Collaboration, Transportation, and Our Shared Future


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Michael Sussman, President and Founder

In 1995, I began studying the infrastructure investment strategies of industry, government, and society. Since then my company, Strategic Rail Finance has coordinated financing for railroad projects in 35 U.S. states. In 2007 I founded OnTrackNorthAmerica, a non-profit transportation policy and planning organization, to share what I have learned for society’s benefit.

What caught my attention in 1995 was the declining use of freight railroads and trains in favor of cars and trucks – despite the inherent energy, capital, and space efficiencies of rail transport. I wondered: why do we continue to invest the lion’s share of public and private capital toward less efficiency rather than more efficiency?

So I have devoted my business and non-profit organizations to turning around the economic principles that we have been relying on to advance major infrastructure systems.


While working in transport finance, I have witnessed the impact that the current model, based on competition, has had on efficiency and progress. Relying on competition as a regulatory principle for building and operating infrastructure systems is insufficient, outdated, and unsustainable. Ask 33 miners in Chile how they all survived 69 days trapped underground in 2010, and they will tell you how quickly they shifted from individualism to collectivism. It was the second day; right after several men ate three days of the entire crew’s daily rations. They learned, as we must learn, how to coordinate and collaborate. We have to share well to live well on this planet of limited resources.

Our civilization is in danger because we have allowed population growth, industrialization, and natural resource development to overwhelm our environment and force us into unsustainable patterns of land use. You only need to read the news to see the many ways in which we are running out of clean air, water, and space.

We can address these issues by improving the way we invest capital in industries, regions, countries, and systems. Fortunately, we can learn all we need to know to transform our outdated strategies into lasting solutions from one single lesson: our predominate investment in roads, not in rail.

Place your hand on a steel rail after a 100-car train has just passed and feel the lack of heat. Friction is low when a hard steel wheel rolls over a hard steel rail. Consequently, the wheels last for hundreds of thousands of miles and the rail lasts for decades. Low friction means that hauling heavy weight and people over rails uses 1/2 to 1/6 the amount of energy while producing fewer emissions than moving comparable weight over roads.

In a world of limited space, moving goods and people in railcars linked together in long trains is a huge space-saver. It takes 3½ trucks to move the goods hauled by a single railcar. It takes a 27-mile convoy of trucks on the highway to move the goods carried by a 1-mile train riding on its own right-of-way. Yet as a society we continually opt to subsidize roads, removing the incentive to utilize the more efficient mode. Isn’t it time for common sense here?

Transportation efficiency can’t be accomplished by investing in railroads at the expense of other modes. We can’t get to the level of whole systems’ efficiency and productivity by continuing to “pit” one industry against another. There is enough cargo to ship and people to move for all modes to be successful. It’s the coordination between the modes and the overall efficiency that matters now, because in addition to commerce transportation planning impacts the environment, safety, quality of community life, and increasingly of significance—land use and space.

Here’s how I look at things: Redirecting the world’s capital flow from inefficiencies to efficiencies will turn our budget challenges into smart investments and our common fate from struggle to prosperity. All modes, systems, and communities will benefit.

This is economics that people can embrace, because it stands on the fundamental use of the age-old invention – the wheel – and it takes advantage of the wheel’s relation to weight, movement, surface friction, energy, efficiency, and the environment. Use the wheel efficiently for moving heavy weight and people over land and we take a major step in the direction of creating a sustainable, resilient society. Overusing the wheel under single vehicle cars and trucks on rubber tires over rough concrete and asphalt wastes fuel, pollutes air, and diminishes available space. I would argue that calamity awaits if we continue on this path. Getting the use of the wheel right will allow benefits to flow to the rest of the transport system, the economy, and the environment.

Despite the recent upsurge in attention to logistics and infrastructure, we are still planning in ways that are contrary to net progress for society. Florida demonstrates the ongoing problem in its June 2014 state-of-the-art Freight Mobility and Trade plan. In 2011 rail hauled only 9 percent of the tonnage that trucks hauled in the state. That already low share is projected to dip to 8 percent by 2040. Over this same period Florida’s population is projected to increase from 20 million in 2011 to 35 million in 2040. It’s unlikely that Florida’s road network can accommodate this 75% growth. Yet we see that this common approach to planning spells future gridlock across the country with accelerating economic and social costs.

This is about much more than which transport mode “wins” share. Continuing to talk about winning and losing in this way preserves the narrow view that everything is a competition for individual gain. Its been shown repeatedly that pursuing more intelligent approaches leads to higher productivity and profitability for all modes. So what do we mean when we say intelligent approaches?

