Port and hinterland network: a case study of the Crescent Corridor intermodal freight program in the US

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Port Port and and hinterland hinterland network: network: aa case case study study of of the the Crescent Crescent Corridor Corridor intermodal freight program in the US intermodal freight program in the US Junko Junko Sugawara* Sugawara* *Tokyo Institute of Technology, Tokyo, Japan, 2-12-1-I4-12 O-okayama Meruro-ku, Tokyo 152-8550, Japan *Tokyo Institute of Technology, Tokyo, Japan, 2-12-1-I4-12 O-okayama Meruro-ku, Tokyo 152-8550, Japan

Abstract Abstract Continued rapid growth of globalization and international trade is increasing the importance of global freight transport and logistics Continued rapid growth of globalization and international trade is increasing the importance of global freight transport and logistics management around the world. In particular, intermodal transport using two or more different modes of transport is extremely important to management around the world. In particular, intermodal transport using two or more different modes of transport is extremely important to implement efficient logistics networks from ports to the hinterland. The Crescent Corridor Intermodal Freight Program is part of the American implement efficient logistics networks from ports to the hinterland. The Crescent Corridor Intermodal Freight Program is part of the American Recovery and Reinvestment Act (ARRA). The U.S. Department of Transportation (USDOT) launched the Transportation Investment Recovery and Reinvestment Act (ARRA). The U.S. Department of Transportation (USDOT) launched the Transportation Investment Generating Economic Recovery (TIGER) discretionary grant program on June 17, 2009 and solicited applications for innovative, multi-modal Generating Economic Recovery (TIGER) discretionary grant program on June 17, 2009 and solicited applications for innovative, multi-modal and multi-jurisdictional transportation projects intended to provide significant economic and environmental benefits. Norfolk Southern’s and multi-jurisdictional transportation projects intended to provide significant economic and environmental benefits. Norfolk Southern’s Crescent Corridor Program was awarded a TIGER grant in the amount of $105 million, split evenly towards the construction of two regional Crescent Corridor Program was awarded a TIGER grant in the amount of $105 million, split evenly towards the construction of two regional intermodal facilities in Tennessee and Alabama, on February 17, 2010. The program is essentially a public-private partnership with the U.S. intermodal facilities in Tennessee and Alabama, on February 17, 2010. The program is essentially a public-private partnership with the U.S. Dept. of Transportation and will be completed in 2030. This empirical and qualitative study is based on analysis of published U.S. government Dept. of Transportation and will be completed in 2030. This empirical and qualitative study is based on analysis of published U.S. government documents, state and regional legislative documents, freight railroad company documents and the PIERS data. This study focuses on the documents, state and regional legislative documents, freight railroad company documents and the PIERS data. This study focuses on the Crescent Corridor Intermodal Freight Program from the Gulf Coast to the Northeast as an example intermodal project in the U.S., describes the Crescent Corridor Intermodal Freight Program from the Gulf Coast to the Northeast as an example intermodal project in the U.S., describes the individual projects and evaluates the effectiveness of the various projects to obtain strategic insights for application to other regions. individual projects and evaluates the effectiveness of the various projects to obtain strategic insights for application to other regions. © 2017 byby Elsevier B.V. © 2017 The TheAuthors. Authors.Published Published Elsevier B.V. © 2017 The Authors. Published by Elsevier B.V. Peer-review under of of WORLD CONFERENCE ON TRANSPORT RESEARCH SOCIETY. Peer-review underresponsibility responsibility WORLD CONFERENCE ON TRANSPORT RESEARCH SOCIETY. Peer-review under responsibility of WORLD CONFERENCE ON TRANSPORT RESEARCH SOCIETY. Keywords: Intermodal; Port and Hinterland network;Intermodal Corridor; Intermodal freight program; Keywords: Intermodal; Port and Hinterland network;Intermodal Corridor; Intermodal freight program;

