Supply chains extend beyond state borders — California and Nevada supply chains are inextricably linked.

Freight logistics between these states has evolved in a vacuum of planning. As a result, commercial lands for production, warehousing and distribution are developed as truck-only facilities. Only one warehouse in Nevada utilizes rail. Many large industrial parks in California are entirely truck only. The growing California-Nevada commerce has become so robust that 70% of all trucks in Nevada are coming from or going to California.

Freight plans for states must encompass the adjacent or distant states that are its most significant supply chain partners. Sustainable economic development must be informed by engagement among California and Nevada’s public agencies, port authorities, economic developers, businesses, communities, and transportation providers. OTNA has initiated that process, identifying and engaging California stakeholders, including Caltrans and Nevada DOT, for this two-state supply-chain approach.

What problem are we addressing?

  • Sustainable supply chains require sustained collaboration among business, communities, and the public sector
  • California’s supply chain has expanded into Nevada for warehousing, distribution, and production
  • There is no rail intermodal service between Nevada and California
  • Crucial rail, trucking, and energy industries need citizens to appreciate their importance to sustainability
  • Communities need their concerns incorporated into plans and investments

What opportunities will be advanced?

  • California’s aggregate sources will begin to bottom out in ten years—increased aggregate supply from Nevada is logical, if transported by rail
  • Expanding the recycling of commercial and municipal waste into new materials and energy in Nevada will be feasible, when feedstock supply is supplemented by California
  • Logistics activities can be staged in Nevada, instead of the densely populated California port areas
  • Rail rights-of-way can be used to connect new electricity generation in Nevada to the California marketplace and train electrification
  • The stability and profitability of trucking companies and the quality of life of drivers can be improved
  • Empty truck moves in and out of Nevada will be reduced
  • Truck flow through the Reno and Las Vegas regions will improve

Who is invited to participate?

  • Landowners, developers, realtors, transportation and energy service providers, government agencies, economic development professionals, shippers, ocean carriers, legislators, regulators, planners, town and county leaders

What results will we produce?

  • Bridge the communications divide between the public sector, private sector, and communities
  • Improve the balance of truck and rail transportation as population and freight volume increase
  • Develop new rail routings and services between California and Nevada

What are the funding options for this new model?

  • Union Pacific Railroad and BNSF
  • Caltrans and Nevada DOT
  • Federal stimulus money
  • Federal agency programs
  • Infrastructure investors
  • Real estate developers
  • Regional cooperative initiatives
    • Western Interstate Energy Board
    • Western Governors Association
  • Utilities
    • Southern California Edison
    • Imperial Valley
    • SEMPRA
    • NV Energy
  • California and Nevada private foundations

What principles will be stewarded?

  • Adopting a whole-systems, regional and common-sense approach to logistics and land use will benefit all stakeholders
  • Placing emphasis on analysis, solutions, and results, not meetings, reports, and studies
  • Supply chains must shorten. Enhancing regional supply chains will transform our overextended, inefficient supply chains
  • Trucking will be more productive when focused on short-haul lanes
    • Short haul drivers, easier to retain, and can go home after work
    • Short haul trucking eliminates costly layovers due to hours-of-service regulations
  • There is no technology on the horizon for creating more land
    • With a constantly growing population, the impacts of goods movement to and from production and warehousing facilities have as much of an impact on land use as do the actual producers, manufacturers, and distributors at the sites. Land use is a systemic issue, not simply an individual property issue
  • Transportation investments can only be made wisely if designed to optimize the whole system
  • All stakeholders have a responsibility to advance this forward-thinking, whole system planning
  • These large-scale strategies for stable, whole-systems investment will be extremely attractive to major infrastructure investors
  • Neither business nor government alone has the expertise to convene this new level of whole supply chain coordination

Who will lead this effort?

  • Project of OnTrackNorthAmerica, 501c3, since 2007
  • Michael Sussman, President and CEO, OnTrackNorthAmerica
  • Governing Board
    • James Hoecker, former Chair of the Federal Energy Regulatory Commission
    • Dan Elliott, former Chair of the Surface Transportation Board
    • Michael Sussman, Chairman and CEO of Strategic Rail Finance and President/CEO of OnTrackNorthAmerica
    • Executive Director, tbd

Initial Alliance Dialogue Questions

  • What are the economic and service issues that have to be worked out to establish San Pedro Bay-southern Nevada rail service, in each direction?
  • What are the economic and service issues that have to be worked out to establish San Francisco Bay area-northern Nevada rail service, in each direction?
  • Are there ways that more export truck traffic can be brought into the ports by rail? What are the issues in doing that?
  • What traffic is originating in southern California and being trucked to Las Vegas and to Salt Lake City that can be shifted to rail?
  • What is being brought in by truck from Mexico and going to Las Vegas and northern Nevada? Given the growing interest among distributors or sales companies in unloading trains in Nevada and for trucking to final destination up and down the west coast, how can we improve direct rail services into CA, OR, and WA as an alternative to adding more truck traffic to these states?

PROPOSED CHARTER OF THE CALIFORNIA NEVADA SUPPLY CHAIN ALLIANCE (“CAL-NEV SCA” or THE “ALLIANCE”)

OnTrack North America (“OTNA”) establishes the Alliance as a project that promotes collaborative, and balanced approach to achieving economic efficiency and fair trade-offs on a regional basis.

The purpose of the Alliance is to explore and develop a sub-regional approach to coordinating the planning and operation of the basic transportation infrastructure that serves the citizens of both jurisdictions which are mutually dependent on one another for the production, import, delivery, and utilization of goods and services.

The goals of the Alliance are to (1) foster regional collaboration and consensus building regarding the planning, construction, and utilization of critical infrastructure, and (2) achieve a level of interoperability within and among specific key supply chains, particularly transportation and energy, that otherwise exist independently. In pursuit of those goals, the Alliance intends to develop consensus-building initiatives and methods that can be employed in regions throughout the country.

The Alliance will promote economic efficiency, jobs, environmental benefits, and lower costs for consumers of a variety of goods and services. To advance this agenda, the Alliance will focus on how modes of transportation and delivery, currently planned and operated in separate silos, can be optimized.

An analysis of the benefits of increased rail market share, electrification, intermodal and hub services, short-haul rail expansions, and other potential improvements could help enhance the timeliness and efficiency of the trade between the two states. For example, the Ports of Long Beach and Oakland and inland ports depend on highway and rail transportation that operate irrespective of the environmental, congestion, financial, energy use, or cost impacts of the whole system. The Alliance is dedicated to strategies and joint actions that optimize the economic benefits and minimize the environmental costs for the affected communities.

The Alliance would offer its expertise and services to policy makers, regulators, state and local governments, industry segments, and consumer organizations. It will encourage multiple, diverse interest groups and authorities which ordinarily do not collaborate, to work together to devise “best practices,” standards, information sharing procedures.

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