View the December 21 seminar recording
Nicole Coene
Good afternoon or good morning to those of you in the West. Welcome to the Talking Freight Seminar Series. My name is Nicole Coene and I will moderate today’s seminar. Today’s topic is: Completed TIGER Program Freight Projects – Success Stories.
Before I go any further, I do want to let those of you who are calling into the teleconference for the audio know that you need to mute your computer speakers or else you will be hearing your audio over the computer as well.
Today we’ll have three presentations, given by:
Ryan Brumfield works for the Federal Highway Administration’s Office of Operations and helps oversee the TIGER Discretionary Grants Program. Ryan works closely with grant recipients, FHWA Division Offices, agency leadership, the Secretary’s Office and others to implement TIGER projects and ensure program requirements are met. Prior to his current role, Ryan worked in the West Virginia Division Office as the Safety and Operations Engineer. Ryan has a Masters and Bachelors of Science in Civil Engineering from the University of North Carolina at Charlotte and is a registered professional engineer in West Virginia.
Christina Casgar has many years of experience in managing research projects and public information sessions, focused on marine and intermodal freight transportation. In August 2007, Ms. Casgar joined the San Diego Association of Governments (SANDAG) as their first Manager of Goods Movement Policy. The Goods Movement Manager position is unique in that the position is supported by both SANDAG and the Port of San Diego; this newly created position focuses on both maritime port issues as well as land port of entry issues. Freight policy, port access issues, sustainable goods movement, and trucks on managed lanes are also task areas. Ms. Casgar formerly worked for USDOT, the Intermodal Association of N. America, and the Transportation Research Board.
Ms. Casgar holds a bachelor’s degree from the University of Arizona in International Relations, and a Master’s degree in Maritime Policy from the University of Delaware.
Darrell Wilson joined the Government Relations Department at Norfolk Southern in August of 2001. Prior to that, he served three different Members of Congress on Capitol Hill, including the former Chairman of the Transportation Committee in the House, Bud Shuster from Pennsylvania. While working for the House of Representatives for 12 years, he spent over 7 years on the Transportation and Infrastructure Committee as a senior professional staffer. During his tenure on the Committee Darrell served on the Rail and Surface Subcommittees and at the Full Committee level as the Special Assistant to the Chairman. During his last two years on Capitol Hill, Darrell served as Chief of Staff to Congressman Bud Shuster.
During this time the committee crafted numerous landmark pieces of legislation, including the ICC Termination Act of 1995, which created the Surface Transportation Board, the NHS Designation Act of 1995, Amtrak Reform Act, the Federal Aviation Administration Reauthorization, ARC, EDA and the Transportation Equity Act for the 21st Century.
Darrell’s present responsibilities at Norfolk Southern include monitoring legislative and regulatory developments on Capitol Hill and at the STB, FHWA and FRA. He also follows the development of Public Private Partnerships between states, the FHWA and private industry.
Today’s seminar will last 90 minutes, with 60 minutes allocated for the speakers, and the final 30 minutes for audience Question and Answer. If during the presentations you think of a question, you can type it into the chat area. Please make sure you send your question to “Everyone” and indicate which presenter your question is for. Presenters will be unable to answer your questions during their presentations, but I will start off the question and answer session with the questions typed into the chat box. If time allows, we will open up the phone lines for questions as well. If we run out of time and are unable to address all questions we will attempt to get written responses from the presenters to the unanswered questions.
The PowerPoint presentations used during the seminar are available for download from the file download box in the lower right corner of your screen. The presentations will also be available online within the next few weeks, along with a recording and a transcript. I will notify all attendees once these materials are posted online.
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I’m now going to turn it over to Ryan Brumfield of FHWA to get us started.
Ryan
Okay. Thank you, Nicole and everyone for joining us today. Today I’m going to talk about the TIGER program. I’m going to give an overview of the TIGER program and set the stage for our next two presenters who will be sharing details about their specific projects. Here is an outline of what I am going to discuss. I will provide an overview on the TIGER program, also known as the Transportation Investment Generating Economic Recovery program. Then I will spend a couple minutes focusing on our most recent round of awards that were awarded in July 2016. Finally, I will talk about TIGER and the relationship with freight. So the TIGER program was appropriated in 2009 as part of the American recovery and reinvestment act. Since then, it has been appropriated annually between 2010 and 2015 as national infrastructure investments. So we’re on our eighth round of TIGER now which was awarded in July 2016. Awards are made by the Secretary and the program is administered by the Secretary’s office with delegate responsibility to each mode within the Department of Transportation. The program supports innovative projects, including multimodal and multijurisdictional projects. One thing that makes it unique is a lot of the awards are made to nontraditional recipients that are not typical recipients of federal-aid funding.
So what makes TIGER unique? In addition to what I mentioned already, TIGER often funds transformative projects – transformative to a community, city, county, region, or the nation. Many TIGER projects encourage partnerships, leverage resources, and have financial contributions for multiple partners in the area where the project is occurring. All public entities are eligible for TIGER awards – which is another unique aspect of TIGER. A lot of awards are made to cities or counties or MPO’s, not just state DOTs which would be our most likely awardee for federal-aid funding. TIGER awards are merit-based and it is a competitive program. Applications are submitted and projects are selected based on the merits that the Secretary identifies in the Notice of Funding Opportunity that initiates the application process. Finally, it is a highly visible program, highly scrutinized by Congress and the general public. That makes TIGER unique in that for any awards that are made, or questions raised about the program, it definitely raises to the level of the general public.
This chart here shows the amount of TIGER funding awarded by round. Eight rounds of TIGER. The first round was funded at $1.5 billion. Each round since then has the between 450 and $600 million. In total, 421 projects have been awarded 28 rounds of TIGER totaling $5.1 billion.
To illustrate how competitive it is, over eight rounds, 421 awarded projects out of 7311 applications received and $144 billion requested. We like to say that for TIGER, the success rate is about equal to the acceptance rate at Harvard. It is about 6% of applications are awarded which is very similar to the acceptance rate at Harvard. So it really is a testament for those who have received awards to the hard work that they have done to put together strong application packages in the projects that are awarded. Like I said, all have their unique benefits and unique impacts to their community. In TIGER 2016, 584 eligible applications were received and 40 projects were awarded. We will get to that on the next couple of slides and look at more specifics about the 2016 round of TIGER.
