist in the level of detail supplied by both data sources from commodity types to levels of geographic coverage. The FAF database was initially released in 2000 and was updated in 2005. The third iteration (FAF-3), when fully deployed later this month, will include freight flow information and forecasts through Year 2040. FAF-3 uses 2007 (pre-recession) as the base year and will provide information for 114 domestic regions, including 64 metropolitan areas. The data will cover all 50 states including those portions of states not included in metropolitan areas. FAF-3 will contain forecasts for freight flows at five year intervals from 2010 to 2040 using 2007 as the base year. For illustration, Exhibit A-1 shows FAF-2 regions and geographic areas, and FAF-3 coverage is expected to be similar. By contrast, the TRANSEARCH database provides freight flow estimates at the county level. County level data is necessary to identify freight origins and destinations and perform the capacity analysis required for the I-15 CSMP. However, I-15 CSMP objectives do not require the additional commodity categories available with TRANSEARCH, and the high cost of acquiring the data is not warranted. Therefore, the following steps are recommended to maximize value for the project and provide sufficient utility for commodity flow analysis: utilize the FAF-3 dataset in lieu of TRANSEARCH disaggregate the FAF-3 database to the county level for selected counties in the 4- state study area to permit use of the forecast for analysis The following sections describe a phased scope of work, including methods successfully used in the past for similar adjustments to the FAF, and a proposed schedule and budget. Potential schedule impacts to the I-15 CSMP project have been considered, and the following approach is suggested as the most suitable. 22

Exhibit A 1: Geographic Areas Used In FAF 2 FAF aggregates the freight flow and commodity data to the geographic areas shown in Exhibit A-1. Although the FAF data is coded for specific origins and destinations, it does not provide visibility of specific freight flows within these areas. For purposes of the I-15 CSMP it will be necessary to disaggregate the FAF regional and state data down to the county level for select counties within the 4-state study area. It is also necessary to separate the existing FAF dataset from regions into a county level geography while distinguishing inbound, outbound, and local traffic for each county. The output from this effort will be a dataset with identified commodity flows per county by the 43 FAF commodity codes, two-digit Standard Classification of Transported Goods (SCTG), as shown in Table A-1. The most commonly used methods for FAF data disaggregation rely upon surrogate variables to proportionally allocate inbound and outbound freight flows to counties within FAF regions. In some cases, freight is simply allocated in proportion to a surrogate variable. In other cases, freight is allocated by multiple surrogate variables using a regression model. Previous studies found that employment by industrial sector is a reasonable surrogate variable, and the production and attraction commodities can be allocated based on employment share by the producing and consuming sectors. The data source for the employment share data is the U.S. Census Bureau s County Business Pattern (CBP). Other studies have used Value of Sales from the Census of Agriculture and Census of Manufacturing as a proxy by which to disaggregate flows of agricultural and manufactured products. 23

Table A 1: Commodity Codes Used In FAF SCTG Commodity Commodity Description 01 Live animals/fish Live animals and live fish 02 Cereal grains Cereal grains 03 Other ag prods. Other agricultural products 04 Animal feed Animal feed and products of animal origin, n.e.c. 05 Meat/seafood Meat, fish, seafood, and their preparations 06 Milled grain prods. Milled grain products and preparations, bakery products 07 Other foodstuffs Other prepared foodstuffs and fats and oils 08 Alcoholic beverages Alcoholic beverages 09 Tobacco prods. Tobacco products 10 Building stone Monumental or building stone 11 Natural sands Natural sands 12 Gravel Gravel and crushed stone 13 Nonmetallic minerals Nonmetallic minerals n.e.c. 14 Metallic ores Metallic ores and concentrates 15 Coal Coal 16 Crude petroleum Crude Petroleum 17 Gasoline Gasoline and aviation turbine fuel 18 Fuel oils Fuel oils 19 Coal-n.e.c. Coal and petroleum products, n.e.c. 20 Basic chemicals Basic chemicals 21 Pharmaceuticals Pharmaceutical products 22 Fertilizers Fertilizers 23 Chemical prods. Chemical products and preparations, n.e.c. 24 Plastics/rubber Plastics and rubber 25 Logs Logs and other wood in the rough 26 Wood prods. Wood products 27 Newsprint/paper Pulp, newsprint, paper, and paperboard 28 Paper articles Paper or paperboard articles 29 Printed prods. Printed products 30 Textiles/leather Textiles, leather, and articles of textiles or leather 31 Nonmetal min. prods. Nonmetallic mineral products 32 Base metals Base metal in primary or semi-finished forms and in finished basic shapes 33 Articles-base metal Articles of base metal 34 Machinery Machinery 35 Electronics Electronic and other electrical equipment and components and office equipment 36 Motorized vehicles Motorized and other vehicles (including parts) 37 Transport equip. Transportation equipment, n.e.c. 38 Precision instruments Precision instruments and apparatus 39 Furniture Furniture, mattresses and mattress supports, lamps, lighting fittings, and illuminated signs 40 Misc. mfg. prods. Miscellaneous manufactured products 41 Waste/scrap Waste and scrap 43 Mixed freight Mixed freight 99 Unknown Commodity unknown 24

