MULTIMODAL INVESTMENT ANALYSIS METHODOLOGY PHASE ONE: THE CONCEPTUAL MODEL

Part 1: INTRODUCTION

Section 1.1: The Intermodal Surface Transportation Act of 1991

Passage of the Intermodal Surface Transportation Efficiency Act (ISTEA) of 1991 marked the beginning of a new era for transportation policy and programs in the United States. With this legislation the federal government’s almost singular focus over three decades on development of the Interstate Highway System was brought to a close. In its place the legislation redirected national transportation policy toward total system integration and intermodalism.

As stated in the Act’s declaration of policy, the programs incorporated in the legislation are intended to promote a National Intermodal Transportation System consisting of "all forms of transportation in a unified, interconnected manner, including transportation systems of the future (1, Section 2). In addition, the legislation promotes the more efficient use of energy, reduced air pollution, and the increased competitiveness of United States businesses in world markets. Other departures from past policy include: (1) an increased emphasis on system preservation, (2) a greater reliance on the private sector to fund infrastructure investment needs, (3) an increased flexibility for state and metropolitan area governments to allocate program funds between highway and transit programs, (4) an increased emphasis on freight system planning, (5) a closer coordination of transportation planning activities between state and metropolitan area governments, and (6) a heightened recognition of the impact of transportation on the natural and man-made environments.

Given the new direction in national policy, the legislation required or recommended a number of significant research and planning initiatives. At the national level, Title V of the Act required establishment of an Office of Intermodalism in the U.S. Department of Transportation and the creation of a National Commission on Intermodal Transportation. Both of these provisions represent a commitment on the part of Congress to move national transportation policy from a modal to a system-wide focus.

The charge given the Commission on Intermodal Transportation further emphasizes this new policy direction. Specifically, the Commission was directed to study eight issues:

    1. The potential benefits to be derived from the international standardization of intermodal transportation technology,
    2. The current and projected market for intermodal transportation and the impact of related traffic flows on infrastructure investment needs,
    3. Legal impediments to efficient intermodal transportation and the relationship between current regulatory schemes for individual modes of transportation and intermodal transportation efficiency,
    4. Impediments to the efficient financing of intermodal transportation improvements,
    5. The potential use of new technologies to improve the efficiency of intermodal transportation,
    6. Documentation problems associated with the transfer of freight involved in intermodal transportation,
    7. Areas related to intermodal transportation requiring additional research subsequent to the work of the Commission,
    8. The relationship of intermodal transportation to transportation rates, transportation costs, and economic productivity (1, Section 5005).

The Commission issued its final report in September 1994. In the report the Commission made twelve recommendations. These recommendations were grouped into three major categories: (1) making efficient intermodal transportation the goal of federal transportation policy, (2) increasing investment in intermodal transportation, and (3) restructuring government institutions to improve support for intermodal transportation. The twelve recommendations are summarized in Figure 1.1 (2).

In addition to redirecting transportation policy and programs at the federal level, ISTEA encouraged state and metropolitan area governments to adopt similar changes. To insure that states moved in the desired direction the legislation required them to establish and implement six management systems and to develop new long-range transportation plans. (The six management systems required by ISTEA covered pavements, bridges, highway safety, traffic congestion, public transit, and intermodal transportation. Although required by ISTEA, these management system were later made optional by the National Highway System Designation Act of 1995.) Both of these requirements included specific provisions emphasizing intermodal transportation and a system-wide perspective (1, Sections 1025 and 1034).

The movement by states to embrace the spirit of ISTEA has not been without opposition or impediment. Traditional highway interest groups have objected to the diversion of funds to purposes other than road construction and maintenance. Also, many state departments of transportation and metropolitan area planning organizations have had a problem implementing the concept of intermodalism. This can be attributed to a lack of adequately trained staff and planning models that do not accommodate or support the type of integrated, system-wide planning envisioned by ISTEA. Even more fundamentally, transportation planners have had a problem agreeing on what types of issues and problems intermodal transportation plans should address, and how traditional transportation planning models and procedures should be modified to support a planning program that embraces all modes of transportation in an integrated manner.