Here is a map showing all of the awarded TIGER projects through the eight rounds. This map excludes Alaska, Hawaii, Puerto Rico, Guam and the Virgin Islands. We do have awards in those areas, and this really illustrates the geographic distribution that TIGER covers. That is actually criteria the Secretary uses to make selections and we have projects in every state.
Here is a breakdown of the different TIGER project types. As you can see, the largest percentage of projects are roadway projects, but we do have trail, transit, port, bike and pedestrian, and then planning projects were awarded in TIGER II and VI. Those were our projects to fund the development of environmental documents or planning studies for projects. In some cases, design activities for projects. Great projects can fit under many of these different categories, but particularly rail and port projects would be our freight projects. Here you can see by round the number of projects that Federal Highway administration has administered. Typically, our agency receives about half of the funding and half of the projects that are awarded. In total, we are administering 212 of the 421 projects with TIGER, which is $2.44 billion out of the $5.1 billion. Again, about half of the projects are administered by federal highway. So focusing on TIGER eight, the most recent round of TIGER, 584 applications received totaling $9 billion and 40 projects were awarded for just fewer than $500 million. This chart here shows the different project types that were awarded. Again, roadway projects tend to make up the highest percentage of project types for our various TIGER rounds. As you can see, there is distribution among many different project types that received TIGER funding.
I will note that the last chart is for all modes inclusive of all 40 projects that were awarded. This next chart is specific to Federal Highway administration. It indicates the different modes and the amount of projects awarded each to mode. As you can see in the bullet, 19 of the 40 projects were awarded to Federal Highway administration.
Shifting gears a bit, I want to mention a few points about TIGER and its relationship with freight. So freight projects do compete very well for TIGER funding historically. Key reason for that would be that freight projects tend to meet national and regional goals and freight projects also satisfy multiple TIGER selection criteria in many cases. The three most common criteria that are satisfied by freight projects would be state of good repair for our freight rail or port infrastructure projects, economic competitiveness, projects that improve productivity by reducing freight shipping costs or travel times, and safety. Safety – we had many in the last couple rounds of TIGER, grade separation projects, and then in TIGER seven, we did have a truck parking project in partnership for truck parking information systems in the Midwest.
The chart here shows you kind of the breakdown of TIGER freight projects as proportion of all projects. This is reflective of all projects awarded to all modes within DOT over the first five rounds of TIGER. As you can see, the first couple of rounds, there was quite a bit of focus on freight. About a third of the projects were freight specific projects. The dual use category shown here in these charts would be projects that serve both passenger and freight transportation passengers that would typically be transit projects or roadway projects with limited impact to freight. So as you can see, the first couple rounds, about a third of the projects were specifically impacting or benefiting freight. The more recent rounds of TIGER, the percentages are closer to a quarter of the projects I would say. There are a few reasons for that, but most importantly, we have programs like FASTLANE which was awarded recently which allows the Secretary some discretion to award some projects under that program. So some more recent rounds of TIGER have focused a little bit more on transit projects, but still there is great focus on awarding freight projects in TIGER even in the most recent rounds.
The next couple slides, I just want to show a few examples. We have many freight projects and lots of great examples and success stories, two of which you will hear about after my presentation. These are just a few examples from the early rounds of TIGER of freight projects. I’m sure a lot of folks are familiar with the CREATE program of projects in Chicago. The more recent rounds of TIGER, again, even though we have FASTLANE, there still has been many freight projects awarded in the recent rounds. As examples, you can see here in TIGER VII, we had the parking project awarded to Kansas, and we have had several grade separations projects in the last two rounds of TIGER. So Tina and Darrell will get into some of the benefits of their projects, but all of these projects had to collect performance metrics on their project. We do have data that reflects the benefits of the projects to their various communities, particularly in terms of economic development for those areas. With that, that concludes my presentation.
Nicole Coene
Thank you, Ryan. We will now move on to Tina Casgar of the San Diego Association of Government.
Tina
Good morning to everyone on the West Coast and good afternoon to folks on the East Coast. My name is Tina. I am with the Metropolitan planning organization out in San Diego. We were the sponsor of the project, but our project partner was Caltrans and we were delighted to be a recipient of the first TIGER grant for about $17 million. It was applied to our border distribution network. The resources were applied to state Route 905. You will see as I walked to the project today that the TIGER project is one component of a large network of system improvements for our border region which is a major freight activities zone as well as an area of intense growth in our region here in Southern California.
Maybe it is important since we are talking to folks across the United States to give a little bit of context. We are in Southern California. San Diego is about two hours south of Los Angeles but our downtown area is really only 20 miles from the US Mexican border. Our Twin City in Mexico is Tijuana. If you hear me say that, I am actually talking about the greater San Diego Tijuana region. Again, knowing that folks are based all over the country here, I’m going to give you a little bit of context about how important order activity is for our region both for personal and freight mobility. This is now a close-up of the map of where we are in San Diego. We had one major class, one railroad, going down the West Coast of California. That terminates in downtown San Diego. We have a small short line connection to the border, but it is not a rail service of intense cross-border traffic. The real activity in the border zone happens by car and truck. To give you some context, if we start with our first border crossing, that crossing between San Diego and Tijuana, it is the busiest border crossing in the Western Hemisphere. We process more people per day crossing the border then we process at Delhi international Airport. Our next crossing is our major commercial crossing called Otay Mesa. It is the busiest crossing between California and Mexico with 1.6 million trucks a year crossing here. The real challenge we are working against here in the freight planning world is this is a very busy commercial border crossing, but the average wait time at the border can be to through four hours for each truck. We are trying to improve this by planning a neighboring port of entry, and that is a major project for us. That is on the books for 2018, 2019. Looking at other activities at the border, private sector interests just completed investing in a cross-border international Airport, meaning you can walk into an airport terminal in San Diego. Walk across a bridge import a plane and a Tijuana international Airport. It has been phenomenally successful because we are an airport constrained area out here in San Diego.