1. Introduction 1. Introduction Continued rapid growth of globalization and international trade is increasing the importance of global freight transport and Continued rapid growth of globalization and international trade is increasing the importance of global freight transport and logistics management around the world. The growth of international trade will cause significant increases in both international logistics management around the world. The growth of international trade will cause significant increases in both international and domestic transportation demand. In particular, intermodal transport using two or more different modes of transport is and domestic transportation demand. In particular, intermodal transport using two or more different modes of transport is extremely important to implement efficient logistics networks from ports to the hinterland, which are essential not only for extremely important to implement efficient logistics networks from ports to the hinterland, which are essential not only for industrial efficiency but also for national economic growth and competitiveness. Therefore, every country or region must industrial efficiency but also for national economic growth and competitiveness. Therefore, every country or region must establish efficient, sustainable, and safe freight transport systems. However, the continued increase of trade volume will cause establish efficient, sustainable, and safe freight transport systems. However, the continued increase of trade volume will cause various social issues such as traffic accidents, congestion, fuel consumption, and polluting emissions. Consequently, the various social issues such as traffic accidents, congestion, fuel consumption, and polluting emissions. Consequently, the

* Corresponding author. Tel.: +81-3-5734-3468; fax: +81-3-5734-3468. * Corresponding author. Tel.: +81-3-5734-3468; fax: +81-3-5734-3468. E-mail address: [email protected] E-mail address: [email protected] 2214-241X © 2017 The Authors. Published by Elsevier B.V. 2214-241X © 2017 The Authors. Published by Elsevier B.V. Peer-review under responsibility of WORLD CONFERENCE ON TRANSPORT RESEARCH SOCIETY. Peer-review under responsibility of WORLD CONFERENCE ON TRANSPORT RESEARCH SOCIETY.

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establishment of efficient as well as safe and environmentally sound intermodal freight transport systems is not easy for states or regions, either developed or developing. The United States is a largest international trading nation in the world and has developed a nation-wide intermodal transport system from ports to the hinterland. Even so, the continued increase in trading volume has caused capacity issues in some intensively used freight corridors. The present study focuses on the Crescent Corridor Intermodal Freight Program from the Gulf Coast to the Northeast as an example of an intermodal corridor project in the U.S., analyses the current situation of the U.S. ports and development of intermodal freight policy and intermodal corridors, and describes and evaluates the effectiveness of various individual projects to obtain strategic insights for application to other regions. 2. Literature Review & Methodology The port and hinterland transportation network is vital for the US economy and public interest to facilitate international trade, but establishing efficient intermodal corridors involves multiple judicial domains and complex systems. US ports face global competition from the Panama Canal expansion, Port of Prince Rupert expansion, and the Suez Canal. In this context, studying the intermodal corridor approach from the port to the hinterland will provide useful information for both developed and developing regions. The Crescent Corridor is an ongoing intermodal corridor project to improve current infrastructure capacity and tackle future social issues such as energy consumption and air pollution. Intermodal freight transport research began in the late 1990’s, so is a relatively new research field in Transportation Research. The OECD (2001) examined institutional aspects to compare and access the impact of different organizational structures on transport planning and intermodal policy development within 14 countries and regions, Austria, Canada, the Czech Republic, Finland, Germany, Hungary, Italy, Japan, Mexico, the Netherlands, Norway, Switzerland, the United Kingdom, the United States, and the European Union. The study found that existing infrastructure and policy making varied between countries, and that intermodal policy development requires close cooperation between the government and the private sector. However, the intermodal corridor concept or specific cases were not discussed. The U.S. Maritime Administration (2009) suggested that the importance of the port system will only grow as globalization continues and the U.S. economy becomes more integrated into the world economy. Landside transportation chokepoints within the port and the hinterland network decrease the efficiency of the marine transportation system. No matter how efficient or effective port operations may be “inside the gate,” that efficiency is lost if cargo is delayed due to road or rail congestion “outside the gate.” Therefore, identification of such chokepoints throughout the network and designation of priority intermodal corridors are essential to improve efficiency and establish smooth and efficient intermodal transport operations from ports to the hinterland.. Various studies have examined intermodal transport operations. Bontekoning et.al conducted intermodal freight transportation review research based on intermodal rail-truck freight transport literature by reviewing 92 publications and discussed aspects by assessing current knowledge base, drayage, rail haul, transhipment, standardisation, multi-actor chain management and control, mode choice and pricing strategies, intermodal transportation policy and planning, miscellaneous aspects, and applied methods and technique. Some operational research has approached intermodal terminal or route choice and optimization, but intermodal transport research requires the multi-disciplinary approach. Mathisen and Hanssen (2014) investigated journals of intermodal transport based on Scopus, the world’s largest abstract and citation database of peer-reviewed literature from 1985-2013 for 11 journals and measured publishing and citation frequency. Monios et.al (2013) investigated the Heartland Intermodal Corridor from an institutional point of view and identified a new mechanism for channelling Federal funds to private operators, representing a new direction for the FHA. However, the Crescent Corridor has not been the subject of specific research. The present study investigated the Crescent Corridor using empirical and qualitative data obtained from US government documents, state and regional legislative documents, freight railroad company documents, and PIERS data, although access to some documents was limited, and a number of interviews and site visits conducted in the United States. 3. U.S. Ports and Intermodal freight (shipping) 3.1 U.S. Ports and Waterborne Container Trade The linkage of U.S. ports to surface transport, either truck or rail, is critical to the US economy. Approximately 75 percent of freight tons in U.S. foreign trade moved by water in 2012. (USDOT, Federal Highway Administration, Freight Analysis Framework 2013) The US freight system is required to move 40 tons of freight per person annually (National Rail Plan USDOT Federal Railroad Administration 2010), so the increasing U.S. population will result in a 22 percent increase in the total amount of tonnage between 2010 and 2035. With an estimated 420 million people in the U.S. by 2050, the increase is projected to be 35 percent (Freight Railroad Administration, www.fra.dot.gov/Page/P0528). Tables 1 and 2 show the top 10 U.S. ports for waterborne container trade by TEU’s and metric tons from 2007 to 2012. These tables show the waterborne container trade has increased despite the economic recession at all 10 container ports from 2007 to 2010. Every year, these 10 ports handle more than 80% of waterborne container trade by both metric tons and TEUs, and all

