Case Study 4: Corridor Development

Tremendous freight volume and projected future demand will significantly impact the Los Angeles region. The region is using a series of strategies to mitigate the local impact of the freight industry, while capturing economic development opportunities and serving the nation as a major gateway for freight.

Planning Guide Strategies Discussed:

Overview

Despite more than 25 years of progress and innovative approaches addressing increased freight transportation demand, growth in international trade and related truck and rail traffic has continued to contribute to roadway network congestion and poor regional air quality in Los Angeles.

The rail network serving the Ports of Los Angeles/Long Beach could no longer handle the amount of cargo needing to be shipped across the region from the ports to the rail yards on the east side of the region. This resulted in significant impacts on local communities as trains idled and blocked more than 200 grade crossings across the region daily. The environmental and economic impact on local areas spurred the ports to begin to work with their partners throughout the region and in Washington, D.C., to develop what ultimately became the Alameda Corridor (Federal Highway Administration, n.d. b).

Following the success of the Alameda Corridor rail corridor project, which connected the Ports of Los Angeles/Long Beach with downtown Los Angeles intermodal rail yards, the region has continued to advance plans for freight corridor development within the region.

Concerns have been raised about the region’s ability to handle additional annual volumes of cargo given forecasted freight volumes from the growth of Asian economies, the introduction of larger maritime vessels, advances in trade relationships such as the passage of the U.S. Korean Free Trade Agreement and steps toward a comprehensive Trans-Pacific Partnership agreement.

Los Angeles is the major gateway for goods imported from Asia. As a result, a significant amount of freight transverses the metropolitan area from the Ports of Los Angeles/Long Beach and LAX, where freight is transferred to rail or truck for inland movement. This historic movement pattern has resulted in significant congestion where the modes transverse several confliction points as they complete their intermodal moves. Given an outdated highway system with numerous grade crossings and outdated designs, the region’s 15 million people regularly overwhelm its roadways for extended periods of time.

In 1997, the public and private sectors came together to alleviate some of the major rail/street confliction points. The three Class I railroads implemented a container fee to pay the debt service on a Transportation Infrastructure Finance and Innovation Act (TIFIA) loan to build a trench along Alameda Street between Long Beach and the downtown Los Angeles rail yards. This Alameda Corridor consolidated rail lines below grade level, eliminating 180 grade crossings, freeing up surface street passenger and freight truck traffic, reducing emissions, and increasing train speeds between the ports and downtown. The project successfully alleviated congestion from this portion of the network.

The success of the Alameda Corridor and its benefits to the entire region provided the momentum for regional partnerships on freight issues in one of the most institutionally complex settings in the country. Despite the success, however, leaders recognized the Alameda Corridor project as only a partial solution to the much larger freight challenges in the region. Improving connections between the ports and the downtown intermodal rail yards was very beneficial, yet it left a large segment of the rail and truck corridors through the Greater Los Angeles area to the east from downtown inefficient and congested.

Economic Impacts

Challenges with the freight network in the Greater Los Angeles area have the potential to pose significant problems for the region, for California, and even for the nation. SCAG estimates that more than $2 trillion/about 1.5 billion U.S. tons of freight was moved across the region in 2010. The freight industry supports more than 2.9 million jobs and has an economic impact on the region of more than $249 billion. Nationally, freight originating from the region supports more than 3.37 million jobs outside of the Los Angeles area (Southern California Council of Governments 2012). More importantly, however, freight congestion and the emissions that result have significant health repercussions; CARB estimates that more than 1,200 premature deaths result directly from goods movement activities in the Greater Los Angeles area (California Air Resources Board 2006). These public health impacts affect the economy by increasing healthcare costs and lowering the productivity of the population.

Regional Approach/Initiative

As the Alameda Corridor was being constructed, the region began planning for what would follow the corridor’s completion in 2002. The freight studies acknowledged the new challenges that the Alameda Corridor presented; as an efficient corridor, it ended downtown. The relationships that developed out of the Alameda Corridor and subsequent studies have continued today, as the region works to address its ongoing freight needs.