We are looking to our neighboring Imperial County. We have Calexico West passenger crossing and Calexico East passenger and truck crossing. It is a pretty active area for border activities. There is one last one, on Drawdy, a very small border crossing on the very eastern side of Imperial. What is important about this particular region for the freight traffic? Our Otay Mesa port of entry as I mentioned is the biggest one for California and Mexico and processes about 42 billion as I mentioned is the biggest one for California and Mexico and processes about $42 billion in trade each year and $1.6 million in trucks. As you can see, we have 14 billion and exports balanced by 28 billion in imports. It is an intense area of two-way trade. It is not just a one-way activity. In fact, a lot of California goods move across the border to become part of the finished product that comes across the border. The big activities in our border region are electronics, agriculture produce, vehicle, and medical devices. In case you happen to be looking behind your TV sets at night, my two cent bet is that your TV set was manufactured in Mexico and came across our border crossing.
Another driver for our interest in freight here, this is the national picture for the growth in US and Mexican trades since the passage of NAFTA back in the 90s. It has been a steady growth pattern for both imports and exports and this is a composite view of that trade. It is a composite growth rate of 552% over the time span. One of the things I also wanted folks to know is this is one of those dual benefit areas. Our projects at the border facilitate both trade and personal mobility. Our region is largely integrated with our neighbors to the south, Tijuana. This is just a few from an atypical perspective. We’re looking up at Mexico from San Diego. We can see each other skylines. It is a large region with a large amount of commercial traffic. There are about 570 maquiladoras which is between plant operation. There is production in the US and there are finished projects in the Mexico. Those move rapidly across the border. We have about 6.4 million folks living in this great region but the population is expected to grow to 10.6 x 20 40. Really we see our regions as linked by economic issues, shared languages, shared cultural background and social interests.
The real driver behind the TIGER project is a system of improvement where we were actually building this new port of entry that I mentioned. The reason we’re taking on this new port of entry is normally it is not in the federal budget because there is a very constrained budget for new ports of entry. We are taking it on as an innovative financing project. We have some background studies. There is sufficient demand obviously with a 234 hour wait time. Folks are looking for different ways to cross the border. We as the NPO got state legislation to allow us to be authority to generate the total revenue to underpin a significant part of the project cost. The TIGER one project which I will get to shortly is a critical part of their overall funding package.
The new revenues we can produce by tolls will allow us to have limitation of the new border crossing. As we look to the future and the challenges with border infrastructure, we think we may have a different prototype wait to take on these difficult projects. As I mentioned, we have a system view of the border and we have incrementally built out this roadway system to support the amount of commerce and personal trial that I am talking about. Here is a close-up of our region showing how we incrementally have put this together. In 2008, we opened a commercial toll road. It was eventually taken over by our agency as a publicly owned toll road. We were moving all these trucks on local roadways, but in 2010, we built a state route that is much more suitable for the amount of truck and personal travel done in this region and the first section of 9-to-5 connecting directly to the Otay Mesa existing border. We finished that out in 2012 with a second section of work 9-to-5. Been very importantly here in 2012, we were able to complete this important TIGER project which is an important connector from this new state route 9-to-5 to a major distribution artery which is Interstate 805 which as you can see that is where it is. As we look forward on how we are developing the border, we just completed segment one of the new route SR 11 connecting to the new port of entry I mentioned. We are building the connectors which will be finished next year to directly link that tollroad to the state route 9-to-5 system. We were fortunate to get a fast Lane grant to the next section of SR 11, giving us the completed roadway system to a new port of entry. Then our capstone project slated for 2018, 2019 is that actual new port of entry. So having giving you that kind of background and noting that the tiger project itself is about $17.2 million in all those incremental projects that I showed you on the previous screen amount to about $449 million.
We presented this in our TIGER application as a highly leveraged tiger project with a lot of other state local and federal funds already dedicated to this system development. We think some of the attributes that helped us on the tiger project were we submitted it in conjunction with our partners at how Tran, the state duty, and they actually were the constructors of the project. It was highly leveraged by the 449 million in previous and current expenditures. When we added the projected expenditures for the new port of entry, it was actually leveraged by about $600 million in overall investments. We positioned it as part of a system of overall border improvements. We had a significant section on the positive economic impacts of the project itself. On the last mile or interval connector project that would help with the seamless connectivity that we are looking for in the border region. As far as a large-scale partnership, we had many letters of support with this project on both sides of the border. We had our federal delegation, state support letters, and we had commercial support letters as it was deemed to be important to the trucking community and some of the commercial advocacy groups down there. Additionally, at the time we apply, we are he had the project in both of these regional transportation plan and what we call the local community plan out here. Because it was an improved breath activity on the tiger grant with improved turning geometry, there were strong safety benefits documented for commercial vehicles. This was the first tiger grant where the department rigorously asked for a cost-benefit study. I think there have been more exacting on this request over time. What we were able to use for our cost-benefit study was well-established model that has been developed by Caltrans as they use it in the development of all the roads in California. It is called the California benefit cost to model. When we ran that model for our Tiger grant, we had significant travel time, savings documented. We had accident, cost savings documented. Vehicle operating cost savings. Most importantly, with the wait times I mentioned at the border, we had some mission cost savings documented. We were well prepared as shovel ready projects when we got the Tiger award. We submitted that application in 2010. We have our construction completed by 2012. Obviously, to move that fast, we already had our environmental permits in place at the time of our application. I think through the course of the narrative, we were able to substantiate that the project really had overall significance both locally, regionally, and nationally. That is a quick walk-through of the TIGER project. I want to thank you all for making time to listen and today during the busy Christmas season. I think as Nicole mentioned, we are happy to take any questions at the end of today’s webinar. Thank you.