From experience, we know that creating optimal systems requires a new mindset about planning for and implementing transportation investments. What we see today are public-sector transportation plans that mostly recycle reports and projections based on past trends. The intelligent transportation planning that we advocate generates a wiser horizon of sustainable actions.

Based on our comprehensive research and perspective, OnTrackNorthAmerica is leading a campaign to transform planning – from reports and projections to “Transportation Action Plans”. These new action plans feature:

  • Stakeholder participation from conception to implementation,
  • Economic, commercial, and financial “business” plan elements,
  • Land use and environmental impacts,
  • Metrics, benchmarks, and targets,
  • Action steps, responsibilities, and commitments; and,
  • Alignment of private sector business plans with plan targets.

The action planning process we’ve designed can lead to an equitable and sustainable future, rather than a continuation of approaches that render us more fragile and vulnerable. This shift requires a clear-eyed understanding of one commonly-held myth about land transportation. For years we have been saddled with the comparison between the “flexibility” of trucks and the fixed nature of trains. The story goes that trucks are more flexible than rail because they can go anywhere, while trains can only go where there are rail lines. It’s a false comparison. Ask a truck driver how they like driving across a muddy field. Trucks go where we build roads and trains go where we build rail lines. Understanding this clearly puts us back in command of a fundamental design question: where do we want to build each transport component and how do we want them to connect?

We can overcome the limiting design assumptions of the past and shift into whole-system-based, objective planning. That’s the only way we can build transportation capacity that contributes to the development of sustainable communities.

It is time for this new level of coordination, collaboration, systems thinking, and imagination. We invite you to weigh in with your thoughts, commentary, and passion. Together we can create a future wherein everyone prospers.

Michael Sussman
President and Founder
OnTrackNorthAmerica, Inc.

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10 Comments on "Reinventing the Wheel"

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Jeff DeLone
Guest

Wonderful commentary on the state of our transportation system and your plan to transform our thinking and planning to preserve our environment .

I appreciate your commitment to protect our land and resources .

Spencer Naith
Guest

The freight transportation inefficiencies you see in North America also afflict Australia, a country which is greatly influenced by North American business practice and culture. Competition to provide services to meet the needs of individual freight shippers takes the focus away from the bigger picture – what is the best way to meet the freight transportation needs and the international competitiveness of the whole society, the nation-state as an economic entity in a competitive world.

Paul Brezicki
Guest
Michael, I think your article make good points from a public policy point of view, but does not address the allocation, or shall we say, misallocation of resources in the private sector freight rail industry. The emphasis on cost-reduction by elimination of duplicate physical plant that dominated management thinking in the 1970’s and 1980’s appears to have merged with the emphasis on maximizing shareholder returns and top executive compensation that characterizes the general corporate mindset of the early 21st century. The end result is under-investment in capacity, which results in the poor performance that drives freight traffic onto the highways.… Read more »
Roxanne Warren
Guest

Dear Michael Sussman,
I am delighted to read about your ideas and organization. One year ago the MIT Press published my book, Rail and the City: Shrinking Our Carbon Footprint While Reimagining Urban Space, which focuses on this very subject, in particular with regard to our land use, transportation, our disregard and neglect of rail, and its great potential.

Please see http://mitpress.mit.edu/books/rail-and-city.

Emilio Sacristan
Guest
I could not agree more with your comments, I share them fully. I was professor of Transportation Economics for fifteen years at the Intermodal Tranportation Institute at the University of Denver, and I still teach Macroeconomics a the University of Mexico. Ia am a Mexican national that have devoted my professional life to the rairoads o practically all the other modes of trasportation, but have always been a part time teacher. It is very difficult to attain a reasonable rate of growth, but it is even more difficult, a rate of growth that is sustainable with our envirement and our… Read more »
Dennis Wilmot
Guest
Interesting article. Paul suggests the rail carriers have under-invested in capacity. The numbers seem to suggest otherwise. Since the Staggers Act of 1980 unleashed the market forces the rail carriers have invested more than half a trillion dollars back into the rail network. The percentage of CapEx annually by the Class I carriers is higher than any other industry, in part because railroads are one of the most capital-intensive industries, period. As for your general idea, there is one major concern. Just about every other attempt to do as you suggest has been initiated and “managed” by the government. It’s… Read more »
Michael Sussman
Guest

Transportation development always requires communities and their governing representatives to participate either proactively or re-actively as the building and operations requires investment of common good resources of land, space, noise, clean air and capital. So we have no more appropriate choice but to improve the depth of thinking and coordination between government and the private sector in how commerce and goods movement is conducted.

Curtis Aubry
Guest

Michael thank you for sharing this important information. Now that I’m educated I will be able to make different decisions going forward and share this with others. Looking forward to seeing you soon.

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