SCAG has become the conduit for the development of a regional freight initiative. The municipal governments, through SCAG and the port authorities, railroads, motor carriers, CTCs, the California Transportation Commission, air quality agencies, and local businesses and groups such as the Goods Movement Subcommittee of the Los Angeles Area Chamber of Commerce, have contributed to a regional freight initiative that has been incorporated into the SCAG Regional Transportation Plan, the most recent version of which was released in 2012. The latest Regional Transportation Plan identifies a number of projects and recommendations that address, directly and indirectly, the remaining regional trade corridor needs, including:

  • The identification of projects that serve as regional priorities for goods movement
  • Quick-start projects, created to both boost employment and rapidly improve system performance
  • New intermodal facilities and improvements to existing facilities
  • Development of expanded truck corridors in the Greater Los Angeles area, especially an assessment of specific alternatives for a new east-west corridor
  • Research on the potential for toll lanes, improved ITS systems, dedicated truck lanes, and cordon pricing to help with system performance
  • The continuation of the outreach work of the long-standing regional goods movement task force for the MPO, with its many constituent stakeholders
  • The active pursuit of new major rail and highway corridor improvements

 The plan focuses on the completion of the Alameda Corridor East (ACE) and the creation of a new east-west highway corridor. The ACE is a set of grade separation and rail safety projects along 70 miles of railroad mainline, running east from downtown Los Angeles through the San Gabriel Valley to San Bernardino County. An authority created by the sub-regional San Gabriel Valley Council of Governments is overseeing the project.

Increasingly, logistics and distribution facilities are locating east of downtown Los Angeles in an area commonly referred to as the Inland Empire. This development pattern is further exacerbating the challenge of moving freight from the ports on the west side, through downtown, to the east side of the region. Discussions with freight stakeholders clearly identified the creation of a new east-west highway route to improve capacity as a major freight issue for the region. The development of such a corridor could relieve truck volume pressure on parallel elements of the network, and some of the key north-south connecting corridor elements of the roadway network. As with the Alameda Corridor, development requires multi-agency collaboration with several jurisdictions and the private sector, so the region as a whole can benefit.

Stakeholder Engagement

Interviews with local agency managers confirmed that the obstacles to successful freight planning across jurisdictions are quite significant. Such temporary localized impacts as construction and the ongoing concentration of traffic into designated corridors have been a source of potential opposition from affected municipalities. With so many individual cities within the region, agency-to-agency level outreach efforts are critical. Perceived negative reactions to freight in general have been impediments to cohesive regional planning. Although this is not unique to goods movement planning, local officials who see freight as only damaging roads, polluting the air, and contributing to congestion are not always supportive of regional freight plan development.

Another challenge identified by public-sector stakeholders was some individual agencies focusing on their own narrow agendas, holding out for attention to their specific local issues and projects (which risked overwhelming a regional plan with smaller tactical considerations rather than the larger strategic needs affecting a greater portion of the system). An additional challenge was continuity in representation over time as personnel changed jobs in both government and in the private sector. The continuity challenge was addressed partially through complete written minutes of meetings, records of decisions, and the history of studies and reports conducted previously, to preserve institutional knowledge and minimize duplication of issue consideration.

When industry and labor unions have spoken up about project benefits, however, attitudes have generally changed. Also, when the private sector has funded a share of system improvements with demonstrated improvements to environmental and other public concerns, local agency officials have been more willing to offer support for regional freight plans. Some local government opposition remains to individual elements of regional plans, but the incorporation of goods movement projects into a broader comprehensive transportation plan, one that addresses all elements of the region’s transportation needs, has greatly increased support for goods movement projects.

A challenge to stakeholder engagement was the varied levels of receptiveness to agencies’ approaches regarding the projects. The initial enthusiasm to collaborate to address well-documented freight system problems was difficult to maintain when the time requirements to work through the process and the number and nature of compromises necessary became clearer. The planning process takes time, and even with the inclusion of some relatively short-term, quick-fix system improvements, some stakeholders did not perceive these as useful enough to justify their ongoing commitment of time. This was especially the case for some private-sector companies, for whom the regional freight system challenges were just one obstacle in operating profitably.