Nicole
Thank you, Tina. We will now move on to Darrell Wilson of Norfolk Southern
Darrell
Good morning and good afternoon depending on where you are. My name is Darrell Wilson. I do public-private partnerships among other things at Norfolk Southern. I am very excited to talk a little bit about the Crescent Court or, eight TIGER one project which was a partnership among five states – Pennsylvania, Virginia, Tennessee, Mississippi, and Alabama. For the Federal Highway administration for US DOT and the TIGER one award, as well as Norfolk Southern ridership is really a critical piece of this whole thing. Without the states being appointed this and without the Tiger award, we very likely would not have been able to achieve what we were able to achieve in the timeframe in which we did it. That makes taking undertaking like this very difficult because you have to have the infrastructure in the right place to be able to serve the market. That is what this was all about. I’m going to move quickly. Just a quick primer on Norfolk Southern – we are the fourth largest class one railroad in North America with roughly 10 after $11 million of revenue. We operate 20,000 route miles in 22 states and the District of Columbia. We move just about anything railroads move.
As intermodal networks are really built around the concept of cordless, what we are looking at is for different types of things that allow us to serve what is basically a truckload market. The Crescent Court or in this instance was about domestic truckloads. It was not about international freight. We’re talking about domestically manufactured goods that are moving between markets to be consumed. We had to take a trucking mentality and look at it and see if we could develop a real product around which would serve that market in places that had not served before. We’re talking about market access meaning to we have a facility that is in the market that we can attract the freight highway. What is the length of whole? Our ability to meet the service design will go into this critical component. Asset utilization basically turning our assets quickly to keep costs low and productivity – so, if there were a reason in the market that you were a shipper, than this would basically help lower your shipping cost and help the productivity of what you do.
Intermodal, for those of you who know a little bit about it, this is just a quick slide. It is an easy way of showing that trucking does a short move on each end of the load, the real move is a longer length of Hall usually around 700 miles on average. The Crescent Court or, were looking at an average length of about 1100 miles to the realm of depending on the origin and destination.
This is a quick snapshot of the intermodal network just to give you a sense of the young we’re going to talk about in the Crescent order. Ennis operates the most expensive intermodal network. We do not own all of these but we do serve these. We label them here whether they are ports. Our Triple Crown terminals have all been closed with the exception of one terminal. We are converting those two conventional intermodals. We serve all those markets where you see the dots. It is that market access around which people in our network to say to we have manufacturing capability there likes can we use the railroad and utilize the railroad to help lower our logistics cost? This gives you a snapshot of the entire industry. Norfolk Southern is about 3.5 million units a year. We are the largest intermodal provider in the eastern half of the United States. All total right now through November 30 of this year, according to AAR, we are about 13.37 All total right now through November 30 of this year, according to AAR, we are about 13.3 7 million units for the year. We are probably going to come in may be just slightly under where we were as a peak year for intermodal within 2015. What we are seeing is that domestic intermodal, domestic truckloads are actually down on the railroads this year. International was actually up. That has been a more recent trend and we think that has a lot to do with domestic manufacturing.
The Crescent Court – we have a lot of influences here. We worked a lot with truck carriers to determine what we can do in the market. We were beginning to see an increase in trade, free trade, between the Northeast and the South. It is something that we were really providing service to before the development of this project in any meaningful way alleys to the domestic truckload market. We were seeing the states were seeing increased highway congestion, growing vehicle traffic travel miles and congestion on the key interstates which they Crescent Court or parallels. Shippers were looking for options. We were hearing a lot from people saying why aren’t you serving this market? We have shippers who would like to use the railroad. State and economic development groups were very interested in this because we see a lot of economic development which are springing up right around our facilities.
Even if we build the facility to be successful, we have to mimic what a truck can drive, the same distances in within two or three hours. We need to be consistent with that service. We need to be on time about 90%. 90, 92% plus or -2 hours. If you some ideas of what were the availabilities that we were trying to make in the truckload market, then this is what we are basically going to have to tell our customers. We’re going to plan to move these trains from these areas in this amount of time consistently so we can actually attract freight off the highway. We also looked at population growth. I’ll just tell you the TIGER one facilities which were funded with $105 million TIGER one award. When you plot them out over this growth map from the census euro, you find that all the facilities even the ones we’ve built in Pennsylvania, our counties which grew by 10% or more. You see a huge demand growth in population that correlates directly to the service needs from the movement of freight. Where people go, they need stuff. We also got some proprietary data from four trucking companies which we signed a confidentiality agreement to get. This is at the market analysis down to the ZIP Code level by three digits. You can see it is a heat map. As it gets better, that is more origin destination pairs. What we’re looking at is where the trucks going today? How far are they moving in the spray clusters is what I would call them? We’re looking at length of Hall, really trying to get to 1000 miles or more. This map represents 4.3 million truckloads based on data from 2008. It is a little bit old way you can see if this was driving where we wanted to locate our markets. What markets we wanted to serve and how much density there was because intermodal trait is 8000 feet of trade, typically. It has about 200 boxes on it. We don’t like to move things shorter than that because of the cost. We like to move it in a double stack configuration primarily. It is basically containing the freight to do that. This slide looks at all the facilities that we were looking at that time. We didn’t end up developing these facilities but mainly three facilities we did do, Charlotte which was not a tiger project but in Birmingham, we were building about 500 we were building about 500,000 lists of capacity. That is how the industry meters capacity around our intermodal facilities. The ability to lift a container off the ground onto the train or off the train onto the ground is a massive amount of capacity increase. We move about 3 1/2 million units a year. All total when you see the complete buildout across the Crescent Court or, we’re going to add about 40% new capacity. One of the problems with that is you are going to pick the freight up here and it is going to want to go north where we were only adding about 50,000lbs of capacity. What we realize is we can easily find ourselves take loads up in no place to drop it in the Northeast. We will talk a little bit about how we figure that out and got around that problem – and to give you a snapshot of what I tried to here is show you what we had as existing intermodal facilities where we were actually serving different markets. At Vienna was the only real big facility at the time. We only have one large customer that was doing that and that was United Parcel Service. So you have these five facilities that were existing in 2009. In 2012, we opened the two TIGER facilities on time, pretty much on budget. I think in large part, the Federal Highway administration helped us oversee the program awards, the Eastern federal lands highway division. Just an amazingly competent and professional organization which helped us manages this project. Most of these projects all came in on budget and were opened on time. As you can see, the Memphis and Birmingham facility is located here in the South. The Greencastle facility which was a public between the state of Pennsylvania and Norfolk Southern India small capacity improvement in Harrisburg which is also a state award. The state of the Commonwealth of Pennsylvania funded $65 million worth of projects during the Tiger won awards even though they did not receive any federal money in that. That goes to the partnership aspect of this. In Charlotte, we did a state public private partnership around Charlotte to build a brand-new facility at the Charlotte Douglas international Airport. It is actually between the two runways. If you land there, you will see our intermodal facilities. It is a great use of either land at the airport.