The following FAF regions include portions of the I-15 Corridor or are relevant to I-15 study area: San Diego metropolitan area (including all of San Diego County) Los Angeles metropolitan area (including Los Angeles, Riverside and San Bernardino counties) Las Vegas metropolitan area (including Clark and Nye counties) Salt Lake City metropolitan area (including Salt Lake, Davis, Weber, Morgan and Tooele counties) Phoenix-Tucson metropolitan areas (including Pima, Pinal and Maricopa counties) San Francisco-Sacramento metropolitan areas and the I-80 corridor Remainder of Nevada (less above counties) Remainder of Arizona (less above counties) Remainder of Utah (less above counties) Remainder of California (less above counties and northern California area) This next section discusses the methodology for determining freight movement along the I- 15 corridor. Steps 1 through 6 were laid out to avoid double counting and to isolate certain movements between geographic areas. Intra-county movements will not be included in any step since it is unclear that this traffic would use I-15 for any portion of the trip. For steps 3 through 6, the intra-state movements will not be totaled because it is not positive that I-15 would be used during any freight transfer or the totals may have been captured elsewhere in a previous step. Cross-country movements using I-15 will be gathered for the I-80 and I- 70 corridors because the volumes coming out of southern California heading towards the Midwest or Northeast portion of the country will use I-15 initially to access I-80 and I-70, respectively. 1. Counties along 1-15 These counties rely on the I-15 corridor because of close proximity and relevance. From the Disaggregated FAF Database (the Database), the interaction between these counties will be totaled for tonnage and freight values for the base year of 2009 and horizon years of 2020, 2030, 2040, respectively. Totals will not be captured for internal movements, when the origin and destination counties are the same. Exhibit A-2 shows the counties along the I-15 corridor. 25

Exhibit A 2: Counties along I 15 2. Major Centers Freight movement between primary commerce areas consist of multiple counties where freight and commerce originate or terminate. The exchange between the Los Angeles and Phoenix areas and other counties were not captured in Step 1. For this effort we will summarize the following exchanges: a. Phoenix and Salt Lake City b. Los Angeles and Salt Lake City c. Los Angeles and Las Vegas This exchange is shown in Exhibit A-3. The areas are made up of multiple county areas. The Salt Lake region is Weber, Davis, Salt Lake, and Utah counties; the Los Angeles region includes Orange, Los Angeles, and Ventura counties; the Phoenix region consists of Maricopa and Pinal counties; and the Las Vegas region is Clark County. 26

Exhibit A 3: Major Commerce Locations 3. Southern California and rest of Utah To capture the movement along I-15 between distant points, we will use the Southern California counties as origins and the remaining Utah counties not along I-15 as destinations (and vice versa). These movements are very likely to use I-15 because of the distance involved and limited alternatives, as shown in Exhibit A-4. 4. Southern California and Southern Nevada Similar to the previous step, the interaction between Southern California counties and Southern Nevada is also likely to rely on I-15, as shown in Exhibit A-4. Any freight destinations further north in Nevada would more likely be served along I-80. 27