To determine the extent to which states have implemented the planning requirements included in ISTEA, the Iowa Department of Transportation surveyed all fifty states. Questions asked in the survey covered the extent to which each state has implemented the six management systems, the modes of transportation included in state transportation plans, the types of modeling tools used to prepare state plans, the modal coverage of models used, and staff training needs identified in response to ISTEA. The results of this survey are presented in Appendix I.

Section 1.2: Multimodal Transportation Planning

In an attempt to help state and metropolitan area planners respond effectively to ISTEA’s emphasis on intermodal transportation and system-wide planning, the Transportation Research Board sponsored a conference in Irvine, California, in December 1992. The objectives of this conference were to:

    1. Review the evolution of the planning and funding of the U.S. transportation system,
    2. Identify the new planning mechanisms developed in ISTEA that mandate transportation improvement programs and intermodal transportation management systems,
    3. Identify issues that need to be addressed in order to achieve more economically and environmentally efficient transportation systems through the optimum combined use of various modes, and
    4. Assess how these issues need to be integrated into the planning process (3, v).

One of the key issues addressed at the conference was development of a consensus on how the scope of transportation planning needed to be modified and expanded to fully embrace the spirit of ISTEA. The conventional definition of intermodal transportation (i.e., transportation involving two or more modes to provide service for a single passenger trip or freight shipment) was felt to be too limited. As such, intermodal transportation planning typically focuses on modal interchange points and access to and from these points. The emphasis in ISTEA on system-wide transportation planning incorporates the concept of intermodalism, but its additional goals pertaining to international competitiveness, traffic congestion, air pollution, safety, and productivity transcend this concept. Consequently, conference participants adopted the concept of multimodal planning as a more comprehensive alternative. This alternative approach to transportation planning was defined to incorporate the following features: (1) the description of transportation problems in non-mode-specific terms, (2) the identification of multiple modal options (both intermodal and mode specific) to solve transportation problems, and (3) the evaluation of options in a manner that provides for an unbiased estimation of each mode’s contribution to solving transportation problems (3, 23).

Conference participants also agreed that multimodal plans would have to address transportation services and infrastructure provided and managed by both the public and the private sectors. They further recognized their efforts would have to reflect the new realities of a global economy, changes in the logistics practices being adopted by businesses to enhance their competitive positions both domestically and internationally, growing environmental challenges, and fiscal constraints. To accommodate this much-expanded list of planning issues, the conference chairman, C. Michael Walton of the University of Texas, summarized the challenges offered by ISTEA as follows:

Travel patterns, markets, and logistics are rapidly changing and, more dramatically, becoming globalized. The logistics of goods and passenger transport force new transport activities that in turn necessitate planning initiatives to meet diverse objectives. Although maximum mobility for both goods and passengers is a goal of transportation, it must now be accomplished with profound respect for the environment. Intermodal efficiency requires today’s transportation professionals to infuse the planning process with state-of-the-art technical systems and to further develop systems that are compatible with and include consideration of overarching environmental and social concerns. ...Inherent in the quest for those solutions will be the need to test new planning models and to analyze how resources are applied to those solutions (3, 1-2).

The research presented in the following report represents an effort to extend transportation planning methods to better facilitate the analysis of the types of multimodal issues introduced by ISTEA.

Section 1.3: Research Objectives and Approach

Traditional transportation planning models were designed for use in urbanized areas to address problems and service needs associated with passenger travel either by private vehicle or public transit. Only a few states have operational statewide transportation models, and those that do only include the highway portion of their surface transportation system. (See results of state transportation planning survey in Appendix A.) Also, those states that have tried to adapt urban transportation models for use in statewide planning have generally encountered problems in simulating freight movements. The reason for this problem is that the factors influencing passenger and freight transportation service demands are fundamentally different.

Passenger travel demands are typically estimated by relating travel purposes to underlying socioeconomic factors, such as household income, motor vehicle ownership, square-footage of retail shopping area, number of jobs, etc. On the other hand, freight transportation service demand typically depends on the profit maximizing objectives of firms. As a result, it is market driven. This means freight transportation service demands are subject to much more variation than are passenger service demands. Thus, whereas gravity types of models work well for distributing passenger trips among traffic zones, freight flow models generally require incorporation of some sort of mathematical optimization algorithm. Also, freight transportation service demands are typically subject to much greater seasonal and cyclical variation than are passenger service demands.

