Case Study 3: Freight Rail Bottlenecks

Approximately 15 years ago, the four Class I railroads that intersect in the Kansas City area were dealing with major bottlenecks. MARC conducted several intermodal freight studies that brought to light regional freight issues. The passage of NAFTA raised concerns about its impacts to the region.

Planning Guide Strategies Discussed:

Overview

The Kansas City region is a major junction point for freight movements in North America. Kansas City is one of the two major locations where freight shifts from the West Coast to the East Coast on Class I railroads (the other location being Chicago). Kansas City also serves as the junction for railroad traffic from Texas and Mexico to points east and west in the United States. To complicate these movements further, the region also contains several major rail/truck transfer points (intermodal, grain, etc.), and a major river port. Both historically and more recently, freight movement patterns have resulted in rail congestion and conflicts between rail and trucks, with each trying to complete quick modal shifts before continuing to their destinations.

Approximately 15 years ago, this situation, combined with the passage of ISTEA (and its freight-related federal focus) and NAFTA, gave rise to a regional dynamic that motivated the public and private sectors to work together to improve regional freight movements. In particular, the four Class I railroads approached the Missouri and Kansas DOTs and local government officials to request improvements to help alleviate the congestion. This resulted in efforts to alleviate critical rail bottlenecks with public/private projects like the Sheffield and Argentine fly-over rail crossings.

Economic Impacts

A major reason for the new regional dynamic was the passage of NAFTA and its effect on Kansas City. NAFTA was intended to eliminate trade barriers, increase investment opportunities, and establish procedures for resolution of trade disputes. Most importantly, it was intended to increase the competitiveness of the three participating countries in the global marketplace. What this meant for the Kansas City region was more pass-through traffic on I-35 between Texas and Chicago, and increased rail traffic from Mexico.

Responding to ISTEA’s guidance that MPO plans should address freight, MARC conducted its first Intermodal Freight Initiative Study (1993–95). This study identified many of the issues and concerns voiced by the railroads, and included strategies and recommendations for addressing these problems. The studies also identified regional transportation resources, including the recently de-commissioned Richards Gebauer Air Force Base.

Soon after this initial study, a Missouri U.S. senator secured an earmark for an international trade study, the TradeWay Study, to be conducted by MARC and the Greater Kansas City Chamber of Commerce (1998–99).

Regional Approach / Initiative

From these studies and partnerships with the railroads; the state DOTs; local governments; local businesses and the chamber of commerce; and, significantly, the MPO, a regional freight initiative was developed to improve freight movements and grow a thriving regional economy. The studies had identified a number of projects and recommendations, including:

  • The need to include modal projects on the regional list of priority projects.
  • Identification of critical infrastructure projects, including major improvements and “low-hanging fruit”–type projects that were relatively inexpensive and quick to complete. (Interviewees said most of the major infrastructure work has been completed or was underway; the quick projects were designed to demonstrate to the private sector that improvements could be made quickly.)
  • The creation of new, and improvements to existing, intermodal facilities.
  • The concept for the Kansas City SmartPort.
  • Several ITS solutions that addressed freeway management, smart signalization, trade data, and cross-town movements.
  • The creation of a regional goods movement committee at the MPO.

 With regard to the Kansas City SmartPort, discussion had demonstrated that the area needed a new, single organization with a focus on coordinating and expanding the transportation/logistics industry. Given that this was not the primary mission of MARC, the Kansas City Development Council, or the local chamber of commerce, the concept for the Kansas City SmartPort was born.

Kansas City SmartPort, Inc. is a nonprofit investor-based organization supported by both the public sector and the private sector. Kansas City SmartPort investors play an important role in all of their activities and programs, both local and international. As a nonprofit economic development organization, Kansas City SmartPort promotes and enhances the region’s status as a leading North American logistics hub. Kansas City SmartPort has two main missions:

1.   To grow the Kansas City area’s transportation/logistics industry through the retention/growth of current businesses and the attraction of new businesses with significant transportation and logistics elements.

2.   To make the industry and the region more competitive in the movement of goods into, out of, and through the Kansas City area.

Stakeholder Engagement

Interviews with eight local public-sector and private-sector leaders involved in Kansas City–area freight planning, studies, strategies, facility operations, partnerships, committees, and economic development efforts provided insights not typically found in the literature as to why the Kansas City freight strategies and SmartPort have been successful. Key factors included:

The Right Time

The almost simultaneous combination of severe railroad congestion, the passage of NAFTA, the prospect of increasing truck traffic on I-35 to the region, and the development of the region’s first freight planning studies that identified the same issues that had been identified by the private sector brought the issue of freight to the attention of local and state officials.

Freight-Focused Studies

The regional freight studies proposed solutions that could benefit both the public sector and the private sector and laid out a clear strategy for the future. These studies gave public-sector and private-sector leaders a shared message and a direction that they could rally behind, as well as a foundation for freight improvements.