And then in TIGER three, we also got a small a war. A $50 million award with -- which leveraged state money and in order to double the size of our Rutherford facility. This was really important because this added another 150,000 units or so with the construction a little to help meet that capacity that we were going to be short in the north where you saw that excess capacity down south depending on how much growth. A very rapid period of time through partnership and through a lot of hard work, we were able to go to serve a huge new domestic freight movement scheme that never existed before. Here is a quick look at where capacity was. If there are two Asterix, those are non-federalized projects from a tiger perspective. They were mainly state and MS projects. We see the Asterix, those are the actual Tiger awards. We added about 800,000 capacities to our system which was around 40% increase capacity of our intermodal network. So as we go through these projects, this is a look at the Memphis facility just after it opened.
You can see we already have some great in the door there. If you take a look, you can see worst state Route 57, we take our tracks underneath it. Part of the program put in on top of this helps us from that great separation which was critical because all the freight actually leaves the terminal from the South and the South is out of the loop so you are looking north. All of that comes to US 72. That comes in the state of Mississippi. In the state of Mississippi, they are in the process of Access Road comes. And putting a great separation and so we can drop a track that will go south of bare to a brand-new development that is going in. There are already three large square foot warehouse is that are going in Mississippi. The state of Mississippi is a partner in this because they saw the economic development interest that they had and they funded about 20 million Dollar Road project to be able to meet the needs of the facility and to their other industry. This is to give you an idea of what the McCullough facility looked like.
We are building a giant tabletop to build this facility which is a $105 million project with $52 million in TIGER. In Greencastle, this was a non-Tiger project but it was essential to the idea that if we are going to pick up freight in the South, we need to have somewhere to put it in the North. Right on Interstate 81, at exit 3, you look to your left if you are going north and you will see the facility. It literally sits at exit 3 so you are less than a mile from the interstate and that is very critical from a service designed especially for domestic truckload freight. Freight is a $95 million project.
On Tiger three, we did the Harrisburg intermodal expansion in our Rutherford facility. Here you see the open facility. We doubled the size of this yard in Rutherford. You can see exactly what the partners had missed. You can see this is the actual list to the left that we were looking at. You see this really substantial growth in our Harrisburg location. Total lists that are occurring in the Harrisburg area. All of these are crescent quarter. The ability to grow this in the southeast is also a driver.
Norfolk Southern doesn’t do a public right of partnership. It doesn’t have some sort of external value or public benefit. What we were able to do is quantify through systematics who did our benefit cost analysis, we were able to look at a truck diversion model by route so that we could actually shows states such as this map. We had a map of all 13 states that have an origin destination Lane that was served across this quarter work as to where the trucks would actually be coming off in the suitable to where they would be coming off and you can abrogate those to show them what these benefits are that they are receiving in terms of the truck diversion, the gallons of fuel that was saved, CO2, state of goods repaired, and safety. Just to give you a snapshot.
The slide looks at market analysis as to what are the market shares of intermodal versus truck. All of our quarter projects are looking at different types of market shares. You can see some very mature market shares which is an international public-private partnership that looks at moving things from the port of Norfolk inland into places like Columbus and Chicago. The crescent quarter this is domestic truckload freight. What you see is a very high truck market share. Railroads weren’t serving markets. This was pre-crescent quarter or. One of the other things we looked at was we bought the data best trends search and we look across the states that are mentioned here in 2008. What we found is that the length of faulty work 400 miles are greater and are really only about 4% of your truck moves in that database but they represent about 20% of your vehicle miles traveled on the interstate. It is a huge leverage point where you can take those long-haul trucks off the interstate. You are going to crank out massive amounts of public benefit for everyone. So, to give you an idea, were coming to the end here of what this really meant from a success perspective. I give you a snapshot look at the crescent quarter or and our combined average growth rates over 2010 two 2015. You can see in the crescent quarter, we have grown about 14%. In the international intermodal link, we have grown about 13% over that same timeframe. Some years are better than others. We are starting from a much lower base on the crescent quarter because you weren’t serving the market. So that reflects some of the percentage increase. In 2016, the crescent quarter or is actually down a little bit. Then the very mature intermodal Lane, we call it our Chicago Lane. You can see that it’s worth the other two in terms of its movement in terms of total units is about 1 1/2 million units a year.
It is growing about 6% this year. East-West lanes are much more mature intermodal markets than the north-south lanes. This is a snapshot just again from the benefit cost analysis of what it would look like if we got to 1.3 million trucks diverted a year. The average length of haul is around 1100 miles. This would be what the aggregated total benefits could be. Then in 2013, I said let’s look at what we are actually doing inlets to the same thing and say we had this facility. We have been up for a full year, what are the public benefits that actually occurred and how do we abrogate those out to the different states in terms of the diversions that we had? This is a snapshot of that. You can see we just aggregated them by state to show the state what they got from those diversions. There we acted them all up into one total. What we were saying is around $192 million of public benefits based on the diversion of that year. That is my presentation. Thank you.
Nicole
Thank you, Darrell. I’d now like to start off the Q&A session with the questions posted online. Once we get through those questions, if time allows I’ll open up the phone lines for questions. We don’t have too many questions a so I encourage everybody to please take this time to ask any questions of our presenters. If you would like to ask a question over the phone, please press start one on your telephone keypad to be placed into the queue to have your phone line unmute. Our first question is for Ryan Brumfield. What is the schedule for the NOFO for the next TIGER round?
Ryan
Currently, there is no appropriation past four Tiger nine, for the next round. Currently, there is no funding available for the next round of Tiger. Picketing resolution, if you follow the news, it was passed recently that provided funding for the government through April. When they reconvened in the spring and pass to the next round of funding, potentially there could be Tiger added to that as far as the appropriations package but currently, we don’t have a schedule because we don’t have the funding yet for the next round.