Lack of data on intercity passenger and freight flows presents another significant challenge to planners attempting to develop comprehensive, statewide transportation planning models. Acquiring the types of survey data typically gathered when developing urban models would be prohibitive for most states. Furthermore, even when data is available at the state level, it has been collected for purposes other than for transportation planning. This means substantial effort and cost would be required to convert it to a form usable to support statewide transportation modeling.

Another critical problem with conventional transportation models is they do not take into consideration the feedback effects of transportation system improvements on the economy. Although such models reflect the impact of diverted trips resulting from transportation system improvements, they generally do not consider future travel impacts resulting of system changes on the affected area’s economy. Also, most existing transportation models lack the capability to identify the distribution of impacts associated with transportation system improvements on different population and business groups.

However, these challenges are not insurmountable. Advances in computer hardware and software, as well as new data gathering and analysis techniques, offer the promise of supporting the comprehensive multimodal modeling efforts needed to effectively implement the type of transportation program envisioned by the authors of ISTEA. Many of the components needed to operationalize this type of model already exist. These include regional input-output models, spatial interaction models, benefit-cost analysis, and geographic information systems.

The purpose of this project is to develop an investment analysis model that integrates the capabilities of these four types of analysis for use in evaluating interurban transportation system improvements. The project will also explore the use of new data warehousing and mining techniques to design the types of databases required for supporting such a comprehensive transportation model. The project consists of four phases. The first phase, which is documented in this report, involves development of the conceptual foundation for the model. Issues addressed in this phase include transportation demand forecasting methodologies, modal split and network assignment procedures, social welfare impact measurement and distribution, economic feedback analysis, and database requirements and structure. Phase two will involve the mathematical specification of the model, the identification of data sources, and the development of database structures. During phase three the model will be empirically tested. Finally, model algorithms and procedures will be automated and documented.

 

Section 1.4: Organization of the Phase I Report

Prior research is reviewed in Part II, which is composed of three major sections providing demand modeling background information for passenger transportation, transportation of freight (manufactured products and supplies), and transportation of natural resources and agricultural commodities. Material from the literature on geographic information systems makes up Part III. Database models for the national and regional economies and for the transportation and logistics network are conceptualized in Part IV. Demand forecasting of transportation service requirements is introduced in Part V, with separate sections for passenger transportation, freight transportation, and transportation of natural resources and agricultural commodities. Characteristics and capacities of the different modes, modal choices, and route assignments are discussed in Part VI. Part VII concludes with a general discussion of the economic impacts and feedback of multimodal transportation activities and facilities.

 

REFERENCES

1. U.S. Congress, Intermodal Surface Transportation Act of 1991.

2. National Commission on Intermodal Transportation, Final Report: Toward a National Intermodal Transportation System (Washington, D.C.: September 1994).

3. Transportation Research Board, Proceedings of a Conference, Special Report 240: ISTEA and Intermodal Planning: Concept-Practice-Vision (Washington, D.C.: National Academy Press, 1993).

FIGURE 1.1: National Commission on Intermodal Transportation: Recommendations

Federal Transportation Policy Goals:

  1. Maximize safe and efficient movement of passengers and freight by incorporating individual modes into a National Intermodal Transportation System.
  2. Ensure Federal policies foster development of the private sector freight intermodal system and reduce barriers to the free flow of freight, particularly at international ports and border crossings.
  3. Adopt Federal policies that foster development of an intermodal passenger system incorporating urban, rural, and intercity service, including a viable intercity passenger rail network.
  4. Intermodal Transportation Investment:

  5. Fund Federal transportation infrastructure programs at authorized levels and strategically target these funds for maximum impact.
  6. Expand innovative public and private financing methods for transportation projects.
  7. Allow greater flexibility and expand eligibility in use of State and Federal transportation funds for intermodal projects of public benefit.
  1. Provide Federal funding incentives for intermodal projects of national or regional significance.
  2. Expand the intermodal focus of research, education, and technology development efforts.
  3. Restructuring of Government Institutions:

  4. Restructure the U.S. Department of Transportation to better support intermodal transportation.
  5. Streamline and expedite the transportation infrastructure planning and project delivery process.
  6. Require Department of Transportation concurrence on other Federal agency actions that affect intermodal transportation.
  7. Strengthen the metropolitan planning organization process to accomplish the goals of ISTEA.1

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Multimodal Investment Analysis: Phase 1 Contents

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