the changing expectations of rail capacity · amtrak monthly ridership april 2003-march 2013 (in...

© Oliver Wyman

The Changing Expectations of Rail Capacity

November 22, 2013

Rodney Case Head of Global Rail Practice

2 2 © Oliver Wyman

How prepared are the Class Is for the changing leadership in Rail Capacity?

Demand Trends and Stakeholders 1

4 4 © Oliver Wyman

Revenue Ton Kms (billions)

Size of National Rail Freight Networks Revenue ton kms - 2012

2.5

2.6

2.1

0.6

0.3

0.1

0.0 0.5 1.0 1.5 2.0 2.5 3.0

United States

China

Russia

India

Canada

Germany

Revenue Ton Kms (billions)

Traffic Growth in a Decade Revenue ton kms 2012 versus 2002

16%

80%

48%

100%

14%

50%

0% 20% 40% 60% 80% 100% 120%

United States

China

Russia

India

Canada

Germany

Rail freight is a large a growing transportation business US leadership in size and growth is being eclipsed by Russia and China who are accommodating large growth in their freight operations

Sources: UIC Database

5 5 © Oliver Wyman

Passenger Kms (millions)

Road Travel Comparison Passenger kms on road

7940

1150

115

1900

493

967

0 2,000 4,000 6,000 8,000 10,000

United States

China

Russia

India

Canada

Germany

Passengers (millions)

Air Travel Comparison Passenger boardings 2009

702

191

38

50

54

108

- 100 200 300 400 500 600 700 800

United States

China

Russia

India

Canada

Germany

America is a passenger market without peer The scale of the US passenger market is such that any minor modal shift could create tremendous demands on the rail system

A 1% modal shift from road to rail would require 11 more Amtrak sized rail companies

6 © Oliver Wyman 6

What structural change binds these events together?

!

Detroit Tests What Foundations Can Do to Rescue Troubled Cities Chronicle of Philanthropy, Oct 23 2013

Vancouver and Toronto office construction boom threatens to drain suburban growth: study

Vancouver Sun, Nov 11 2013

Amtrak Adds 18 Michigan Trains For Thanksgiving

CBS Detroit ,Nov 9

7 © Oliver Wyman 7

What structural change binds these events together

!

Detroit Tests What Foundations Can Do to Rescue Troubled Cities Chronicle of Philanthropy, Oct 23 2013

Vancouver and Toronto office construction boom threatens to drain suburban growth: study

Vancouver Sun, Nov 11 2013

Amtrak Adds 18 Michigan Trains For Thanksgiving

CBS Detroit ,Nov 9

Percentage of Young Persons with a Driver’s License Continues to Drop!

University of Michigan, July 20, 2012

8 8 © Oliver Wyman

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Mon

thly

pas

seng

ers

(in m

illio

ns)

Amtrak monthly ridership April 2003-March 2013 (in millions)

Rapid transit monthly ridership May 2003-April 2013 (in millions)

0

50

100

150

200

250

300

350

400

Mon

thly

Pas

seng

ers

(in m

illio

ns)

Sources: Amtrak-U.S. Department of Transportation, Federal Railroad Administration, Office of Safety Analysis, Operational Data Tables, Table 1.02, available at http://safetydata.fra.dot.gov/OfficeofSafety/ as of June 2013. Transit-U.S. Department of Transportation, Federal Transit Administration, National Transit Database, available at http://www.ntdprogram.gov/ as of June 2013. Rapid transit include: heavy rail, light rail and streetcar rail.

Passenger rail demand continues to grow Increasing ridership levels on existing lines and introduction of new passenger corridors place greater demands on rail infrastructure capacity

2.9% Annual Growth

5.2% Annual Growth

9 9 © Oliver Wyman

Local support and innovation is driving expansion The renewed interest in passenger rail is being driven largely by local state initiatives and funding

New commuter networks

New and enhanced light rail networks

Existing corridors

soldier on with ridership gains1

New potential corridor routes

• New Mexico • Utah • Minnesota • Beaverton OR

• Charlotte • Newark NJ • Dallas • Houston • Denver

• Denton TX • Austin

• Palmetto (+10.5%) •  Illini/Saluki (+9.8%) • San Joaquin (+8.9%) • Piedmont (+8.6%) • Wolverine (+8.2%)

1 April 9, 2013, “Amtrak Ridership Growth Continues In FY 2013” October-March FY 2013

• State of Virginia – DC to Roanoke • All Aboard Florida

Perc

ent o

f mar

ket s

hare

15%26%

79% 53%

5%

4%

1%

17%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Medium Long

Air

Bus

Road

Rail

Market fundamentals could change The rail passenger market in Sweden is dominated by leisure travelers and is competitive with road transport

Traveler, Share of Travel % Business 9%

Leisure 68%

Market Share by Trip Type

Commuter 23%

Sweden would rank as the 33rd state by pop density and 11th state by total

population

Sources SJ Annual Report 2011

Trends in the Large Rail Networks 2

12 © Oliver Wyman 12

The focus of investment and optimization is different

Junctions and Terminals Corridors


The view of capacity destruction is different

Scheduled Passenger On Demand Bulk


0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

0 5 10 15 20 25

Source: UIC:International Railway Statistics 2012; Association of American Railroads; Oliver Wyman analysis.

