ENVIRONMENTAL BENEFITS OF
Building an Intermodal Hub in St. Louis
Sidra Naseer
May 5, 2014
Research Question
Is a rail and trucking intermodal hub
the most efficient environmental
solution for transportation
development and economic wellbeing
in the Saint Louis region?
Efficiency—allocation of cargo movements between multiple modes
where the surplus derived from these transfers is maximized in the form
of reducing both operational cost and environmental damage
How do Jelly Belly
Beans get to
consumers?
Flow of Goods to Market for
Jelly Belly Beans
Buyer
places an
order with
the seller
Product shipped
from the seller’s
production
facility in
California
Shipment
sorted in the
seller’s
distribution
center in
Wisconsin
Shipment
sent to
buyer’s main
warehouse
to be sorted
Shipment sent
to buyer’s local
warehouse
Shipment
delivered
to the
store
Why Should YOU Care?
Transportation affects:
Consumer prices
Congestion
Infrastructure
Pollution emission
Economic well-being
Definitions
Intermodal—Transfer of products involving multiple modes of
transportation such as truck, railroad, or ocean
Intermodal Terminal—A railroad facility designed for the loading
and unloading of containers and trailers to and from flatcars for
movement on the railroad and subsequent movement on the street or
highway
Intermodal Hub—Similar to an intermodal terminal but will allow
multiple railroad carriers to run their tracks via separate lanes through a
common location in order to capitalize on opportunities with various
trucking carriers to transfer cargo across both short-haul and long-haul
distances
Source: Intermodal Association of North America. (2013). Intermodal Glossary.
Saint Louis— Gateway to the West
More than one billion tons of cargo passes through St. Louis
Cargo Traffic by Mode of Transportation in St. Louis
7%
33%
60%
Source: Missouri Department of Transportation. (2014)
Trucking
Rail
Other Modes
Ideal Location
Most U.S. cities available
either same day or within
two days by most modes
Economic hub of
manufacturers
Freight Carried on Major U.S. Waterways: 2003 to 2011
(In millions of short tons)
Waterway
2003
2004
2005
2006
2007
2008
2009
2010
Atlantic intracoastal waterway
1.9
2.3
2.7
2.6
2.5
2.9
2.5
2.9
Great Lakes
156.5
178.4
169.4
173.0
161.0
152.4
108.7
129.5
Gulf intracoastal waterway
117.8
123.3
116.1
122.6
125.1
115.9
108.1
116.2
Mississippi River system \1
676.8
699.8
678.0
702.1
699.0
681.6
622.1
663.2
..Mississippi River main stem
478.0
496.9
464.6
497.7
500.5
486.8
447.7
483.2
..Ohio River system \2
261.3
271.5
280.1
270.7
260.2
259.2
229.5
245.2
Columbia River
47.2
53.5
51.5
52.3
58.1
54.8
46.0
54.7
Snake River
5.3
5.7
5.3
5.2
5.4
3.7
4.4
3.4
Source: U.S. Army Corps of Engineers, Waterborne Commerce of the United States, 2011, November 2012,
and earlier reports. Freight Carried on Major U.S. Waterways: 1985 to 2011.
2011
2.9
134.7
112.6
672.5
499.0
239.6
54.2
2.7
Current Situation
Environmental Arguments
Reduces carbon emissions
Creates positive externalities
Addresses concerns about property rights
Equalizes marginal control and damage costs
Maximizes net benefits
Leads to technological progress
Hub-and-Spoke Design
Source: Racunica, I. &. (2005). “Optimal Location of Intermodal Freight Hubs.” Transportation Research:
Part B: Methodological, 39(5), 453-477. Figure 1.
Comparison
CONVENTIONAL
TRANSPORTATION
Origin
Local
Warehouse
Rail
Terminal
INTERMODAL HUB
origin
Intermodal
Hub
Reduces Carbon Emissions
Reduction in drayage eases congestion and lessens CO2
emissions
On average, railroads are four times more fuel efficient
than trucks.
