‘FIAILi-i d . U.S. Department of Transportation Federal Railroad Administration AD Fr: LIBRARY MAR 19 1996 UNIVERSITY OF CALIFORNIA INSTITUTE OF TRANSPORTATION STUDIES , El SHT Ti: iAFFi Fl WS 199 FEDERAL RAILROAD ADMINISTRATION II rr'IrIIHr ace—21981 [I LLnLI l L,‘ WWW December 1980 us LIBRARY u.c'.* BERKELEY PAILRDAD FPEIGHT TRAFFIC FLOWS ’| BBQ Preface Methodology The Regions The Network The Flows The Forecasts Grain Iron Ore Coal Stone, Sand, and Gravel Nonmetallic Minerals Grain Mill Products Food Products Forest Products Lumber and Wood Products Pulp and Paper Chemicals Cement, Clay, and Glass Primary Metal Products Transportation Equipment All Other Commodities Railroad Freight Traffic — 199i) 20 22 24 26 28 30 32 34 36 38 40 Contents ‘r Most railroad lines in the United States date from the 19th century. They were built to meet local and regional transportation demands. It was only progressively that they took the form of a coherent network. Since the industrial market in America is dynamic, the railroad network also needs to change to be efficient and viable. The network that has evolved to date may not be consistent with today’s traffic patterns and may be less suited for tomorrow’s. Accordingly, the Federal Railroad Administration (FRA) has undertaken the task of identifying future railroad traffic flows to assist the railroad industry and the Government in planning to meet future requirements. We chose 1990 as the time frame for our forecasts because we believe that a 10-year period represents a good trade—off between reasonably reliable forecasts and their applicability to investment-planning decisions. Forecasts for less than 10 years would not allow sufficient time to plan major investments, while forecasts for 15 to 20 years would be too uncertain. Previous FRA efforts to identify railroad network requirements focused on historical traffic flows1 or light-density branchlines.2 This report examines a projected mainline network. We believe that it is the responsibility of FRA to analyze interstate and interregional freight flows so that the industry and the Government can make better assessments about the future requirements of the mainline railroad network. We have not studied branchlines because our data samples are not large enough to give us the statistical accuracy necessary to make branchline traffic forecasts, and because we believe that judgments regarding secondary lines and branchlines must be made by the railroad companies working with State and local officials, and shippers. FRA’s 1978 study, A Prospectus for Change in the Freight Railroad Industry, noted that the railroad industry will face a multibillion-dollar capital shortfall over the coming decade. The report identified a number of steps that are necessary if the railroads are to overcome this shortfall: reduced regulation, restructuring, internal management changes, and for a few years at least, continued financial assistance from the Federal Government. Congress has recently enacted the Staggers Rail Act of 1980, providing for substantially reduced regulation of railroads, but other steps must still be implemented. Nevertheless, a shortfall of capital in the railroad industry may persist. We hope that the railroad industry and the Government will be able to use the information in this report as one aspect in helping direct the limited amount of capital available to those facilities most needed to meet future traffic requirements. This analysis has been based upon minimum distance routing of traffic and does not include the circuity of rail movements due to corporate ownership or physical condition of lines. Furthermore, this effort has focused on the prospective traffic flows without regard to capacity constraints on the mainlines or in the yards. In the coming year, we will update projections by assessing those capacity constraints and identifying those links and nodes of the network with potential capacity limitations in the context of minimum distance routings. The maps in this report are the first to show railroad commodity flows in such a vivid and comprehensive manner. We believe that they provide insight not only into the railroad network but also into the geographic structure of American industry. Recent developments in network analysis, economic forecasting, and computer graphics make such presentation possible. This report is part of a continuing effort. FRA will prepare a new 10-year forecast periodically. We hope that this continual updating will enhance the ability of the railroad industry to make reasonable, long- term investment plans. We believe that an American railroad network with services and facilities tailored to future requirements will play a growing role in the transportation system of this country. We welcome your comments, and we seek your guidance in improving the usefulness of this report. John M. Sullivan Federal Railroad Administrator 1Final Standards, Classification, and Designation of Lines of Class / Railroads in the United States, US. Department of Transportation, 1977. 2Rail Service in the Midwest and Northeast Region, US. Department of Transportation, 1974. Preface Methodology For purposes of this study, the country was divided into 129 traffic regions, and all freight originations and terminations were assigned to these 129 regions. The principal city or railroad junction in each region was designated a centroid or a node. The 129 nodes were connected by a series of links representing railroad mainlines. The numbers of traffic regions, links, and nodes were selected to be large enough to give a representation of the flows on the railroad mainline network and yet small enough to be cost—effective and to permit ease of data collection, manipulation, and sensitivity analysis. Railroad freight was divided into 14 major commodity groups plus one “all other" group. Rail traffic forecasts for 1990 were made for each of the commodity groups between each of the 129 regions. The commodities were flowed through the network following a minimum-distance routing. Each of the commodity group flows is displayed on a separate map, and the final map in the report shows the sum of the bidirectional, interregional flows of all 15 commodity groups. The 5 Elegions The U.S. Department of Commerce has divided the continental United States into 171 Bureau of Economic Analysis (BEA) areas. They are the basis of Federal forecasts of production, consumption, population change, and economic activity. Forty-three of these BEA areas, however, originated or terminated very little railroad freight traffic in the past and are not expected to change in the near future. In this study, these 43 BEA areas are joined to appropriate adjacent areas having significant railroad activity. The BEA area representing the greater New York area was divided into two because railroad routings to New York City differ from routings to the New Jersey side of the Hudson River. The- following map depicts the 129 FRA traffic regions that resulted from combining 43 BEA areas with adjacent areas and dividing one area. The map also shows the designated centroid of each region — either a principal traffic-generating or terminating point within the region, or a major railroad junction. These centroids become the nodes of the railroad network. For analytical purposes, the centroid is the point at which all traffic within the region originates or terminates. Tr‘affic Regions-3 The Network The following network map, a general representation of the physical railroad mainline network, is a series of links (representing mainlines) that connect nodes (representing the major traffic origination or termination points or major railroad junctions). This railroad mainline network map represents the results of a step—by-step analytical process. A preliminary map was drawn to show existing physical mainlines chosen on the basis of their traffic density. Subjective judgment was then used to select the links for the network map. In areas where traffic volume was very low, links were removed from the network; conversely, in certain high-density traffic areas, additional links were added to provide a clearer representation of the network. Each link represents one mainline, or more. For example, the link from Las Vegas to Salt Lake City represents one mainline owned by the Union Pacific Railroad. The link from Cleveland to Buffalo represents two mainlines, one owned by the Consolidated Rail Corporation (Conrail), the other owned by the Norfolk and Western Railway. The link between Chicago and Davenport represents five mainlines owned by the Santa Fe, the Burlington Northern, the Milwaukee Road, the Chicago and North Western, and the lllinois Central Gulf. The mileage applied to each link was the actual mileage if a single mainline was represented, or the average mileage if multiple mainlines were represented. Traffic was routed on the basis of minimum distance, determined by a mathematical algorithm. Minimum distance routing does not respect corporate ownership or physical condition of lines. Some traffic routings now are made by railroads to maximize the distances traveled on their own lines; in other cases, traffic may be routed by shippers who use a variety of considerations when selecting their specific routings. While computer technology makes it possible to take into account corporate ownership and other considerations when making routing selections, this analysis shows the basic commodity flows only; it does not attempt to show all the possible routings those flows could take. Since there are over 40,000 freight stations in the United States, the development of a computer model to represent the railroad network connecting those 40,000 freight stations would be too costly to be practical. As the network representation becomes less detailed, the costs 0f finding minimum paths and assigning commodity flows to the network decrease substantially. lt was necessary to exchange the detail of network representation for the cost of computing time. The result is an easily displayed, comparatively small network that connects the principal traffic origination and termination points. The network map also contains all the railroad mainlines included by the US. Department of Defense in its Strategic Rail Corridor Network, a network based on estimates of defense traffic requirements in peacetime.3 Not included are the branchlines and secondary lines that serve specific military installations. 