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35 C H A P T E R 4 4.1 Assessing Multimodal Options The routing of an OSOW load is based on a variety of factors including origin and destination, weight and dimensions, state regulations, construction, modal access, cost, trip length, load time sensitivity, and infrastructure constraints. The research team consulted with shippers, carriers, and forwarders or brokers to identify when routing decisions are made, the decision makers involved, and the key considerations for mode and route choice. Figure 4-1 displays the typical planning process for an OSOW shipper or buyer. Depend- ing on the company or contract, either the shipper or the buyer of a load organizes the load. The organization making the contracting decisions in the planning process is referred to as the organizer. In the planning process, the organizer makes decisions based on the cost, timelines, and weight and dimensions of a load, which in turn inform routing and mode of transportation. Figure 4-1 displays three paths involving carriers, brokers, and possibly a private fleet. Path 1. The organizer contacts carriers directly to explore pricing, delivery timeframes, and availability. In this case the organizer is responsible for choosing the mode of transport. Path 2. The organizer uses its own transportation assets to ship the OSOW load. In this arrangement, the organizer may carry the load for the whole or a portion of the trip. Path 3. The organizer contracts a forwarder or broker to organize the load. The forwarder or broker then contacts carriers to price out different routes and modes of transportation. Figure 4-1 presents the various paths in an OSOW planning process as mutually exclusive, but the organizer of an OSOW load often prices out multiple carriers, forwarders, or brokers to obtain the best price for its shipping needs. Additionally, an organizer may solicit quotes from multiple modes to determine the route and mode that best fit its needs. By obtaining quotes from multiple carriers and forwarders or brokers, the organizer is able to assess its options while leveraging the expertise of these firms. Organizers are able to take advantage of competitive market pressures to incentivize a transportation plan with the lowest cost. In addition to comparing multiple carriers, forwarders, or brokers, the research team found that the OSOW market functioned efficiently through competition. An example provided to the research team was when an organizer asked for a trucking quote on a load that was going to be more competitive traveling by rail because it fit within the dimensional restrictions of rail and was moving long distance. The carrier suggested that the organizer use a mode other than road because it would not be as competitive. While slightly counterintuitive, the cost of providing a quote and knowledge of the market suggested to the carrier that transportation by road would Multimodal Options and Modal Competitiveness in Oversize/ Overweight Transportation
36 Multi-State, Multimodal, Oversize/Overweight Transportation not be competitive, therefore it provided its expertise to build a relationship with the organizer and save the cost of the quote. Consultations with carriers of all modes, shippers, and brokers revealed significant knowledge about competing modes, including rules of thumb for when each mode is competitive and the advantages and disadvantages of each mode. 4.1.1 Modal Options and Competitiveness Although most OSOW movements are carried by truck, rail and marine transportation are also used. Each mode brings cost advantages and infrastructure constraints, which translates into three relatively exclusive market segments. Figure 4-2 displays a compilation of the advantages and disadvantages of each mode for the movement of OSOW freight. Multiple consultations suggested that while there is competition between the modes, OSOW modes are limited to specific subsets of the market because of their unique access, cost struc- tures, and infrastructure restrictions. 4.1.2 Factors Affecting Modal Competitiveness There are four key factors that drive the relative competitiveness of road, rail, and marine transportation: ⢠Modal characteristics, ⢠Modal access at origin and destination, Figure 4-1. Overview of the OSOW planning process. Road Rail Waterway Advantages Disadvantages Advantages Disadvantages Advantages Disadvantages Access Weight Weight Width Weight Speed Speed Height Price Height Height Access Ease of Use Price Fewer Jurisdic onal Issues Access Width Ease of use Width Permi ng Mul -Piece Move Ease of Use Mul -Piece Move Price Source: CPCS analysis of modal consultations Figure 4-2. Advantages and disadvantages of OSOW modes of transportation.