Nicole
Thank you, Ryan. The next question is just a question for clarification Darrell. What’s a Unit in this context?
Darrell
It is an actual unit. It could be 20 feet, it could be a domestic. It really is a revenue load typically. What we are looking at is the box, or a trailer that was listed on their train. That is how we view that. It is not in a 20 foot unit equivalent. There are three primary types of boxes that we move that are brought in broadband service – 53 foot, domestic, 48 feet, 40 foot international container and a 20 foot. Those are really the four major once but each one would count as a unit.
Nicole
The next question comes to Ryan from Abby. Can you speak to how FHWA sees these projects as meeting the TIGER Primary Selection Criteria for “Livability” and “Environmental Sustainability?” Presumably, congestion mitigation through capacity expansion for the CA project, and mode shift for the NS project (Rick made that clear)…but it would be nice to know more, for example if projected emissions avoided might have been swamped by facilitating increased freight volume?
Ryan
I will try to take a stab at that. By no means am I an expert. In the benefit cost analysis part of the process, but I think you hit on it in your question. You answered it a little bit there that for particularly Darrell’s project, the crescent quarter project really is the benefits of the modal shift and getting the trucks off the highway, which is reduction in fuel use and then air quality benefits. I think that is the environmental sustainability link there. We have a lot of projects in recent rounds that are great separation projects. That hits more on the aspect because those great crossings tend to be safety issues. Sometimes, it can be barriers from one side of the community to another. So separating those crossings in a lot of cases create a ladder to opportunities for those communities which then benefits the livability aspect in that community. So I’m not sure that answer your question but that is for the Otay Mesa, I think that is modal shift and capacity expansion to improve air quality of those areas. That is the environmental sustainability linkage.
Tina
One of the big challenges is the wait times at the border itself. Every time we can improve the distribution system, we can bring out some of the admissions. I ironing out the roadway system, the specific Tiger project could speed up the speed of the trucks. It doesn’t necessarily drive market share. What it improves with turning safety and a lot of trucks are coming off the 905 on that ETA five ramp. Let me know if you have other questions.
Darrell
Yes. The one question I see here on sustainability about locomotive fuel efficiency, we do have a sustained program internally with our locomotive mechanical forces to have reduction technology on our entire over the road locomotives. We have been converting a lot of our fixed terminal facilities to a new system which actually allows them air temperatures are below 35. We plug them into keep the warm. When we did the benefit cost analysis, Alan Myers who is now actually backed out the increased locomotive in missions that would occur because we are adding trains across our network. We figured in all of that and we had to back numbers that were going to come off the highway. It was a net total of exactly increased locomotive emissions versus the truck in missions that were going to be diverted off the highway. We did factor that out. It was a negative because we were doing that.
Ryan
One more thing to add interest to note that both Darrell and Tina’s projects four Tiger one projects. If you remember, Tiger stands for transportation investments generating economic recovery. A lot of the focus of the early rounds was about economic competitiveness. That was probably the key criteria that were looked at for making these particular awards. The more recent rounds I think environmental sustainability, livability arch but in the early rounds, I think there may have been more focused on economic development.
I believe that Darrell’s response was to Abby’s question about describing locomotive fuel efficiency reduction technologies. Norfolk Southern is using at the Alabama/Tennessee project locations to help beyond modal shift.
Darrell
I should add to that. I may have been a mixed metaphor there when I jumped to her question because I didn’t know which one I was answering. Part of what we did with this, Nicole, was we created a new technology called an automated gate system and we put all of that technology on our crescent terminal. It is a system under which we take a digital photograph of all sides of the truck that is coming into or out of our facility. We give the truck driver a pin number that they put in and this allows them so that when they gain access to our facility, it actually speeds them out through the door and so that we don’t have trucks sitting idling trying to get them into our facilities. On average, a truck driver spent about 15 minutes coming in, getting unloaded, and getting out. We greatly improved the great throughput in all of our intermodal facilities. That helps our truckers be more efficient.
Nicole
Thank you. What are your views regarding best practices or essential elements to include in cost-benefit analyses related to public infrastructure funding/cost sharing?
Ryan
Maybe we can look to Darrell to have some advice for their applications but we do have resources available from the secretary’s office provides four Tiger. If you go to transportation.gov/Tiger, there are recorded webinars and guidance documents available for what should be included in your applications regarding benefit cost analyses in the mid-18 and Darrell have some specific examples from there is.
Tina
Right. We will be happy to share the model or the proposal itself for the questions, but I am looking at our cost-benefit analysis. We had an annual admission cost savings that we factored into the cost-benefit analysis. We had several safety benefits having to do with the construction standards for the ramp which included standard shoulders, increased site distance, great improvement, and removing trucks off of local route. Additionally, we were able to document benefits with the improved level of service. Also, another aspect in the economic impact analysis was the direct jobs created by the construction of the project itself and some direct and induced employment benefits after the project went to the operating period. That is just a quick high spot of what we used in the towel BC model.
Darrell
I will just say that we worked extensively with Alan Myers and developing the model. I will say the benefit cost analysis has come a long way since Tiger one. I steer away from that model because US DOT and the Tiger team has done a good job of trying to inform people as to what is they really want to measure. They had these projects over the eight rounds and I think they have done a lot of good things in that route. I’m a big believer and looking at benefits and cost. From a railroad perspective, we happen to have the efficiency of being able to move heavier rings long distances with a lot less you’ll use. Most of our benefit cost comes from that when we divert traffic or freight. As Ryan said in his presentation, I was nodding vigorously up-and-down in agreement that freight projects compete well because of that. If you are looking at modal shift, or if you are looking at a sort of productivity increase even from a trucking perspective, something of that nature, you are talking about amounts of moving things. The benefits can add up quickly. When you can turn assets quicker into some other things.
Nicole
Another question for you, Darrell, do you have advice, lessons learned, as a private company participating in a public-private partnership. How can public agencies help to support these projects up rent and then did the delivery and construction process?