Train Intensity Comparison for Increasing Number of Parallel Tracks

Com

plex

ity

Sha

re o

f m

ainl

ine

that

is d

oubl

e tra

ck o

r mor

e

Intensity Average Trains per day

US Class Is have differences in capacity utilization Railroad B is a clear leader in getting more train capacity out of the network

C

D

B

A


0%

10%

20%

30%

40%

50%

60%

0 10 20 30 40 50 60 70 80 90


Train Inensity Comparison for Increasing Number of Parallel Tracks

Com

plex

ity

Sha

re o

f m

ainl

ine

that

is d

oubl

e tra

ck o

r mor

e


Russia

Germany

Kazakhstan C

China

France

D Ukraine

Poland

B

Italy

Global leaders in capacity utilization are not North American Railways in Europe and Asia operate more trains per similar sized corridor than the US due to several factors

A


Additional mains and sidings

25,000

25,250

25,500

25,750

26,000

2006 2007 2008 2009 2010 2011 2012

Trac

k m

iles

Net additional mainlines and passing sidings

400,000

425,000

450,000

475,000

500,000

525,000

550,000

2006 2007 2008 2009 2010 2011 2012

Total train miles

Growth and utilization of mainline infrastructure Indexed to 2006 (2006 = 1.000)

Source: STB Form R-1: Class 1 Railroad Annual Report

•  Net additional mainline and passing siding mileage increased 2.1%, or 522 miles, between 2006 and 2012

•  Total train miles decreased 12.2% between 2006 and 2012

•  Added mainlines and passing sidings will relieve pressure on the freight railroad network

Corridor infrastructure expansion continues US rail carriers continue to expand their mainline infrastructure through the addition of second and third main tracks, as well as more passing sidings

Trai

n m

iles

(000

s)

0.700

0.800

0.900

1.000

1.100

2006 2007 2008 2009 2010 2011 2012

Inde

x

Train miles per mainline track mile


Changes since the recession have increased train starts The classic formula of increasing train sizes was relaxed after the recession and the railway operating ratios have still improved

0.950

1.000

1.050

1.100

1.150

2006 2007 2008 2009 2010 2011 2012

Inde

x

Gross tons per train Indexed to 2006 (2006 = 1.000)

0.700

0.800

0.900

1.000

1.100

2006 2007 2008 2009 2010 2011 2012

Inde

x

Annual train starts Indexed to 2006 (2006 = 1.000)


•  Gross tons per train increased 6.5% between 2006 and 2012

•  Annual train starts decreased 12.8% between 2006 and 2012

•  Service Design Teams at the Class Is are very aware of the need to watch average train size.

•  The consolidation in train starts by 20% in the recession created many trains with more complex blocking and switching that impacted terminals and yards

•  There is an increasing level of balance between the needs of the market, corridors and terminals that has increased train counts faster than the returning traffic

18 18 © Oliver Wyman

2012 was a break with typical performance Train speed on the US network rebounded even with train volumes returning to the network but one railroad’s performance stands out

15

16

17

18

19

20

21

22

23

24

3,000

3,500

4,000

4,500

5,000

5,500

6,000

2006 2007 2008 2009 2010 2011 2012

Miles per hour

Trai

n m

iles

per m

ainl

ine

trac

k m

ile

Network velocity

Train miles per Mainline track mile

Network velocity and train density US Class 1 performance 2006 to 2012


RR

Train Size

Train Miles

Train Speed

A 9% -‐15% 13%

B 8% -‐4% 16%

C 3% -‐14% 9%

D 1% -‐6% 4%

Network metrics 2012 vs 2006 US Class 1 performance 2006 to 2012


0%

10%

20%

30%

40%

50%

60%

0 10 20 30 40 50 60 70 80 90


Train Density Comparison for Increasing Number of Parallel Tracks

Com

plex

ity

Sha

re o

f m

ainl

ine

that

is d

oubl

e tra

ck o

r mor

e


Russia

Germany

Kazakhstan C

China

France

D Ukraine

Poland

B

Italy

The best in NA still is far behind the rest of the world The addition of more corridor track is not allowing the best in the US to match the other larger networks suggesting a needed change in focus

A


654.0

1039.0

1

0

200

400

600

800

1000

1200

1400

1600

1993 2012

Trai

n km

(m

illio

ns)

X-axis title Subtitle

DB NETZ capacity Train kms operated

Infrastructure managers motivations are different Many of the world railway networks have infrastructure managers who are motivated by revenue opportunities as much as expense reductions

•  Infrastructure Managers are increasingly sophisticated about train path definitions and use by operating companies

•  Train Path allocation is defined to understand the exact routing from yard through junctions to terminal/yard

–  In some cases yard tracks are part of the path planning process

•  Scheduled trains are priority planned for train path allocation

•  Train paths are reserved within the capacity for ad hoc train operations – typically bulk trains