Multimodal Options and Modal Competitiveness 37 ⢠Loaded dimensions, and ⢠Regulations encountered along the route (and the impact of these regulations on cost). Modal Characteristics Road, rail, and marine transportation have comparative advantages in the movement of freight, and their pricing and business models reflect these advantages. Trucking is generally the fastest mode from origin to destination but is less cost-efficient at transporting heavy and large goods. Therefore, the competitiveness of rail and waterway largely hinge on the load not being time sensitive. Beyond time sensitivity, rail and marine transportation are the most competitive in moving dense and heavy goods over long distances. Trains and barges can be configured to transport massive quantities of freight using unit trains and multi-barge tows. Depending on the size, number of pieces, and the requirements of the shipper and receiver, OSOW freight may get placed in the general pool to be transported from origin to destination as part of a multi-barge tow or merchandise train. Conversely, OSOW freight may use a dedicated rail or water service to increase the speed of the trip. The use of a dedicated rail service allows for OSOW loads that might face obstacles in road transportation to transit the rail network at an additional $100 to $120 per mile cost and in less time. For example, Union Pacific charges $120 per rail mile with a minimum of a $24,000 charge in addition to other freight charges.1 Similarly, CSX charges $105 per mile with a minimum charge of $11,550.2 A dedicated barge service could cost an addi- tional $120,000, but a dedicated service is limited to very large loads or multiple loads in a barge when the added cost is still competitive relative to trucking. Another modal characteristic that increases the competitiveness of rail and marine transpor- tation is the ability to combine multiple OSOW truck shipments onto a single barge, tow, railcar, or unit train. Figure 4-3 displays a group of nine wind tower blades in each of the open hopper barges. Alongside the blades are covered hopper barges, likely carrying other bulk commodities, which suggest that this move did not opt for a dedicated service. Each hopper barge replaces nine OSOW truck shipments. One consultation suggested that the cost of moving a non-dedicated barge from New Orleans to St. Louis was about $35,000; but, in the case of Figure 4-3, the cost would be split between nine pieces, making it cost-effective. 1 Frequently Asked Questions About Shipping Dimensional Loads. Union Pacific. https://www.up.com/customers/ind-prod/ consumer/machdimen/faq/index.htm. Accessed May 11, 2015. 2 Publication CSXT 8100: Terms and Conditions of Service and Prices for Accessorial Services. CSX. http://www.csx.com/share/ wwwcsx_mura/assets/File/Customers/Price_Lists_Tariffs_Fuel_Surcharge/8100/cxm176094_csxt8100_8_5x11_rSgW.pdf. Accessed May 14, 2015. Source: Ceres Barge Figure 4-3. Wind tower blades moving with covered hopper barges.
38 Multi-State, Multimodal, Oversize/Overweight Transportation Modal Access Rail and marine transportation require an access point such as a rail spur, siding, dock, or waterway access point at the origin, destination, or along the route. Modal access changes modal competitiveness due to the cost of transloading and the cost of using another mode to make up for limited access to a loadâs origin and/or destination. The cost varies by the weight and the radius of the crane needed to lift the load. Crane services cost between $400 and $1,400 per hour depending on the weight of the load alone. Transloading not only increases cost, but it also increases the risk of damaging an OSOW load. The risk of damage is at least partially contingent on the number of times the load must be moved to a different mode. In the case of a truck-only move, a maximum of two lifts is required in most cases, one at the origin and one at destination. The same load could require two to four lifts (six lifts if a product is moved through a laydown area) to move by rail or water depending whether the origin or destination has rail or waterway access. Therefore, limited access reduces the competitive advantage of rail and marine transpor- tation on a cost per tonâmile basis. Figure 4-4 displays the interstates, Class 1 railroads, and marine highway network in the United States. While the interstates are the most capable of carrying OSOW freight, they represent Sources: Bureau of Transportation Statistics, U.S. Army Corps of Engineers, U.S. Maritime Administration, Federal Highways Administration, and Association of American Railroads Figure 4-4. Interstates, Class 1 railroads, and marine highway network in the United States.
Multimodal Options and Modal Competitiveness 39 only 1.2% of the total roadway network.3 Similarly, Figure 4-4 displays Class 1 railroads, which rep- resent 69% of the U.S. rail network.4 The marine highway and inland waterway system in Figure 4-4 covers most of the water routes, which leaves much of the United States far from waterway access.5 The density of the road, rail, and waterway networks shown in Figure 4-4, representing 1.2%, 69%, and 100% respectively, displays the differences in modal access. Loaded Dimensions The loaded dimensions of OSOW freight significantly affect the competitiveness of each mode. This is primarily the case with road and rail transportation, both of which face greater infrastruc- ture constraints relative to waterway. In the case of road, the loaded height and weight are the lim- iting factors. Not only do high loads (15 ft and above) have a limited use of interstates throughout the United States, but also these loads start to need utility involvement, which requires signifi- cant coordination and can be the single largest component of the cost. Similarly, as the weight of an OSOW load increases, the number of bridge reviews needed