Exhibit A 4: Southern California Interaction 5. Growing Fields of California The central California agricultural areas are primary producers of perishable food products for the West Region. The produce from these areas are transported on I-15 by truck to markets in Las Vegas and Utah. The counties south of Fresno (Santa Barbara, Tulare, Kings, Kern, and San Luis Obispo) will travel south and east to I-15 in order to access the Las Vegas and Utah markets, as shown in Exhibit A-5. Exhibit A 5: Farming from California 28

6. Mexican Border The border counties of Arizona (Yuma, Pima, Santa Cruz, and Cochise) will interact with most of Utah via I-15. The southern counties of Utah were not included since most freight movement is anticipated to travel through the state of Arizona to access Utah and will not load onto I-15 until into Washington County (St. George, UT). These counties are illustrated in Exhibit A-6. Exhibit A 6: Mexican Border Uncertainty in this process is mostly around the movements from the agricultural areas of Imperial County (located in California along the Arizona and Mexican border) and whether trucks would tend to travel west to I-15 or go North on US 95 to Las Vegas before loading onto I-15. Initially, we have assumed the latter to undercount the potential freight. If it is determined that the trucks tend to travel west, then we should account for the movement between Imperial County and some other areas in Utah, Nevada, and California. Total tonnage and freight values will be determined upon completion of data analysis. After the totals are determined between the various county-to-county movements, the tonnages will be converted to truck load equivalents. The calibration of the converted FAF totals will be accomplished by comparing them to known truck volumes using model output and existing truck counts. This will help account for empty movements along the corridor. The resulting growth factors from the FAF totals will be applied to the existing truck volumes to determine a range of future truck volumes along the corridor. Cross country movements will be determined by comparing the disaggregated FAF database to the original database. Long distance rail and freight movements using either I- 70 or I-80 to reach destinations beyond the I-15 Corridor region of rail and truck will be grouped together. These movements will be discussed in aggregate form since they potentially use I-15 for a portion of their trip, but some details are not available or not 29

necessary for this project. The original FAF database uses Metropolitan Statistical Area (MSA) regions and states for geographic boundaries, as shown in Exhibit A-1. Freight Output by State This is the summary of the disaggregated FAF database by state as used in the I-15 Corridor System Master Plan. Arizona The following data tables are derived from FAF3 data. The data reviews only movements within the four state study area comprised of Arizona, California, Nevada, and Utah. Truck Data As illustrated in Table A-2, the majority of truck freight in Arizona originates in Maricopa County, with 127,182,000 tons of freight moved in 2007, valued at over $102 billion. These figures are projected to increase to 185,745,000 tons in 2040 with an estimated value of over $200 billion by 2040. Table A 2: Arizona Exports of Truck Tonnage and Dollars for 2007 and 2040 by County 2007 2040 Tons (k) $M Tons (k) $M Apache County 578 $ 214.27 1,535 $ 379.98 Cochise County 5,136 $ 1,860.60 9,664 $ 3,917.69 Coconino County 2,661 $ 1,941.96 5,230 $ 3,829.42 Gila County 1,384 $ 683.06 2,784 $ 840.50 Graham County 1,946 $ 1,413.29 3,594 $ 1,662.49 Greenlee County 40 $ 25.91 117 $ 39.50 La Paz County 1,162 $ 485.96 2,827 $ 1,011.08 Maricopa County 127,182 $ 102,718.14 185,745 $ 200,136.59 Mohave County 9,411 $ 2,683.34 17,920 $ 5,392.83 Navajo County 3,479 $ 850.73 6,469 $ 1,160.57 Pima County 28,918 $ 17,352.66 36,047 $ 46,133.32 Pinal County 15,112 $ 6,083.49 22,100 $ 11,099.42 Santa Cruz County 2,571 $ 5,147.15 7,173 $ 14,927.88 Yavapai County 12,656 $ 3,140.34 23,447 $ 12,059.31 Yuma County 6,074 $ 5,054.37 13,638 $ 10,289.04 Grand Total 218,310 $ 149,655.27 338,291 $ 312,879.61 The primary county trading partners for Arizona within the study area are within Arizona itself. This is true for both 2007 and 2040 in terms of both tonnage and commodities. 30