3An Analysis ofa Strategic Rail Corridor Network (8 TRACNET) for National Defense, MTMC Report RND 76-1, Military Traffic Management Command, US Department of Defense, 1976. Railroad Mainline Network . ' its. g , ,, m ROCHESTER new YORK ADELPHIA " ILMINGTON ‘ HARLESTON éLAVANNAH /' V CORPUS CHRISTI Federal Railroad Administration, December 1980 The Flows The traffic flow lines on the following commodity maps show the relative amounts of net tonnage for the commodity movements on the various links. Net tonnage does not include the weight of locomotives and freight cars for both loaded and empty movements. Gross tonnage, which includes locomotive and freight car weight, is approximately 2.5 times net tonnage, although there are variations according to commodity. For coal and other heavy-density commodities, gross tons are about 1.7 times net tons, while gross tons of lighter density commodities are as much as 3.2 times net tons. The traffic flow data forecasts were provided in the form of matrixes. One matrix containing 16,641 cells (129 by 129) was prepared for each commodity. Since most of the traffic in each commodity group moves to and from a limited number of regions, flow data are found in only a small number of cells in each matrix. Part 1 of the following figure (Traffic Flows) shows an example of a matrix for a smaller four-node network. The number in each cell represents the total flow from one region, aggregated at its centroid, moving to the centroid of the destination region. No traffic flows within individual traffic regions are shown. The traffic moves through the network along the shortest route. Part 2 of the figure illustrates a simple four-node network; and the movement of traffic through the network along minimum distance routes is shown in part 3. On the A—C link, the flows are only those between the two nodes (A and C). On another link, B-D, the flows include movements between pairs of nodes beyond the two that describe the link (A and D, C and B). Part 4 shows the sum of the steady state flows over each link of the network. This form of graphic representation is used throughout this report. Line'thicknesses are proportional to the amount of tonnage moving in each direction. The right—hand rule applies; as the reader looks at the line from A to B, the thickness of the line on the right side represents the traffic moving from A to B. The traffic flows do not take into account any capacity constraints on either links or nodes. lf constraints were applied, the algorithm would flow the traffic over the shortest path up to the maximum capacity of any link or node. The remaining traffic would then seek the next shortest path with unused capacity. Such constraints were not applied because of the assumption that railroad companies would make thenecessary investments to overcome the constraints and accommodate the forecast traffic efficiently. Railroads would not attempt to accomplish this through artificial and unrealistic circuitous routings. The method of graphical display does not show the traffic flows that occur entirely within single regions. Some of these flows are substantial (for example, iron ore movements within the Duluth region) and could compete for mainline track capacity with the interregional flows. Each commodity map has a different scale to permit the reader to observe more acutely the relative flows of each commodity over the national network. Had a uniform scale been) selected, the difference in flows of some of the smaller commodity groups could net be observed easily, From Region To Region o C 3. Minimum-Distance Routes A B C D — 40 50 60 10 — . 20 30 10 10 — 10 5 5 5 — 1. The Matrix Traffic Flows (Million Net Tons Per Year) 2. Four-Node Network C 4. Sum of the Flows The Forecasts The future transportation requirements of American industry are a function of both the supply of and the demand for the various commodities. Commodity production and consumption forecasting requires assumptions about demographic trends, employment, financial markets, the housing market, the public sector’s role in the economy, energy costs and requirements, and other determinants of the size and composition of the national economy. In this report, the 1990 commodity flow forecasts made by Data Resources, Inc., are based on the following assumptions: 0 Real gross national product will grow at an average annual rate of 2.8 percent to $3.50 trillion4 in 1990 from $2.54 trillion in 1978. 0 The total US. population will increase from 218.4 million in 1978 to 243.5 million in 1990. 0 The labor force will grow at a rate of 1.7 percent per year between 1980 and 1985 and 1.3 percent per year between 1985 and 1990, compared to growth of 2.4 percent per year between 1970 and 1980 o The inflation rate is expected to decrease from 12.9 percent in 1980 to 9.9 percent in 1981 and 7.9 percent in 1984, before it returns to 8.3 percent at the end of the decade. 0 Government spending will continue to be stable at 21.8 percent of the gross national product. 0 The rate of increase in productivity will rise from 1.1 percent per year in 1978 to 1.8 percent per year in 1990, as both the capital/labor ratio and average work force expand. 0 The rate of unemployment will de— crease from 6.0 percent in 1978 to 5.6 percent in 1990. 0 Fuel oil imports will decrease from $101.5 billion in 1978 to $92.9 billion in 1990. 0 Energy demand will grow to 89.1 quadrillion Btu in 1990 from 78.1 quadrillion Btu in 1978. (One quadril- lion Btu equal 500,000 barrels of petroleum, per day, per annum.) 0 Energy sources for electric utilities will change, as follows. 1978 1990 Fuel “/0 °/o Coal . 43.2 52.8 Natural Gas- 14.1 7.0 Petroleum 16.4 6.8 Other (including nuclear, hydro, solar, etc.) 26.3 33.4 The following assumptions were made for each commodity. 0 The location of production and con- sumption in 1990 0 The total commodity flows that link production and consumption at specific locations 0 The railroad share of the total flow for each commodity These assumptions depend on a myriad of occurrences in the railroad industry, as well as in the rest of the world. This study uses “most probable” rather than either optimistic or pessimistic assumptions. (If required, the network model system could also be used to analyze “most probable,” “extreme case,” or any other set of assumptions.) The forecasts do not assume major changes in the capacity of other modes, of and railroad that might result‘from reduced regulation of these modes. Reform of trucking and railroad regulation has occurred only recently. When there is sufficient evidence as to how the Interstate Commerce Commission will interpret the new laws and how trucking . companies, railroads, and shippers will respond to those interpretations, new forecasts can be made to include the effects of reduced regulation. Assumptions were made regarding changes in the capacity of other modes of transportation. The construction of high- capacity locks on the Mississippi River at Alton, |llinois,'scheduled for completion in 1988 is not expected to affect railroad traffic significantly through 1990. Even though three coal slurry pipelines have been proposed for constructionbefore 1990, none has cleared all the legal barriers that must be overcome before construction is possible. Therefore, the forecasts for coal movement are based on the assumption that no new slurry pipelines will be operating before 1990. The railroad freight traffic forecasts involve the following six steps. (1) Econometric models were developed to forecast railroad originations and terminations in each of the three Railroad Districts — Eastern, Southern, and Western — for 14 major commodity groups plus one “all other” group. The models are based on the 1949-to-1978 data from the Freight Commodity Statistics (FCS), supplemented by railroad data from other sources, and relate historical and forecast industrial production and consumption measures and mode share statistics to railroad originations and terminations. (2) The One-Percent Carload Waybill Sample provided origin-to-destination flows for 1978 between the districts. The FCS totals were used to develop the factors for each of the interregional and intraregional flows that will expand these flows to 100 percent of the originations and terminations reported by FCS. (3) Flows between districts in 1990 were projected with the econometric models from Step 1 and the data from Step 2. Trends in district interactions were analyzed to ensure their proper reflection in the 1990 interdistrict estimates. (4) Matrixes of interdistrict growth factors were created for each commodity group by dividing the 1990 interdistrict flows (from Step 3) by the 1978 interdistrict flows (from Step 2). (5) The 1978 Carload Waybill Sample was used to prepare a region-to-region flow matrix, by commodity, for the 129 regions. (6) The growth factors from Step 4 were applied to the 1978 interregional flow matrix (from Step 5) to develop a 1990 interregional flow matrix. Specific information regarding each commodity was taken into account in all the commodity forecasts. For example, 1990 coal flows will reflect the opening of new mines, the expansion of some existing mines, the conversion of some powerplants to coal, and the construction of coal-fired powerplants, as well as historical flows. Total railroad traffic is expected to grow from 1.5 billion net tons in 1978 to 2.1 billion net tons in 1990, an average annual growth rate of 2.58 percent. ‘All dollar amounts are in 1980 constant dollars. 800 - Legend 1918 - 1990 I 600 - a A g 2 I- 3 E E 400 - 200 0 Source: Data Resources, Inc. . , Rallroad Shipments of Selected Commodltles, 1978, 1990 Gr‘ain Wheat (STCC5 01137), 38.0 percent;° corn (STCC 01132), 36.7 percent; sorghum (STCC 01136), 8.8 percent; barley (STCC (01131), 4.4 percent; soybeans (STCC 0114), 8.4 percent; oats, rice, and other grains, 3.7 percent 140 — 120 Net Tons (millions) 100 1972 1 974 Source: Data Resources, Inc. Railroad shipments of grain are expected to grow from 117.6 million tons in 1978 to 132.4 million tons in 1990 — about 1 percent per year. For this period, shipments for domestic consumption are expected to fall 1.6 percent per year, from 58.1 million tons to 47.9 million tons, while export shipments to ports are predicted to increase 3 percent per year, from 59.5 million tons to 84.5 million tons. 10 1976 Railroad Shipments of Grain, Selected Years 197a 1990 in the short term, grain production fluctuates in response to weather conditions; in the long term, its fluctuations are based upon improved fertilization, better farming practices, and new hybrids. Little additional farmland will become available after 1981, and grain yield per acre is expected to increase slowly. Domestic consumption is predicted to grow proportionally with population growth, while overseas demand is expected to rise and consume all the available domestic production. Third World nations, especially, will have difficulty in maintaining their own production levels in the face of population pressures and will increase their grain purchases. Higher energy costs, however, are predicted to limit the funds they will have available for grain purchases. Corn, the largest grain crop, is grown predominantly in the Midwest — from Ohio to Nebraska. Most of it is used as feed for hogs and cattle and is transported over short hauls by private trucks. Corn destined for grain mills often moves in sufficient quantities to justify railroad transport. Of the 198 million tons of corn produced in 1978, 60 million tons were exported, generally, through Atlantic and Gulf Coast ports, but a portion also moved through Pacific Coast and Great Lakes ports. Railroads carried 25 percent of all corn tonnage in 1978 — a share that is forecast to remain constant during the 1980’s. In 1978, of the 54 million tons of wheat produced, 37.5 million tons were exported. Most is grown in the Midwest from North Dakota to Oklahoma, although the areas of eastern Washington and Oregon and northern Idaho are becoming major production centers. Almost all wheat exports move through Houston and Portland, although Duluth, Corpus Christi, and New Orleans are also major wheat ports. Wheat destined for domestic consumption is carried to grain mills for conversion to flour and cereals. In 1978, railroads carried about 65 percent of all the wheat produced, and that percentage is expected to rise during the 1980’s, as the