Airport Baggage Handling System Decision-Making Based on Total Cost of Ownership (2023)

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2023 A I R P O R T C O O P E R A T I V E R E S E A R C H P R O G R A M ACRP RESEARCH REPORT 252 Research sponsored by the Federal Aviation Administration Subscriber Categories Aviation • Terminals and Facilities Airport Baggage Handling System Decision-Making Based on Total Cost of Ownership Studdiford Technical Solutions, LLC Alexandria, VA i n a s s o c i a t i o n w i t h Amir Neeman Consulting, LLC Alexandria, VA TransSolutions, LLC Fort Worth, TX VTC Arlington, TX

AIRPORT COOPERATIVE RESEARCH PROGRAM Airports are vital national resources. They serve a key role in transpor- tation of people and goods and in regional, national, and international commerce. They are where the nation’s aviation system connects with other modes of transportation and where federal responsibility for man- aging and regulating air traffic operations intersects with the role of state and local governments that own and operate most airports. Research is necessary to solve common operating problems, to adapt appropriate new technologies from other industries, and to introduce innovations into the airport industry. The Airport Cooperative Research Program (ACRP) serves as one of the principal means by which the airport industry can develop innovative near-term solutions to meet demands placed on it. The need for ACRP was identified in TRB Special Report 272: Airport Research Needs: Cooperative Solutions in 2003, based on a study spon- sored by the Federal Aviation Administration (FAA). ACRP carries out applied research on problems that are shared by airport operating agen- cies and not being adequately addressed by existing federal research pro- grams. ACRP is modeled after the successful National Cooperative High- way Research Program (NCHRP) and Transit Cooperative Research Program (TCRP). ACRP undertakes research and other technical activi- ties in various airport subject areas, including design, construction, legal, maintenance, operations, safety, policy, planning, human resources, and administration. ACRP provides a forum where airport operators can cooperatively address common operational problems. ACRP was authorized in December 2003 as part of the Vision 100— Century of Aviation Reauthorization Act. The primary participants in the ACRP are (1) an independent governing board, the ACRP Oversight Committee (AOC), appointed by the Secretary of the U.S. Department of Transportation with representation from airport operating agencies, other stakeholders, and relevant industry organizations such as the Airports Council International-North America (ACI-NA), the American Associa- tion of Airport Executives (AAAE), the National Association of State Aviation Officials (NASAO), Airlines for America (A4A), and the Airport Consultants Council (ACC) as vital links to the airport community; (2) TRB as program manager and secretariat for the governing board; and (3) the FAA as program sponsor. In October 2005, the FAA executed a contract with the National Academy of Sciences formally initiating the program. ACRP benefits from the cooperation and participation of airport professionals, air carriers, shippers, state and local government officials, equipment and service suppliers, other airport users, and research organi- zations. Each of these participants has different interests and responsibili- ties, and each is an integral part of this cooperative research effort. Research problem statements for ACRP are solicited periodically but may be submitted to TRB by anyone at any time. It is the responsibility of the AOC to formulate the research program by identifying the highest priority projects and defining funding levels and expected products. Once selected, each ACRP project is assigned to an expert panel appointed by TRB. Panels include experienced practitioners and research specialists; heavy emphasis is placed on including airport professionals, the intended users of the research products. The panels prepare project statements (requests for proposals), select contractors, and provide technical guidance and counsel throughout the life of the project. The process for developing research problem statements and selecting research agencies has been used by TRB in managing coop- erative research programs since 1962. As in other TRB activities, ACRP project panels serve voluntarily without compensation. Primary emphasis is placed on disseminating ACRP results to the intended users of the research: airport operating agencies, service pro- viders, and academic institutions. ACRP produces a series of research reports for use by airport operators, local agencies, the FAA, and other interested parties; industry associations may arrange for workshops, training aids, field visits, webinars, and other activities to ensure that results are implemented by airport industry practitioners. ACRP RESEARCH REPORT 252 Project 03-53 ISSN 2572-3731 (Print) ISSN 2572-374X (Online) ISBN 978-0-309-69863-4 Library of Congress Control Number 2023937001 © 2023 by the National Academy of Sciences. National Academies of Sciences, Engineering, and Medicine and the graphical logo are trade- marks of the National Academy of Sciences. All rights reserved. COPYRIGHT INFORMATION Authors herein are responsible for the authenticity of their materials and for obtaining written permissions from publishers or persons who own the copyright to any previously published or copyrighted material used herein. Cooperative Research Programs (CRP) grants permission to reproduce material in this publication for classroom and not-for-profit purposes. Permission is given with the understanding that none of the material will be used to imply TRB, AASHTO, APTA, FAA, FHWA, FTA, GHSA, or NHTSA endorsement of a particular product, method, or practice. It is expected that those reproducing the material in this document for educational and not-for-profit uses will give appropriate acknowledgment of the source of any reprinted or reproduced material. For other uses of the material, request permission from CRP. NOTICE The research report was reviewed by the technical panel and accepted for publication according to procedures established and overseen by the Transportation Research Board and approved by the National Academies of Sciences, Engineering, and Medicine. The opinions and conclusions expressed or implied in this report are those of the researchers who performed the research and are not necessarily those of the Transporta- tion Research Board; the National Academies of Sciences, Engineering, and Medicine; or the program sponsors. The Transportation Research Board does not develop, issue, or publish standards or spec- ifications. The Transportation Research Board manages applied research projects which provide the scientific foundation that may be used by Transportation Research Board sponsors, industry associations, or other organizations as the basis for revised practices, procedures, or specifications. The Transportation Research Board; the National Academies of Sciences, Engineering, and Medicine; and the sponsors of the Airport Cooperative Research Program do not endorse products or manufacturers. Trade or manufacturers’ names or logos appear herein solely because they are considered essential to the object of the report. Published research reports of the AIRPORT COOPERATIVE RESEARCH PROGRAM are available from Transportation Research Board Business Office 500 Fifth Street, NW Washington, DC 20001 and can be ordered through the Internet by going to https://www.mytrb.org/MyTRB/Store/default.aspx Printed in the United States of America

