railroads & economic development: on parallel tracks? page siplon executive director

Railroads & Economic Development: On Parallel Tracks?

Page SiplonExecutive Director

Georgia’s Center of Innovation for Logistics

Center of Innovation for Logistics

Fueling Logistics CompetitivenessResource:- Access to R&D and technology leaders- Analysis of data and innovative trends- Cross-sector connections and collaboration- Collective industry voice

Result:Increased opportunities for industry growth and success

Center of Innovation for Logistics

What is Logistics?Who Cares?

What is Georgia’s Story?

Center of Innovation for Logistics

A …………………………………………………. B

What is Logistics? And what makes a “Logistics Industry”?

“…that part of Supply Chain Management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers’ requirements.”

The line between disorder and order lies in logistics...Sun Tzu

Center of Innovation for Logistics

VOLUMEVELOCITYVISIBILITY3 V’s of Logistics

Center of Innovation for Logistics

… Every SupplyChain is unique

2008 total cost of logistics was $1.4 trillion, or 10.1% of the US GDP

Center of Innovation for Logistics

Employment Size

Center of Innovation for Logistics

Center of Innovation for Logistics

… still a tight race!

Center of Innovation for Logistics

What is Logistics?Who cares?

What is Georgia’s Story?

Center of Innovation for Logistics

EVERY YEAR RAILROADS IN THE USA MOVE:

• 1.7 million carloads of wheat, corn, soybeans, and other agricultural products…

• 1.5 million carloads of animal feed, beer, canned produce, corn syrup, flour…

• 2 million carloads of chemicals…

• 7.7 million carloads of coal (70% of total)

• 1.3 million carloads of lumber and paper products

• Tens of thousands of carloads of scrap paper

• 12 million intermodal containers (60% of which consists of imports or exports)

• 70% of the automobiles built in the United States

• 1.7 million carloads of finished vehicles, parts, and accessories…about 28 million total carloads, if you were curious

Center of Innovation for Logistics

DID YOU KNOW?

If all freight rail traffic were shifted to trucks, rail shippers would have to pay an additional $69 billion per year

Average U.S. freight rail rates are half those in China and Japan, and 75% below those in major European countries

In 2008, U.S. railroads moved a ton of freight an average of 457 miles per gallon of fuel (up from 436 in 2007)

If 10% of the long-distance freight currently moving by truck moved by rail instead, fuel savings would exceed one billion gallons per year

In 2007, the average U.S. freight railroad employee earned wages of $68,200 and fringe benefits of $27,100 — for total compensation of $95,300.

In fiscal year 2008, some 600,000 beneficiaries received more than $10 billion in retirement and survivor benefits from the Railroad Retirement System.

Center of Innovation for Logistics

What is Logistics?Who cares?

What is Georgia’s Story?

Center of Innovation for Logistics

RAIL TONS

Center of Innovation for Logistics

So what really is Georgia’s rail impact?

Center of Innovation for Logistics

Georgia’s Rail Impact?• 5,000+ miles of track; origin of 24 million tons; destination for 75 million tons

• 21 short-lines & 2 Class-1 railroads

• 7,900 railroad employees in the State

• $481 million in payroll every year

• Top 10 rail state by employment measures

• Private rail industry invests over $215 million in maintenance and upkeep

• 17% of total revenue goes back into infrastructure

Center of Innovation for Logistics

Georgia’s Rail Impact?• 5,000+ miles of track; origin of 24 million tons; destination for 75 million tons

• 21 short-lines & 2 Class-1 railroads

• 7,900 railroad employees in the State

• $481 million in payroll every year

• Top 10 rail state by employment measures

• Private rail industry invests over $215 million in maintenance and upkeep

• 17% of total revenue goes back into infrastructure

True, but… NO

Center of Innovation for Logistics

Georgia’s Rail Impact?• Rail is a critical component to 4,071 businesses in Georgia

• Directly affecting 114,007 employees

• Moves cargo valued at $209 billion every year, requiring 3.8 million movements

Center of Innovation for Logistics

Georgia’s Rail Impact?• Rail is a critical component to 4,071 businesses in Georgia

• Directly affecting 114,007 employees

• Moves cargo valued at $209 billion every year, requiring 3.8 million movements

NO… but getting closer!

Center of Innovation for Logistics

Georgia’s Rail Impact?Y’all are not in the rail business just because you like trains … Right?

You are in the rail business to move cargo for your customers.

So, we also need THEIR stories and insight to complete this impact message.

• So far, this only represents about 2/3 of the short-lines and the “Class-1’s”

• We need as many future growth & potential stories as possible

• We need to have a complete story to tell for this to be effective

• Your CUSTOMERS need to help us tell it!

• What/how/why have they expanded and grown because of rail in Georgia?

• Why will they have or may shrink/close/move because of rail in Georgia?

• This is a work in progress …

Center of Innovation for Logistics

Center of Innovation for Logistics

Center of Innovation for Logistics

Thank you!

Page Siplonpsiplon@georgia.org

Center of Innovation for Logistics

BACKUP DETAIL SLIDES

Center of Innovation for Logistics

Center of Innovation for Logistics

Center of Innovation for Logistics

2007 Truck Flow

Center of Innovation for Logistics

Center of Innovation for Logistics

TRUCK TONS

Center of Innovation for Logistics

RAIL TONS

Center of Innovation for LogisticsLogistics Focused Education Resources

Center of Innovation for Logistics

2027 Truck Tons Truck Value Truck Loads

Intra-Georgia 328,141,735 $426,861,660,705 35,374,065

Export from Georgia 200,086,705 $541,481,764,406 15,356,021

Thru-Georgia 278,237,377 $1,067,694,758,484 15,910,278

Import into Georgia 152,183,974 $475,674,612,341 13,929,517

TOTAL: 958,649,791 $2,511,712,795,936 80,569,881

2007 Truck Tons Truck Value Truck Loads

Intra-Georgia 225,997,976 $220,086,817,329 23,562,840

Export from Georgia 118,071,047 $277,787,560,000 9,348,556

Thru-Georgia 190,323,924 $663,233,710,000 10,734,561

Import into Georgia 106,381,822 $281,806,330,000 8,851,269TOTAL: 640,774,768 $1,442,914,400,000 52,497,226

Center of Innovation for Logistics

Center of Innovation for Logistics

Center of Innovation for Logistics

Supply Chain Technology

Center of Innovation for Logistics

Center of Innovation for Logistics

Domestic Transportation Management – (Non Asset Based): 3PLs providing value-added transportation management services dealing with shipments originating in and destined to North American points. Usually performed in conjunction with freight brokerage, often contractual.

Domestic Transportation Management – (Asset Based): 3PLs providing dedicated contract carriage services supplying tractors, drivers and management. Trailers are normally included, contract terms are 1-7 years. Primarily dedicated contract carriage.

International Transportation Management – (Non Asset Based): 3PLs providing value-added international transportation management services dealing with shipments originating in or destined to North American points usually performed in conjunction with freight forwarding, often contractual.

Value-Added Warehousing and Distribution – (Asset Based): 3PLs normally providing long term contract warehousing or distribution center operations with a host of value-added services.

Four Main 3PL Segments (defined)