View the July 2019 seminar recording
Jennifer Symoun
Good afternoon or good morning to those of you to the West. Welcome to the Talking Freight Seminar Series. My name is Jennifer Symoun and I will moderate today's seminar. Today's topic is The Impact Of Emerging Technologies on Freight Transportation and Land Use.
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'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. We will also take questions over the phone if time allows and I will provide instructions on how to do so once we get to that point.
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.
Talking Freight seminars are eligible for 1.5 certification maintenance credits for AICP members. In order to obtain credit for today's seminar, you must have logged in with your first and last name or if you are attending with a group of people you must type your first and last name into the chat box.
PDH certificates are also available for Talking Freight seminars. To receive 1.5 PDH credits, you will need to fill out a form. Please see the link in the chat box. Certificates will be emailed one week after the seminar. A seminar agenda has been included in the file download box for those who need to submit an agenda to their licensing agency.
Finally, I encourage everyone to please also download the evaluation form from the file share box and submit this form to me after you have filled it out.
Today we'll have three presentations, given by:
Our first presentation will be given by Dr. José Holguín-Veras, the William H. Hart Professor and Director of the Volvo Research and Educational Foundations Center of Excellence for Sustainable Urban Freight Systems, and the Center for Infrastructure, Transportation, and the Environment at Rensselaer Polytechnic Institute. He is the recipient of numerous awards, including the 2013 White House's Transportation Champion of Change Award for his research on urban freight transportation.
Jose Holguin-Veras
Fantastic. It gives me great pleasure to tell you a bit about the research we're conducting on this important subject. To give you an idea about what we're going to do in this webinar, I will try to somehow provide the background related to the impact of technologies and then Kazuya Kawamura will talk about what should transportation agencies do. And then, after him, Professor Catherine Lawson will talk about what should land agencies do. This is kind of the order of the webinar.
Just to start, I want to share a what I call a key principle of a system like this one. In essence, we need to accept that complex problems do not have easy solutions; and the implication is that there are no magic bullets. Complex problems require sophisticated solutions. That is the key. If they were easy to solve, somebody else would have solved them before us. That is a fundamental insight to keep in mind. I want to also give you a holistic view about the freight systems and each activity that it produces. This is important because when people think of freight they tend to think about the big units; the ports, intermodal centers, and the like. And once we understand these facilities, the reality is that the amount of freight activity that they produce is a miniscule portion of the freight activity that takes place in the porting areas. Freight activity takes place at all levels: International, global, Metropolitan, urban, and it is the numbers are basically tremendous, as you will see later in my presentation.
To understand metropolitan economies and freight, we need to be cognizant of the significance of freight as part of the economy. Basically, what I'm going to do now is to share with you these statistics. Take a look at these numbers. Sixty percent of global GDP is produced by the top 600 cities. In the U.S. about 80% of the manufacturing, depending on how you measure it, is in metro/micropolitan areas. This is the idea about size of the freight that is transported in metropolitan areas. If we compute or estimate all of the traffic, all of the freight that is transported, you get, for instance in the U.S., freight per capita is about 114-kilogram/person-per-day. This is a tremendous number. In metropolitan areas such as New York City 45kg/person-per-day, Beijing, China about 35 kg/person-per-day, Medellin, Colombia about 25 kg/person-per-day. If we go to poorer countries you can see that number decreases. Because, in reality, freight activity is an expression of the economy. You send money in one direction and then you get cargo in the opposite. That is the fundamental insight.
Another way to see the true importance of freight is to subdivide the economy in two major chunks; what we call the Freight Intensive Sectors, and the other is what we call Service Intensive Sectors. The Freight Intensive Sectors are those for which the production and consumption of physical supplies is a central activity of their operations. This group includes manufacturing, agriculture, wholesale, retail, transportation, and accommodation and food services. This segment represents 45% of establishments in the U.S. and about half the employment. In essence, the implication is that the performance of Supply Chains directly impact the one half of the American economy, and indirectly the other half that is what we refer to as Service Intensive Sectors. Just as a reference, the transportation sector is only about 3% of the employment. That 3% of employment, brings the supplies needed by both the Freight Intensive Sectors and the Service Intensive Sectors. This is important.
To give a sense about the size of the metropolitan activity, I'm going to share with you the result that we have estimated using the establishment level models that we will use in these two NCHRP projects in which we collected from a sample of establishments in the U.S. Then we calculated the number of deliveries and the number of shipments sent out as a function of the establishment. This model is basically collected in these publications that I show in the slide. All of these models, to make it easier for practitioners to use, have been loaded into this web page. Once you register you will be able to use the models for free. We did this in order to help the practitioner community use the models. But the only thing is that you need to register.
I want to give you a long-term view of freight trip generation. What you see in this slide is basically the analysis that we did of historical data about freight trip in the U. S. The first is this one from 1963. That is basically the last freight on the initial survey that was conducted in New York City metropolitan area. Back then, if we express the generation of freight trips as a function of the population, the per capita freight trip generation was about 0.15 freight trips/person-per-day. Over the years with the changing economy this per capita freight trip generation declined to about 0.08 freight trips/person-per-day. Let's take a look at internet deliveries to households. In 2009, the first year the National Household Transportation Survey collected the data about internet deliveries, the per capita generation of Internet purchases was about 0.04. In essence, for every 25 citizens, one internet delivery was being made. Now, as you can see in this slide, the rate of generation of deliveries to commercial establishments, that is business-to-business, have remained kind of stable in the period 2009 through 2017. In contrast, the greater generation of business to consumers, the B2C of the equation, triples from 0.04 to 0.12. What is clear from the slide is now the number of deliveries we have in total from B2B plus B2C is more than double the one that we had before the internet commerce took flight. Now, the interesting thing is that now in a city like Seoul, South Korea, the rate of internet purchases two years ago was 0.20. Our best guess is that nowadays, in 2019 in the US, this rate that was about .12 is close to .20. What that means is that the amount of freight activity has basically more than tripled. It more than tripled the one before e-commerce. And this is a tremendous challenge for the US. Now, with the on-demand economy, that means purchases that have to be delivered in one hour or two, the freight activity is going to increase.