increases along with cost and the time it takes to permit the load. Additionally, as shown in Move 3, the weight of a load may require a circuitous routing to avoid a weak bridge. Circuitous routings result in additional miles and an increased likelihood of traveling on local roads or roads with more stringent regulations. For the heaviest loads, a state may restrict roadway travel by providing a connection from rail or waterway to the origin or destination of the load. Therefore, height and weight provide a competitive advantage for rail and marine transportation relative to truck, though rail may be limited on height depending on the route. The competitiveness of rail is largely a function of width and to a lesser extent height. Gen- erally speaking, any piece over 13 ft wide has difficulty moving on rail. Some corridors can accommodate wider loads, but width is the largest constraint to the shipment of OSOW loads by rail. Therefore, railways cater to dense loads and high loads, especially on rail corridors used for double-stacked containers. Marine has very few size and weight restrictions and is the mode most able to transport the largest OSOW loads. Air draft or overhead obstacles that could damage the load are examples of infrastructure restrictions in water. One consultation suggested that air draft restrictions were an issue at 30 ft high and become problematic at 40 ft high. Given those dimensions, air draft is not a substantial issue relative to other modes. Both rail and truck face more frequent overhead restrictions before a load reaches 30 ft or 40 ft, resulting in a competitive advantage for waterway for the movement of very high loads. The general lack of restrictions on dimensions and weight in water enables it to be very competitive on the movement of megaloads. Water is also competi- tive for very heavy loads that are outside the envelope of rail. Regulations Encountered Along the Route States are responsible for the permitting of OSOW loads on state-maintained roadways. OSOW carriers often have to obtain permits from local jurisdictions (cities and counties) for the use of their roadways. Once a load is on the network, rail and marine transporters are not subject to state or local permits to use the transportation network. Not only does the lack of permit requirements create a cost advantage, but also trucking companies must apply for and 3 Transportation Statistics Annual Report 2013. Bureau of Transportation Statistics, U.S. Department of Transportation, 2014. http://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/TSAR_2013.pdf. Accessed April 24, 2015. 4 Overview of Americaâs Freight Railroads. Association of American Railroads. https://www.aar.org/BackgroundPapers/ Overview%20of%20Americas%20Freight%20Railroads.pdf. Accessed April 24, 2015 5 Americaâs Marine Highways. Maritime Administration, United States Department of Transportation. http://www.marad. dot.gov/documents/AMH_Fact_Sheet_V11.pdf. Accessed April 24, 2015.
40 Multi-State, Multimodal, Oversize/Overweight Transportation Waterway Connection During consultations for this study, ports, shippers, and carriers raised concerns about the connection of the waterways to OSOW generating and receiving facilities. For ports, many of which are surrounded by cities, the key challenge is identifying and protecting corridors that provide access for OSOW carriers. The protection of corridors is increasingly difficult when multiple jurisdictions exist along the corridors that serve a port. Port managers often work with shippers for years in advance to ensure their loads can transit to or from the port, without knowing how local roadways may change. The biggest issue is the construction of permanent structures or infrastructure that limit the dimensions that have access to the port. For shippers, the focus is also on access. One shipper explored investing $1 million in improving infrastructure and creating a corridor from its facility to the Mississippi River. Such a corridor would facilitate the landside movement of OSOW loads and allow for lower transportation costs. Ultimately, the efficiency by which OSOW loads are transported directly affects the competitiveness of the shippers and economy as a whole. It is critically important that shippers and receivers of OSOW freight are connected to the waterway to facilitate the safe and efficient movement of these goods. wait for permits to be granted, which become increasingly difficult as the dimensions and weight of a load increase. State and local regulations govern the operation of OSOW freight on the road network through the permitting process, which defines the operating parameters of a load, such as maximum weights allowed on a single axle or a group of axles. The competitive advantage of rail and water is that shippers and buyers can avoid the restrictions of the permitting process when shipping multi-state loads. Therefore, the competitiveness of each mode varies depending on the loaded dimensions and weight, origin, destination, the number of states a load transits, and the operating and cost characteristics of each mode. Additionally, because each state issues permits for its state alone (with the exception of regional permits), carriers must interface with each state separately, taking construction, infrastructure restrictions, and regulatory differences into account on a state-by-state basis. While some states have an easier and less expensive permitting process than others, as the number of miles increases, so does the likelihood that a load has to obtain multiple permits as it crosses state lines. 4.1.3 Knowledge of Modal Options Carriers of all modes demonstrated knowledge and information of the relative competitive- ness of each mode. Carriers work with other modes to move a load from origin to destination, which contributes to their exposure to the relative competitiveness of each mode as well as the constraints. The general consensus of carriers of OSOW freight is that they had the appropri- ate information needed to make efficient routing decisions. In addition to shipper and car- rier knowledge of multimodal options, brokers and forwarders provide the expertise needed to navigate contracting a multimodal OSOW move. These firms have the experience and industry