 According to the Association of American Railroads, moving freight
by rail instead of truck reduces greenhouse gas emissions by 75%
 Highway gridlock costs the U.S. economy $121 billion per year in
wasted fuel and time.
A 2005 case study by Bas Groothedde utilizing avoidance
expenditure valuation techniques found that:
 Average truckload shipping intensity is 125 grams of CO2 per ton mile
 Intermodal CO2 intensity is 70 grams of CO2 per ton mile
Assigns Property Rights
Each rail and trucking carrier wanting to operate within the
hub signs a contract with the local agency that monitors the
hub
Contract defines the owner’s rights, privileges,
responsibilities, and limitations for use of the land
Transportation providers pay taxes and assist in damage
clean-up costs
Internalizes External Costs
Hubs internalize external costs of accidents, noise, air
pollution, climate change, and congestion
Source: Study conducted by Fedele Iannone comparing marginal external costs of transporting full and empty containers exclusively
road and rail transport. “The Private and Social Cost Efficiency of Port Hinterland Container Distribution through a Regional Logistics
System.” 2012. Transportation Research: Part A: Policy And Practice, 46(9), 1424-1448.
Intermodal Hubs Equalize
Marginal Control & Damage Costs
Maximizes Net Benefits
Free markets with minimal regulation
 Demand drives efficient allocation of cargo during consolidation
Private sector seeks to reduce marginal cost, and act as
network planners to design cost effective solutions
Hubs mediate the volatility in fuel prices
 Forces partnerships among each other
Private rail companies will invest in the building of these
hubs
 Governmental regulatory agencies to serve as the liaison in interstate
commerce
Attracts Economic &
Technological development
Primary sites for the introduction of transition technologies
Transportation as a whole accounts for 19% of global
emissions
 Energy emissions from transportation are expected to grow by 50%
by 2030, and a 100% by 2050 from 2007 levels
In the U.S., trucking is expected to experience the fastest
growth
 More than 60% increase in freight emissions from heavy-duty freight
trucks
Promotes new companies to locate in the region and
regional investment
Source: Craig, A. J. (2013). Estimating the CO2 Intensity of Intermodal Freight Transportation. Transportation Research: Part D:
Transport And Environment: 2249-53.
Opposing Business & Political
Arguments
Takes business away from trucking companies
What to do with existing rail terminals
 Rebuttal:
 Forces companies to adopt innovative technologies to gain a
comparative advance
 Incentivizes trucking as a whole to explore fuel and energy
alternatives for operations
 Utilize land for other development purposes
Opposing Economic Argument
Too much competition from surrounding Midwest
intermodal hubs
Rebuttal:
Exports
(Billions of dollars)
Imports
(Billions of dollars)
3.0
25.0
2.5
20.0
2.0
15.0
1.5
10.0
1.0
5.0
0.5
0.0
0.0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: U.S. Census Bureau, Foreign Trade Division, USA Trade Online. (2014). Table of U.S. Exports and General Imports of
Merchandise by Customs District: 2002 to 2013.
Missouri in Comparison to
Other States
Source: U.S. Census Bureau Data.
ArcGIS Geospatial Online Maps. 2007
Commodity Flow Data.
Opposing Environmental
Argument
Attracts new companies, which will increase emissions
 Rebuttal:
 Companies want to do business with companies that are
environmentally and socially responsible for both the direct and
indirect efforts of their business operations
 Intermodal hubs foster healthy competition among firms to provide
the most environmentally sustainable supply chain solutions
Alternative Solutions for
St. Louis
ALTERNATIVES
Expand an existing rail terminal
Construct a port
Leave things as they are
PROBLEMS
 Political issues—which one to
expand?
 Existing rail terminals are still far
away from the locations of trucking
warehouses
 Expensive
 Demand does not justify full port
operations
 Using scarce inefficiently
 Environmental issues persist
Conclusion
Based on environmental economic
arguments, the construction of an
intermodal hub in St. Louis will promote
environmentally, sustainable economic
growth.
Limited alternatives to the hub do not provide the optimal
tradeoff
Overall environmental opportunity cost is too high to not
pursue the intermodal construction
Thank You!
Questions?