Transcript Linking Logistics Requirements to Public Policy Washington

The Transportation Logistics Company
Indiana Logistics Summit
Infrastructure Needs and Opportunities
September 26, 2007
TRANSPORTATION INFRASTRUCTURE
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Trucking’s Progress Since 1985
175
155
135
ATA’s Monthly Truck Tonnage Index
(1993 = 100)
6% Average Annual Growth Rate
115
95
75
Jan-04
Jan-02
Jan-03
Jan-01
Jan-99
Jan-00
Jan-98
Jan-96
Jan-97
Jan-95
Jan-93
Jan-94
Jan-92
Jan-90
Jan-91
Jan-89
Jan-87
Jan-88
Jan-85
Jan-86
55
Source: American Trucking Associations
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Land Capacity: Congestion
2020 Estimated Peak Period Capacity
Sources: US Department of Transportation, Federal Highway Administration
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Only 4% of the Market Has More Than 20 Trucks, but We
Believe That 4% Controls ≈70% of the Capacity
4.1%
8.6%
0-6 Trucks
7-20 Trucks
Greater Than 20 Trucks
87.3%
Represents 613,242 fleets, including owner-operators with operating authority.
Sources: Motor Carrier Annual Report, TT Press and American Trucking Trends 2005 by ATA.
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Demographics Remain Unfavorable for Significant
Driver Additions
1.5%
Female Population Growth (Aged 20-44)
0.3%
0.3%
0.1%
0.2%
-0.1%
-0.1%
-1.1%
-0.4%
-0.5%
-0.2%
-0.1%
0.0%
0.0%
0.0%
0.3%
0.1%
0.4%
0.2%
0.5%
Annual Growth
0.5%
0.0%
0.1%
2001-2010 CAGR
Males Aged 20-44: 0.1%
Females Aged 20-44: 0.0%
Male Population Growth (Aged 20-44)
-1.5%
2001
2002
2003
2004
2005
2006E
2007E
2008E
2009E
2010E
Source: U.S. Census Bureau
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Ugly Demographics Will Persist Past 2010
 Males, ages 20-44: 52.3 mil. in 2000; 52.7 mil. in 2010; 0.1% CAGR
 Females, ages 20-44: 51.8 mil. in 2000; 51.7 mil. in 2010
 At 3% GDP growth, driver availability would be 34% worse by 2010
 Males, ages 20-34: 0.4% CAGR, going from 29.9 mil. in 2000 to an
estimated 31.1 mil. by 2010--the “only hope”--demographic is still growing
at less than half the rate of GDP growth
 Average age of a Teamster driver is 57 years--Yikes!
 209,000 of 1.3 million long-haul drivers retiring in next 8 years
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Congestion issues are increasing
Congestion-related Shipment Failures
2.0%
1.8%
Percent of Loads
1.6%
1.39%
1.44%
2005
2006
1.4%
1.2%
1.01%
1.0%
0.8%
0.6%
0.4%
0.2%
0.0%
2004
Year
Source: J.B. Hunt Transport, Inc.’s over-the-road shipments during October of each year
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HOS - When do drivers drive?
Drivers drive during the normal work day hours
 By 5:00 pm, 90% of a driving hours are expired
Driving Capacity
14%
10%
8%
90% of the daily driving
capacity is consumed by
17:00 each day
6%
4%
2%
23:00
22:00
21:00
20:00
19:00
18:00
17:00
16:00
15:00
14:00
13:00
12:00
11:00
10:00
9:00
8:00
7:00
6:00
5:00
4:00
3:00
2:00
1:00
0%
0:00
Available Driving Capacity
12%
Time of Day
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Policy Ideas to Improve Highway Congestion
 Day of Week
 Time of Day
 Lane Restriction
 By Vehicle Type
 Increase Weight Limits
 Increase Trailer Lengths
 Expand Highways
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Change the Weight Laws
80,000 lbs. gross to 96,000 lbs. gross
Gain +20%
Safety Issues – Stopping distance
79% of our JBHT freight would not apply
Increased road maintenance
Capital investment by the trucking industry?
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Change Length Laws
 53’ – 57’ Trailers +7.5% cubic
 Double Trailers “Twins”
 Safety: Training of Drivers, Turning, Lane
Changes, Backing
 Road Infrastructure
 Urban Areas – Docking problems
 What roads would allow them?
 Capital Investment by trucking industry
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Increase Highway Infrastructure
2 Lanes
4 Lanes
4 Lanes
6 Lanes (Most interstate highways)
6 Lanes
8 Lanes
8 Lanes
10 Lanes
Cost: $ $ $ Billions
Time to Rebuild
Setting Priorities
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Re-Engineer Of U.S. Shippers Supply Chains
 Mode conversion:
 Truck → Intermodal
 Truck → Dedicated
 Less plant transfers – more customer direct shipping
 Improved packaging
 Better cube fill in trailer
 All water shipping to east coast ports
 Increase use of ocean containers staying intact
 Shippers are manufacturing products closer to their
customers
 Customers are taking miles/loads out of the supply chain
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Freight Mix?
What will the freight mix look like in
5, 10, 15 years?
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Who is Moving the Freight Today
LOH Comparison (Today)
100
80
%
60
40
20
0
0 - 250
251 - 400
401 - 500
501 - 750
751 - 1000
Truck
DCS
1001 - 1500
1501 - 2000
2001 - 2500
> 2500
IM
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How Freight Mix will look in 10-15 Years
LOH Comparison (Future)
100
80
%
60
40
20
0
0 - 250
251 - 400
401 - 500
501 - 750
751 - 1000
Truck
DCS
1001 - 1500
1501 - 2000
2001 - 2500
> 2500
IM
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Elements of Rail Capacity
 Vehicles (locomotives and cars)
 Line-of-road (alignment, signal systems, number of
tracks)
 Terminals (location and capacity)
 Operating Plan
 People
 Execution
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Possible Solution
 Have 5-15 year plan on building 15-20 new Intermodal
terminals
 Have Government Assistance
 Site location
 Environmental issues
 Financial - Industrial bonds, tax incentives, etc.)
 Benefits
 Highway congestion – reduces pressure on highway expansion
 Economical – Best return on a dollar spent
 Helps Greenhouse issues
 Saves Fuel 3:1
 Help the trucking industry recruit drivers – more local jobs
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Summary: What’s the Best Solution?
 Combination of Rail and Highway
Rail Infrastructure
Highway Infrastructure
Terminal Expansion
Especially Urban Areas
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Thank You
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Always Buckle Up and
Please Drive Safely!