improved regulatory climate will encourage railroad companies to compete more effectively with trucks and barges for bulk movements, especially during off-peak periods. Sorghum grains, grown mainly in Nebraska, Kansas, and Missouri, are used primarily as animal feed. Production in 1978 was 22.5 million tons, of which 36 percent was moved by railroad. Exports constituted 22 percent of production and were moved through the ports of Houston, Corpus Christi, and Los Angeles. Domestic consumption is greatest in the Midwest and Arizona. Railroad shipments of sorghum grains are expected to increase to 10 million tons in 1990. Soybeans, grown throughout the Midwest from Louisiana to South Dakota, are another major export commodity. Of the 56.1 million tons produced in 1978, 41 percent was exported, primarily through the ports of New Orleans, Baton Rouge, Mobile, and Baltimore. Seventeen percent of total production moved by railroads; trucks carried a large portion of the soybeans destined to mills for processing, while barges carried a large portion to Gulf ports. The railroad share is forecast to increase to 21 percent in 1990, as railroad rates and services become more competitive and exports rise. 5Standard Transportation Commodity Code. The STCC number is omitted intentionally when numerous, minor products are combined. SShare of tonnage of this commodity group shipments in 1978. Gr‘ain / 1990 ' /\7\ \ > Ew HAVEN \ \, NEw YORK ,, , ‘ » I ROCHESTER ADELPHIA \ _ . -> ‘ V V. ‘. ~ 1 , :1. _ = 4/ .1! , ~ _ V ILMINGTON ' \ » CHARLESTON ,; Mm, b, : .JVANNAH Scele: Mllllpne 01 Net Tone ACKSONVILLE o 5‘ 1o 15 20 ' ‘V > V. ,» ‘1: ,, f _‘ . .' . .1 V ’. " " )F’ENSACOL The volume ol trelllc Is represented by the wldth ot the red rectangles along the black network llnke. The dlrectlon ot the tralllc between nodes In determlned by the placement at the red reetengle. Treltlc Irom A to B ll ehown by the red rectangle on the right elde ol the llne en the reader looks Irom A to B. Trelllc horn B to A Is shown by the red rectangle on the right slde ol the Ilne a: the reader looks Irom B to A. CORPUS CHRISTI Federal Railroad Admlnlstratlon, December 1980 11 Iron Ore Crude ore (STCCs 10111, 10112), 38.1 percent; and concentrates and agglomerales (STCC 10113), 61.9 percent 140*- 120— “A 52 i-é’ a: 100— I 0 1972 1974 Source: Data Resources, Inc. Railroad Shlpments of Iron Ore, Selected Years Railroad shipments of iron ore are expected to increase slightly from 133.4 million tons in 1978 to 134.7 million tons in 1990. Total US. iron ore traffic was somewhat higher in 1978 than in prior years because iron ore mining in the Duluth region expanded to compensate for lowered Canadian production, as a result of a strike by miners. Forecasts of iron ore traffic in 1990 .show moderate increases over the more normal traffic levels of the mid-1970’s. 12 Iron ore movement by railroad is determined by the market for steel. American steel production is expected to grow from 136.7 million'tons in 1978 to 150.9 million tons in 1990. Most of this growth will occur after 1982 following a sluggish period in the early 1980’s, a consequence of the 1979-1980 recession. Ore shipments and steel production will decline in the early 1980's and recover more slowly than total steel shipments because of the replacement of older steel furnaces and the conversion to more ore- efficient technologies. Ore consumption per ton of steel produced may decline from 0.85 gross ton'in 1978 to 0.77 gross ton in 1990. This trend represents a shift in the blast furnace charge to materials with .a higher metallic content (e.g., pellets, instead of the lower metal content sinter). In addition, electric furnaces using scrap steel will replace some open—hearth furnaces in the eastern steel-producing region, further dampening growth in iron ore demand. The location of steel—producing plants is also important in determining railroad movements of iron ore. In the EaSt, steel production capacity is divided between water- served facilities in Chicago, Detroit, Cleveland, Buffalo, and Baltimore and inland plants located in eastern Ohio and western and eastern Pennsylvania. While both groups of plants receive shipments of iron ore from mines in the Great Lakes region, the waterfront plants are supplied almost exclusively by ore boats. The inland plants rely heavily on railroad shipments of domestic ore transshipped from Lake Erie ports and railroad shipments of imported ore from eastern ports. (Most Great Lakes traffic involves railroad movement both before and after boat movements.) The Birmingham region, the center of steel production in the South, receives iron ore shipments by railroad and" barge. In the West, steel-producing plants are IoCated, generally, near iron ore mines and rely almost exclusively on railroads for short—haul shipments of ore. Railroads move iron ore within the Duluth region and within the western mining districts; many short-haul movements also occur within the eastern steel—producing regions. In 1978, approximately 92 million tons of iron ore —— nearly 70 percent of total railroad ore shipments — were intraregional movements. Of this intraregional traffic, 59.2 million tons originated and terminated within the Duluth region. These flows represent movements from the Mesabi Range to Duluth for boat loading and subsequent transport to waterfront steel plants on the lakes and to Lake Erie ports for railroad shipment to inland steel plants. An additional 20 million tons moved intraregionally within the Green Bay region. In 1990, Duluth and Green Bay will probably continue to generate most of the iron ore railroad traffic, with 61 million tons and 21 million tons, respectively. Iron Ore Scale: Mllllons ot Net Tons The volume at lratllc is represented by the,wldth ot the red rectangles along the black network llnks. The dlrection oi the trattlc between nodes ls determlned by the placement at the red rectangle. Tratllc from A to B Is shown by the red rectangle on the rlght side at the line as the reader looks ”am A to B. Tralilc from B to A Is shown by the red rectangle on the right slde ot the line as the reader looks Iram B lo A. Federal Railroad Administration, December 1980 ROCHESTER 1990 13 Coal Bituminous coal (STCC 1121), 98.2 percent; lignite (STCC 1122), 1.3 percent; and anthracite (STCC 111), 0.5 percent 900 F 600 — Net Tons (millions) 300 — Source: Data Resources. Inc. V1976 1978 1 990 Railroad Shipments of Coal, Selected Years Coal, the highest volume commodity transported by the railroads, comprised 26 percent of all railroad freight tonnage in 1978. As the Federal Government encourages the substitution of coal for petroleum to reduce U.S. dependence on imported petroleum, coal is expected to show the most dramatic growth of all railroad-hauled commodities in the next 10 years. Furthermore, uncertainties about the price and the availability of worldwide petroleum supplies and the growing concerns about nuclear powerplants increase the potential for additional coal consumption. These uncertainties, however, are responsible for frequent changes in forecasts of coal production. The forecasts in this report are consistent with the updated Energy Information Administration forecasts presented in the National Energy Transporta- tion Study.7 Railroad shipments of coal are expected to more than double between 19788 and 1980 — from 397 million tons to 827 million tons — increasing at a rate of of 6.3 percent per year. This will be substantially greater than the 1.9 percent annual growth rate from 1968 to 1978. By 1990, coal will represent 40 percent of all railroad freight traffic. Three primary types of coal —anthracite, lignite, and bituminous — are produced 14 domestically. Anthracite is very hard, with a high percentage of carbon, a low percentage of moisture and hydrocarbons, and is nearly smokeless when burned. In 1978, the 6 million tons of anthracite produced was less than 1 percent of total US. coal production. Nearly all anthracite is found in eastern Pennsylvania, and most is used locally, primarily for residential and commercial heating. In 1978, under 2 million tons of anthracite was moved by railroad through the port of Philadelphia for shipment to US. military bases in the Federal Republic of Germany. Railroad shipments of lignite are expected to grow from 7.7 million tons in 1978 to 12.7 million tons in 1990. Lignite, a very soft coal. with a low Btu and a very high moisture content, is found predominantly in North Dakota and Texas. It is used primarily by electric utilities and industrial plants in those areas. Softer than anthracite, but harder than lignite, bituminous coal is much more abundant, and its lower cost and greater availability make it the preferred coal for most users. In 1978, approximately 680 million tons of bituminous coal were mined. Electric utilities are the principal users of bituminous coal, accounting for nearly 80 percent of total consumption in 1978; coke plants consumed an additional 12 percent. While virtually any grade of bituminous coal can 3e used as steam coal to fuel the boilers that generate electricity, only certain grades and types are suitable to produce coke. Coking, or metallurgical coal, which must be very low in sulfur, ash, and moisture content, is found principally in Pennsylvania, West Virginia, Kentucky, Virginia, and Alabama and is consumed wherever steel is made. Domestic demand for metallurgical coal is expected to grow from 71 million tons in 1978 to 92 million tons in 1990, a 2.1 percent annual increase. Foreign demand for American metallurgical coal is forecast to grow from 31 million tons in 1978 to 69 million tons in 1990. This coal is exported from the ports of Norfolk, Newport News, Baltimore, and Philadelphia, primarily, to West Germany, France, and Japan. Steam coal use will grow significantly during the 1980’s. Total railroad steam coal traffic originating in the East is expected to increase from 165 million tons to 317 million tons between 1978 and 1990, and traffic originating in the West should expand from 121 million tons to 407 million tons. Western coal production will increase at a rate faster than eastern coal production because western coal has less sulfur, is more plentiful, and, since it can be surface—mined, is cheaper. The trend toward increased use of western coal will continue despite new Environmental Protection Agency (EPA) regulations on coal scrubbing, which tend to make low-sulfur western coal less attractive to users than was the case prior to these regulations. The Revised New Source Performance Standards of the EPA require that all new utility plants and other coal- burning facilities be equipped with scrubbers. Earlier standards required that only high- sulfur coal be scrubbed to meet air quality requirements and, therefore, favored low- sulfur western coal. With the revised, higher standards, eastern plants will probably consume more local coal in lieu of western coal. Nonetheless, demand for western coal is forecast to continue to grow rapidly, especially in western markets. The Gillette and Billings regions, in the coal—rich Powder River Basin, will be the principal sources of coal in 1990, both originating annually more than three times their 1978 volumes. Other important originating regions will be Huntington, Bluefield, Charleston, Grafton, Pittsburgh, St. Louis, and Harlan. Together with Billings and Gillette, they will account for 70 percent of coal production. Since barges are an efficient and low-cost mode of transport, rail-to-barge transfer facilities are being built at St. Louis and other Mississippi River points. Coal originating in the St. Louis region, as well as in the Powder River Basin, will be brought to the transfer facilities for loading on barges destined for utilities in the South. In certain circumstances, coal slurry pipelines may be cost effective for the movement of large volumes of coal. Although three coal slurry pipelines are scheduled to open before 1990, none has cleared all the legal barriers that must be overcome before construction. Consequently, the forecasts do not assume that any new coal slurry pipelines will be operating by 1990. Exports of steam coal, like coal for domestic consumption, are expected to grow in the 1980’s. In 1979, 14.1 million tons were exported primarily to Canada; by 1990, exports of steam coal are expected to grow to 35.9 million tons, most destined for Europe and eastern Asia. Initially, the export steam coal will move through the same facilitiesas the metallurgical coal. As the export market develops and stabilizes, however, new facilities are likely to be built. Because of the number of ports vying for new facilities and the uncertainty about where they will actually be built, the 1990 forecasts have not assumed any new export coal facilities. Total exports of coal —- anthracite, metallurgical, and steam — are expected to rise to 105 million tons in 1990. Other studies have forecast even greater coal exports; they are the subject of an ongoing, more detailed study by the Interagency Coal Export Task Force. 