e National Academy of Sciences was established in 1863 by an Act of Congress, signed by President Lincoln, as a private, non- governmental institution to advise the nation on issues related to science and technology. Members are elected by their peers for outstanding contributions to research. Dr. Marcia McNutt is president. e National Academy of Engineering was established in 1964 under the charter of the National Academy of Sciences to bring the practices of engineering to advising the nation. Members are elected by their peers for extraordinary contributions to engineering. Dr. John L. Anderson is president. e National Academy of Medicine (formerly the Institute of Medicine) was established in 1970 under the charter of the National Academy of Sciences to advise the nation on medical and health issues. Members are elected by their peers for distinguished contributions to medicine and health. Dr. Victor J. Dzau is president. e three Academies work together as the National Academies of Sciences, Engineering, and Medicine to provide independent, objective analysis and advice to the nation and conduct other activities to solve complex problems and inform public policy decisions. e National Academies also encourage education and research, recognize outstanding contributions to knowledge, and increase public understanding in matters of science, engineering, and medicine. Learn more about the National Academies of Sciences, Engineering, and Medicine at www.nationalacademies.org. e Transportation Research Board is one of seven major programs of the National Academies of Sciences, Engineering, and Medicine. e mission of the Transportation Research Board is to provide leadership in transportation improvements and innovation through trusted, timely, impartial, and evidence-based information exchange, research, and advice regarding all modes of transportation. e Board’s varied activities annually engage about 8,000 engineers, scientists, and other transportation researchers and practitioners from the public and private sectors and academia, all of whom contribute their expertise in the public interest. e program is supported by state transportation departments, federal agencies including the component administrations of the U.S. Department of Transportation, and other organizations and individuals interested in the development of transportation. Learn more about the Transportation Research Board at www.TRB.org.