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freight is transported from the port to the hinterland or final destination. A total of 29, 477,025 TEUs were offloaded and transported in 2012. Table 1. U.S. Top 10 Waterborne Container Trade by Customs Port Rank 1 2 3 4 5 6 7 8 9 10 Rank 1-10 Total % of total

Customs Port Los Angeles, CA Long Beach, CA New York, NY Savannah, GA Norfolk, VA Oakland, CA Houston, TX Seattle, WA Charleston, SC Tacoma, WA

2007 5,754,162 4,986,262 3,943,316 2,049,102 1,585,231 1,439,096 1,416,710 1,290,316 1,409,731 1,147,162

2008 5,681,418 4,585,644 4,002,492 2,120,713 1,594,675 1,381,720 1,374,437 1,083,789 1,333,307 1,126,999

2009 5,024,133 3,732,670 3,534,832 1,914,502 1,375,940 1,381,036 1,255,153 1,072,728 954,835 871,413

2010 5,561,664 4,436,299 4,044,124 2,170,222 1,435,210 1,505,199 1,346,313 1,416,911 1,069,025 835,397

2011 6,011,025 4,318,278 4,264,512 2,285,413 1,482,613 1,538,985 1,418,427 1,363,784 1,147,169 885,766

2012 5,938,454 4,330,482 4,246,769 2,288,024 1,646,550 1,541,584 1,494,516 1,240,258 1,216,465 1,091,738

25,021,088

24,285,194

21,117,242

23,820,364

24,715,972

25,034,840

29,228,177

28,453,588

24,903,898

27,866,377

29,029,577

29,477,025

85.6

85.4

84.8

85.5

85.1

84.9

(Source: Port Import Export Reporting Services, PIERS)

Table 2. U.S. Top 10 Waterborne Container Trade by Customs Port Rank 1 2 3 4 5 6 7 8 9 10 Rank 1-10 Total % of total

(TEUs)

Customs Port Los Angeles, CA New York, NY Long Beach, CA Savannah, GA Houston, TX Norfolk, VA Oakland, CA Seattle, WA Charleston, SC Tacoma, WA

(Metric Tons)

2007 40,761,579 31,469,184 35,967,282 17,438,764 13,882,577 13,286,993 12,333,209 10,580,546 11,795,629 9,361,809

2008 41,785,006 31,800,168 33,305,334 18,064,445 13,287,114 13,531,141 11,983,437 9,047,470 11,123,719 9,483,095

2009 37,351,580 28,837,913 27,051,784 16,685,066 12,444,245 11,898,367 12,315,190 9,113,852 8,192,745 7,428,348