Here to show you this is our estimate of the amount of deliveries both business-to-business and business to customers for the city of Charlotte. What you see here is the rate of the deliveries to customers for the city of Charlotte has increased following economic growth, this is the organic growth of the economy. But in contrast, deliveries to households has jumped quite a bit. This is what we see across the country.
Now, who produces all this traffic in the B2B segment? As you can see on this slide, you have here a number of different metropolitan areas. In essence, Retail and accommodation/food present 45-75% of the traffic. If we add wholesale trade that total jumps to 60-85%. If we produce the results according to business size, the big chunk of that is produced by small establishments. As indicated in the slide, 28-53% of total is produced by establishment of less than 5 employees, and 43-68% by establishments of less than 9 employees. In essence, believing that large establishments, commercial centers, and the like produce a big chunk of the traffic is not correct.
Now, let's talk a bit about the trends affecting transportation and freight activity in particular. There are now a multitude of trends from all domains; economic, technological, societal, and even environmental. All of them are pushing freight activity in different directions, that is what is happening. In terms of impact in the short and medium-term, I believe the most impactful forces on land use are the Internet Economy and the development Novel Vehicular technologies. These developments are going to have the most significant effect. Many of these trends, in particularly things like the Internet technology and the vehicular technology, these are affecting the choices made by individual businesses and people. Basically, what we see here is that this is in real decisions pertaining to location of business, size of economic activity, how many deliveries they get, etc. All of these trends, all of these changes at the individual level inflate into system-level impact in terms of congestion, travel time, number of truck trips, etc. The challenge here is that the net effect of what we will be able to perceive depends on the net effect of all of these sources. This is a challenge to predict.
Let me start with our guess about the impacts of the Internet Economy. What you have here is what we call the base activity. This is basically the amount of delivery freight associated with the B2B segment; Business-to-business simply deliver it to commercial accounts. This is basically the base condition. If we add to that the Internet delivery at the rate of .12, this is the number that we get. As you can see it is a dramatic jump. As you know, all metropolitan areas regarding size are similarly impacted. If instead of delivery at rate of .12, as we have as the in South Korea, this is basically the expected increases in traffic. If on top of that we add the effect of the on-demand economy or on-demand delivery, assuming that they will be generated for this short-term analysis at the same rate that they are delivered to household were being generated at a rate of 0.05, what we get is basically this line here at the top. In essence, we are talking about major increases; major increases that are about to strain transportation systems without any doubt. The Internet Economy also has an impact in other ways. This is basically an article from CNBC that shows in general what was the coverage area for one-day deliveries. All of the deliveries within these general areas, residents living in these general areas could enjoy one-day delivery for their household. Now, as you see here the covered has expanded tremendously. It definitely changes. Now, in 2018, more than 30% of the U.S. population is within reach of one-day delivery. This basically will have major impacts on traffic.
If we move now to Novel Vehicular Technologies, basically, what is the impact in general? The idea is that at the end of the day these technologies are going to have impact on cost. In history in the Economic Order Quantity model (EOQ) shows that reduction in transportation costs, decreases shipment sizes, increases shipment frequency, and also increases separation between economic units. And the reason it does that is because a cheaper transport allows companies to locate farther away to benefit from lower land prices. The reduction in shipment sizes has a major implication on vehicle choice, because the lower the shipment sizes the more competitive the smaller vehicles become. Basically, if the amount of cargo remains the same, moving to a smaller vehicle increases total VMT; that is a key effect. We are now living in the midst of a tsunami of new technologies. Here you have a snapshot of some of them. If we talk about truck platoons, what you have is a screenshot of the European Truck Platooning Challenge. It is a convoy of trucks, in this case with one driver. This is a lead truck and this lead truck with only one driver is driving three trucks; and they completed that two years ago. The implication of this is that these types of deliveries are going to play a major role in interconnecting container trucks to different centers. This type of technology is bound to foster logistical sprawl and also it will pose a major threat to freight rail. Another thing that warrants discussion is truck-drone combinations. These things are bound to play a role in suburbs, with the "mother" truck deploying drones to make deliveries to nearby locations, that could help reduce congestion there. And we also have drones. Basically, I do not think the drones are going to be widely used in metropolitan areas, maybe in suburbs and low density cities. In large and dense cities, I do not see them being a major market for this technology. We also have a tremendous number of technologies that are being developed to do the last-line; on the last 50 or the last 500ft. These things are going to require major changes in curbsides, sidewalks, and are likely to produce conflicts with pedestrians, and maybe at some point it might be possible that a distinction between sidewalks and roads might disappear, because we may be forced to manage both the sidewalks and the roads as a continuum. Time will tell.
Now, what are the net effects? There are basically multiple counterbalancing trends. On the one side we have e-commerce an on the other side we have all of these vehicular technologies. And then here in the middle we have a number of metrics that reflect how the changes in land-use are going to manifest themselves. This direction to the left will be a decrease in the metrics and to the right will mean an increase. In the case of e-commerce, this is our guess about what may happen. In the case of the vehicular technologies, as you can see, they are not always aligned. The net effects will depend on how these counterbalancing forces balance out. That's basically the implication.
Key insights. Well, as you know, these are times of major transformations along the social, economic, and the technological dimensions. All of these forces are producing and will continue to produce effects. Both on Internet Economy and all these developments in the vehicular side are going to have tremendous impacts. And more than before, we have to be proactive. I think that this is a fundamental fact. It is important to remember that the insight that there are no magic bullets. In most cases technology solves some problems and create others. We believe we need to have comprehensive approaches to maximize beneficial benefits and eliminate, if we can, the negative effects. I want to thank you for your patience.
Jennifer Symoun
Thank you Jose. Our next presentation will be given by Kazuya Kawamura, a Professor at the Department of Urban Planning and Policy at the University of Illinois at Chicago. He has over 100 publications on a variety of topics including freight planning, transport economics, and travel analysis. He holds a B.S. degree in Mechanical Engineering from the North Carolina State University, Raleigh and PhD and Master's degrees in Civil Engineering from the University of California, Berkeley.