Multimodal Options and Modal Competitiveness 41 connections to weigh the multimodal options and organize the movement of these loads on behalf of the shipper or buyer. Road Road transportation is different from rail and waterway because of the number of different jurisdictions that can regulate the movement of OSOW loads (as distinct from rail and marine that are largely federally regulated). OSOW carriers have to request permission and follow the regulations of states, cities, counties, and toll roads depending on the route and jurisdiction that maintains those roadways. Essentially, there are three different types of information needed to permit and operate OSOW loads on roadway. ⢠Permitting Requirements include information on who requires a permit and how to obtain that permit, such as city or county permits, route surveys, or utility notification, as may be necessary. ⢠Operational Requirements include information on what will be required when moving the OSOW load, such as civilian or police escorts, or hours of travel restrictions. ⢠Infrastructure Restrictions include up-to-date information on the status of the infrastruc- ture on which an OSOW load is traveling. Infrastructure changes such as construction, bridge Variations in Permitting Costs States have different OSOW permitting fee structures, varying from a flat fee per permit to an incremental fee based on the loaded dimensions, number of miles traveled within the state, axles, total weight, or a combination of these variables. Permitting costs for a load measuring 80 ft long, 12 ft wide, 14 ft high, weighing 92,000 lbs, using a 5-axle configuration, and traveling 50 miles range from $5 in Hawaii to $210 in Texas, with most of the states charging $20 to $40. The states with the highest permitting costs were those with incremental fee structures. The difference between the permitting costs increases as the size of a load and the total number of miles increase. Therefore, the relative modal competitiveness of rail and water increases in states that have incremental fee structures as the weight and distance traveled increase. Source: CPCS analysis of OSOW permit fees 0 5 10 15 20 25 Fr eq ue nc y Permit Cost Distribution of permitting fees.
42 Multi-State, Multimodal, Oversize/Overweight Transportation postings, and road closures are a variable and must be verified before using the route listed on a permit. Consultations with carriers identified various gaps for each type of information, but were generally focused on easy access to information and communication when requirements or restrictions have changed. Rail Through the course of this research, shippers, carriers, forwarders, and brokers demonstrated substantial knowledge about the constraints and opportunities to move OSOW freight by rail. That said, OSOW stakeholders did note that there is limited availability of information on the location of sidings for transloading to and from trucks. As a quick fix, carriers noted that they could use satellite-based maps, such as Google Earth, to locate the closest siding when defining a route. Similarly, the organization of rail services is a perceived information gap. Non-rail stake- holders cited issues with getting to the right person to organize an OSOW load and suggested that this knowledge was a barrier for first-time users of rail transportation. From the rail side, one rail veteran noted that information on transload and rail sidings was available, but that organizers needed to ask for it from the railroads. The key difference in these perspectives was about what was publicly available to the organizers and what had to be solic- ited. Ultimately as private organizations, railroads have the choice about what to make public to facilitate these moves. Marine Marine transportation is similar to rail in that experience and comfort with shipping by water is a key determinant of waterways being considered as a modal option. At least one shipper con- sulted used a broker when using more than one mode. The broker facilitated the movement, obtaining quotes and organizing the transload between modes. OSOW shippers were generally able to describe the circumstances when shipping by waterway was effective, suggesting that shippers understand the modal advantages of shipping by waterway. 4.2 Roadway Competitiveness Trucking is the most expensive mode of transportation on a per mile basis, but on the whole provides the most comprehensive level of service to shippers when assessed from a speed and access perspective.6 Additionally, the access that roads provide makes the organization of road transportation simple, relative to the other modes that may require trucking to connect the origin and the destination. 4.2.1 Competitive Advantages Trucking is particularly competitive for OSOW loads less than 12 ft to 14 ft wide and up to 14 ft high because the load is largely able to select an interstate route for most of the journey. The access to infrastructure relative to rail and waterway is the biggest advantage of OSOW truck moves. Related to the access, trucking companies can move a load on a single mode of trans- portation from origin to destination. This ease of use is a key advantage for roadway transporta- tion, because of the cost and risks associated with transloads when origins and destinations are 6 Bureau of Transportation Statistics. http://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/publications/national_transpor tation_statistics/html/table_03_21.html. Accessed May 25, 2016.