2010 41,146,639 33,065,748 31,895,878 19,031,936 13,901,140 12,349,814 13,128,923 11,949,778 9,391,524 7,007,109

2011 44,803,371 34,824,700 30,779,730 20,025,688 14,782,700 12,760,044 13,406,613 12,109,317 9,830,885 7,460,971

2012 43,851,331 35,034,934 31,121,436 20,155,572 15,623,220 14,346,961 13,747,637 11,193,427 10,374,640 9,258,857

196,877,571

193,410,928

171,319,090

192,868,490

200,784,021

204,708,015

233,874,478

229,910,654

205,517,377

229,705,842

239,642,015

244,982,399

84.2

84.1

83.4

84

83.4

83.6

(Source: Port Import Export Reporting Services, PIERS)

Table 3. Weight and value of Shipments by Transportation Mode: 2007 and 2040

2007 2040 2040/2007

Millions of metric tones Total Domestic Exports 17,127 15,288 594 24,933 20,939 1,655 1.46 1.37 2.77

Imports 1,245 2,340 1.88

Billions of 2007 dollars Total Domestic Exports 16,651 13,457 1,196 39,441 29,578 4,195 2.37 2.20 3.51

Imports 1,997 5,668 2.84

Source: USDOT

Table 3shows that exports and imports accounted for 1,839 million tons valued at 3,193 billion dollars in 2007 and are forecast to make up an even greater share of freight moving throughout the United States in the future, reaching 3,995 million tons (2.1 fold increase) and 9,863 billion dollars (3.1 fold increase) by 2040. This continued growth of international trade will cause issues with existing infrastructure capacity in the near future. 3.2 U.S. Major Gateways and corridor The US transport network consists of an extensive network of highway, railroads, waterways, pipelines, and airways. These infrastructure modes include approximately 4,000,000 miles of public roads, including 163,741 miles of national highways,



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46,960 miles of interstate highways, 138,518 miles of railroads including Class I, regional and local railroads, 11,000 miles of inland waterways, and extensive pipelines. Intermodal system routes incorporate the transpacific maritime route (containership services between Asia and the U.S. West Coast), the U.S. rail network, and the interstate highway system. The Ports of Los Angeles and Long Beach (LA/LB) are the main gateway from Asia and offload more than 11 million TEUs which are transported from the ports to the hinterland including the Northwest and East Coast. In the West Coast gateway and corridors, I-5, I-10 and I-15 are the most congested interstate highways. (Figure 1) The distribution hubs from the Ports of LA/LB are Chicago, St. Louis, Memphis, and Houston. Figure 1. U.S. West Gateways & Corridor

Source: U.S. Maritime Administration Figure 2. New York Gateway & Corridor

Source: U.S. Maritime Administration The Ports of New York and New Jersey offload more than 3 million TEUs for transportation from the ports to the hinterland including the North, South, and Southwest. The East Coast intermodal system route comprises the transatlantic maritime route (containership services between Europe and the U.S. East Coast), the U.S. rail network, and the interstate highway system. In the New York gateway and corridors, I-95, I-81 and I-70 are the most congested interstate highways. (Figure 2) The distribution hubs from the Ports of NY/NJ are Chicago, St. Louis, Memphis, and Houston. The Port of Norfolk handles approximately 2 million TEUs for transportation from the port to the hinterland including the North, South and South West. The East Coast intermodal system route comprises the transatlantic maritime route (containership services between Europe and the U.S. East Coast), the U.S. rail network, and the interstate highway system. In the Norfolk

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gateway and corridors, I-95 and I-81 are the most congested Interstate Highways. (Figure 3) The distribution hubs from the Port of Norfolk are Chicago, St. Louis, Memphis and Houston. Figure 3. Norfolk Gateway & Corridor