7National Energy Transportation Study, U.S. Departments of Transportation and Energy, 1980. l3Railroad coal traffic in 1978 was unusually low relative to prior years because of a 16—week coal miners’ strike and an 11-week railroad clerks’ strike on the Norfolk and Western Railway. Coal ’ ’ISSD ROCHESTER ' "”’ mm m// iv .. v a.» r“ ‘ EW HAVEN v - NEW VORK ADELPHIA ' ILMINGTON \ ' V HARLESTON V . y '4 ‘k AVAN NAH In ' Wfifi? JACKSONVILLE Scale: Millions oi Not Tom The volume at mm: is ropuuniad by "10 wldih at me rod rocllngln along the black mlwork links. The direction oi line traiilé bclween nodes is determined by the plnccmcnl oi "I. rod reclnngle. Trllilc from A to B I: shown by tin red mingle on in: right side oi the line no the reader looks from A to B. Trafllc ham I to A In shown by ill: red rectangle on "In right aide oi the line as ill. reader looks from 3 lo A. ‘ CORPUS CHRISTI Federal Rlllroad Administration, December 1980 15 Stone, Sand, and Gravel Crushed stone (STCC 142), 56.2 percent; aggregate sand (STCC 14411), 12.5 percent; aggregate gravel (STCC 14412), 12.4 percent; and industrlal sand (STCC 14413), 18.9 percent 120— 80* ”A 5% "E fig 40— 1972 1974 Source: Data Resources, Inc. While demand for the stone, sand, and gravel commodity group rose from 1.6 billion tons in 1964 to 2 billion tons in 1978, total railroad shipments dropped from 160 million tons in 1964 to 85 million tons in 1978 — a decrease of 4.6 percent per year. These shipments are expected to continue to decline at a rate of 2.8 percent per year, to 60 million tons by 1990. The decrease can be attributed, partially, to the efforts by railroads to discourage this unprofitable business. Since the railroad industry is reluctant to invest in new equipment for hauling aggregates, its share has fallen steadily to only 4 percent of the total demand for construction aggregates. 16 1978 1990 Railroad Shlpments of Stone, Sand, and Gravel, Selected Years Typical of this commodity group is crushed stone. Between 1970 and 1978, railroad rates for crushed stone increased 3 percent per year faster than truck rates. Even so, it is still generally unprofitable traffic for railroads, often involving small, irregular, local shipments from stone quarries (often located on little-used branchlines) directly to construction sites. As a result, the movement of crushed stone has shifted to trucks, which are generally more efficient. Although in 1978 only 5 percent was transported by railroad, this amounted to nearly 54 million tons out of a total of over 1 billion tons produced. Railroad shipments of construction sand and gravel equalled 15.4 million tons in 1978 — less than 2 percent of total production. Most sand and gravel movements by truck were short hauls from local quarries to construction sites or to plants for premixing enroute to construction sites. Four percent is hauled by barges serving sources along rivers. Railroad shipments of industrial sand —— rated more highly and hauled longer distances than other commodities in this group — totaled 15.5 million tons in 1978 or nearly one half of production. Industrial sand is used primarily in the manufacture of glass and fiberglass and in molds for metal castings. The railroad share of this market is expected to remain almost constant through 1990, as railroads will continue to compete effectively for this traffic. In 1990, of the 38 million tons of industrial sand that will be produced, the railroad share will be 18 million tons. Railroad transportation for this commodity group consists of a large number of relatively short-haul, low-volume flows. However, the flows from the San Antonio, Taylor regions to Houston will account for 20 percent of total projected 1990 railroad movements of stone, sand, and gravel. These relatively long shipments will occur because of the high cost of quarrying in the Houston area, and the demand of the construction industry there. Stone, Sand, and Gravel 1990 ROCHESTER \I . Ew HAVEN ' > NEW vonK ADELPHIA ILM|NGTON ~ AVANNAH Selle: Millions oi Net Tone JACKSONVILLE o 2 4 c a 10 . ' PENSACOL The volume oi trattic is represented by the width at the red rectangles along the black network llnks. The direction at the tratllc between node: I: determined by the placement of the red rectangle. Traitlc IIom A to B Is shown by the red rectangle on the rlght side at the line as the reader looks from A to B. Tratllc from B to A is shown by the red rectangle on the rlght side of the line as the reader looks Irom B to A. CORPUS CHRISTI Federal Railroad Administration, December 1980 17 Nonmetallic Minerals Phosphate rock (STCC 14714), 70.5 percent; rock salt (STCC 14715), 5.2 percent; sulphur (STCC 14716), 6.7 percent; clay, ceramlc, or refractory minerals (STCC 145), 3.1 percent; gypsum and anhydrlte (STCC 14911), 3.1 percent; asphalt and bitumens (STCC 14913), 2.1 percent; and other nonmetallic minerals, 9.3 percent 80y— Net Tons (millions) 40—- 0 1 972 1974 Source: Data Resources, Inc. 1976 1978 ' 1990 Railroad Shipments of Nonmetallic Minerals, Selected Years Railroad shipments of nonmetallic minerals are forecast to increase from 65 million tons in 1978 to 82 million tons in 1990, an average growth rate of nearly 2 percent per year. Unprocessed phosphate rock, used primarily to produce fertilizers, is the dominant commodity. In 1978, the intrareg- lonal movement of 35 million tons of phosphate rock within the Tampa region represented nearly 55 percent of all railroad shipments of nonmetallic minerals. This phosphate rock, mined principally in Florida’s Bone Valley, is shipped by railroad to the Gulf Coast. From there, it is shipped by barge 18 to New Orleans and other Mississippi River locations for production of fertilizers. Phosphate rock production in Florida is projected to grow at a rate of 4.6 percent per year through 1987. After 1987, a decline of 4.9 percent per year is forecast, as mining firms exhaust readily available deposits. Railroad shipments of phosphate rock in the South will follow this production pattern, rising 3.3 percent per year to 52 million tons in 1987 before they drop to 47 million tons in 1990. In the West, the largest shipments of phosphate rock by railroad are those within the Pocatello region (moving from mines to fertilizer production plants) and those from Pocatello to Canada via Spokane. Although western phosphate rock production —— primarily from the Pocatello region ~—— is forecast to grow at a more modest pace than southern phosphate rock production, there is no threat of western mine depletion in this decade. Western phosphate rock production is projected to grow from 5.6 million tons in 1978 to 6.7 million tons in 1990, an average rise of 1.5 percent per year. From 1978 to 1990, railroad shipments of western phosphate rock are forecast to grow more slowly than production — only 0.3 percent per year — because shipments were unusually large in 1978. Western shipments fluctuate from year to year because the phosphate rock often freezes in the winter, creating handling problems. Over the forecast period, 1978-1990, railroads will handle 82 percent of western phosphate rock production, or 5.5 million tons by 1990. Sulfur, the second largest nonmetallic mineral shipped by railroad, is produced either by mining (“Frasch” sulfur—named for the inventor of the process) or by recovery from petroleum and natural gas during refining and processing (recovered sulfur). The transportation of sulfur varies according to the method of production and location. Railroads carry both types, although the percentage of Frasch sulfur is lower because the major mines, located in Louisiana, use barges. Most sulfur is shipped to chemical plants where it is converted into sulfuric acid and used in the manufacture of various chemical polymers. Because recovered sulfur is a nondiscre- tionary byproduct of refining and gas treatment, regional production is determined by the location of petroleum refineries and the demand for fuel. Recovered sulfur is expected to grow 2.7 percent per year between 1978 and 1990. On the other hand, Frasch production is expected to decline 0.5 percent per year between 1978 and 1990, as the more easily mined deposits are exhausted and more recovered sulfur comes on the market. Total sulfur production (Frasch and recovered) is expected to increase 1.1 percent per year between 1978 and 1990. Because of the decline in Frasch production and the increase in recovered sulfur production, railroad shipments are expected to grow 2.6 percent per year, over twice as fast as total production growth, and are expected to be 7 million tons in 1990. The primary originatingregions of sulfur are El Paso, San Antonio, and Lubbock. Salt has a variety of end uses, including chemical production and highway deicing. Some uses, such as chlorine and caustic soda production, have increased, while others, such as synthetic soda ash production, have dropped sharply. Overall, the total demand is almost unchanged since 1970. Salt production is, therefore, projected to remain constant, at approximately 47.5 million tons through 1990. Railroad shipments of rock salt are concentrated in the East, originating primarily in the Rochester region. The leading salt- producing States of Texas and Louisiana ship almost all their rock salt by barge and truck. Rock salt production in the South is declining as some salt mines in Louisiana are being converted to oil storage use. Productivity from other southern mines is decreasing also, because these mines are nearing the end of their productive lives, and stringent safety standards are being enforced. To compensate for the decrease in southern rock salt production, New York and other eastern mines are increasing their output. Between 1964 and 1976, eastern railroad shipments of salt grew from 870,000 tons to 2.9 