Multimodal Options and Modal Competitiveness 43 not connected to rail or waterway. Shippers noted that the ease of moving freight by truck had a distinct advantage and that they are willing to pay a premium for road transportation rather than use an alternative mode. Trucking is also competitive for overwidth loads because rail faces a very constrained load envelope. Also, rail and water often require trucking and transloading at the origin and the des- tination, reducing their cost advantage. OSOW movement by truck is typically faster than other modes, especially for routine OSOW freight. Trucking companies are better able to respond to single loads compared to rail and waterway transportation, especially when the configuration is classified as a routine load, thereby not requiring highly specialized trailers, bridge reviews, route surveys, utility notification, and lengthy permit processes. 4.2.2 Competitive Disadvantages Height and weight are two of the primary competitive disadvantages for moving OSOW freight by road. As the loaded height and weight increase, the probability that trucking will be the primary form of transportation decreases. The major constraint when height increases is that it limits the routes an OSOW load is able to take due to bridges and overpasses. The presence of overhead structures shifts OSOW loads off interstates and onto city and county roads, which are more likely to have utilities over the roadway. Figure 4-5 displays a lift truck raising a traffic signal so that an OSOW load can travel safely through the intersection. The cost of utilities reconciliation is one of the major drivers of mode choice. For example, a load from Wisconsin to Alberta encountered 64 different utilities, which resulted in a total additional cost of $230,000. A different load traveling less than 100 miles within Wisconsin paid over $200,000 in utility costs. In some cases, the identification, notifica- tion, and cost of lifting lines is equal to the total operational cost of moving the load. Utilities can add substantial cost to the movement of OSOW freight when a load is significantly overheight. Weight also affects the overall competitiveness of trucking. As the weight of a piece of OSOW freight increases, so does the weight of the equipment needed to carry the load. For example, a 150,000 lb load results in a total loaded weight of approximately 250,000 lbs. This issue is not Figure 4-5. Lift truck used to raise a traffic signal.
44 Multi-State, Multimodal, Oversize/Overweight Transportation unique to OSOW trucking; a loaded 80,000 lb truck is able to carry approximately 40,000 lbs to 45,000 lbs. Weight impacts OSOW transportation in two ways. First, the cost of permitting can be sub- stantially higher due to incremental permit costs assessed based on weight and the additional cost of bridge analysis in some states. Second, as weight increases it is more likely that the load will have to be routed around bridges that are not structurally able to handle the weight, increas- ing the chance that the route includes county and city roads. Finally, state-to-state differences in regulation can cause delay in permitting or operations at state borders. A state border delay or rejection of a permit has a cascading impact on permits within other states. Depending on the associated delay, this could cause a carrier to reapply for permits for each state along the route to reflect a new timeline. This presents a significant risk to the timeline for shipping OSOW loads, but this risk is far greater for superloads compared to routine OSOW loads. Not all states allow permit amendments generally and some only allow amendments in specific cases such as a mechanical breakdown or weather restrictions. Carriers must file a completely new permit in states that do not allow permit amendments, which can result in significant delay depending on the permit turnaround time. From an operations standpoint, differences in state regulations take different forms. Delays can be very minimal, such as changing the flags or signs on OSOW loads, or lengthy delays, such as those resulting from loads stopping at a state border to wait for police or civilian escorts, or from differences in hours of travel from one state to another. Each day of delay costs a carrier thousands of dollars in labor costs and lost utilization of trucks and trailers. Carriers must build these costs into the rate they charge, further detracting from the competitiveness of trucking, relative to rail and marine transportation, when these are viable alternatives. 4.2.3 Overall Market Segment Trucking maintains a cost advantage for those loads with trip ends without nearby access to a rail spur. The other key advantage is the timeliness of the shipment. Trucking is able to quickly respond when the load falls within the routine OSOW load category and faces limited regulatory and infrastructure constraints. Additionally, trucking becomes more competitive as the width of a load increases to 12 ft 6 in. to 14 ft wide and is faced with very limited competition with rail when loads exceed 14 ft wide. There is minimal overlap in the market segments for truck and marine transportation due to access and the time needed to ship by waterway. Overall, trucking serves a largely complementary market to rail and waterway, serving time-sensitive and smaller loads for single trips that are not located on or near a rail line. 4.2.4 Example of a Multi-Jurisdictional Road Move An OSOW load traveling from South Carolina to Maryland on a 5-axle configuration travels through four states and is subject to their respective maximum permitted axle weights on both single and tandem axles. The configuration must comply with the lowest maximum weights, in this case South Carolinaâs. Figure 4-6 shows the maximum permitted axle weight for single/steer and tandem axles. As shown in the total maximum combination weight, the maximum weights for each axle group directly affect the maximum total weight of the configuration. If the configuration totaled more than 100,000 lbs, it would need to add an axle to comply with South Carolinaâs regulation and would have an âextraâ axle when traveling through North Carolina, Virginia, and Maryland. Adding axles increases the cost to the carrier, because the equipment becomes more expen- sive, creates more wear and tear on tires, and reduces fuel economy. It is also possible that the