Source: U.S. Maritime Administration The Ports of Charleston and Savannah handle approximately 4 million TEUs for transportation from the ports to the hinterland including the North, South and South West. The East Coast Intermodal system route comprises the Central and South American maritime routes (containership services between Central and South America and the U.S. East Coast), the U.S. rail network, and the interstate highway system. In the Charleston/Savannah gateway and corridors, I-95 and I-81 are the most congested Interstate Highways. (Figure 4) The distribution hubs from the Ports of Charleston/Savannah are Chicago, St. Louis, and Memphis. The port and hinterland network requires a system-wide approach within the combination of modes, ocean, rail and truck. Investigation of these gateways and corridors has identified some of the busiest interstate corridors. The U.S. Department of Transportation (FHWA, 2007) has started to recognise the need for balance of capacity and demand and bottleneck issues, and has selected six interstate corridors which carry 22.7% of the nation’s daily interstate movements. These six selected corridors are I-95 from Florida to the Canadian border; I-70 in Missouri, Illinois, Indiana and Ohio; I-15 in Arizona, Utah, Nevada and California; I-5 in California, Oregon and Washington; I-10 from California to Florida; and I-69 from Texas to Michigan. Figure 4. Charleston/Savannah Gateways & Corridor

Source: U.S. Maritime Administration



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Table 4. Container Ports of Major U.S. Gateways and Their Distribution Hubs Ports 1. 2. 3. 4. 5. 6. 7.

Los Angeles/ Long Beach New York/ New Jersey Savannah & Charleston Hampton Roads Oakland Houston Seattle/ Tacoma

Regional Distribution* 33% 80% 20% 18% 20% 70% 30%

Distribution Hub Chicago New York Atlanta Chicago Chicago Chicago Chicago

Source: U.S. Maritime Administration *Regional distribution indicates the percent-age of cargo handled by a port that remains in that port’s local geographic region.

The US Interstate Highway System was planned in the 1950’s and designed for projected 1980’s traffic volumes. In 2005, highways carried 77% of US freight by tons and 92% by value. Congestion occurs at bottlenecks in the Interstate Highway System, mainly at outdated and over-capacity interchanges. (AASHTO 2007) Therefore, traffic congestion may cause significant delays although the ports operate efficiently for handling of containers and connecting to inland transport. 4. Freight Railroad in the US All of them are private companies. Approximately 570 freight railroads operate in the United States and all of them is private company. The seven “Class I” railroads, with 2013 revenue of at least $467 million, account for around 69 percent of freight rail mileage, 90 percent of employees, and 94 percent of revenue. Each Class I railroad operates in multiple states over thousands of miles of track. (AAR, 2015b) The U.S. Class I railroads in 2013 are: BNSF Railway, CSX Transportation, Grand Trunk Corporation, Kansas City Southern Railway, Norfolk Southern Combined Railroad Subsidiaries, Soo Line Corporation, and Union Pacific Railroad. The Grand Trunk Corporation consists of almost all of CN’s U.S. operations. The Soo Line Corporation includes all of Canadian Pacific’s U.S. operations. (AAR, 2015f) Freight railroads are very important in the US Intermodal system. Several Class I railroads operate intermodal transport systems. BNSF Railway and Union Pacific Railroad serve the West Coast, and Norfolk Southern Corporation and CSX Transportation serve the East Coast. None of the freight railroads operates a trans-continental network. Rail intermodal has been the fastest growing segment over the past 25 years on the US freight railroads. Rail intermodal traffic volume was 6 million containers and trailers in 1990, and more than doubled to 12.3 million containers and trailers in 2006.Rail intermodal traffic volume reached 13.5 million containers and trailers in 2014, as shown in Figure 5, a record high. More than 50% of rail intermodal freight consists of imports and exports, reflecting the vital role railroads play in international trade. (AAR, 2015d) Figure 5. US Intermodal Traffic (Unit: Millions of Containers and trailers)

Source: Association of American Railroad

In 2012, US railroads moved a ton of freight an average of 476 miles per gallon of fuel. On average, railroads are four times more fuel efficient than trucks. (AAR 2013a) Hence, rail is an environmentally friendly transport mode compared with trucks.