Darrell
That is a really good question. Can I take the next 29 minutes? Let me just say that partnership, as I said, the outset is critical. One of the things you have to do in a partnership is to listen. You need to listen intently. You also need to understand what are the pushes and pulls that public agencies have. What are the pushes and pulls that a private company like Norfolk Southern has. And the eagerness around which all of that sometimes can get lost. If you can listen and you build friendships around that so that you can clearly enunciate what your goal is and what you are trying to do, then you will find the willingness and the capability that those things can happen. Really, it starts with sitting down and looking at what is the problem, what are we trying to achieve and how best to go about attacking the problem and solving that problem. I found the Eastern Highway division took over the development of our Tiger one project. The states turned those projects over, and we did all of the bidding and everything through Eastern federal land. It was essentially an amazing process Norfolk Southern learned a lot. We learned to look at projects differently. I think that was hugely helpful to my engineering core in Atlanta. They resisted it at first, but they have taken a lot of lessons learned from this Tiger around. They applied them to other projects, specifically on engineering around and by mental issues. We have gone a lot smarter as the company around that. I think that there is a lot of expertise in public agencies that people take for granted, and I really love to create those partnerships because it actually makes a huge impression on Norfolk Southern, interchanges us so we can have better practices and do things better. All I would say is I encourage people to listen to one another. Don’t be afraid to go out and see if you can jointly do something together to make things better.
Tina
The partnership alignment is extremely important. I couldn’t agree more with the other speaker. We had 32 different agencies that had something to do with border region planning. The only way to get some of these projects done is to have intensive partnership discussions.
Nicole
Thank you, Tina. Our next question is for you. Some of the improvements for San Diego are in Mexico. What difficulties has this created for the Tiger grant?
Tina
I think in certain aspects of the project, we do look at the systemic improvements at the Tiger grant is solely applied to the project located in the United States. The safety benefits are solely occurring in the United States. The job creation is in the United States. It is only in the admissions area, when there is no way to really segregate the admissions created and the Mexican side of the border versus the US side of the border. So that is a challenge when you are that close to the border region. I might just adhere for the previous question talk about sustainability; we do have a unique situation California. I think we had the most vigorous truck admission standards of any state in the union. Those are applied to both trucks originating in Mexico and California as well. So the trucks entering the commercial stream in the United States are subject to the same air quality and engine standard regulations that apply to any other trucks in California.
Nicole
Thank you, Tina. Darrell, two questions for you combined from one participant. 1) Isn’t (wasn’t) Detroit – Atlanta a big intermodal / TCS corridor (esp. for automobile parts)? Also 2) though the Crescent Corridor is 1,100+ miles in length, are there significant volumes of rail intermodal in intermediate markets (e.g. Charlotte NC / Atlanta, GA / Atlanta – Birmingham, AL. etc.)?
Darrell
Let me take the first one. While Triple Crown which we wound down last year, there was a link between Detroit and Atlanta. One of the problems was the Triple Crown product was not a conventional intermodal product. I won’t go into all of this but it was very truck competitive. The returns on the investment in that market would just not there which is why it was eventually allowed to be wound down. But yes, we did lose some volume because of the line down of that. Some of that was converted to our conventional capability. Those were actually truck trailers. You couldn’t double stack that. That was part of the problem from a cost perspective. Tiger industry is going for that vertical density. That is why when you see an intermodal train, it will be double stacked as much as it possibly can because that is where we are actually able to make the money. You can put 280 trucks behind locomotives in move it. That is where you get the cost savings. That is why we can make money doing it. Triple Crown couldn’t do that.
The other intermediate markets, we have high hopes for intermediate markets. The only thing that is going to make them really is unfortunately very painful for all of us on this call. That is called congestion. As congestion goes up on your rural interstates, let’s say [ Indiscernible ] I 85 between Atlanta, Charlotte, and Richmond to DC or I 81 as people feel the pain of congestion there, they will begin to move there service over to us because it is our ability to move the freight from a domestic perspective. Intermediate markets are a lot harder to compete in because the truck has 14 hours of on duty time and see how far they can go 500 miles and 14 hours, probably they can to the extent that the truck model begins to break down. The rail model, we are always trying to press that to be able to move to train a little bit farther and faster in a safer environment. That if your push and pull on those. For 1000 miles we can always compete because our ability to drive the train through the night when the truck driver has to go to sleep. From a single driver perspective, we can have a much better way to compete and state six, 700 miles. You begin to really do that. Yes we do serve Atlanta to Charlotte. A lot of that is international freight, however. International freight is not domestic truckload freight. It is a completely separate market and has a completely separate profile.
Nicole
Thank you, Darrell. Our next question comes from Laura Phillips. How much money staff time, consultant services, data purchases, etc. is spent on average to produce a successful application? Tina, would you like to go first?
Tina
It took a lot of time -- I was trying to think about your question here a little bit. I would say on a composite probably 100 staff hours to put it all together. We don’t hire out for outside consultants. We have a couple of in-house economist to run the cost-benefit analysis for that. We are required to do a cost-benefit analysis on many of our projects so we have full-time staff. We split the work up between the majority of the writing with the freight planning staff which is just two of us and then our government affairs staff weighs in heavily to get the support letters. We usually put back sheets out for public information so folks really understand the dimensions of the project. Before we can generate the necessary support and partnership letters. We also have several standing committees. We have standing committee that consists of all the parties that are interested in these border related projects. When it comes time to developing partnerships, we don’t have to go on a hunt to find people to talk to. We arty have an institutional setup so that those folks are already pretty to how we develop projects and how we plan them and what we go for funding, they are already well aware of the project attributes.
Darrell
For my CEO perspective, he would say too much money was spent. My vice president answered that I answer to say my intermodal department hijacked me and took me hostage for almost 2 years until I actually understood what I was talking about. So he would say it was painful for him. We didn’t really hire any sort of consulting services until the Tiger program was basically created. Before that, it was really the intermodal team. It was me and some of our state government relation folks talking with state beauties and build the idea and the concept with them. We had a lead time of nearly 2 years for the development of this project. If we had not started the developer of this project in late 2006, 2007, I don’t know if we could take advantage of the first Tiger around. You have to understand, they didn’t make awards for nearly a year after the recovery. So that gave us a huge amount of time to go out and buy the property in some of these locations were we didn’t have the property. We went on and secure the right-of-way for these facilities and began to do the environmental studies with state to move the process before the award. Not knowing if we were going to get the award. That is when the consultant really started. We brought on one of the environment will investment attorneys in Atlanta. We brought on Alan Myers who we thought did some of the best work looking at these projects. We went on and ran very quickly with respect to the development of the environmental documents. Again, this was part of the learning process were we took our engineers and said you need to think differently about the world because if you can design around environmental impact, now is the time to do that. Make those bizarre decisions now and build them into your cost structure to make the permitting, to make the environment will document much less of an issue. We were able to get our bimetal documents done in 2010 after the awards that we could go to construction in 2011 on everything whether it was a state or federal project. There was quite a bit. I would probably say I never saw the final total number. It was probably in the ballpark of several million dollars in total consulting fees before was all said and done would be my guess. It was not zero.