The private-sector stakeholders represented a broad variety of industries and roles within the transportation system, which often led to quite different perceptions of the projects, depending on what the private-sector entities were most interested in or what they perceived as affecting them. Larger transportation carriers were more likely to have a longer-term perspective and an understanding of the institutional planning process, which more realistically constrained initial expectations for how their companies and their customers would benefit from improvements to the freight system. The larger carriers were those in the private sector most likely to benefit directly and substantially from major operational efficiency improvements. Shippers and third-party non-asset operating intermediaries were less likely to see direct benefits that would affect their operational efficiency or cost structures, which influenced their perceptions of the usefulness of projects. In many cases, the private sector was likely participating partly out of fear of what might happen, either from a regulatory or operational perspective, if they did not contribute to the planning dialog.

The packaging and branding of projects together helped facilitate private-sector support for the projects, though not uniformly. Some small businesses affected by construction or diversions of business from new freight operational efficiencies were not uniformly supportive of projects. Some private stakeholders might be best described as apathetic, as they described themselves as not sufficiently affected by the projects either way.

Local governments view the regional partnership and the continued infrastructure improvements as a benefit. Interviews reveal that even as governmental dealings with the individual cities remain critical, the level of general collaboration has much improved over the past 20 years. In addition, there has been an increased appreciation for freight as an essential and important part of the region’s business and economy.

Interviews with several local public-sector and private-sector leaders involved in Greater Los Angeles planning, studies, strategies, facility operations, partnerships, committees, and economic development have provided compelling insights as to why corridors have worked in the region. Key factors include timing, goods movement studies, regional leadership, private-sector partnerships and funding, government funding, bundling and branding, and creating a new agency.

Timing

The costs of delays and bottlenecks as congestion worsens puts pressure on the private sector to support cooperation, and brings political pressure to address the problems. In Los Angeles, several factors made political DM easier: the combination of air quality improvement initiatives, growing delays to goods movement, and labor desires to support improved system performance and infrastructure-related jobs. The region’s goods movement plans established solutions to address documented problems in private-sector freight traffic so that local and state politicians could act.

Goods Movement Studies

The regional goods movement studies proposed solutions that could benefit the public and private sectors sufficiently for each to support the plans. Perhaps even more critical, strategies were established to give current leaders directions and programs that they could support immediately, while still advancing long-term needs for freight.

Regional Leadership

Regional leaders from each of the critical public agencies, business, labor, and environmental groups worked together on freight issues, moving planning recommendations ahead and continuously updating and advancing the plans as some projects were completed.

Private-Sector Partnerships and Funding

The unprecedented partnership between the multi-faceted public sector and the private sector to address the region’s goods movement congestion problems and to provide support for innovative funding solutions has resulted in non-traditional funding sources like congressional appropriations, local governments, and railroads.

Government Funding

Gaps in private-sector funding to address congestion problems and air quality were filled by voter-approved infrastructure bond funding and special tax measures, Caltrans program funding, and regional transportation agency funding.

Bundling and Branding

 With so many discrete elements of the system needing improvement, plans that bundle individual projects into larger-scope sets of projects, and provide interdependent performance improvement benefits under one name, have helped to generate public acceptance and support. Branding sets of projects with names such as the Alameda Corridor or Goods Movement Action Plan has provided public officials and the media with a tool for communicating concepts more easily when looking for support at the state and federal level. Interviewees identified project bundling and naming as important success factors in a region with so many individual goods movement project needs.

Creation of a New Agency

 When it is logical to do so, the creation of a new agency with joint powers has proven an effective mechanism for approval, funding, and management of goods movement projects. The establishment of the Alameda Corridor Transportation Authority was essential to this project’s successful funding, construction, and administration.

Emerging Issues

The relationship between freight growth and air quality in the Greater Los Angeles area was identified by all major freight partners as a growing challenge. CARB is an active member of the larger Los Angeles regional freight partnership. Statutorily, CARB is a regulatory agency; however, it attempts to act as a facilitator, working with the private sector to create mutually beneficial solutions that mitigate air quality impacts of the freight industry in the Greater Los Angeles area.