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5. Development of intermodal transport policy and intermodal corridors in the US Intermodal transport operations have been efficient since the Staggers Rail Act was enacted in 1980. The Staggers Rail Act deregulated the railroad industry to a significant extent including rail rates, mergers, etc. Ex Parte No. 230 following the Stagger’s Rail Act was approved to reduce regulatory constraints affecting intermodal transport (Sugawara’s dissertation). Intermodal transport incorporates rail, rail-owned trucks, and pickup and delivery motor carriers in the transport market. In this context, shippers are able to choose the most efficient combination of modes for their logistic management. (Sugawara, 2007) The Surface Transportation Efficiency Act (ISTEA) enacted in 1991 introduced the intermodal approach to surface transport systems, highways and transit as a high priority. This era was the beginning of the intermodal approach, and the ISTEA clearly stated that the national intermodal transportation system must provide improved access to ports and airports, the nation’s link to world commerce. (ISTEA, 1991) The ISTEA designated a number of corridors to be part of the National Highway System including the Alameda and FAST Corridors. The Transportation Equity Act for the 21st Century (TEA-21) was enacted in 1998. The TEA-21 is the successor legislation to the ISTEA to maintain intermodal corridors t as part of the National Highway System designated by the ISTEA and authorises a 42% increase in Highway authorizations and 31% increase in transit authorizations from the ISTEA levels. The Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) was enacted in 2005. The SAFETEA-LU addressed many challenges such as improving safety, reducing traffic congestion, improving efficiency in freight movement, increasing intermodal connectivity, and protecting the environment, as well as laying the groundwork for addressing future challenges. The SAFETEA-LU promotes more efficient and effective Federal surface transportation programs by focusing on transportation issues of national significance, while giving state and local transportation decision makers more flexibility for solving transportation problems in their communities. The U.S Department of Transportation, National Highway System Administration has adopted the single and /or multi-state intermodal corridor approach throughout the projects authorised by the ISTEA to SAFETEA-LU. In 2007, the US Department of Transportation specified six interstate routes as "Corridors of the Future" to help freight traffic congestion. These six selected corridors carry 22.7 percent of the nation’s daily interstate travel: I-95 from Florida to the Canadian border; I-70 in Missouri, Illinois, Indiana, and Ohio; I-15 in Arizona, Utah, Nevada, and California; I-5 in California, Oregon, and Washington, I-10 from California to Florida; and I-69 from Texas to Michigan. These routes are some of the nation’s busiest corridors. Bontekoning et.al (2004), argued that the policy context in the USA and Europe differs. In Europe, intermodal transport has been a policy objective for years, but is still new as a policy objective in the USA. However, as a series of transport policies have showed, intermodal transport or transport corridor has remained part of the policy objective in the USA from 1991.

6. The Crescent Corridor Intermodal Freight Program 6.1 The Crescent Corridor The Crescent Corridor Intermodal Freight Program is part of the American Recovery and Reinvestment Act (ARRA); the U.S. Department of Transportation (USDOT) launched the Transportation Investment Generating Economic Recovery (TIGER) discretionary grant program on June 17, 2009 and solicited applications for innovative, multi-modal and multi-jurisdictional transportation projects intended to provide significant economic and environmental benefits. Norfolk Southern directly serves 22 states and the District of Columbia and operates one of the most extensive intermodal networks. The company's 20,000-mile railroad serves every major eastern seaport between New York City and Jacksonville, Fla.; the Gulf ports of Mobile, Ala., New Orleans, and St. Bernhard, La.; Great Lake ports; and river ports in Illinois, Ohio, Pennsylvania, and Tennessee. (Figure 6) The NS service territory includes 74% of the 2009 U.S. population, 58% of the total energy consumption in the U.S., and 63% of U.S. manufacturing. A Norfolk Southern study suggest that at least 30 million truck shipments over 550 miles occur in the service territory. Hence, the Norfolk Southern network area covers one of the busiest interstate highway corridors and faces congestion and capacity issues to meet increasing freight demand. The Crescent Corridor is a program of improvements to infrastructure and other facilities geared toward creating a high capacity 2,500 mile intermodal route from New Jersey to Louisiana that serves 26 percent of the nation's population and 30 percent of the nation's manufacturing output, and provides the shortest intermodal double stack route between the South and the Northeast. (Figure 7) When fully operational, the Crescent Corridor will handle more rail freight traffic faster and more reliably, creating or benefiting some 73,000 green jobs by 2030. Norfolk Southern’s Crescent Corridor initiative is a multistate network of infrastructure improvements and other facilities intended to enhance Norfolk Sothern’s existing 2,500-mile rail network that supports the supply chain from the Gulf Coast and Memphis to Harrisburg, Philadelphia and the New York metropolitan area and enable handling of more freight traffic faster and more reliably. The railroad is in the process of implementing Corridor projects, including straightening curves, adding passing tracks, improving signal systems, and building new terminals. (Norfolk Southern, http://www.nscorp.com)