million tons. In 1978, shipments on eastern railroads fell more than 900,000 tons because of a railroad equipment shortage and strong competition from the trucking industry. Eastern railroad shipments of rock salt in 1990 are projected to remain virtually constant at 2.9 million tons as the increasing production will be offset by the declining railroad share. Nonmetallic Minerals Scale: Millions ot Net Tone The volume cl trltllc ll represented by the width at the red rectangles along the black network llnkl. The direction at the traltlc between node: I; determined by the placement at the red rectangle. Trettlc‘ Irom A to B Is shown by the red rectangle on the right side at the line a: the reader looks from A'to B. Treltlc from B to A I: ehown by the red rectangle on the IIth side at the line as the reader looks from B to A. ,-_ / Federal Railroad Administration, December 1980 CORPUS CHRISTI 199C) 19 Gr‘ain Mill Products Flour (STCCs 2041, 22045), 33.7 percent; prepared feeds (STCC 20421), 25.8 percent; soybean meal and flour (STCC 20923), 19.1 percent; corn starch and syrup (STCC 2046), 12.1 percent; cereal preparations (STCC 2043), 4.3 percent; and milled rice (STCC 2044), 5.0 percent 80 Net Tons (millions) 40 1972 1974 Source: Data Resources, Inc. From 1967 to 1976, grain mill products, one of the more stable railroad commodity groups, has fluctuated in the narrow range between 47 million tons to 50 million tons of railroad traffic, and this trend is forecast to continue. Railroad movement of grain mill products is expected to grow to 52.7 million tons by 1990, an average annual growth rate of only 0.3 percent from 1978 to 1990. By 1990, grain mill products will comprise 2.5 percent of total railroad traffic. Even though the grain mill products group will continue to show stability, there will be substantial fluctuations in the 20 1976 1978 1990 Railroad Shipments of Grain Mill Products, Selected Years subgroups. While railroad shipments of soybean meal are expected to grow 37 percent, from 11.7 million tons in 1978 to 16.0 million tons in 1990, total shipments of other grain mill products are expected to decline by 6.0 percent, from 39.1 million tons in 1978 to 36.7 million tons in 1990. Since grain mill production occurs primarily in the areaswhere the grain is grown, significant volumes of grain mill products originate in the Midwest. Springfield (|||.), Kansas City, Cedar Rapids, and Minneapolis—St. Paul will continue to be the principal regions originating railroad shipments of grain mill products. St. Louis and Chicago, the major terminating regions, are expected to terminate 5.1 million tons and 2.4 million tons, respectively, in 1990. Much of this traffic will be transshipped by barge to southern Mississippi River locations. The majority of grain mill products shipments — especially flour, cereal, and corn syrup —- are destined for end—use consumption markets. Therefore, the origin-to-destination flows of milled grain are relatively small but very diverse. The quantities of production and exports of soybean meal are the key determinants of railroad traffic. Soybean meal is produced in conjunction with soybean oil during the soybean—crushing process. Soybean meal, a high—protein feed component, is used both domestically and overseas. With only limited competition from barges, railroads are expected to maintain their share of traffic in the domestic soybean market. Although railroads participate in the . export market, for the last 10 to 15 years most shipments of soybean meal (a growing traffic movement) consisted of short—haul movements by truck to barge-loading points for transshipment to Mississippi River ports. Barges are expected to continue taking the major share of incremental export traffic. Therefore, the growth of railroad shipments of soybean meal will consist mostly of shipments for domestic consumption. With the exception of the relatively large flow of 3.5 million tons (6.6%) of grain mill products from Springfield UN.) to St. Louis (much of which travels beyond this region by barge), no single interregional flow will account for more than 1 percent of the total shipments of this commodity in 1990. Gr‘ain lVlilI Products , ' 199C) Selle: Mllllonl at Not Tone The volume at tralllc I: represented by the wldth ot the red rectangles along the black network Ilnks. The dlrectlon ol the trattlc between nhdee ls determlned by the plecement at the red rectangle. Treltlc from, A to B I: ehown by the red rectangle on the right slde ot the llne u the render looks from A to B. frame from B to A It shown by the red rectangle on the rightslde oJAhe Ilne es the reader look: [mm B to A. ‘ CORPUS CHRISTI Federal Rallroad Admlnlstratlon, December 1980 21 Food Products Beverages (STCC 208), 25.3 percent; sugar (STCC 206), 15.3 percent; canned and preserved fruits and vegetables (STCC 203), 19.4 percent; meat and dairy products (STCCs 201, 202), 10.7 percent; soybean oil (STCC 20921), 5.7 percent; cottonseed oil or byproducts (STCC 2091), 3.6 percent; other oils and byproducts (STCC 2093), 2.7 percent; and other food products, 17.3 percent 60— 50— “A :0, £5 £3. 40—“ 0 1972 1974 Source: Data Resources, lnc. 1976 1978 Railroad Shipments of Food Products, Selected Years Railroad shipments of food products are expected to decline from 52.1 million tons in 1978 to 48.8 million tons in 1990. The major commodities within the food products group have distinct handling requirements, serve diverse markets, and vary considerably in their transportation needs. These disparities are reflected by the differing amounts of railroad traffic for the various food subgroups. There have been major gains in the market share of beer and substantial market share. losses in other finished foods (e.g., dairy products, meats, canned goods). Because of these differences, food traffic forecasts are 22 comprised of four subgroups: beverages, sugar, canned and preserved fruits and vegetables, and other food products. National production measurements, as well as regional market share factors, have been used to forecast the movement of food traffic by railroad. Derived from historical trends, the market share factors are assumed to continue throughout the 1980’s. Food consumption has been forecast by projecting consumer expenditures for food, population growth, per capita personal income, and other indicators of demand. The food industry grew 3.3 percent per year from 1964 to 1978, while railroad shipments declined 1.9 percent per year during the 1970’s. The decreases were largely the result of market share losses by railroads to competing motor carriers. For the 1980’s, the food industry is expected to grow at a slower rate than during the prior two decades (2.8 percent per year), reflecting a slower growth in real per capita expenditures on food, as well as a slackening of overall growth in the economy. From 1978 to 1990, the decline of railroad food traffic will moderate to 0.6 percent per year because perishable traffic, which is least desirable for railroads, has already been relinquished, and higher fuel prices will make truck shipments relatively more expensive than railroad shipments. The beverage industry has grown at a rate of 5.6 percent per year from 1964 to 1978; beer sales grew 3.8 percent per year over that period. Beverage traffic on railroads grew 1 percent per year; beer traffic grew 5.3 percent. From 1978 to 1990, growth in beverage production is expected to moderate, with mixed results for the railroads. The major breweries will be among the chief originators of railroad traffic of food products in 1990, and beer traffic is expected to continue to increase at a rate of 2.2 percent per year. Traffic of other beverages is expected to grow 1.2 percent per year over the decade. This traffic will decline in the East as that region will earn a lower share of total US. personal income, while the South and West will show traffic increases. Growth in sugar refining has been slower than growth in the rest of the food industry, with this pattern expected to continue during the 1980’s. If the substitution of corn syrup and other sweeteners occurs, industry growth could be even more sluggish. Railroad traffic has declined, both in tonnage (a 1.5% per year decrease between 1964 and 1978) and market share, with market share losses expected to continue. Consequently, railroad shipments of sugar are forecast to fall 2.0 percent per year through 1990. The frozen and preserved food subgroup has shown a relatively strong growth trend, reflecting high consumer demand for convenience foods. The railroad share of this traffic, however, has declined 1 percent per year during the 1970’s because the trucking industry dominated, movements to local distribution centers and retail outlets. These trends will continue in the 1980’s; industry growth will average 4.5 percent per year; and railroad traffic will decline 1.1 percent per year. Because of demographic shifts, traffic losses in the East will be highest; losses in the South and the West will be less pronounced. From 1964 to 1978, railroad traffic of other food products declined 2.4 percent. per year. This decline is expected to decrease to 1.7 percent per year in the 1980’s, but the trend is more a reflection of traffic that has already been lost, particularly in the East, rather than a strengthening of rail performance. Forecasts for food and kindred products traffic are uncertain in light of reduced railroad regulation. Railroad rates for fresh fruits and vegetables have already been deregulated, and it is likely that other food commodity rates will be deregulated soon. This may lead to some significant increases in the railroad market share. Such gains would be more likely to occur in piggyback than in carload traffic, and would then appear in the “all other" commodity group. 199C) ’ Food Products Forest Products Pulpwood logs (STCC 24114), 48.1 percent; wood chips (STCC 24115), 43.6 percent; and saw logs (STCC 24111), 8.3 percent 100— 80— “A c“ 3.5 33. 