CARB’s efforts started in the 1990s when the state of California adopted anti-idling regulations for commercial vehicles. In general, commercial vehicles cannot idle for more than 5 minutes without risking fines of between $300–$1,000. Similarly, CARB executed enforceable agreements to limit idling of railroad locomotives. Although this was a major step forward, it provided only a modest improvement in air quality. Interviewees at CARB stated that the largest air quality improvement comes from diesel engine improvements to truck fleets.

Relative to the rest of the nation, the Greater Los Angeles area has a much older truck fleet due to short drayage lengths and the Southern California climate. This presents a unique problem in regard to air quality. New trucks are built with engines that produce 90% less emissions. The Ports of Los Angeles/Long Beach and CARB have launched several programs to incentivize improvements (e.g., engine filters) to the aging truck fleet. These projects have been funded both through bond issuances and through fees imposed on trucks that enter the region’s ports and rail yards without the required emissions-reduction equipment. CARB estimates that these programs will effectively create a fleet that meets 2010 diesel engine emission standards by 2023.

Much controversy has surrounded the planned development of a new east-west highway route, and the Burlington Northern Santa Fe (BNSF) Railroad’s Southern California International Gateway (SCIG). The SCIG is a proposed new near-dock intermodal yard, designed to take container traffic off of the existing major highway corridor between the ports and downtown (the I-710 Freeway). A subsequent major freight challenge for the region will be balancing the economic benefits of these projects versus the localized environmental consequences.

Discussions with freight carriers, trade associations, and local governments also have identified challenges that, while geographically smaller, could have a huge impact on everyday freight movements. For example, a local drayage carrier indicated that restrictive truck routes are not coordinated between all of the individual cities, creating difficulty and added risk to their operations. In addition signal timing, including ramp meters, does not always accommodate truck acceleration or deceleration requirements. However, all interviewees acknowledged that they saw improvements over the last decade, and they know that additional improvements take time to implement. All said that additional regional infrastructure improvements are required because freight traffic continues to grow.

The regional planning agencies are very engaged in freight planning, yet conditions make rapid progress difficult. No matter how comprehensive the plan or how much consensus is achieved, uncertainties around economic/fiscal conditions and environmental permits add to the difficulty of making progress. With the very long lead time infrastructure projects require for development, planning also is made more difficult because funding availability is sometimes jeopardized during lengthy delays. Private-sector interviews revealed an impatience with the planning process to yield results that will make a difference for their businesses, even for medium-term planning such as site selection and service planning, especially when the uncertainty of project schedules is taken into account.

Long-term transportation planning can have difficulty keeping current with more-rapidly changing private-sector practices that are driven by industry trends external to the region. For example, changes driven by the growth of e-commerce affect air cargo, while also shifting demand in trucking toward more time-sensitive parcel deliveries.

Another issue identified was the need for additional modern distribution centers. With the increase in e-commerce and individual product count proliferation, freight shippers are seeking larger distribution facilities to concentrate and sort inventories, and to ship them across the country. There is a desire for recognition that tolling of trucks can be an acceptable cost of doing business and an effective demand management initiative as long as the toll revenues are used for the transportation system, and not punitive to favor other modes. In addition, planning must take into account added security costs for operations in less secure areas, especially if time-of-day shifting to night hours is adopted as policy.

Concluding Observations

Metropolitan area goods movement strategies and programs need to balance public-sector and private-sector needs to improve freight mobility more quickly. Small-scale improvements and operational changes completed in the shorter term can help build acceptance for larger scale projects bundled together in the long-term planning context.

Freight strategies for such a complex community as the Greater Los Angeles area may not be needed or appropriate in other metropolitan areas. As a gateway city, Los Angeles is both the start and the end of the domestic portion of many international supply chains. Its freight problems and issues are not the same as those of inland cities such as Chicago, Illinois; Kansas City, Missouri; or Dallas, Texas. In addition, its freight problems involve a complex mix of affected urban areas in which challenges that have a smaller scope may not command as much attention as they would from MPOs facing less massively complex systematic planning.

The region’s success in improving freight mobility is a result of public-private partnerships; goods movement advocates and thought leaders; studies that have produced innovative strategic recommendations; a willingness to prioritize and fund freight-focused infrastructure improvements; and an ongoing commitment to identifying emerging trends in freight logistics and to modifying their approaches accordingly, through project bundling, branding, and outreach.

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