The Economic Impact of Rail The City of Chicago

Transcription

1 The Economic Impact of Rail to The City of Chicago Copyright Simmons-Boardman Publishing Corp.

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3 Chicago s Freight Railroads The 12 major private railroads in Chicago employ over 37,600 workers, and control infrastructure in the City that occupies 15,997 acres over twice the land area of O Hare Airport.

4 Chicago s Freight Railroads Freight railroads in Chicago own: 74 marshalling yards 17 for intermodal (rail-truck) traffic, totaling 6,919 acres 2,796 route-miles of trackage 1,116 viaducts and bridges 137 switching facilities or interlockings These railroads generate: 1200 daily trains 1.2 million truck trips each year, transferring cargo from yard to yard

5 Chicago s Freight Railroads Despite the benefits railroads bring, they also have community impacts: Delays at the 600 at-grade crossings Pollution Noise - Unnecessary whistle soundings Air - Diesel emissions, increased by rail congestion and idling and drayage operations Ground - Fly-dumping Deteriorated and unsightly viaducts, and the aesthetics of the yards Excessive truck movements created by over-the-road transfer of intermodal freight between railroads Rail infrastructure as barriers to redevelopment

6 Chicago s Freight Railroads To move forward, we had to engage the railroads. Through US DOT s Surface Transportation Board, a Chicago Rail Task Force was established. We re working with the Task Force on numerous issues, including planning improvements to the rail network to deal with increasing rail congestion. Another CDOT initiative is a study of the impacts of freight rail on Chicago s economy. This study will help the City formulate policies on railroad issues and future plans for the rail network.

7 Railroad Trends in Chicago Provide the Context for this Study Railroads are locating some new facilities outside City borders (Joliet Arsenal, Rochelle) Intermodal traffic growth is increasing terminal and urban congestion Rail mergers have concentrated traffic flows on fewer lines Freight - passenger R-O-W conflicts growing Area shippers are concerned

8 Goals of this Study To evaluate the incremental impact of selected railroad strategies on the City and regional economies including public and private investment alternatives. To analyze the beneficial impact to the City of railroad land redevelopment. To develop policy recommendations for the City for interaction with the rail industry to maximize the economic benefit to the region.

9 4-Step Analysis Framework Develop Economic Base Case for Rail-Related Activities Reebie Associates & DRI/WEFA Construct Scenarios: Changes in Rail Activity Reebie Associates & Menaker Associates Calculate Shifts in Business Costs & Activity Locations Reebie Associates & KKO Associates Evaluate Changes in Chicago Area Economic Activity Reebie Associates & EDRG

10 Principal Elements Evaluated Rail transportation Rail traffic on network Rail facilities Railroad strategies for Chicago Regional economy Economic growth rates Land values & use trends Highway and transit network Regional demographic trends

11 Four Analysis Regions City of Chicago Suburban (non-city) Cook County, IL Collar Counties (DuPage,Kane, Lake, McHenry, and Will Counties, IL) Lake and Porter counties in Indiana

12 State Hwy 83 WUSHwy 30 Railroad Network and Facilities StateHwy 58 I 90 I 294 I 290 US Hwy 41 I 94 ElginO State Hwy 19 I 90 USHwy 20 I 355 I 290 State Hwy 43 State Hwy 64 StateHwy 38 I 88 Southwest Hwy I 55 I 94 I 94 State Hwy 50 USHwy12 State Hwy 912 State Hwy 171 USHwy 6 WUSHwy 6 StateHwy 7 I 394 I 57 US Hwy 45 US Hwy 30 USHwy30 I 80 I 65 US Hwy 41 Chicago Rd USHwy30 USHwy 52 StateHwy 64 US Hwy 41 US Hwy 12 Survey Areas Wolf Lake IMX Terminals StreetMap USA Highway Primary road Water body US Hwy 41 State Hwy 1 US Hwy 45 S US Hwy 52 State Hwy 53 USHwy 231 Cedar Lake SWQuad SEQuad NWQuad NEQuad aol.com/.com/chirailfan chirailfan/watchmap watchmap.html

13 Selected Scenarios Base Case -- Organic expansion adjusted for productivity Intermodal to Rim -- Intermodal activity to periphery of region Rationalization -- Consolidate traffic volumes on upgraded infrastructure Minimal Rail Freight in City -- Intermodal moves to periphery; loose-car business de-marketed Bypass Chicago -- Reroute of trains to bypass routes and alternate gateways