Champions

Regional champions, including leaders of the local chamber of commerce, the Missouri Department of Transportation (Missouri DOT), and MARC, kept momentum behind freight issues, promoting the need to move the study recommendations ahead and get projects implemented. The project was created when the railroads approached government to help mitigate the rail conflicts. The local chamber of commerce and Kansas City SmartPort served as the vehicle for larger private-sector involvement throughout the project.

Private-Sector Partnership and Funding

 Cooperation from the railroads, both in demanding that the government pay attention to the freight congestion problems and in their willingness to provide funding for improvements, won support from the public and local governments for freight improvements.

Government Funding

 State DOT and MPO funding for freight infrastructure projects helped correct some of the congestion problems and won the support of the private sector.

Creating a New Agency

 Creating a new agency that could focus on selling the concept of Kansas City as a cutting-edge logistics hub made a difference. Each of the other agencies involved had other primary responsibilities, and they would not have been able to provide such a direct and concerted branding effort.

Interviews with local government officials indicated that initially there was a mixed reaction to the freight strategies, and even to the formation of the SmartPort. Not all local governments in the metropolitan area had freight-related traffic problems. Many felt their biggest issue with freight was the impact of trucks on their pavements.

This attitude began to change when the railroads invested money in the improvements, and when local residents began to see the benefits to the region. The location of new freight facilities near the
Interstate limited the negative impact on local governments and made them more supportive of the projects. Today, local government reaction to freight projects and the SmartPort is generally positive, as they are seeing spin-off benefits. Many local governments have freight assets such as docks, have major freight employers in their local area, and believe that what benefits one facility or location will have spin-off benefits for them.

Local governments are seeing the DOTs continue to make infrastructure improvements, and all cite good highways as a benefit of the emphasis on SmartPort. Several interviewees indicated concern that their small city/region is not high on the regional priorities list. However, they are beginning to recognize that even trucks running through their towns translates into economic improvements in their area and jobs for their citizens.

 Branding

 Branding made a big difference. The name “SmartPort” provided developers with a concept that was new, fresh, and interesting to sell, and that harmonized with other efforts to brand the Kansas City metropolitan area. Several interviewees pointed to the name as a critical success factor.

Emerging Issues

Discussions with local motor carriers and governments indicated that freight problems still occur in the region. A local drayage carrier reported that certain area trucks are waiting hours to cross the tracks. Additional rail grade separation is needed, and the northeast quadrant of the region still needs work to improve freight mobility. Nonetheless, all interviewees acknowledged that they had seen improvements over the last decade, they know that more improvements are coming, and regional infrastructure is well maintained.

Economic development agencies and SmartPort staff discussed the importance of keeping up with changes in supply chain movements and staying ahead of freight shippers’ and carriers’ needs. They indicated that this is the value of having an agency like SmartPort, whose primary role is to focus on retaining, growing, and attracting freight and logistics businesses to the area. Some of the future trends, needs, and directions they identified include:

  • The need for more ready-made/ready-to-rent distribution centers. With the increase in e-commerce, freight shippers are seeking large distribution facilities to concentrate and sort inventories, and to ship them across the United States from the Kansas City region.
  • Selling the area as “vertically ready” versus “shovel ready”—in other words, as a region where the infrastructure is in place for companies to locate to the area. (The term “vertically ready” was coined as another way of branding the area.)
  • Recognition that Central American and South American markets are growing, and that distribution patterns are changing from the previous east-west patterns to north-south patterns.
  • Recognition that more rail grade separations are needed, and that maintaining infrastructure is critical to marketing the area as freight-friendly.
  • Recognition of the importance of strong partnerships, and making sure that all investors understand that each project brings in employers and jobs, with spin-off benefits to all.
  • The need for continued work to bring residents, government, and industry officials together to successfully locate future intermodal and freight development sites.

Concluding Observations

Metropolitan freight strategies and programs need to be nimble to address changes in freight trends and markets. Not all freight strategies work in every metropolitan area. As an inland city, Kansas City is not the end of a line. Kansas City’s freight problems and issues are not the same as those of a New York City or a Los Angeles, and will not be concentrated in the downtown area.

Kansas City’s success in creating a freight-friendly region with improved freight access and mobility was a result of public-private partnerships, cooperation among freight champions and leaders, studies that produced bold strategic recommendations, willingness to prioritize and fund freight-focused infrastructure improvements, an ongoing commitment to identifying trends in freight supply chains and movements, and a willingness to modify the approach accordingly, through branding and creative marketing. In general, Kansas City treats freight as an economic development issue, and is positioning itself to create freight-related business opportunities for the region.

Previous   Home      Next    

2086 Total Views 1 Views Today