Multimodal Options and Modal Competitiveness 45 increased weight or trailer length could trigger other regulations, such as extra escorts or hours of travel regulations. Additional regulations depend on the weight and dimensions of the load as well as the states where the load is operating. 4.3 Rail Competitiveness According to consultations with trucking, rail, and waterway carriers, rail is the least costly mode of transportation for OSOW freight on a cost-per-mile basis. The definition of OSOW loads, or dimensional loads as they are referred to by railroads, for rail transportation is different from the definition of OSOW loads for road transportation because the infrastructure, design, and constraints of rail are different. States define loads as OSOW when they are 8 ft 6 in. wide, but for rail overwide loads begin at 10 ft 6 in. to 11 ft (Figure 4-7). Similarly, states define legal height anywhere from 13 ft 6 in. to 15 ft. Figure 4-7 displays a selection of the dimensional limits of some Class 1 railroads. For the three railroads included, dimensional loads begin from between 15 ft 6 in. to 17 ft above top of rail. Therefore, OSOW loads in road transportation are not defined as dimensional loads when traveling on rail. Loads that are not defined as dimensional are not required to undergo a clearance process, which reduces the time and cost of transportation. Dimensional loads require a clearance review of the infrastructure the load will transit, at a cost of $500 to $1,000. Burlington Northern Santa Fe (BNSF) railway notes that the cost of a clearance review is refundable on loads that use the railroad within one year of the clearance being conducted. Axle Type South Carolina (lbs) North Carolina (lbs) Virginia (lbs) Maryland (lbs) Single/Steer 20,000 20,000 24,000 20,000 Tandem 40,000 50,000 44,000 52,000 Maximum Total Weight 100,000 120,000 112,000 124,000 Source: Uship.com Figure 4-6. Maximum permitted axle weights. Source: BNSF, Union Pacific, and Norfolk Southern websites Figure 4-7. Class 1 definitions of OSOW.
46 Multi-State, Multimodal, Oversize/Overweight Transportation Figure 4-8 displays the steps and the recommended timeline for those steps according to BNSF. Other railroads have similar steps and timelines for the shipment of dimensional loads. The timeline for the contracting process depends on the dimensions and the number of railroads involved along the route. One factor in the overall time needed to contract rail transportation is the type of car needed to transport the load. As size and weight increase, the specialization of the railcar increases and so does the lead time needed to ensure that the car is available. 4.3.1 Competitive Advantages The competitiveness of rail from a dimensional perspective is evident from looking at the defi- nition of a dimensional load when compared to an OSOW load transported by road. The defini- tions of both height and weight start significantly higher than the legal definitions for trucking. Consultations with shippers, carriers, and forwarders/brokers suggested that the ability to carry heavier weights and taller heights are key advantages for rail. This competitive advantage relates to the cost and time needed to go through the bridge review process and the resulting route that the load may need to take to go around a weak bridge. Some states allow carriers to hire outside consultants to conduct bridge reviews, and most states require an additional fee for applications requiring a bridge review. The advantage for height stems from the need to involve utilities to Source: CPCS research Figure 4-8. Railroad shipment process and timeline.
Multimodal Options and Modal Competitiveness 47 lift lines over roadways, usually when a load exceeds a loaded height of 15 ft. Utility involve- ment increases significantly as the load reaches a height of 16 ft because of the lines that the load encounters. The load will likely be routed off the interstate system, which again increases the overall number of utility lines encountered. Lastly, railroad marketing departments highlight their ability to haul large quantities of OSOW freight by a unit train. In this instance, the shipper has all its freight concentrated in a single ship- ment, allowing for easy tracking. Additionally, the marketing departments assign an account manager that handles scheduling of service to ensure that assets are available far in advance. The unit train segment of OSOW shipments by rail is very time sensitive as the railroads often service manufacturer-to-port hauls, for which they must make ship departure schedules. 4.3.2 Competitive Disadvantages The most significant limitation on the use of rail for OSOW shipments is width. Both road and waterway encounter fewer restrictions as width increases. Though the envelope for trans- porting OSOW freight varies depending on the origin and destination of the load, the research team found that rail encountered problems when a load was more than 12 ft 6 in. wide and had great difficulty when a load was more than 13 ft 6 in. wide. The difficulty in routing because of restrictions led one industry expert to suggest that loads which were more than 14 ft wide would not move by rail. From an infrastructure perspective, rail and road are similar in that the Eastern states are much more constrained than the Western states from both a height and width perspec- tive, with width being the most limiting factor as railroads upgrade clearances to accommodate double-stacked containers. Key Steps in the Rail Shipment Process Measure the Load. Determine if the load is dimensional based on the criteria used by the railroad. Price the Shipment. Contact the railroad to obtain a price quote to move the shipment. Clear the Shipment. Request the railroad to undertake a clearance study to ensure that the infrastructure can handle the load. The railroad that originates the load will coordinate with the other railroads, including short lines along the route, to evaluate restrictions such as bridges, tunnels, and potential weights.7 An alternate route may be suggested if the load can go around an obstruction. Load the Shipment. The load must be loaded onto the railcar according to the rules specified by the Association of American Railroads (AAR). Submit Instructions. Provide the railroad with instructions for shipment, which ini- tiates the actual shipment of the load through the submission of a bill of lading. Get Inspected. The shipment must be inspected and approved before it receives clearance to move on the railroad. 7 Some short-line railroads may not be able to handle the weight of very heavy OSOW load on their tracks. The clearance process identifies these constraints, as well as alternative routings.