Kazuya Kawamura
Thank you, Jennifer. Following Jose's presentation that identified some of the key issues related to technology adoption in both the urban freight and also more broader freight industry, I would like to present a kind of scenario development related to the most visible emerging technologies in logistics and freight industry with particular focus on trucking. The goal of my presentation is to provide fairly high-level insights on how new technologies can be deployed in the freight sector and how that might affect the land use patterns. While Jose's presentation covered pull effects of technologies including e-commerce, my presentation will focus more on the system-wide effects of push effects of technology adoption. Some of the material presented in this presentation are based on my involvement with the NCHRP 08-117 project that is looking at broad technology adoption including passenger and freight travel and its impacts on land use, also the initiative to develop smart logistics center in the Chicago area. Broader insights on technology adoption come from various literature including a book by Garrison and Levinson called Transportation Experience that includes excellent insights into the process of innovation in transportation.
When thinking about technology adoption in freight transportation, it is important to take the end-to-end systems perspective that Jose touched upon. This slide shows a simple example of imported retail goods that come in from the port of LA/LB and delivered to the stores in Chicago. When thinking about technology and innovation, I believe retail goods are the good place to start because of their high value and high inventory cost. Basically, it is a likely place to see technological innovations. In terms of adoption of technologies, especially with trucks, there are clear differences among the three segments shown in this picture – the port area, the line haul, and urban freight, and thus their deployment will probably take different paths and timing, which I will be discussing.
To derive plausible scenarios, I will first look at some key factors that would drive adoption of technologies by the freight industry. Then, I will talk about key technological advances that are likely to play important role in the continuing evolution of freight and logistics industries.
Then, I will discuss how the plausible path of technology adoption will impact land use, and derive some insights. I should note that over the years, I have come to be convinced that when it comes to freight industry, there is little benefit to think long term, such as 20 or 30 years, because of the pace at which the industry changes and also the highly heterogeneous nature of freight and logistics systems. Therefore, I will try to focus on changes that will happen in the foreseeable future, which is within 10 years in my view. For freight professionals, long-term typically means 3to 5 years.
Fundamental difference between behavioral norms of freight or business in general and passenger travel is that competition forces the former to pursue efficiency relentlessly rather than being satisfied with a minimum acceptable level. Such behavioral norm drives their behavior.
Because they are driven by competition, they need to have reliable information to assess return on investment before making critical decisions. For new technologies that that can have significant impact on their productivity and bottom line, they tend to be initially careful because of the lack of information to support their decision making. At the same time, once the benefit of a technology is proven, adoption will be swift. Logistics operations change so quickly, it is not worth considering long-term strategies. Ability to adapt to new environment is more important than having strategic view. As a result, they may be myopic but also rational.
Now, what freight stakeholders will be concerned with in terms of where to use technology to beat the competition, cost of operation is a good place to start. For long distance trucking, driver cost is by far the largest component of the marginal cost of operation, followed by fuel. Both of these cost elements can be reduced by the adoption of connected trucks, although the benefit in fuel saving will be modest at less than 10% according to most studies. Continuing driver shortage and recent increase in driver wage should provide incentive to adopt technologies such as platooning or some level of driver automation by the industry. In the next few slides, we will look at some relevant characteristics for the segments of end-to-end freight system.
While the last mile portion in the urban areas may be expensive, when limited to the trucking cost, the line-haul portion is still the greatest. As many of us are aware, the last mile, especially the last 50 feet continue to be the most complex and challenging component of current freight system. Finally, the nodes that include warehouses, terminals, ports where these segments are connected to each other, are expensive parts of the freight system. When we look at the current state of technology adoption for three segments, the container terminal at ports can be considered the front-runner. There are more than dozen fully automated container terminals in the world and there are many more partially automated terminals as this map shows. Container freight market has been going under automation since the early 1990's (Rotterdam being the first mover). The top picture is the Yangshan Deep Water Port in Shanghai has 6million TEU capacity, and the bottom one, the Victoria terminal in Melbourne has 1 million TEU capacity. Both port of LA and LB have on-going projects to introduce automation at their container terminals, which has been in the media recently.
The example of port automation can tell us a couple of things. Firstly, automation, like many of the innovative technologies we are discussing today, is very expensive. The automation of the Victoria terminal, which had 1million TEU capacity before automation costed $400 million. There are 6 intermodal terminals in Chicago area that handle more than 1 million TEU per year. Another point is the nature of the bottleneck. In a way, automation of port is a curious development since the systems view says that simply increasing the throughput at the port will shift the bottleneck to downstream of the system. So, automation is good or even necessary for ports to deal with mega ships, but without the coordinated improvement of other parts of the system, expected benefit may not materialize.
Of course, this is not lost on the logistics industry, and efforts are underway to address the system-wide upgrade. But, need for astronomical investment in upgrading the end-to-end transportation system components will result in rather slow and long process unless the government can take the initiative in a big way. I will come back to this point later.
If we look at the line-haul portion of the system, vehicle technologies will be the main field of technology adoption. While vehicle manufacturers are actively engaged in the development of Level 4 or 5 automation of trucks, wide-scale deployment is still a decade or more away even in the best-case scenario. For the foreseeable future, platooning combined with some level of automation that reduce the required number of drivers seems to be the most relevant technology on the horizon due to the potential cost savings. But, those potential cost savings will heavily depend on the nature of regulation that govern the use of such technologies.
If we turn to the urban freight, we find so many potentially impactful innovations, that makes it quite difficult to think about the collective effects on overall freight flow and land use, which was touched upon by Jose in the slide that showed opposing impacts of some of these technologies.
In other words, it is very difficult to even speculate on how these innovations will transform urban freight.
So, when I consider the information that I have discussed so far, it is possible to derive plausible scenarios for how freight-related technologies will be adopted. The starting point is the assumption that port automation will continue and that will result in significant increase in the throughput of containers and basically the goods that are in those containers throughout the system. Because of the benefit associated with the end-to-end upgrade to take advantage of automation in the upstream of logistics chain, there will be considerable incentive to innovate the nodes downstream that handle container traffic. It is not clear, though, if return on investment can justify the massive investment required to upgrade those facilities. I believe that in the US, platooning will be quite enticing for the line-haul truck operators because of the savings associated with driver cost and addressing chronic shortage of drivers.