60— ° 1972 1974 Source: Data Resources. Inc. 1976 1978 Railroad Shipments of Forest Products, Selected Years Railroad shipments of primary forest products are expected to grow from 75.0 million tons in 1978 to 94.7 million tons in 1990 — an average growth rate of 2 percent per year. In 1978, originations of pulpwood logs, wood chips, and saw logs were 34.5 million tons, 33.6 million tons, and 5.4 million tons, respectively. Railroads dominate the transportation of pulpwood logs and wood chips while trucks dominate the saw log market. The roles of railroads and trucks in moving these commodities are determined largely by the type of mill served. Pulp mills must be sizeable to attain economies of scale. To operate efficiently, a pulp mill must have a resource base with a radius of 150 to 200 24 miles for an adequate supply of raw materials. The distances involved and the necessity that pulpwood logs be cut to standard lengths (5 to 8 feet, depending on the region) give railroads an advantage in the movement of this commodity. Nevertheless, railroads moved less than one-half of all pulpwood logs and wood chips shipped to mills in 1978, because the cost of moving pulpwood by railroad has risen even faster than the cost by truck. Trucks have an advantage over railroads in the transportation of saw logs as compared with pulpwood logs and wood chips. Sawmills rely predominantly on truck delivery because of the large size of saw logs (both diameter and length) and the smaller quantities required for efficient operations. Thus, the resource base may extend only about 50 miles, making trucks more efficient. Beyond this range, it is more cost effective to build another sawmill than to broaden the resource base. Although total railroad shipments of pulpwood logs and wood chips are expected to increase between 1978 and 1990, railroads are likely to lose some of their market share. There is a trend toward constructing sawmills next to pulp and paper mills, especially in the South. Chips produced as byproducts in these adjoining sawmills need not be shipped to their consumption sites —— the pulp and paper mills. The forecast for forest products traffic assumes no new railroad marketing initiatives or service improvements. With an environment of less regulation, however, railroads may choose to compete for this traffic, although for several years they shunned it. Over the past several years, the sources of forest products have been changing, as the West (especially the Pacific Northwest) has become a shrinking timber base. Production of forest products will continue to shift to the South as private forests there are exploited to meet unfilled demand. Thus, western railroads face slow or negative growth in forest products traffic, while southern railroads will have new market opportunities. imports of forest products from Canada continue to play an ever increasing role in supplementing U.S. production. in this report, Canadian shipments are depicted as originating in the region bordering Canada at the point of entry into the United States. In 1978, railroads in the South originated 61.2 percent of total US. originations of forest products, compared to 34.1 percent for those in the West and 4.6 percent for those in the East. By 1990, the southern share is expected to increase to 64 percent, while the western share will decline to 33 percent and the eastern share to 2.8 percent. In 1990, nine regions are expected to each originate more than ’3 million tons of forest products traffic. Only two regions — Bangor (5.1 million tons) and Seattle (4.8 million tons) —— are not in the South. The Jackson and Macon regions are expected to generate the greatest forest product tonnages, 7.8 million tons and 6.2 million tons, respectively. The Jacksonville and Savannah regions — both major producers of pulp and paper products and the leading receivers of railroad shipments of forest products — are expected to terminate 8.5 million tons and 7.2 million tons, respectively, in 1990. Other principal terminating regions are Portland (6.2 million tons) and Seattle (5.7 million tons) in the West, and Bangor (5.1 million tons) in the East. ‘ Forest Products ’IBSD ROCHESTER aw HAVEN ' NEW‘YORK ’ ADELPHIA CHARLESTON ' VANNAH Scale: Mllllona at Net Tone JACKSONVILLE The volume at tratllc Is represented by the width at the red rectangles along the black network Ilnks. The dlrectlon ot the traltlc between nodes Is determlned by the placement of the red rectangle. Tratllc from /A to B is shown by the red rectangle on the right slde ol the llne as the reader looks from A to B. Tvaltlc from B to A is shown by the red rectangle on the rlghl slde ol the Ilne as the reader looks from B to A. Federal Railroad Administration, December 1980 25 Lumber‘ and Wood Products Lumber and dimension stock (STCC 242), 54.7 percent; millwork, veneer, and plywood (STCC 243), 28.5 percent; particle board (STCC 24996), 11.2 percent; and other wood products, 5.6 percent 40— 35 Net Tons (millions) 30 0 1972 1974 Source: Data Resources, Inc. 197s ' 1978 Railroad Shipments of Lumber and Wood Products, Selected Years Railroad shipments of lumber and wood products are expected to decline by 11 percent between 1978 and 1990 -— from 37.8 million tons to 33.6 million tons. These declines represent a continuation of the changes that have occurred in the lumber industry over the past decade. Production of lumber and wood products have fallen with the reduced supply of mature western trees. Southern production and Canadian imports are increasing, but do not offset entirely the decline in western production. As a result, there will be a net decline in railroad shipments of lumber and wood products. The railroad share of lumber and wood products traffic is also decreasing. With the industry shift from the use of western timber 26 to southern logs, there has also been a shift towards shorter, local moves. This trend will continue through the 1980’s, but the major effects have already occurred. Although the West will remain the leading supplier of lumber and wood products through 1990, railroad traffic from this area will decrease from 20.4 million tons in 1978 to 16.6 million tons in 1990. The South is expected to increase its lumber and plywood production by 18 percent between 1978 and 1990 —— from 12.2 million tons to 14.4 million tons. Total railroad shipments of lumber and wood products from the South are predicted to rise from 6.4 million tons in 1978 to 8.0 million tons in 1990. The East has historically been a relatively small producer of lumber and wood products; its wood going instead to the pulp and paper industries. Eastern railroad shipments of lumber and wood products have steadily shrunk as railroads have lost a share of the market to trucks; shipments fell from 1.9 million tons in 1972 to 0.8 million tons in 1978. This decline is expected to continue through 1990, at a rate of 2 percent per year, with eastern railroad shipments falling to 600,000 tons in 1990. Imports from Canada captured approxi- mately 25 percent of the US. market for lumber in 1978 — 10.5 million of the 41.5 million tons. A steady growth is forecast for Canadian lumber, 3.5 percent per year to 1985, and 1.2 percent per year thereafter to 1990. Canadian shipments by railroad are projected to increase at similar rates during the decade. Although truckers with relatively low backhaul rates have made small gains in this market, the competitive Canadian railroads originating the traffic are likely to maintain their dominance over trucks throughout the 1980’s. Railroad shipments of lumber from Canada are forecast to grow from 7.8 million tons in 1978 to 8.7 million tons in 1990. In this report, railroad shipments of Canadian lumber and wood products are shown as originating in the region that receives the traffic at the Canadian—US. border. Thus, some railroad shipment originations attributed to the regions of Seattle, Spokane, Grand Forks, and Duluth actually originate in Canada. The regions of Eugene (4.6 million tons), Seattle (3.2 million tons), and Sacramento (2.1 million tons) are expected to be the largest originators of lumber and wood products in 1990. Other major originating regions in 1990 will be Spokane (1.3 million tons), Duluth (1.6 million tons), Grand Forks (1.5 million tons), and Jackson (1.3 million tons), the only southern region that is expected to originate more than 1 million tons of lumber and wood products. The Los Angeles region is the single largest terminator of this commodity. In 1990, railroad terminations in Los Angeles are estimated to reach 2.5 million tons, with some of this traffic destined for export. All other regions are forecast to terminate less than 1 million tons of lumber and wood products in 1990. Lumber“ and Wood Products 1990 venture“ ..... ROCHESTER j ., , .. ACKSONVILLE 0 2 4 6 B The volume ol lrelllc I: represented by the wldth ol the red rectangles along the black network llnke. The dlrectton ol the trellis between nodes ls determined by the placement ol the red rectangle. Tretllc Irom A to B Is shown by the red rectengle on the right elde ot the Itne u the reader Iooke from A to B. Trelllc Irom D to Ale ehown by the red rectangle on the right elde ot the llne ee the render looks from B to A. CORPUS CHRISTI Federal Railroad Admlnlstratlon, December 1980 27 Pulp and Paper“ Pulp and pulpmlll products (STCC 261), 15.1 percent; paper (STCC 262), 26.7 percent; paperboard, pulpboard, and fiberboard (STCC 263), 38.8 percent; corregated paper products (STCC 264); 11.9 percent; building paper and board (STCC 266), 4.8 percent; and containers and boxes (STCC 265),2.7 percent 80— 65 Net Tons (millions) 50 0 1 972 1974 Source: Data Resources, Inc. 1976 1978 I I 199 Railroad Shipments of Pulp and Paper, Selected Years Total railroad shipments of pulp and paper products are expected to increase 35 percent between 1978 and 1990 — from 57.9 million tons in 1978 to 78.3 million tons in 1990. The pulp and paper industry ls international in scope: Canada supplies over 60 percent of the newsprint consumed today in the United States. Although railroads now play a large role in shipment of the Canadian newsprint, the traffic from Canada is expected to grow at a slower rate in the future. The Canadian share of the U.S. newsprint market is forecast to fall to 50 percent in the 1980’s. 28 Thus, the railroads’ share of newsprint shipments is expected to decline from 55 percent in 1978 to 53 percent in 1990. Since pulp is the intermediate material that goes into the making of paper and related products, the breadth of demand is limited. Most pulp is consumed at or near its production site; very little is transported over the longer distances (at which railroads are more efficient carriers than trucks). In 1978, only 7.3 million tons — 14.5 percent of the 50.5 million tons of pulp produced in the United States — were shipped by railroad. Railroads are expected to maintain this share of pulp traffic in 1990, carrying 9.9 million tons of the 67.7 million tons forecast to be produced. Paper and paperboard products, unlike pulp, are produced, generally, in a limited number of areas and shipped to many destinations. For example, although most of the unbleached kraft paperboard is produced in the South (64% in 1978), it is consumed in all regions and requires extensive distribution networks. This distribution system generally favors railroads. In 1978, railroads carried nearly 80 percent of total paperboard production and are expected to increase their share to 83 percent by 1990. Increasing truck costs relative to railroad costs and a strategy among railroads that stresses growth in the medium- and long-haul bulk paperboard commodities will result in a moderate gain for railroads in the market share of paperboard products. In spite of substantial truck competition, railroads have maintained a 60 percent share of the paper market, excluding newsprint. Although railroads lost 5 to 8 percentage points of this share (attributable to a large increase in railroad rates during 1975), overall modal shares have remained stable in recent years. In the 1980’s, construction of new paper mills in the South may favor trucks slightly, but railroads are expected to retain their market share. Since 1965, railroads have shown a steady loss of domestic newsprint traffic to trucks mainly because of the shift in newsprint production from the West to the South. The new southern mills have access to a more plentiful supply of raw materials, which, in turn, will lead to an expansion of newsprint production in the 1980’s. Because many of these mills were built without railroad access, trucks have been able to increase their share of newsprint traffic in the South. ‘ Pulp and Paper ‘ 1990 RRRRRRRRRR , . \ ...... EEEEEEE , V IIIIIIIII AAAAAAAA PENSA """""""""" SSSSSSSSSS Federal Railroad Adminisiratlon, December 1980 29 Chemicals Industrial chemicals (STCC 281), 61.9 percent; agricultural chemicals (STCC 287), 14.9 percent; plastic materials and synthetic resins (STCC 282), 12.8 percent; common salt (STCC 28991), 2.9 percent; and other chemicals and products, 7.5 percent 160 130 Net Tons (millions) 100 1972 1974 Source: Data Resources, Inc. 1976 ' 1918 Railroad Shipments of Chemicals, Selected Years Total railroad shipments of chemicals are expected to increase from 116 million tons in 1978 to 158 million tons in 1990. In general, chemicals traffic increases at a slightly lower rate than production. Stringent environmental regulations and saturated markets have resulted in declining production at eastern chemical plants served by railroads and have caused many manufacturers to relocate their plants to port cities in the South. These relocations, as well as new plant construction, have led to substantial growth in the chemical industry near the cities along the Gulf of Mexico. These cities are expected to remain the center of US. chemical production. 