Kansas City Cross Town Improvement Project (C-TIP) Summary

1. IFTWG Intermodal Freight Technology Working Group Kansas CityCross Town Improvement Project (C-TIP) Summary A Public Private Partnership June 21, 2006

2. Contents • Background • Problem Statement • Community & Business Impacts • Solution • Public & Private Industry Benefits • Key Issues • Why Kansas City? • Partner Review • Next Steps • Summary

3. Background • More than one ground mode is often involved in the transportation of intermodal goods • Interchange of this traffic must occur, often in metropolitan areas • Truck to rail (near ports) • Rail to truck to rail (rail interchanges) • Truck-borne “rubber tire” interchanges are used: • When moving freight into and out of ports (where on-dock rail is not available) • When steel wheel rail-to-rail interchanges are not possible • To save time (steel wheel rail-to-rail interchanges often take 2-3 days) • When containers will have cargo added/removed • When service criteria for cutoff connection not met • When railroads have car shortages or don’t want to relinquish scarce assets • When trains are not block order loaded at the origin terminal

4. Background • Railroads provide critical freight links • Long haul railroads rely heavily upon interchanges for cross-continent movements • Intermodal rail traffic converges on a handful of Midwestern cities • Interchanges also occur in significant numbers in and around sea ports

5. Rail-to-Rail Interchanges • There are five major East-West intermodal exchange points • Chicago is the largest example • Intermodal crossroads • 6 Class I railroads interchange • 20+ major rail yards • 20,000 daily intermodal truck moves (Source: CREATE) • Nearly 1/3 are cross-town • At least 10% are Bobtails • Other hub cities experiencing same situation on a smaller scale: • Kansas City • Memphis • St. Louis • New Orleans

6. Port-to-Rail Interchanges • Problem applies to a number of cities with large ports • Few ports have on-dock rail • Reliance on rubber-tire interchanges with nearby rail terminals

7. Airport Interchanges • Airport cargo contributes to cross-town moves between airports and distribution centers

8. Why Kansas City? • Smaller hub cities are also affected by these issues • Kansas City is the second largest rail hub in the US • Significant risks associated with a pilot study in Chicago • Too large a scope • Significantly more expensive • Very visible to the public • While not as significant a problem, benefits will be seen • Results will be directly transferable to other cities

9. Example

10. Problem Statement “The existence of cross-town rubber tire interchanges creates conditions that adversely impact the efficiency of the transportation network, the safety of the motoring public, and the security and quality of life of citizens in the communities through which they take place.” • Interchange volume expected to increase proportionally to overall freight volumes • Inefficiencies in cross-town interchanges lead to added traffic congestion and diminished air quality • Bobtail and empty moves do not create revenue • Bobtail tractors are inherently unsafe • Empty trucks are not subjected to comprehensive security standards • Lack of integration and communication results in fragmented operations

11. Volume Increases • Intermodal volume is increasing • Port related traffic is increasing • Number of truck miles is growing • Distance between terminals is increasing Source: American Association of Port Authorities Source: FHWA, Highway Statistics, Table VM-1, 1980-2004

12. Congestion Increases • FHWA Freight Analysis Framework (FAF) predicts significantly worsening congestion at interchange locations • Congestion at key locations where cross-towns occur: • East coast (port-to-rail) • West coast (port-to-rail) • Along Mississippi (rail-to-rail) Back to Problem Statement

13. Air Quality Degradation • Congestion leads to idling which emits more pollutants • Low profitability of drayage providers contributes to an aging fleet which is less environmentally friendly Back to Problem Statement

14. Bobtail Efficiency • Empty and bobtail moves create no revenue • Costs associated with moving bobtails must be absorbed by one or more carriers • Empty moves represent additional, potentially unnecessary truck trips Back to Problem Statement

15. Lack of Integration • Operations are not integrated across modes • Modes operate independently • Backhaul opportunities are lost • Accurate visibility information is not fully available, or shared • Separate, isolated databases • Inconsistent data quality and quantity • Communications between modes is sub-optimal • Heavy reliance on phone, fax, e-mail • High degree of human intervention

16. Bobtail Moves • Empty moves between terminals occur at a high frequency • Bobtail moves are inherently unsafe Source: The Michigan Heavy Truck Study, Executive Summary 1990 Source: www.hankstruckpictures.com/joe_hyberg.htm “The bobtail configuration clearly has the most serious problem safely negotiating the highway system” - The Michigan Heavy Truck Study, Executive Summary, 1990 Back to Problem Statement

17. Security • Some units (often coming in on railcars) do not have security bolts • During cross-town movements there is limited ability to locate the truck • Limited security (fencing, locked gates) at terminals that do not operate 24/7 • Bobtail moves often do not have to check in/out at facilities • HazMat containers are mixed in with other cross-town containers at many terminals Back to Problem Statement

18. Impact on Communities • Congestion is worsening • Service level degradation across all modes • Deteriorating air quality • Reduction in safety • Bobtails inherently unsafe • Large number of trucks on city streets • Bobtail moves are eroding carrier profitability • Owner-operator companies disappearing • Public outcry against truck traffic • Resistance to public acquisition of new right-of-way

19. Introduction to Solution In defining a technology-based solution, a number issues had to be addressed, namely: • Intellectual Property – who will own the software, and will licensing (if any) fees be guaranteed reasonable? • Business Model – is there a money-making opportunity here for industry? • Mode Expandability – at how many other sites and modes will the solution work with little or no modification? • Operator – who will operate the solution during the pilot? After it’s adopted? • State & Local Involvement – What role will state and local governments play? MPOs?