Finally, because the adoption of technologies is expensive and if the benefit is shared by different stakeholders of the system, there may not be sufficient return on investment to motivate adoption. For this reason, in-house freight will probably be the early adopter of automation and also connected trucks. This may explain the fact that auto-industry has been the leader in supply chain automation.
Now, we turn attention to the land use impacts. Essentially, what we expect from adoption of technologies such as automation of container handling and truck platooning is the continuation of the evolution in logistics facilities that have been making them more flexible and higher capacity. In addition, automation means that these facilities will operate 24/7 to maximize productivity, but at the same time, reduce need to have access to large labor markets. So, taken together, we will probably see large, technologically advanced logistics facilities pop up along interstates, ports, and airports. The Mobility Innovation Zone in Alliance Texas that was announced recently fits that bill perfectly.
Also, as Jose mentioned, depending on the EOQ, we may see a restructuring of logistics network configuration. Because movement of freight is closely connected to personal and economic activities, we should also consider change in spatial demographics.
We all know that US is urbanizing, but it is more accurate to call it "suburbanizing". As this graph shows for the last ten years or so, the growth in the emerging suburbs and exurbs have outpaced those in the urban core and older suburbs, and there is no indication that this trend will stop. What this suburbanization will do to the logistics facilities is that it incentivize them to also decentralize because historical data show that logistics facilities tend to stay close to the origins and destinations. The end result is the decentralization of logistics facilities. Which is often called "logistics sprawl". From the policy point of view, though, it is not clear what logistics sprawl means in terms of amount of truck traffic in urban areas.
As an example, I would like to give some food for thought based on the analysis of data collected in Tokyo that I and my collaborators carried out. Like many cities in the world, Tokyo has experienced logistics sprawl. Based on large two shipper surveys conducted in 2003 and 3013, the average distance to the urban center increased by 26%, which resulted in a 6% increase in average shipment distance.
But, at the same time, total amount of truck freight being shipped decreased by 13% due to the loss of manufacturing. More importantly, the average load size increased by 14%. Combination of these two factors led to a 24% decrease in total number of truck trips. The end result is a 19% reduction in total truck vehicle kilometers traveled and 4% decrease in truck vkt per ton of shipment generated between 2003 and 2013. While this is far from proving causality, the data indicates that facilities that are in the suburbs or exurbs tend to generate larger shipments regardless of when they were built. What this research indicates is that there are still lot of unknowns about how logistics sprawl impact truck traffic.
As we have seen, automation, which can multiply the capacity of terminals, is already well underway at container ports, and that would put pressure on the downstream segments, such as line-haul trucking, to adopt technologies that will boost their capacities, may it be automation or connected and autonomous vehicles. But, these innovations are expensive and return on investment calculus made by individual actors may not encourage large-scale technology adoption. In other words, we will have a positive externality problem. What this suggest is that there is a research need to quantify the system-wide benefit to inform pubic-sector policies. Also, experience with ports suggests that without system and data integration, automation may not produce significant productivity improvement for the system as a whole. I believe that this is a technical area that warrants research by either public or private sector.
As I said, the regulation of the CAV will impact its deployment. So, further research is needed in that area as well. I believe that some of these are already being looked at in efforts like the 21st Century Truck Partnership Research Blueprint. In terms of the impacts on land use, we expect to see increased incentive to locate large logistics facilities in rural areas or the outskirts of urban areas. However, the impacts of the spread of rural logistics facilities and logistics sprawl is not well understood, and thus is an important area of research.
This will conclude my presentation. Thank you for your attention.
Jennifer Symoun
Thank you, Kazuya. Our final presentation will be given by Dr. Catherine T. Lawson, an Associate Professor in the Department of Geography and Planning, and Affiliated Faculty in the Information Science Ph.D. Program in the College of Emergency Preparedness, Homeland Security and Cybersecurity at the University at Albany, State University of New York. She is also the Director of the Lewis Mumford Center/Albany Visualization and Informatics Labs (AVAIL) at the University at Albany. Her research interests include: applied data science; advanced uses of archived intelligent transportation systems (ITS) data and spatial analysis/geographic information systems (GIS) applications for transportation planning and analysis for freight, transit (including ferries), and passenger travel; the role of transportation in emergency preparedness; and natural hazard mitigation planning.
Kate Lawson
Great. So just a quick reminder, everybody, that trucks carrying freight rarely take a leisure trip. They're going from one land use to another. So that means everybody needs to understand the role of land use planning. And, full disclosure, I was a land use planner with the Bureau of Planning in Portland, Oregon while I was completing my PhD. So, let's begin with how local land-use actually works. In the world of land-use we have formal processes for policies and regulations, and we're looking into the future for our communities. Land use has always had a rich history of data, but many of their data sets our idiosyncratic to the particular jurisdiction where they are applied. Planners also like to use best practices, and those are things borrowed from other places, and to have model language to facilitate getting legislative actions adopted.
So, that sets us up for how land use works, but, unfortunately, freight is often absent from the period of time when goals are set, and objectives are being understood for the land use actions. Now, the traditional tool that we have for planning are the Euclidean Zoning, which is a single-use application originally designed to protect the public health, and it broadly includes trucks with industrial designations. And there is, unfortunately, very few opportunities to address what is happening with freight in commercial and residential areas. Another tool that many of our jurisdictions have are the Comprehensive Plans. This is where we have a community-wide vision of where we want to go in the future, but it also often has freight activities not included in these discussions, and both of these Euclidean Zoning of the Comprehensive Plans are two-dimensional which means they just have boundaries on a map.