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Figure 6. Norfolk Southern System Network

Source: Norfolk Southern Corporation

Figure 7. Norfolk Southern Intermodal Network

Source: Norfolk Southern Corporation Figure 8. Crescent Corridor

Source: Norfolk Southern Corporation

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The Crescent Corridor consists of a program of improvements to infrastructure and other facilities geared toward creating a seamless, high-capacity Intermodal route spanning 11 states from New Jersey to Louisiana and offering truck-competitive service along several major interstate highway corridors, including I-81, I-85, I-20, I-40, I-59, and I-75. More than $2 billion in projects have been identified to improve freight rail service and reduce interstate highway congestion. (Figure 8)(Norfolk, http://www.nscorp.com) The Crescent Corridor program of projects is estimated to cost $2.5 billion for full development. Crescent Corridor projects currently planned for development include new independent intermodal facilities at Birmingham, Ala., Charlotte, N.C., Memphis, Tenn., and Franklin County, Pa.; the expansion of intermodal terminals in Harrisburg and Philadelphia, Pa.; and the addition of freight rail capacity in Virginia and Mississippi. In addition to facility investments, the program includes significant investments in rail route improvements consisting of additional passing tracks, double track projects, improved signaling systems and other track speed enhancements. Norfolk Southern is a private railroad company, but has planned and initiated the Crescent Corridor project to improve rail infrastructure as part of the speed, high-capacity (double stack) and truck competitive intermodal route. Completion of the Crescent Corridor is planned by 2030 and a Norfolk Southern study shows that the Crescent Corridor will create 122,820 jobs across the rail network and new terminal facilities in Birmingham, Alabama, Memphis, Tennessee, Charlotte, North Carolina., and Greencastle, Pennsylvania. In addition, the expected transfer of freight from congested highways will prevent emission of 1.9 million tons of carbon dioxide annually, save more than 169 million gallons of fuel annually, and eliminate more than 1.3 million long-haul truck trips annually. 6.2 TIGER I grant for the Crescent Corridor Norfolk Southern and 5 partner states, Pennsylvania, Alabama, Mississippi, Tennessee and Virginia submitted a joint TIGER grant application for seeking the Federal grant on September 15, 2009. The proposed total cost for the application is $618 million and the cost share is $300 million federal grant request (48.5%), $264 pledge from Norfolk Southern (42.7%), $54 million state commitment- $45 million from Pennsylvania; $9 million from Virginia (8.7%). The series of independent projects across five states included 5 new and expanding intermodal facilities along with rail route speed and capacity improvements. The TIGER grant application is a competitive grant program supplied by the U.S Department of Transportation. 51 projects awarded TIGER I grants, ranging from $105 million to $ 3.64 million, across 41 states and the Columbia District. Norfolk Southern and 5 partner states awarded $105 million for the Crescent Corridor Program on February 17, 2010. This joint program with state governments and private company is a prominent Public Private Partnership (PPP) for multi-state projects to connect seamless intermodal freight corridor. The $105 million grant is split equally towards the construction of two regional intermodal facilities in Tennessee and Alabama including development of innovative automated gate system technology and Tier IV lift equipment. The Crescent Corridor project is The program is essentially a public-private partnership with the U.S. Dept. of Transportation, 5 state governments and will be completed in 2030. Under the TIGER I grant, one of new intermodal terminals, the Memphis Regional Intermodal Facility in Roseville, Tennessee opened on July 1, 2012 and is intended to move freight between the Gulf Coast and the Atlantic Ports in New York and New Jersey. Another intermodal terminal, the Birmingham Regional Intermodal Facility in MacCalla, Alabama opened on October 17, 2012 and was built as a strategic marketing effort to service the growing intermodal demand as a major gateway for truckcompetitive freight moving between the South and Northeast. 6.3 TIGER II grant for the Crescent Corridor The 6 partner states, Pennsylvania, Alabama, Mississippi, North Carolina, Tennessee and Virginia, submitted a joint TIGER II grant application for the Crescent Corridor on August 15, 2010 to plug the funding shortfall from TIGER I. The Crescent Corridor is a huge rail infrastructure project costing more than a $2.5 billion, so the TIGER I grant is not sufficient to complete the first phase of the Crescent Corridor development. The TIGER II project consists of intermodal terminal development in Pennsylvania and North Carolina as well rail route enhancements in Virginia, Tennessee and Alabama, including replacing rail and ties, straightening curves, adding passing and double stacks, and new signals in order to support truck-competitive transit times. The proposed Crescent Corridor TIGER II grant total cost for the application was $109.2 million and the cost was shared at $16.9 million from Alabama, $27.0 million from North Carolina, $29.0 million from Pennsylvania, $20.1 million from Tennessee, and $16.2 million from Virginia. However, the project grant was not awarded. According to the Department of Transportation, nearly 1,000 applications were submitted and competition was very high for the Federal grant. Secretary LaHood of the Department of Transportation stated “The wave of applications for both TIGER I and II shows the backlog of needed infrastructure improvements and the desire for more flexible funds.” The Federal agency recognized the funding needs for the multi-state intermodal corridor project although freight railroads are private entities. Freight railroads are responsible for their infrastructure and operation investment, but the rail networks spans multiple states and the