C O O P E R A T I V E R E S E A R C H P R O G R A M S CRP STAFF FOR ACRP RESEARCH REPORT 252 Christopher J. Hedges, Director, Cooperative Research Programs Waseem Dekelbab, Deputy Director, Cooperative Research Programs Marci A. Greenberger, Manager, Airport Cooperative Research Program Joseph D. Navarrete, Senior Program Officer Stephanie L. Campbell-Chamberlin, Senior Program Assistant Natalie Barnes, Director of Publications Heather DiAngelis, Associate Director of Publications ACRP PROJECT 03-53 PANEL Field of Policy and Planning Rohini Kumarage, Austin-Bergstrom International Airport, Austin, TX (Chair) Bhaskar Chopra, Siemens Logistics, Dallas, TX Jaspreet Fervaha, Toronto Pearson International Airport, Mississauga, ON Stuart Mathews, Port of Seattle, Seattle, WA Denise McElroy, Southwest Airlines, Dallas, TX David McNamara, Faithful+Gould, Austin, TX Christina Nutting, FAA Liaison Paul James Eubanks, Airports Council International–North America Liaison

ACRP Research Report 252 is a guide for incorporating total cost of ownership into airport baggage handling system decision-making. The report will be of particular interest to practitioners who want to consider a holistic approach to identifying, evaluating, and selecting options for updating or expanding their facility’s systems. Airports take a wide range of approaches to designing and building baggage handling systems. Most are designed and built with a focus on minimizing capital costs with fewer considerations given to the future costs of performance, operations, and maintenance. Recently, however, greater attention is being paid to the total cost of ownership for these systems, yet research was needed to help airports benchmark and track their total cost of ownership and incorporate it into financial models. The research, led by Studdiford Technical Solutions, began with a literature review focused on understanding baggage handling system trends and identifying industry best practices and factors used to calculate total cost of ownership of critical aviation infrastructure. This was followed by a comprehensive industry outreach process using interviews, site visits, and discussions with subject matter experts, including airport operators, airlines, consultants, and vendors. The research team combined the results of these efforts with their own exper- tise to identify effective practices airports could consider implementing at their facility. Key features of the guide include a discussion of emerging trends and technologies; considerations for selecting baggage equipment based on total cost of ownership, energy consumption, security, and checked-bag screening; a primer on funding mechanisms; and a review of procurement methods, including design-bid-build, design-build, progressive design-build, and construction manager at risk. In addition to ACRP Research Report 252, appendices (not included herein) provide numer- ous resources, and a graphical decision-assist toolkit is available to help airports evaluate baggage handling systems from a total cost of ownership perspective. The appendices and toolkit are available on the National Academies Press website (nap.nationalacademies.org) by searching for ACRP Research Report 252: Airport Baggage Handling System Decision-Making Based on Total Cost of Ownership. F O R E W O R D By Joseph D. Navarrete Staff Officer Transportation Research Board