So, what should land use planners do? They should get with the program. By that I mean the data program. Since every jurisdiction has to have an inventory of their land use activities for every parcel in their jurisdiction, they need to consider using the Land-Based Classification Standards. LBCS was develop by FHWA, the American Planning Association, and several other federal agencies back in back in 1998. It was an amazing opportunity to understand how five harmonized dimensions with codes and definitions could be applied to parcels. So, there is a code for the activity, there is a code for the function, the structure type, the site development characteristics, and the ownership of every parcel in your jurisdiction. All of the data that is needed to do this type of application, the access, information, and the data is already in an access file that is available on the American Planning Association website. However, we found that since most jurisdictions already have their own sets of codes, they haven't really seen the need to adopt the Land-Based Classification Standards.
But here is an application where it was used in Albany, New York. We used the function land use dimensions to understand what was going on in an area that was zoned for light industrial and we discovered there was a lot of commercial activities going on. That explained the traffic that was going in and out of those land uses. So, when we think about what we can do going forward for these emerging technologies, we can think about enhancing the LBCS program by including the freight activities, both the production and attraction estimation equations, that can be appended to the land use designations and the function. And we can do this with Transferability Process. Just as Jose was describing the previous work we had done, on NCFRP 19 & 37, we have a whole set of estimation parameters by NAICS code for freight generation, freight trip generation, and service generation, and we have a crosswalk from the NIACS code to the LBCS function codes. And what that means is that every parcel can have the designated types of truck trips coming to them and out of them with an LBCS plus truck trips new formation. That would give us the harmonized data for more efficient and cost-effective ways for understanding how we will have trucks integrated into our urban fabric.
Now, land use planners also need to know what need to know what the transportation planners have been doing that impact the land use. Thinking about the National Performance Management Research Dataset, this is the data that is collected every five minutes on the interstates and the non-interstate roads. And it is being prepared and provided by FHWY for the performance measure for State DOTs and MPOs. So, they have to figure out their level of travel time reliability, their truck travel reliability, and their peak hour excessive delay. So, when you have your National Performance Management Research Dataset you have it statewide, you have it at the MPO level, at the county level, at the network level, at the root level, and you have it at the traffic message channel level. And that means that you can have information about congestion right on the block face. So, having these different levels of geography it's then possible to have your different types of vehicles. You can disaggregate single unit trucks and tractor-trailers. Even though the raw data cannot be shared, it only can be used by State DOTs and MPOs, the data derivatives can be used by local jurisdictions to monitor the traffic behaviors. So, the additional local roads can also be provided by commercial vendors. And that you can add to this information your local classification count so that you can have accurate and time specific volumes of trucks.
So, with that data, with the land use data and the data from the transportation side, now it is time to adopt some proactive planning tools. Now in our NCHRP 08-111 Freight Efficient Land Use we have been looking at these tools. These tools include overlays, where you have specific adaptations for freight. We have some new forms of zoning, both form-based in hybrid codes. There are special districts and logistic zones. What is going to be necessary, we're going to look at the details of what the tools are. We also need the model language. That makes it possible for land use planners to quickly adopt what types of progressive tools that they would like to have. So, we need to make sure that we get the model language to go along with it. Now one of the things you can have as an Overlay Zone. The Overlay Zone does require local legislative action, although often they're not faced with too many controversies because everything within the zone is catered to specific and explicit needs. This is very appropriate for when you need to address freight. In case studies, we have a good case study in Baltimore. Here is what you would see if you had a zoning overlay. You would have specific places with specific information that would make it possible to address things like noise, truck parking, other things that we find our important when you have freight impact.
Now Form-based Zoning came along when it was decided by the land use community that the single-use planning was not working effectively. And so, especially with doing your biking and ped and your transit planning, they wanted to have three dimensions and not two dimensions, and they wanted to make sure they had lots of public outreach to begin with, because once the form-based zoning is adopted there is very little need for additional legislative actions. However, they use a transit concept and unfortunately, that marginalized freight activity. So, here is an example of what form-based zoning codes look like. They have actual three-dimensional illustrations for developers to follow. So, if you want to build you just get to the right code, you look at what you need to do, and you are ready to roll-up your sleeves and get busy. Then the transit down in the corner, they have the urban areas, they have the suburban areas and the rural areas, and freight has been primarily pushed out of these areas and not recognized as being needed. So, along came Hybrid zoning. Hybrid zoning is actually a mix of traditional and form-based zoning. And what is wonderful about Hybrid zoning is that this time freight is included. It has been successfully described and it also illustrates freight activity. It also requires intensive public outreach to get the original adoption, but once the code is adopted then there is much reduced amount of legislative action for developers of these properties. And a case study is right in Albany, New York. And here is an example of what is in a zoning code. You have actual indications of where the truck parking should be, how the development is going to go forward. And so, with this designation, it makes it much easier for us to see how we are going to integrate these technologies of the future into a land use that is catering to freight need.
Now we also have special districts, and these are larger than overlays there where freight is primarily occurring. So special issues are put into the entire district. And these mitigating strategies are primarily to reduce conflicts, but often to increase the productivity of the freight community. So, we find that the freight community will come to the table and work with the land use planners in order to get their designated needs adopted. And it has flexible boundaries to make sure that it is catering to those areas were freight needs our important. Portland, Oregon has a freight district, and in fact they are right in the middle of getting an update to their freight district right now. Again, these are larger geographic areas, and all of the regulations will apply across that particular district zone. Then we have what are now emerging to be logistic zones designated as Port-centric Logistics Zones, and Logistics Support Zones which just outside of the port. We have Urban Distribution Centers, where we have intermodal activities. We have Urban Consolidation Centers that happen inside of the urban areas, which is more like a logistics function happening inside of a specific area where you would have shared resources for freight. And then there is the concept of the Freight Village where there's a large volume of these type of logistics activities going on and it's very symbiotic; one freight activity is coherently and cooperatively associated with another freight activity. Those have happened generically and organically before, but now they are actually seen as a designation that can be used by land use planners.