20. Solution Real-Time Traffic Monitoring Chassis Utilization Tracking Wireless Drayage Updating Intermodal Move Exchange

21. Solution “C-TIP is a four-part pilot demonstration that seeks to provide a sustainable solution to cross-town intermodal exchange problems. It will be delivered through a public-private partnership that includes the participation of city governments, MPOs, State DOTs and the US DOT, in addition to railroad and trucking companies, steamship lines and 3rd party providers” Major Components: • Intermodal Exchange (IMEX) – open architecture portal that allows for collaborative dispatch management model among rail lines, truckers and facility operators • Wireless Drayage Updating (WDU) – open architecture mechanism utilizing low cost wireless technology as an interface between drivers and dispatchers • Chassis Utilization Tracking (CUT) – open architecture portal that allows for commonly managed chassis fleet and/or options for collectively managing current assets • Real Time Traffic Monitoring (RTTM) – real time monitoring and distribution of route-specific and location specific travel time and congestion information

22. Public Benefits • Improved Efficiency • Fewer overall moves leads to congestion mitigation • Improved Safety • Fewer overall moves leads to less accidents • Reduction/elimination of unsafe bob-tail moves • Reduction in negative Environmental factors • Fewer overall moves leads to less pollution • Improved air quality

23. Private Industry Benefits • Improved Efficiency • Reduced costs and higher utilization rates for drayage providers • Increased driver results and retention • Increased reliability and availability of key data • Reduced growth rate of capital investment in assets and real estate • Higher rate of terminal capacity recovery • Reduced dwell time of loads prior to departure • Reduced chassis inventory and repositioning

24. Key Issues *Issue ID is referenced in later slides

25. Potential Partners

26. Partner Priorities & Objectives Deploy technology to: State and Local Gov’t Reduce Congestion and Improve Air quality (KC Scout 1998 ITS Earmark) DHS/TSA Enhance Freight Security ($672,998 approved 2005 Supporting C-TIP) Carriers Enhance Productivity (Contribution of Data and Operation Processes) US DOT Enhance freight Efficiency and Safety (Request ITS funding to address these issues) 3rd Parties Address user needs Through Public/Private Partnership

27. Statements of Support • State of Missouri • KC SmartPort – promotes inland port operations in KC • KC Scout – ITS traffic incident management program • Railroad Companies • Union Pacific Railroad (2 terminals in KC area) • BNSF Railway (2 terminals in KC area) • Kansas City Southern Railway (1 terminal in KC area) • Norfolk Southern Combined Railroad (1 terminal in KC area) • Trucking Companies • In-Terminal Services • Mid-Cities Motor Freight, Inc. • Greer Transportation • Intermodal Association of North America (IANA) • Provides coordinative, educational, and technical support services to the intermodal freight industry

28. OPS User Apps Technical Connectivity Institutional & Business Framework Next Steps Next Steps C-TIP Project Components C-TIP Pilot Operations Partner Evaluation Systems/Process Refinement Development of Value-Added Applications ITS Deployment Test User Needs Assessment IMEX, WDU, CUT, RTTM Development Technical/Operational Evaluation • User Needs Assessment • Teaming Agreements • Detailed Project Planning • Evaluation Planning Business Process Mapping Performance Measures User Driven Cost/Benefit Assessment Concept of Operations Policy/Funding Decisions • Concept of Operations • Funding Decisions • Completion of Preliminary Analysis (CBM, Process Modeling)

29. Summary • “Cross-town” interchanges occur frequently, and are expected to grow in number • Interchanges are currently deficient • Efficiency • Safety/Security • Environment • Coordinated intermodal solution is required • Need to leverage technology • Multi-part deployment • Public/private partnership • Repeatable, expandable, scalable solution • Next steps…secure funding and begin detailed planning

30. Appendix:Business Case Details

31. Business Case Overview Issues Back to Solution

32. Business Case Overview Issues Back to Solution

33. Business Case Overview Issues Back to Solution

34. Business Case Overview Issues Back to Solution

35. Potential Impacts P-T Port Truck A-T Air Truck R-T-R Rail-Truck-Rail

36. Potential Impacts P-T Port Truck A-T Air Truck R-T-R Rail-Truck-Rail

37. Potential Impacts P-T Port Truck A-T Air Truck R-T-R Rail-Truck-Rail

38. Potential Impacts P-T Port Truck A-T Air Truck R-T-R Rail-Truck-Rail 1. Congestion Rankings taken from the 2005 Annual Urban Mobility Study done by the Texas Transportation Institute 2. Air Quality statistics taken from the EPA Green Book 3. Airport data reported as cargo tonnage moved 4. Norfolk is not ranked, Virginia Beach (ranked 46) and Richmond (ranked 57) are in the immediate area

39. Railroads Ben Shelton, Union Pacific Ocean Carriers/Ports Ed McQuillan, Hanjin Shipping South Carolina Port Authority Airports David Wirsing, Former President, Air Cargo Association Aircargoworld.com Research Bodies Eric Jessup, Washington State University The Michigan Heavy Truck Study, 1990 Annual Urban Mobility Study, 2005, Texas Transportation Institute Green Book, US Environmental Protection Agency MPOs Gerald Rawlings, CATS Pete Beaulieu, Puget Sound Regional Council Southern California Council of Governments 3rd Parties Ted Prince, Optimization Alternatives, Inc. Tom Malloy, Intermodal Association of North America Walter Locke, Railinc Mike Winchester, OCEMA K. Mark Sommerhauser, Kansas City Scout Chris J.F. Gutierrez, Kansas City SmartPort CREATE Trucking Companies Phil Noury, Landstar References