AUTHOR ACKNOWLEDGMENTS The research discussed in this guide was performed under ACRP Project 03-53, “Airport Baggage Handling System Decision-Making Based on Total Cost of Ownership,” by a research team of recognized experts in airport baggage handling and security systems planning, design, management, and implemen- tation. Studdiford Technical Solutions, LLC, was the primary research consultant. Larry Studdiford, President and Founder at Studdiford Technical Solutions, was the principal investigator. The other authors were Larry Butler, Ryan Crews, Joe Emery, Martagus Newton, Carla Rountree, Richard Spies, and Donna Studdiford at Studdiford Technical Solutions, LLC; Amir Neeman at Amir Neeman Consulting, LLC; Andy Entrekin, Jessica Gafford, Yoges Warren, and Doug Wendt at TransSolutions, LLC; and Chris Norton, Joe Pharis, and James Schuenemann at VTC. The research team acknowledges the contributions of information provided by the Transportation Security Administration in the form of data collected over the course of the last decade. The research team also thanks the many airport operators, airlines, consultants, and vendors who contributed their time, opinions, and data regarding the financing, design, construction, operations, and maintenance of baggage handling systems, for which we are grateful. These include: • American Airlines: Al Alvarez, Steve Holloway • Southwest Airlines: Mark Baker, Shamir Gonzalez, Kim Perkins, Rick Weaver • United Airlines: Steve Tamaroglio • Austin-Bergstrom International Airport (AUS): Dominic Garafolo, Shane Harbinson, Brian Long, Paul Pena, Mike Robinson, Valerie Slaughter • Ben Gurion Airport (TLV): Ronen Elyahu • Bluegrass Airport (LEX): Mark Day • Bozeman Yellowstone International Airport (BZN): Brian Sprenger • Buffalo Niagara International Airport (BUF): Stephen Maziarz, Karen Renna, Lee Weitz • Charlotte Douglas International Airport (CLT): Randy Garrell, Chris Hazen, Renay Hodges, Frank Linder, Andy Williams • Cincinnati/Northern Kentucky International Airport (CVG): Stephen Saunders, Kevin Watts • Dallas-Fort Worth International Airport (DFW): Jimmy Gomez, Tammy Huddleston • Dallas Love Field (DAL): Mark Duebner • Edmonton International Airport (YEG): Peter Agnew, Steve Maybee • Hartsfield-Jackson Atlanta International Airport (ATL): Jim Herren • Miami International Airport (MIA): Pedro Hernandez • Nashville International Airport (BNA): Christopher Keating • Orlando International Airport (MCO): Scott Goodwin, John Scala • Phoenix Sky Harbor International Airport (PHX): Ben Armour, Alice Bimrose, Ken Cook, Jennifer Maples, Jerry Oakes • San Francisco International Airport (SFO): Greg McCarthy • Southwest Florida International Airport (RSW): Bill Dowling, David Morris • AvAirPros: Matt Ross • JSM & Associates: Blair Cox, Jim Weigand • The Sheward Partnership: Michael Pavelsky, Michael Sheward • Turner Construction: Mike Kessler • ELS: Fred Vernon • JBT Aerotech: Mark Bentley, Dave Dusenbury, James Higdon, Chris Jeardoe, Jason Martin • Daifuku Webb: Todd Alderman • Robson Handling Technology: John Golding, Matt Williams • Siemens Logistics: Jay Bouton, Dan Stricklin, Brenda Swartz • Vanderlande Industries: Art Masri, Jonah Thompson • Association of Railroads: John Gray

1 Chapter 1 Total Cost of Ownership for Baggage Handling Systems: Introduction and Setting 1 1.1 Introduction 1 1.2 Content and Structure 2 1.3 Guidebook Purpose 2 1.4 Background 7 1.5 Where We Are Today 8 1.6 Research Approach and Methodology 11 Chapter 2 Defining Total Cost of Ownership for Baggage Handling Systems 11 2.1 Introduction and Background 11 2.2 CAPEX versus OPEX 13 2.3 Variables versus Considerations 13 2.4 The Impact of Stakeholder Engagement on TCO 17 2.5 Technology Selection Impact on TCO 29 2.6 Energy Efficiency 33 2.7 Security Considerations 37 Chapter 3 Future Trends and Considerations 37 3.1 Predictive Analytics 41 3.2 Blockchain Technology 45 3.3 Self-Service and Remote Bag Drops 48 3.4 Baggage Image and Weight Identification System 48 3.5 Video Coding 50 3.6 Radio Frequency Identification 53 3.7 Automated Guided Vehicles 54 3.8 Digital Twin 55 3.9 Robotics and Automation 58 Chapter 4 Baggage Handling Systems Funding Mechanisms 58 4.1 Introduction 58 4.2 TSA CBIS Design Funding Assistance 60 4.3 Bonds 60 4.4 PFC Revenue 61 4.5 AIP Grants 61 4.6 Airport Revenue 62 4.7 State and Local Grants 62 4.8 Other Funding Options 64 4.9 Industry-Disrupting Funding Options 66 4.10 Buy America/Buy American Provisions 67 4.11 What Lies Ahead C O N T E N T S

68 Chapter 5 Procurement Methodologies 68 5.1 Introduction 68 5.2 Procurement Types Defined 72 5.3 Cost Trade-Offs 74 Chapter 6 Conclusions 74 6.1 Strategies for Considering TCO 76 Bibliography 80 Appendices 81 Abbreviations and Acronyms Note: Photographs, figures, and tables in this report may have been converted from color to grayscale for printing. The electronic version of the report (posted on the web at nap.nationalacademies.org) retains the color versions.