So, what else can land use planners do? They can watch the clock, because time matters. Time may be the fourth dimension. We've already been thinking about this in land use planning because we have shared parking for retail during the day and residential at night. That means we can understand ways to accommodate truck in land use planning because we have is your bucket for retail during the day and residential at night. That means we can understand ways to accommodate truck parking in places by different times of date, by different locations, and to take care of the sets of relationships that happen during different times of the day between the freight community and the land use community. We can figure out if there are special thresholds at which an overlay zone or district would trigger some more aggressive responses to manage things with a time perspective, and to improve the truck traffic by a particular time of day. And you can also then monitor the "before & after" land use development at different times of the day with different geographic features, including using your congestion management tools and your PMRBS in order to figure out is that their particular peak, maybe not the morning peak or the afternoon peak, but some mid-day peak, which is more important for trucks to pay attention to and to get some relief by having special attention paid to it.
Now, the next one is Assistive Intelligence. Implementing assistive intelligence in NCFRP report 29 Making Trucks Count, it describes the use of mobile apps to aid truck activities. This is important because with these apps we can have incentives for participating in programs that can either be site-specific in an overlay zone or in a specific district, and these can be truck mobility programs in which the truck driver or the truck company participate in an at-base program where they can make their reservations, they can make sure they arrive on time, they know where to be, how long they can park, they can communicate back to the app to say if they are running behind and do some rescheduling. So, with the efficiencies of the scheduling and the transactions in these reservations it's possible to include this type of a program into a land use legislative action. We have Transportation Management programs on the bike ped and transit side, so those same type of ideas can be translated into a program where we are communicating with our trucks.
And finally, it's important to think about your local Hazard Profiles. We have had now attention more recently on resiliency, and it turns out that all jurisdictions, counties, and states need to have a FEMA approved Hazard Mitigation Plan. And these Hazard Mitigation Plans we can identify disruptive and resistant networks locally. These are places where the freight community is going to have problems based on a natural hazard. In case studies, Seattle's new earthquake-proof tunnel. They actually looked at what the consequences were of the upcoming, potential earthquake of a 9.0. So, the transportation community rolled up their sleeves and said, what can we do? How can we do it? So, they have now opened up the earthquake-proof tunnel. And what this requires is that freight and land use efforts to prepare for the automated trucks before, during, and after an event. We cannot ignore this. We have some examples even recently where we need to make sure we are thinking about this, that we develop our local Network Analytics or hazard warnings. Because it might be that one of these days our freight community and our emerging freight technologies are going to have this to deal with. Or they might have this to deal with; this is the effects of the Alaska earthquake.
With that in mind, what should land use planners do? Well, they need to access high-quality, harmonized data programs for local land-use analysis. We have in the past thought about local land-use as being designated to be taken care of by local land-use planners. That is true, but our MPOs and our states can work in combination with local land-use planners using the LBCS to understand where things are and where they're going to be in the future, so that we can better plan. We can apply the innovative land use planning tools, the policies and programs, and make sure that they are paying attention to freight challenges. Land-use planning is very good now at the bike and ped in the transit world, the challenges and they are meeting them very, very well. We need to roll-up our sleeves a little higher and make sure we do not miss our freight challenges. We need to pay attention to time and behavioral changes for specific days of the week, times of day, weeks and months, and seasons so that we have the right program in place for the right actions given the types of differences we have, especially in those places where there are strong differences by time of year with respect to the weather. And then using our Assistive Intelligence, which includes harvesting the app data and analyzing how will the reservation and the transactions are occurring, and make sure that we are using the data that is happening in real time by analyzing it and applying it to land-use solutions. So, maybe the threshold of time needs to be expended, maybe it can be contracted, but these new tools make it possible to better coordinate between the freight activities and the land use solutions. And we need to not forget about the local hazards and making sure that we address those, or are at least aware of them, so that we are not caught by surprise. And when the land use planners our ready we can let those automated trucks roll. With that I think we're ready for questions.
Jennifer Symoun
Thank you, Kate. 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.
Kate, I will start with this one from you since you are the most recent presenter. Do you have any recommendations for considering long-term, such as 10 hour, truck parking in the overlay, hybrid, or special district zoning? For example, minimum requirements or shared costs?
Kate Lawson
Well, I think it's a really good idea, and I am hoping that that some of these ideas where we have freight plans that are being updated right now, that we think about this and where we have land-use opportunities. One thing that has to happen before we make decisions about the period of time, like with long-term planning, is to make sure that we understand what the trucking community needs are. For example, with Jason's Law, we know that we have an inventory of where truck parking is available. But with the new hours-of-service it may now be the case that you run out of time to drive at a different location than you use to. So, before we work on what exactly we need to do in the way of regulations or incentives, we need to reach out, land use planners need to meet with MPOs while they're meeting with the freight communities and make sure that we are solving the right problems. So, yes, we do need to have the 10-hour understandings, but we need to make sure they're in the right place at the right time for the drivers that need them. Until we have all automated trucks, we're still going to need a place for those drivers.
Jennifer Symoun
All right, thank you. I am going to go back up now with some questions for Jose. One question for you. What was the source of the B2B data projections?
Jose Holguin-Veras
Essentially, what we did is to use the freight distribution model that we had. We use that in combination with [Indiscernible - low audio]it is produced by the Census Bureau. Then we used this data as we implemented the models. We applied the models to the business partners. [Indiscernible - low audio]. That allowed us to produce the estimate of the level of ZIP Code, counties, states, and even [Indiscernible - low audio].
Jennifer Symoun
All right, thank you. Another question for you, Jose, and I know you typed you typed in a response but if you want to give other information about what the EOQ model is.
Jose Holguin-Veras
Shippers and receivers have to decide on the frequency and size of the shipment. They do that by somehow assessing a trade-off between transportation and cost. There are basically two strategies. You could bring a large shipment and that would last you a week or two weeks, but you need to have space to store it, and that's a space and a cost. Another strategy at the other end, particularly is to get many deliveries of small shipments. This is kind of just-in-time strategy. In that case transportation cost generate a lot more trips, but the shipment sizes are small. What happened in the U.S. over the last 30 years is with increasingly low shipping rates, they are relying on frequent shipments because that allows them to eliminate storage areas. There is a cost. The EOQ what is the ultimate balance between shipment size and frequency.
Jennifer Symoun
Thank you. Another question for you. Was the threat for modal diversion more specific for the European freight system because of smaller trains, et cetera?