48 Multi-State, Multimodal, Oversize/Overweight Transportation Operationally, single OSOW shipments encounter greater travel time variability with rail rather than trucks. This is because railroads prioritize fluidity within their network over dimen- sional moves. Operationally, an OSOW car will be set out on a passing track to allow other trains to pass in order to maintain the fluidity of the network. Therefore, the transit times for OSOW loads can be very long. For example, one industry expert noted that a trip from Peoria, Illinois, to the Port of Savannah, Georgia, commonly takes two to four weeks. The exception to this is when OSOW loads use a specialized train, which comes at a significant cost ($100 to $120 per mile) or have the volume to book a unit train, which provides a superior level of service. As such, unless the load is very large, making trucking difficult due to bridge reviews and overhead obstacles, most of the OSOW loads traveling on rail are not single shipments. In fact, most of the rail business comes from equipment manufacturers moving freight from plants to ports for international export. According to an industry expert, 65% to 75% of OSOW loads shipped by rail originated at the manufacturersâ production facilities and were destined for the ports. Generally speaking, single moves are less competitive on rail, especially when time is a factor. Exceptions to the competitiveness of single loads are superloads and megaloads that may be restricted from using roadways other than as a connection point to rail and water. 4.3.3 Overall Market Segment The overall market segment for transportation by rail is primarily volume routes from factory to port. The remainder of the market segment consists of loads less than 12 ft 6 in. to 14 ft wide where time is not a factor and that have access to rail transportation at the origin and destina- tion. According to an industry expert, OSOW shipments provide the best margins for railroads but make up only 0.4% of the total revenue. The business model of prioritizing fluidity on the rail network and giving secondary priority to loads that decrease fluidity such as OSOW is likely to continue. 4.3.4 Example of a Multi-Jurisdictional Rail Move The John Deere facility in East Moline, Illinois, uses unit trains to transport combines from its factory to the Port of Baltimore, Maryland. Both the John Deere plant and the Port of Balti- more have rail access, removing the need to use trucking and the need to pay additional trans- loading costs. The combines are then loaded onto a ship to travel to international destinations. Two combines are often able to travel per car, allowing for the transportation of two equivalent truckloads. Additionally, a single combine may be combined with other related freight on the railcar. This same load would have to be split if it traveled by truck because the tires and other boxes would likely be classified as a divisible load. From a service perspective, the total transit time from the factory to the port is usually less than four days because the railroad gives priority to unit trains. Trucking and marine transporta- tion have difficulty competing with the level of service provided to John Deere. 4.4 Marine Competitiveness Inland and coastal waterways represent the most limited network for the movement of OSOW freight from an access perspective, but are the most open in terms of infrastructure restrictions. As such, competition between water, rail, and truck for domestic routine load movements is limited to specific circumstances where access is provided at the origin and destination and where multiple pieces can be placed in one barge or vessel. Generally, waterway specializes in the
Multimodal Options and Modal Competitiveness 49 movement of superloads and megaloads, specifically those that are restricted from rail and road transportation or would be very costly due to restrictions and the involvement of third parties such as utilities. 4.4.1 Competitive Advantages The primary competitive advantage for the waterway shipments of OSOW freight is the unre- stricted infrastructure it provides to move the largest OSOW loads. One consultation described waterâs market segment as those loads that cannot move by rail or truck. Real competition between the modes is lacking because water is the only option for these loads due to cost and regulations. Consultations suggested that pieces with unloaded weights of more than 250,000 to 300,000 lbs, 15 ft high, and 20 ft wide provide an opportunity for waterway to be competitive. Additionally, there are examples of multiple pieces of OSOW freight using a single barge or ves- sel to increase cost competitiveness. 