Nicole
Thank you, Darrell. Ryan, this question is for you. Will Tiger 2017 criteria dovetail at all with FHWA definition of alternative fuel court orders, perhaps to help establish national gas fueling locations supporting truck movement? One example of potential would be Virginia transportation’s effort to serve shippers like conduct with compressed national gas card carriers and Talladega, Alabama and potentially elsewhere.
Ryan
I will start by saying that we haven’t received funding yet for another round of Tiger. So as of now, I can’t speak to any potential details of another round of Tiger because currently it is unfunded. But once the funding is passed, if it is passed, there will be a process to develop a notice of funding opportunity. That will go out with all of the criteria for the application process and a lot of that depends on the prerogative of the new administration and what their key goal areas and priorities are. So, it’s a little too early to tell. I will say that in the last couple rounds of Tiger, we have had an increased number of alternative fueling or North type projects submitted. We had a couple that I can remember in particular that really concentrated on the benefits of their project related to alternative fuel, whether it was transit projects or even alternative fuel court or projects. That would be highly infrastructure. So regardless of the criteria, if there is another round of TIGER, I would encourage you to submit applications that highly the benefits of your project in terms of environmental sustainability, and alternative fuel quarters, alternative fuel use can help you meet that type of criteria. That has always been around since Tiger one. You can always include that in your application. In the last couple rounds, it has deftly gone interaction from reviewers.
Nicole
Thank you, Ryan. We are down to our last question. I encourage you if you have a question to type it in now or to press*one on your telephone keypad to be pressed into the key. The question is for both Tina and Darrell. What you think were the biggest factors in your organizations successful and relatively quick implementation of your Tiger project.
Tina
Sure. It is a good question and perhaps something I should have addressed. If you notice, I spent some of my background outside of California. Something I learned in California is that the NPO’s function differently than in many other parts of the United States. So a number of the major NPO’s in California are what we call self-help counties which mean we are authorized by the state to go to the voting public input on a ballot of a transportation tax, sales tax, increment initiative. And San Diego is one of those self-help counties. By virtue of that sales tax, we do have local funds to be able to invest in those projects. That becomes very helpful when competing for Tiger, Fastlink, or any grant because you have the local funds to leverage the federal dollars. I think US DOT is increasingly looking for highly leveraged projects. It helps us to use those local dollars to have the particular project shovel ready. I mentioned we were able to probably be nimble when the Tiger grant came out he comes we have the environmental permitting behind us. It had been paid for. We had it approved on all the regional plans, and we had those resources available to leverage the federal dollars. I think that was very helpful for us. The other thing that comes to mind is I mentioned that we have a strong relationship with Caltrans. We very often put our grants together as the constructor of the project. That was the case we did here. That also helped it to move along. That reminds me also we talk about staff time going into the proposals. We also had quite a bit of staff hours in there from the engineers at Caltrans. So just like Darrell mentioned, in order to write a thoughtful grant, you have to really immerse yourself in the culture of the operators or the engineers in our case so you really can write about it in a convincing way. I think those were things that helped us a lot, chip.
Darrell
Yes. It maybe even goes to the other question about how to have a successful partnership the really our lead state on this application was Pennsylvania. We had a very committed champion and the governor of Ed Rendell who was pretty well-versed in the structure as a former mayor in Philadelphia. He understood what transportation could mean to a region or to a state or to a country. Without somebody like that who is really committed and was 100% behind what we are trying to do believed in it and understood what it meant, but not only that, he was also the chairman of the national governments state Association at the time. We had numerous meetings with all the governors of the state. With my CEO with me and with some of our project teams to go through and talk about concerns, problems, all of those things – so to have that commitment at the top meant everybody that was in part of the project team when it was in Mississippi DOT or Alabama DOT, Pennsylvania or Virginia or Tennessee DOT meant that we could talk to one another to help solve problems. Many times there was state secretary transportation on the phone with one another talking to figure out how they were going to solve problems. I was on a plane to Birmingham or Montgomery. I was on a plane to Nashville numerous times in the development basis of these projects. So staying close to the people who are your of lamenting agencies was critical. The other thing that was really important for the quick success of this and accelerated our environmental phase of our project within actual process was that they had developed for another project. We were one of the first four or five projects statewide that went through their accelerated review program which turned out to be extremely successful. The other piece of it was the engineering expertise which resides inside Norfolk Southern. We had an amazing group of engineers, many of which have several decades of experience and understand what they can and can’t do with respect to project development. So they did nothing but live or breathe these facilities while we were in the very critical phases of that. Being able to turn things around for Eastern federal lands any timely way and anytime they had a total for information, we would work tonight to get them the information as quickly as we could to help keep the iteration decision-making sure. That is critical because that adds up over a three-year time. Having that sense of urgency from your partner is critical and we had that. It starts by getting that commitment from the top. Once you have that, most of your problems are not insurmountable.
Nicole
We’ve gotten through all the questions and I don’t see anything else coming in. I think we will go ahead and close out. The recorded version of this event will be available within the next few weeks on the Talking Freight website.
The next seminar will be held on January 18, 2017 and the topic is tentatively scheduled to be “Truck Parking and Initiatives” Registration is not yet available but I will send a notice out through the Freight Planning LISTSERV announcing when registration is open.
I encourage you to join the Freight Planning LISTSERV if you have not already done so.
Thank you to our presenters and to everyone attending. Please enjoy the rest of your day.