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investment cost is very considerable. In order to meet future international and domestic freight demand, more flexible and comprehensive funding scheme with federal, state and local agencies, private companies and stakeholders besides existing Public Private Partnerships must be established. Failure to achieve such schemes risks significant harm to the nation’s economic development. For new funding schemes, each level of the current funding hierarchy needs to set periodical dialogue to balance funding needs and budgets and to prioritize corridor projects. (Figure 9) For intermodal corridor project planning, freight railroads or logistics providers need to take the initiative to identify congested corridors. Figure 9. New Funding Scheme

7. Conclusion This study focused on the intermodal transport corridors from ports to the hinterland network, and specifically the Crescent Corridor as a case study of intermodal corridors in the United States. The United States is the largest international trading country and the waterborne container trade volume has continuously increased since the economic recession. Each person requires the movement of approximately 40 tons of freight per year across the freight network.(USDOT, 2007) The Government projected that exports and imports accounting for 1,839 million tons and value of 3,193 billion dollars in 2007 will reaching 3,995 million tons (2.1 fold increase) and 9,863 billion dollars (3.1 fold increase) by 2040. This continued growth of international trade will cause existing infrastructure capacity issues in the near future. Looking at major gateway ports and corridors, dense and busy interstate highway corridors can be identified. Some interstate highway corridors are located along the East Coast. The Crescent Corridor project is intended to enhance existing rail infrastructure and establish an integrated multistate network to increase rail intermodal freight from congested highways. The U.S. Maritime Administration report of 2009 suggested that Americans lose 3.7 billion hours and 2.3 billion gallons of fuel sitting in traffic jams every year, costing an estimated $200 billion, and that figure continues to grow. Completion of the Crescent Corridor is planned to reduce highway congestion, fuel consumption and pollutant emissions. Figure 10. Crescent Corridor Strategy

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Since the intermodal corridor concept was developed in the early 1990’s, ISTEA is the beginning to emphasize the intermodal concept and to designate high priority corridors for Federal funds. Since ISTEA, the intermodal corridor and connectivity approach has been implemented in the national highway system. Federal funds have not been allocated to freight railroads for a long time because these private companies are not eligible to obtain federal funds. The Crescent Corridor Intermodal Freight Program is part of the American Recovery and Reinvestment Act (ARRA); the U.S. Department of Transportation (USDOT) launched the Transportation Investment Generating Economic Recovery (TIGER) discretionary grant program on June 17, 2009 and solicited applications for innovative, multi-modal and multi-jurisdictional transportation projects intended to provide significant economic and environmental benefits. The Crescent Corridor was awarded TIGER grant $105 million as a public private partnership for intermodal facilities which is the largest grant awarded. However, the crescent Corridor is a project requiring $2.5 billion to complete and improvements are needed along the entire 2,500 mile intermodal network. The TIGER competitive grant system is a practical method to select projects but a more flexible funding system may be necessary. In conclusion, establishing efficient intermodal corridors from ports to the hinterland is not easy even in the United States. There are many and varied hindrances. Each country or region has different regulatory systems, infrastructure, and technology, funding system, political issues and culture. However, the integrated approach with federal, state, local and private sector involvement and multiple modes considered within the corridor project to achieve full cooperation is the first step to create efficient intermodal transportation. 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