30 The chemical industry is highly competitive, with relatively stable markets and predictable product line growth. Controlled petroleum prices have permitted U.S. petrochemical producers to purchase feedstocks at prices well below the world market prices and to sell chemicals in the world market at competitive prices. As a result, chemical exports have grown. With the decontrol of domestic oil prices, the cost of domestically produced chemicals will increase relative to chemicals produced elsewhere. Consequently, the export market for US.— produced chemicals will decline as other countries increase their petrochemical sales. Industrial chemical production is expected to grow 3.3 percent per year from 1978 to 1990. This growth will be accompanied by wide fluctuations in production among regions. The proportion of chemicals produced in the East will drop in response to higher cost of pollution controls for older plants, higher labor costs, and relocation of producers to the South. Reflecting this decline, industrial chemical traffic originating in the East is expected to decrease 1.0 percent per year from 1978 to 1990. On the other hand, chemical traffic originating in the South is expected to increase 1.8 percent per year, and in the West, 4.4 percent. By 1990, the share of industrial chemicals produced in the West is expected to be nearly 70 percent of domestic production. Industrial chemical consumption shows the same regional pattern. Chemical markets in the East are relatively mature and will generate little new demand. Chemical traffic terminations in the East are expected to grow only 0.2 percent per year from 1978 to 1990. Terminations in the South and West, however, are expected to grow 3.2 percent and 3.8 percent per year, respectively. The agricultural chemical market differs from the market for industrial chemicals. Fertilizers are made from processed phosphate rock in Florida, North Carolina, and Idaho and from potash imported from Canada or mined in the western United States. Consumption takes place in all the agricultural regions. While US. exports of agricultural chemicals have increased, the export market will decline in the 1980’s as feedstock price increases narrow the US. price advantage in world markets and as more phosphates are mined in Third World countries. Also expected to affect the decrease of railroad traffic in agricultural chemicals is the highly seasonal movement, both long haul from production sites to regional distribution centers and short haul from distribution centers to farmers. Many railroads do not seek participation in unprofitable short-haul movements, preferring to leave this traffic to trucks. To facilitate fertilizer application, the agricultural industry has increased its use of fertilizer compounds with greater nutrient content per ton, which reduces tonnage and transportation costs. As a result, agricultural chemical originations are expected to decline at the rate of 5.2 percent per year in the East and 0.3 percent per year in the West. In the South, where nearly one—half of all agricultural chemical production occurs, originations will increase 1.1 percent per year. Chemicals ' 1990 aaaaaaaaa ‘ K . ‘ 3X EEEEEEE ,. MMMMMMM IIIIIIIII I; CCCCCCCCCC / JACKSON ,1 PENSACO ’ "1’ 3 """""""" eeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee g MMMMM Federal Railroad Administration, December 1980 Cement, Clay, and Glass Hydraulic cement (STCC 324), 27.8 percent; structural clay products (STCC 325), 10.2 percent; concrete, gypsum, and plaster products (STCC 327), 12 percent; processed clay and kaolin (STCC 3295), 44.9 percent; and other cement, clay, and glass products, 5.1 percent 80— 60— “A 5% I'= £5 40— 0 1 972 1974 Source: Data Resources, Inc. 1976 197s 7' Railroad Shipments of Stone, Clay, and Glass, Selected Years Total railroad shipments of cement, clay, and glass products are expected to decline from 64.6 million tons in 1978 to 57.4 million tons in 1990. Although over the past decade, railroad shipments have declined as a result of market share losses to trucks, the rate of future decline is expected to be lower. As a consequence of its link to the construction industry, cement production grew from 71.7 million tons to 87.6 million tons between 1964 and 1978, an average of 1.5 percent per year. Over the same period, railroad shipments of cement fell 3.0 percent per year —— from 26.6 million tons to 17.3 million tons. The pattern of cement shipments 32 can be divided into three separate movements: (1) from the processing plant to the distribution terminal; (2) from the distribution terminal to the consumer; and (3) from the plant to the consumer. The first movement is long-haul with relatively few origins and destinations. While barges also compete for plant-to-terminal movements, this traffic presents the best opportunity for railroads to maintain their market share. The latter two movements are short-haul, local deliveries to many destinations — best performed by trucks. Many railroads discourage these unprofitable short—haul moves'and have chosen not to make investments in new cement hoppers as the old cars wear out. As a result, the cement hopper fleet is shrinking and aging in relation to the rest of the freight car fleet. Even though some shippers lease cement hopper cars from private sources, the numbers are insufficient to reverse the decline in available cars. This phenomenon is expected to continue during the 1980’s. Although the demand for cement is expected to grow from 87.6 million tons in 1978 to 108.3 million tons in 1990, railroad shipments are projected to fall from 17.3 million tons to 14.0 million tons. The strongest decline in traffic is likely to be in the East, where new construction is expected to lag because of demographic shifts. Also, urban renewal is expected to take the place of much new construction. Only the South will show positive gains, reflecting the migration of people and businesses to the Sunbelt. Clay, kaolin, and other nonmetallic minerals (ground or otherwise processed) make up a large portion of this commodity group. Nearly 30 million tons of these products were shipped by railroad in 1978. They are used primarily in producing paper and making porcelain, fiberglass, rubber, and some medicines. In 1978 the Macon region shipped 4.8 million tons of processed clay and kaolin to nationwide destinations. By 1990, these shipments are expected to decline slightly to 4.5 million tons, and trucks will gain a larger share of the market. The two major receiving regions are Savannah and Bangor, both large paper-producing areas. As with cement, structural clay products, including building tiles and bricks, are closely tied to the construction industry. In 1978, approximately 6 million tons of these products were shipped by railroads. In the future, however, the railroads in the East and the West will be confronted by competition from trucks. Only in the South will the railroads expect to keep their share of the market. Cement, Clay, and Glass I ’ISBD RRRRRRRRR ,:._,M..,,..M—.~-~-- * ‘ . ' ......... ....... IIIIIIIII bbbbbbbb the black nelwork llnkl. The dlrecllon oi Ihe tnfllc between nodes Is determlned by V ' ' . _.’ - . » _i ccccccccccccc Federal Railroad Admlnlslration. December 1980 Primary Metal Products Steel works or rolling mill products (STCC 331), 79.8 percent; iron or steel castings (STCC 332), 3.8 percent; nonferrous metal primary smelter products (STCC 333), 11.1 percent; nonferrous metal basic shapes (STCC 335), 4.3 percent; and other primary metal products, 1.0 percent 80— 65— “’7: 55 P: as 50— 0 1972 1974 Source: Data Resources, Inc. 1976 1978 Railroad Shlpments of Primary Metal Products, Selected Years The demand for steel mill products is very sensitive to fluctuations in the economy. Steel production had reached 150 million tons in 1973 when the economy was prosperous, but dropped to 117 million tons during the 1975 recession. Recovery has been slow; in 1978, steel production was 137 million tons. The 1979-1980 recession has dampened growth again, but less severely than in 1975. Steel production is expected to rise slowly until the mid-1980’s, when improved economic conditions and a stronger demand are anticipated. Production is forecast to grow at an 0.8 percent annual rate, from 137 million tons in 1978 to 151 million tons in 1990. 34 Finished steel products comprise the largest portion of primary metal products’ railroad traffic. These products include iron and steel castings and forgings, steel plates, sheets, bars, pipes, balls, and other finished goods. Railroad shipments of finished steel products are expected to grow from 31.6 million tons to 41.9 million tons between 1978 and 1990, reversing the declining trend experienced since the mid-1960’s. Rising fuel prices should help railroads become more competitive with trucks. Virtually all the finished steel products hauled by railroad originate from US. mills. Imported steel products are transported mainly by barge or truck to user sites. The import share of finished steel products’ consumption is expected to grow from 15 percent in 1979 to 20’ percent in 1990. Ingot and semifinished steel move in large lots within and between plants owned by the same firm. Railroads handle only 15 percent of total ingot production; the remaining 85 percent is consumed in the plant where it is produced. Projections are that railroad shipments of ingots and semifinished products will grow from 14.7 million tons in 1978 to 17.9 million tons by 1990. The major steel-producing centers are located in the Northeast. Over 50 percent of railroad shipments of semifinished and finished steel products originate from the Chicago, Pittsburgh, Cleveland, and Youngstown regions. Production of nonferrous metals — primarily aluminum and copper — like that of steel, rises and falls with the economy. Since the production of aluminum is very energy intensive, it has been affected by rising energy costs, and some producers have moved their refining plants to Canada, where energy costs are lower. Also, the higher costs of aluminum products have prompted users to seek substitutes. Principal originating regions for railroad shipments of aluminum products are Portland, Evansville, Sheffield, and Seattle; some imports enter the United States via Portland and Seattle. Railroad shipments of aluminum products are expected to increase from 5 million tons in 1978 to nearly 6 million tons in 1990. Approximately one-half of all US. copper is mined in Arizona, but significant amounts come from Utah, New Mexico, Montana, Michigan, and Nevada. Principal terminating regions for copper products are El Paso, Amarillo, Chicago, Fort Wayne, and Atlanta. Railroad shipments of copper products are expected to increase from 2.6 million tons in 1978 to 3 million tons in 1990. Traffic movements of other primary metals, including tungsten, chromium, and various additional metals important to steel manufacturing, consist of small shipments concentrated in the eastern steel-producing regions. These shipments are forecast to decline from 7 million tons in 1978 to 6.9 million tons in 1990. Primary Metal Products / ‘ 199C) OOOOOOOO ,\ NNNNNNNNNN i :::: CCCCCCCCCC PENSACOL g: 1 ‘ CCCCCCCCCCCCC 1,: ’ MMMMM Federal Railroad Administration, December 1980 Transportation Equipment Motor vehicles (STCC 3711), 37.5 percent; motor vehicle parts and accessories (STCC 3714), 53.5 percent; railroad equipment (STCC 374), 8.1 percent; and other transportation equipment, 1.1 percent 50r 40— “A :0. 