Jose Holguin-Veras
Not really, because what happens is these connected trucks are intended to assemble. They assemble as a convoy and are driven by driver all the way and then the trucks peel off. In essence they behave like a mini train, but they also eliminate the issue of intermodal transfers. The transfer from truck to rail and from rail company to rail company takes a lot of time. These technologies allow them to assemble and disassemble in a very similar fashion. This would apply to the EU and the U.S. and any other big country.
Jennifer Symoun
All right, thank you. I think I have another question another question for you, Jose, before moving on. I see two more. Do you have examples of case studies from Japan? If there is a link to share those or any information to share, maybe we can pass that along.
Jose Holguin-Veras
Okay, I will.
Jennifer Symoun
One more for you. Is 3D printing potential technological a development that will have a material effect on nature and volume of freight movement?
Jose Holguin-Veras
The consensus that I see is as you probably saw in my comments, the bulk of the traffic will be related to Internet deliveries to households. To what extent this is going to come from 3D printing I have no idea, but my guess is it will not be much.
Jennifer Symoun
All right, thank you. We'll move on to some question for Kazuya. How do automated truck costs impact the freight system?
Kazuya Kawamura
I think the question, like I said, is will that actually translate to the faster or the cheaper shipments? It's a quality of service question. So, like I said, to enjoy the system's benefit, you cannot just shift the bottleneck to the downstream of the system. All of the all of the system has to be upgraded to take advantage of those new technologies. I think there was a question about automated ports. That's exactly the same situation where you are processing some component of the freight system much better if those shipments would sit somewhere within the system and just wait. We're just shifting the wait time to somewhere else. Until we can get more information, such as end to end and freight fluidity index for example, that will be the great indicator as to how those innovations will actually affect the performance.
Jennifer Symoun
All right. Another question for you. Is the effort to create freight lockers to consolidate delivery to the consumer having any tangible effect on reducing truck trips?
Kazuya Kawamura
I don't know. I think part of the big question of that is tangible. To me that means demand and response, how many people actually use that. At the same time, normally what we find is that when the delivery vans are filled, they have a high load factor; that is a good thing. That is why we mostly focus on a lot of times looking at the auto freight is how many truck trips are generated per a ton of shipment moves. So, if those freight lockers actually contribute to increase load factors, that might actually reduce truck trips. But when deployment for the penetration of those lockers are lost, then the delivery company is not going to do that. So, that all depends really on the demand side. That's why harbor freight is so difficult to predict what's going to happen with it.
Jennifer Symoun
All right, if any of the presenters want to jump in with a response, feel free to for that question.
Jose Holguin-Veras
This is Jose. I took an order of looking to the preference of users of lockers. In essence people value convenience. They want deliveries to be made to the house. That's basically the reality. Unless the trend continues in behavior prompted by desire to minimize the impact on climate change, lockers always seem to be like a minor player. That is what we see in the data.
Jennifer Symoun
Kate, any thoughts?
Catherine Lawson
Not more than Jose. We have been looking at this in our research, and I think he summarized what we're finding.
Jennifer Symoun
All right. Kazuya, we'll move on to one more question for you. Does automation on container freight movement been opportunity to increase intermodal share?
Kazuya Kawamura
I did answer that one as related to the last question. But it depends on the adoption of the end-to-end service quality. That is a question that I addressed to my presentation with that. Basically, automation is happening because there would be large ships coming to the port. The port, having limited real estate and also to make more productivity out of that real estate, has to be able to process containers quickly. That is the reason they are automating. That being said, maybe those very big ships may not come as often as small ships. In terms of total end-to-end service time, intermodal may or may not see improvement. One thing I can say is that when those large ships, bigger ships come to dump a lot of containers on shore, we still don't have the intersystem figured out to process them very quickly so that customers can get their freight quicker to the end destination. So, that is something that I pose as a great research need we have, because there are not really any great stakeholders large enough or that incentivize to invest in an end-to-end improvement over the freight system that will cost enormous amount of investment.
Jennifer Symoun
All right, thank you. Go ahead if you have other thoughts.
Jose Holguin-Veras
I would like to add based on the key findings from NCFRP 44. We just finished NCFRP 44. As part of that we conducted interviews with really big shippers in the U.S., big firms. We also used the confidential commodity flow data to estimate . Because in order to assess the significance of traffic time from the ordering of the shipment to the finishing, and the other factors: cost, quality of service, etc. One of the Key Findings from both the in-depth interviews was that traffic time was a very minor factor. The key factor in the selection of the freight modes are basically the cost, the freight they have to pay, and the quality of the experience. And that has some issues because in many of these intermodal moves, the transfer takes a lot of time. That is insofar as this time is related to cost, that would be a key indication.
Jennifer Symoun
Thank you. Kate, a question for you. Can you expand what you meant by urban distribution centers and consolidation centers? Do you mean we should expect a dozen or more small inventory warehouses locally, one per suburb? What is that scale that you mean?
Catherine Lawson
Limited the research on this we found that, this is specifically the urban consolidation centers, there have been times when the public sector has tried to make those things happen, and they did not happen well because there were not people who wanted to participate in it. But in the research that Jose and I are doing we did an international scan, and we found that there are actually folks in other countries where the private sector is the one using the urban consolidation centers to keep the tenants in their buildings happy. So, it does require a really clear understanding of a supply chain and, again, the end to end story. And in these consolidation centers it has to be beneficial to everybody, that the freight go to a location and the amount of travel is reduced from that for the purposes of air quality. But the amount of travel is reduced with the large trucks breaking down into the smaller trucks, and then the ability to aggregate the loads and move them to the next location after they have been consolidated. So, if we really understand the needs of the carrier community and the needs of the shipper and the needs of the receiver, it is possible to put these in the right place at the right time in the right way. So, having an arbitrary "every place will have one" may or may not be the solution. We have to make sure it fits the needs of all the different players and the stakeholders. With that said, we are already seeing here in the U.S. some entrepreneurial consolidation centers where empty warehouse space is being used, or even we find that some stores are acting as accumulation location for local neighborhoods. The most important thing is to try and understand all of the cost and all of the benefits. And if we can understand these logistics centers that need to be included in our urban areas, maybe our business improvement districts could designate an area on every other block. Like we have transit stops, you would have places for trucks to duck in and duck out and put their loads and then have the ability to get those loads repackaged and sent to their next location. But freight planning is an art more than a mathematical equation, so we really have to make sure that we make these attempts to have these things happen that we have everybody on board, and that's why the communication with the stakeholders is so important. So, in France they actually have this consolidation center. It used to be a parking structure and now it's being used it very efficiently for the consolidation. And the same with distribution centers. We just have to do more research with actual applications, a lot of case studies. And I think we've got one going on in Seattle now, but in the best of all possible worlds the answer would be, yes, we would understand what that function is and we would include it like we have city parks, like we have bikeways. We would have a place for these freight activities to happen comfortably, and with the right set of regulations and incentives so that our citizens, whether they are in commercial areas or in residential areas, can get the expected delivery of the goods that they want. It's too late now to say that we are not going to have this on-demand delivery, so now we have to figure out how to accommodate it. I hope that helps.