4.4.2 Competitive Disadvantages Limited access to origins and destinations is the largest disadvantage to shipping OSOW freight by water. The majority of OSOW freight shipping by water will require another mode of transpor- tation to complete the move. Additionally, not all waterways and ports are open year-round, fur- ther limiting the ability of OSOW shipments to move by water. Another constraint cited was the grain season, which according to one consultation increases the cost of barge travel by four times. Additionally, depending on the channel and the loaded draft of the vessel, there may be restric- tions due to the depth of the channel, particularly for inland waterways. There are a variety of other considerations such as the impact of extended droughts that reduce water levels or floods causing major infrastructure damage that lead to closures of waterway sections. While inland waterways may be seasonal, closing for certain periods annually because of ice, severe winters can extend the season or halt cargo shipments, as was the case on the Great Lakes during the winter of 2014 and 2015. Finally, depending on the load, the overall timeliness of the waterway was also cited as a disadvantage. Marine transportation does encounter some infrastructure restrictions, especially as it relates to piloting requirements. For example, it takes 12 to 15 hours for an OSOW load to travel from the New York Harbor to the Port of Albany, New York. During the trip the load crosses three segments, requiring a different pilot for each segment. The route has potential additional delays in the Lower Hudson River segment for vessels with a draft over 28 ft, which need to wait for a rising tide. At least through 2010, if this midâLower Hudson River segment was reached near sunset, the journey was further delayed as pilots lacked the training for night travel through the Upper Hudson River segment to Albany.8 Pilotage is compulsory on the Hudson River for foreign vessels and U.S. vessels under register; there are also pilotage fees.9,10 4.4.3 Overall Market Segment The research teamâs consultations with barge and U.S. flagged vessel owners, brokers, for- warders, and trucking companies suggested that waterway filled a very small niche market where trucking and rail could not compete because of their infrastructure restrictions. These 8 2010 Port of Albany NY Master Plan. 9 General Transit Information. Hudson River Pilots Association. http://www.hudsonriverpilots.com/ship-transit-information.html. Accessed May 18, 2015. 10 Hudson River. Hudson River Pilots Association. http://www.hudsonriverpilots.com/uploads/3/1/1/3/3113206/cpb2_e41_ c12_20120826_0006_web.pdf. Accessed May 18, 2015.
50 Multi-State, Multimodal, Oversize/Overweight Transportation loads are trucked to the closest waterway, loaded onto a barge or U.S. flagged vessel, then tran- sited to the final destination or the closest offload point to the destination and trucked again. An exception to waterwayâs niche market is when multiple shipments of freight have the option of using the same barge or vessel, are located close to a waterway, and have flexibility on the delivery of their goods. 4.4.4 Example of a Multi-Jurisdictional Marine Move A 2010 series of moves from the Port of Vancouver, Washington, to Solano County, Califor- nia, displays the strengths and weaknesses of moving OSOW freight by waterway. The developer, enXco, had 46 full wind turbine towers (tower sections, blades, and nacelles) to move along the West Coast. The company commissioned a feasibility study to determine how to move the load from origin to destination. The tower sections encountered significant challenges moving, which prompted the use of an ocean-going barge. To bypass the regulatory and infrastructure constraints, enXco opted to transport 30 pieces of OSOW cargo per barge and use trucking to travel to the final destination (Figure 4-9). The com- pany used four barges to transport the tower sections and then trucked the remaining 18 sections because it was not economical to move less than a full load by barge. The tower sections shipped by barge arrived faster than those moved by truck because of the delay that would have been needed to schedule highway patrol, permits, and drivers. The solution to move the tower sections by barge saved time and money for enXco and displays the economies of scale available when an entire barge is able to be filled. The project also demonstrated that in the absence of a full load, trucking can be more economical.11 Source: Inbound Logistics Figure 4-9. Barge transportation of wind tower bases. 11 Brown, J. Transporting Wind Turbines: An Oversized Challenge. Inbound Logistics. January 2012. http://www.inboundlogistics. com/cms/article/transporting-wind-turbines-an-oversized-challenge/. Accessed May 27, 2015.
Multimodal Options and Modal Competitiveness 51 Nebraska to Virginia by the Port of Houston Waterways are the most competitive in the transportation of very large loads that are too wide for rail and too high or heavy for roadway. This case study provides an example of a shipper exploring its modal options for a very large load. Load and loaded dimensions. Length Width Height Weight Piece Size 43 15 19 225,000 lbs Fully Loaded 214 19 * 15 * 489,000 lbs *The load was placed on its side to minimize the height. The shipper first explored moving the load by rail, but the dimensions were too large for rail. As an alternative a truck-only route was explored (Route Option B), but could not be permitted through Ohio and Maryland due to the loaded height and weight. Therefore, the load traveled by truck from Nebraska to the Port of Houston in Texas, where it was transloaded onto a U.S.-flagged vessel and traveled to Hopewell, Virginia. Finally the piece was transloaded onto a truck and shipped to its destination. The roadway-only option (Route Option B) would have cost $295,000 and taken approximately 12 days. The truck and marine option (Route Option A) totaled $755,000 and took 17 days (7 days of trucking and 10 days for marine). More than half of the truck and marine cost was attributable to marine transport.