14 Input Development Process Identify Areas of Anticipated Change Land Use, Volume, Rail and trucking employment Survey and Interview for Quantification 4700 Shippers; 21 Rail and Motor Carriers; 5 Government Agencies Model Predicted Changes; Calculate Impacts Logistics Costs; Demand Elasticity; Land Remediation and Redevelopment Derive Inputs for Economic Modeling Jobs; Investment; Business Migration; Regional Competitiveness

15 The REMI Model Rail-Related Related Activity Output Population & Labor Supply Labor & Capital Demand Market Shares Wages, Prices, & Profits User Cost Competitiveness

16 Base Case: Traffic Flows Total traffic volumes grow nearly 55% by 2020 Intermodal traffic growth exceeds carload growth Inbound traffic growth exceeds outbound growth Overhead traffic expansion exceeds local traffic growth Millions of Annual Tons Chicago Region -- Forecasted Traffic Growth Base Case Analysis Intermodal Tons Carload Tons

17 3 Scenarios: Similar Results Intermodal-to-Rim / Bypass / Minimal Rail City & Cook County Shipper migration creates negative overall impact Loss of employment, population Decline in Real Income, Regional Sales, GRP Collar Counties & Indiana Carrier investment and industrial growth creates positive overall impact Rail and trucking jobs added New shipper jobs added (migration from Chicago) Increase in Real Income, Regional Sales, GRP

18 Rationalization: REMI Outputs City & Cook County Infrastructure investment provides temporary stimulus Efficiency gains reduce shipper migration Gain of employment, population Gain in Real Income, Regional Sales, GRP Positive overall impact Collar Counties & Indiana Modest investment and industrial growth creates positive overall impact

19 Rationalization: REMI Outputs Rationalization: Impacts on on City City Economy Billion Billion $ (2002) (2002) Year Year Regional Regional Sales Sales Real Real Income Income Gross Gross Regional Regional Product Product

20 The Impact of Redevelopment Rationalization plus Redevelopment: GRP Impact on City's GRP under Rationalization and Redevelopment Change (billions, 2002$) w/o Re-use with Re-use Year 2020

21 Summary of Impacts Major Indices -- City of Chicago Summary of City Impacts in 2020 Across All Scenarios City s Total Job Impact in 2020 Scenario With Re-Use Without Bypass 15,400-5,100 Intermodal-to-Rim 7,500-6,400 Rationalization 19,700 8,300 Minimal Rail 13,600-15,700 City s GRP Impact in 2020 ($Billion) Scenario With Re-Use Without Bypass Intermodal-to-Rim Rationalization Minimal Rail City s Real Income Impact in 2020 ($Billion) Scenario With Re-Use Without Bypass Intermodal-to-Rim Rationalization Minimal Rail

22 The Chicago Economy: Perspective Basecase Values Chicago Employment (000's) 3,757 4,146 4,606 4,888 Gross Regional Product $116 B $135 B $173 B $201 B Output $185 B $217 B $273 B $321 B Personal Income $72 B $91 B $142 B $196 B CHANGE -- Rationalization Scenario with Redevelopment Chicago Employment (000's) Gross Regional Product $0 B $0.0 B $0.2 B $2.8 B Output $0 B -$0.1 B $0.1 B $5.8 B Personal Income $0 B $0.0 B $0.0 B $1.2 B Underlying Chicago economy is growing Rail can contribute significantly to City s long-term growth

23 Conclusions Intermodal-to-Rim; Minimal Rail; Bypass Chicago Move freight away from City Reduce GRP by $1-3B annually by 2020 Loss of 5,000-15,000 jobs (without redevelopment) Redevelopment can mitigate some impacts Rationalization Retains most freight movement in City Adds $1B to annual GRP by 2020 Adds 8,000 jobs to City Economy Redevelopment can double benefit

24 Recommendations to Chicago Invest to Rationalize Rail Infrastructure Rail infrastructure investment aids in business retention Productivity improvements delay capacity investment Explore strategies for improved intra-regional freight movement Truck only corridors for rubber-tire interchange Intermodal connector improvements

25 Developing Strategies for Chicago Redevelopment Opportunities Encourage investment in existing railroad facilities to retain shippers in the City Encourage redevelopment of industrial land served by rail Managing passenger/freight capacity demands on limited infrastructure Increase benefits to all, including passenger and commuter rail users, adjacent communities, and freight shippers Strategic right-of-way preservation and banking with redevelopment of unneeded rail property