Jennifer Symoun
Great, thank you. Go ahead, Jose.
Kazuya Kawamura
The one interesting example on consolidation center comes from Tokyo and probably one of the most successful ones I've seen in the world. They have reduced number deliveries by 99%. They told me that they have been able to reduce 100 trucks to one, because this is delivery to the large vertical shopping mall visited by more than 20 million people a year. That's the largest shopping area in the middle of Tokyo. What they did was from the planning stage the citizens got together and said, we are not going to put up with truck deliveries to these shopping malls. They demanded that they have a high degree of consolidation. So, from the planning stage they got involved and made sure that all of these buildings are designed so that the consolidation has to be the way to get supply of this merchandise into the shopping mall. One of the things they told me was that unless the buildings and everything were designed from the beginning to accommodate consolidation, they would not have achieved this high degree of success. It has something to do with the building code and plan review, or something like that, can play a role. But the important part is that the citizens demanded it.
Jennifer Symoun
All right, thank you. We have a few other questions. This one I will put it out to anyone wants to answer. With moving more freight to trucks, has impact to roadways been considered?
Jose Holguin-Veras
Absolutely. That has basically been the intent. That is basically why we have been proactive because with increased freight traffic there will be increasing congestion, pollution, and everything else.
Kazuya Kawamura
I think we have been aware. I think one of the oldest frameworks about 15 years ago the – that supported the rail infrastructure. Because they realized that their highway system would basically collapse if truck traffic is allowed to increase at the rate that they have been. Yes, I think they have been pretty generally a lively recognized problem is having so many freight trucks on the road.
Catherine Lawson
Yes, we have a performance measure now on road conditions that can be brought into the picture as well. So, where we have lots of freight traffic that we can recognize through the data of the trucks, we can also then look to see what is the condition of the pavement and make some good scientific advances on what exactly that relationship is because we have these new performance measures.
Jennifer Symoun
All right, let's see here. What is the potential for electric automated trucks to turn into mobile warehouses? And what be the impact of transportation network and land uses since this may eventually contribute to the road transforming into dynamic parking lots.
Catherine Lawson
I'm going to take a stab at that one, because that is exactly what we saw happening to the rail networks. When the oil started rolling on the rails, then we started finding that they were parking those tanker cars on the side waiting for the market prices to change. So, that is a threat, and we need to think about that with respect to the consequences of on-time-delivery and monitoring where the loads are and what they are doing. I hate to think of it of it as a dynamic parking lot, but that is one of the things that we have to be careful of. And with the data, although, it's probably not a bad idea to have end-to-end, this is one of the things freight fluidity I think is going to help us with is where is that load going and when is it going to get there. But that will mean we will have more active space being taking up with inventories that are on the move.
Jose Holguin-Veras
Let me add to that. I also have an interesting view of this. Wal-Mart now is investing in technology like that. The intent here is to have a fleet of mobile warehouses to transfer this cargo to a group of helpers to make the last leg of delivery. I have to say that concept is going to work out well, because they are focusing on technologies to do the last leg of deliveries. That is basically going to produce conflict between these small autonomous devices and people. But what Wal-Mart and other companies are doing is using floating warehouses. Everything goes to a block, transfers to helpers that walk to destinations to make deliveries, like a crowdsource effort. And then this mobile vehicle moves to the next location. I think that if they do not park in the middle of the road basically waiting for the next assignment as indicated, that thing may have some beneficial effects. Because it doesn't have the – of possessing a sidekick like deliveries with drones have. It depends on how it's implemented.
Jennifer Symoun
All right, thank you. I think we have two questions left. I know we don't have much time left and we will try to quickly get through those if presenters can give brief answers. Would it be practical to use autonomous truck fleets that use smaller trucks? This would give the freight industry more flexibility in urban areas and potentially reduce VMT and intermodal transfers?
Kazuya Kawamura
I think the way we talk about these autonomous vehicles, those are Level five, or at least level four vehicles where the driver has no additional marginal labor cost for running these trucks. And that's the point I made is that those will be the complete game-changers. But at the moment those technologies whether they would receive wide scale adoption is quite a ways away. That is something I really did not get into because it will completely change the freight industry if there's very little marginal cost running small trips very frequently because there is no demand.
Jose Holguin-Veras
Basically, a concern I have is we need to keep in mind that the amount of cargo freight is increasing on per capita basis. We are consuming more freight. The implication is if we, artificially, force a downsize of vehicle size from large to small the total VMT is going to increase. And that is going to make a difference. If more freight vehicles, in some cases at the local level might produce less impact, but the total VMT they produce as a group.
Jennifer Symoun
All right, thank you. Jose, one final question for you. Is Korea FTG data modeled or actual historic data?
Jose Holguin-Veras
Historic data. That was based on a survey.
Jennifer Symoun
Thank you all for attending today's seminar. The recorded version of this event will be available within the next few weeks on the Talking Freight website. Registration is not yet available for the August webinar but once it is information will be sent through the Freight Planning LISTSERV. The Freight Planning LISTSERV is the primary means of sharing information about upcoming seminars. I encourage you to join the LISTSERV if you have not already done so.