•  Unused train paths are increasingly charged a penalty

Unused train paths


Investment is more balanced to increase network throughput The balanced focus on all elements of the network allows the yards and the corridors to operate together to increase throughput of trains


Train Operators have a different cost optimization En route failures have a strong penalty system that is a typically a magnitude larger that the fee of the single train path

•  Rail cars operate with far fewer online failures due to frequent comprehensive inspections

•  Trains operate with higher horsepower per ton

•  Locomotives have more frequent inspections

•  Train crews rarely fail to complete their trip

Examples of Innovation 3


The Service Design MultiRail user community is global Our MultiRail system has been deployed globally for some of the world’s largest passenger and freight railways

SEPTA

•  The Service Design community comes together every two years to share insights

•  Common tools across railways is driving similar process

•  Integration with production systems is more common for faster operating plan updates

•  Resource and capacity optimizations are more common in parallel

Rail Carrier Systems and Databases

MultiRail Blocking

Plan Designer

MultiRail

Advanced Traffic Router

MultiRail Train Plan Designer &

Bulk Train Planner

MultiRail Trip Planner &

Advanced Network Simulator

Operational Planning and

Analysis

Output Management

MultiRail Integrated Collaborative Rail Planning Data Repository

Traffic & Blocking

Shipment Routes Trip Plans Network

Outputs/KPIs & Workloads Trains Resources

MultiRail Locomotive

Planner & Optimizer

MultiRail Assigned Crew Schedule

Optimizer

MultiRail Train Schedule Optimizer

(in beta) MultiRail

Block Optimizer Optimization

tools

Raw Data Management and

Analysis

MultiRail

Operating Plan Explorer

MultiRail

Operating Plan Report Manager

MultiRail

Traffic Flow Analyzer

MultiRail Corridor Viewer-

Timetables & Stringlines

MultiRail

Data Exchange

MultiRail Traffic Mgt. Suite –

Forecast Manager MultiRail Network

Designer MultiRail Traffic

Mgt. Suite – Rule- based Traffic Editor

Export to external systems

The MultiRail Planning Suite integrates many network elements 16 rail planning modules that provide a wide array of functionality, each focusing on a specific aspect of rail planning and operations

1


MultiRail Blocking

Plan Designer

MultiRail

Advanced Traffic Router

MultiRail Train Plan Designer &

Bulk Train Planner

MultiRail Trip Planner &

Advanced Network Simulator

MultiRail Integrated Collaborative Rail Planning Data Repository Traffic & Blocking

Shipment Routes Trip Plans Network

Outputs/KPIs & Workloads Trains Resources

MultiRail Locomotive

Planner & Optimizer

MultiRail Assigned Crew Schedule

Optimizer

MultiRail Train Schedule Optimizer

(in beta)

MultiRail Block Optimizer

MultiRail

Operating Plan Explorer

MultiRail

Operating Plan Report Manager

MultiRail

Traffic Flow Analyzer

MultiRail Corridor Viewer-

Timetables & Stringlines

MultiRail

Data Exchange

MultiRail Traffic Mgt. Suite –

Forecast Manager MultiRail Network

Designer MultiRail Traffic

Mgt. Suite – Rule- based Traffic Editor

The planning integration is advancing again Recent innovations by our railway clients has driven the integration of corridor simulation tools into the operating plan development process

MultiRail Suite Corridor Simulators - like RTC

Growth in the use of network planning tools is increasingly outside of the Class I Service and Network Design teams


The Montreal– Toronto corridor upgrade is a model The recent investment in the corridor focused on a balance of network design issues to increase performance and volume

Key Characteristics

•  30+ passenger trains per day with incremental 2 daily trains

•  60+ MGT freight operation with 12,000 ft trains

•  100 mph passenger with 60 mph freight trains

•  Island platforms at stations

•  High speed turnouts in terminal entrance and exits

•  12% triple track divided between 2 locations


How prepared are the Class Is for the changing leadership in Rail Capacity?

QUALIFICATIONS, ASSUMPTIONS AND

LIMITING CONDITIONS

This report is for the exclusive use of the client named herein. This report is not intended for general circulation or publication, nor is it to be reproduced, quoted or distributed for any purpose without the prior written permission of . There are no third party beneficiaries with respect to this report, and does not accept any liability to any third party.

Information furnished by others, upon which all or portions of this report are based, is believed to be reliable but has not been independently verified, unless otherwise expressly indicated. Public information and industry and statistical data are from sources we deem to be reliable; however, we make no representation as to the accuracy or completeness of such information. The findings contained in this report may contain predictions based on current data and historical trends. Any such predictions are subject to inherent risks and uncertainties. accepts no responsibility for actual results or future events.

The opinions expressed in this report are valid only for the purpose stated herein and as of the date of this report. No obligation is assumed to revise this report to reflect changes, events or conditions, which occur subsequent to the date hereof.

All decisions in connection with the implementation or use of advice or recommendations contained in this report are the sole responsibility of the client. This report does not represent investment advice nor does it provide an opinion regarding the fairness of any transaction to any and all parties.

the changing expectations of rail capacity · amtrak monthly ridership april 2003-march 2013 (in...

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