3:9 £13. 30-— 0 1974 Source: Data Resources, Inc. 1976 1978 Railroad Shlpments of Transportation Equipment, Selected Years Between 1978 and 1990, railroad shipments of transportation equipment are expected to rise from 32.7 million tons to 43.5 million tons, an annual rate of almost 2.4 percent. Major changes predicted in the motor vehicle industry during the 1980’s are: (1) the consolidation of existing production facilities; (2) the stabilization of the import market; and (3) a maturation of the market in North America. The motor vehicle market is expected to rise slowly in the 1980’s as consumers will continue to own automobiles for longer periods. Sales are expected to increase at a rate of 2.5 percent from 1978 to 1985 and at a slightly slower rate for the 36 second half of the 1980’s. Although below the 3.2 percent average growth rate of the last decade, this growth rate represents an improvement over the 1.5 percent rate of the past 5 years. Constraints on motor vehicle sales include sluggish growth in disposable income, a decline in the rate of growth of the driving-age population, substantially higher prices for automobiles and fuel, and continued uncertainty of energy availability. Furthermore, as each new automobile will weigh less than the one it replaces, railroad tonnage per automobile produced will be reduced. Automobile imports are presumed to fall from 22 percent in 1978 to 16 percent in 1990, as US. manufacturers strive to fulfill the needs of consumers. Imports will be stabilized and may even decline if foreign producers proceed with plans to build plants in the United States. Such plants, however, would continue to rely heavily on imported parts. Major markets for the sale of imported cars are, and will continue to be, concentrated along the East and West coasts, where relatively short hauls are required from port of entry to final market — an ideal situation for motor carrier transportation. One exception is the transport of Japanese cars from western ports to eastern markets — a long—haul movement that will continue to be dominated by railroads. The demise of the large automobile has resulted in the permanent shutdown of a number of production facilities in the West. Plant conversions and construction of new facilities to produce smaller automobiles are expected to be concentrated in Detroit and adjacent regions in proximity to corporate research and engineering facilities. Such proximity assists in the coordination of planning and production activities during this period of rapid change. As a result of these regional production shifts, the eastern share of total auto production is projected to increase to 70 percent by 1990 from 65 percent in 1978. The Detroit region will remain the leading originator of railroad shipments of automobiles and parts, with over 30 percent of railroad shipments in 1990. Automobile and parts traffic originating in the West is expected to decrease by 5 percent, as most plant conversions are likely to occur in the East. The portion of automobile production in the South is forecast to remain constant through 1990, as labor costs and growing markets combine to make the South attractive to foreign and domestic automobile producers. No changes are predicted for the modal share between railroads and trucks through the next decade. The traditional movement of finished vehicles by railroads to regional staging areas and the subsequent movement by trucks to dealers are likely to continue. Reduction of regulation, especially the introduction of contract rates, should strengthen the ability of railroads to maintain their share of both automobile and auto parts traffic. Production of railroad equipment — the remaining product in this commodity group — will continue to rise. in 1979, 92,000 new freight cars were delivered, and there is a substantial backlog of orders through 1981. As a consequence of the high-growth rate forecast for coal traffic and the continuing shortage of grain cars, predicted orders for grain and coal hoppers and locomotives should rise in the early 1980’s, but will fall to replacement levels after 1985. Transportation Equment . * 199C) ::::: WM¥\\EWHAVEN noonesren . "w-r ..... ‘ NEW‘YOl‘tK k ADEhEfllA ILMINGTON Scale: Mllllone ot Net Ton: PENSACOL The volume 01 trelllc ls represented by the width ot the red rectangles along the black network llnke. The dlrectlon ol the tratllc between node: I: determined by the placement ot the red rectangle. Tramc Irom A to B Is shown by the red rectangle on the right slde ot the llne as the reader looks from A to B. Trattlc from B to A It shown by the red rectangle on the right slde ot the llne as the reader looks Irom 810 A. . CORPUS CHRISTI Federal Railroad Administration, December 1980 37 All Other" Commodities 220— 200— “A a 55 l-= as 180— 0 1972 1974 Source: Data Resources, Inc. 1976 ”18’ Railroad Shipments of All Other Commodities, Selected Years The “all other” group consists of heterogeneous commodities that have not been classified separately because of their small, individual contribution to total railroad traffic. Between 1978 and 1990, this traffic is expected to increase 1 percent per year —— from 182 million tons to 204 million tons. All Other Commodities 1990 Percent 1990- srcc No. Subgroup ("‘"“°" 0' 1973 tons) total ratio 44, 45, 46 TOFC/COFC 62.8 30.8 1.61 40211 Iron and steel scrap 42.5 20.8 1.48 10, except 101 Other metallic ores 25.1 12.3 1.14 299 Coke 22.7 11.1 0.99 29, except 299 Petroleum products 17.9 8.8 0.66 34, 35, 36 Fabricated metals and machinery 11.7 5.7 1.46 21 to 31, 38 Miscellaneous 39, 41, 47 manufactures 5.8 2.8 0.75 All other 15.3 7.5 0.58 Total 203.8 100.0 1.12 38 The trailer on flatcar/container on flatcar (TOFC/COFC) subgroup is composed of freight forwarder traffic, shipper association or ' similar traffic, and miscellaneous mixed shipments. It is expected to account for almost 30 percent of the “all other” commodity group in 1990. Historically, this traffic has grown quickly, because railroads were able to attract new traffic, and' tonnages from other categories were reclassified into TOFC/COFC. From 1964 to 1978, TOFC/ COFC traffic increased 7.1 percent per year. Southern and western TOFC/COFC traffic grew 14 percent and 11.4 percent per year, respectively, while eastern traffic grew 1.6 percent per year. Consumer goods and goods involved in the import-export market, especially the merchandise trade, make up the bulk of traffic in the TOFC/COFC subgroup. As a consequence of the slower economic growth projected for the 1980’s, TOFC/COFC traffic will increase at a rate of only 4 percent per year to 1990. Nonetheless, this is a faster growth rate than that forecast for real U.S. consumption of goods in the 1980’s, which is projected to increase at 2.5 percent per year to 1990. Higher petroleum prices should attract shippers and truckers to railroad TOFC/COFC services. The iron and steel scrap subgroup traffic is expected to increase at a rate of 4 percent per year between 1978 and 1990. This traffic is dependent upon the steel and automobile industries. It typically originates in Cleveland and Detroit, parts of South Carolina and Alabama, parts of Illinois and Iowa, as well as in the iron ore region of northern Minnesota. Pittsburgh is the major terminating region. The petroleum products subgroup, consisting primarily of those products that cannot be shipped by pipeline, such as residual fuel oils and lubricants, and those products that are usually transported by pipeline, such as liquefied gases, gasoline, and middle distillates, is expected to show a decline of 3.5 percent between 1978 and 1990. These commodities move by railroad to or from landlocked locations or sites where the demand is too small to justify a pipeline. The decline will be caused by falling consumption of petroleum, as well as by an expanding pipeline network. Railroad shipments of coke are affected by steel and steel—related industries. Total originations of coke are expected to decline slightly, from 22.9 million tons in 1978 to 22.7 million tons in 1990. Growth is expected to occur in the eastern steel region, with eastern originations growing from 11.7 million tons in 1978 to 12.8 million tons in 1990. Southern originations are expected to fall from 2.4 million tons to 1.1 million tons, a drop of 5.8 percent per year. In the West, coke traffic should decrease 0.2 percent per year, from 8.0 million tons to 7.8 million tons. Railroad traffic in other metallic ores is expected to increase from 22.1 million tons to 25.1 million tons between 1978 and 1990. This growth will be restricted to the West, which originates 75 percent of this traffic; small decreases are expected in the East and South. The three remaining groups — fabricated metals and machinery, miscellaneous manufactures, and all other — are relatively minor and comprise a small percentage of railroad traffic. Fabricated metals and machinery traffic is expected to increase from 8.0 million tons in 1978 to 11.7 million tons in 1990. A decrease in eastern traffic and an increase in southern and western traffic are also forecast. Shipments of miscellaneous manufactures are expected to decrease in all regions — falling from 7.7 million tons in 1978 to 5.8 million tons in 1990. ’ISSD \ All Other" Commodities 40 :lailr‘oad Freight: Tr‘affic — ’I 990 The following map shows the sum of projected bidirectional, interregional flows for all 15 commodity groups in 1990. it shows, in general, areas of heavy traffic, as well as areas where traffic will become lighter, and it shows the relative impOrtance of the various commodity groups. in many locations what appear to be long, continuous flows are, in reality, a series of flows between a large number of origins and destinations. Since the traffic has been routed over the shortest path, actual flows in 1990 will differ because they will still be routed according to corporate ownership of lines. Nonetheless, as fuel costs increase and become an even larger portion of total railroad-operating costs, the circuity of routings should decrease. There are several noteworthy aspects of the map. Coal will be the major commodity handled by railroads, and the coal flows from Wyoming and Montana will be the predominant movements on the network. Even though there will be some population shift to the South and the West, there will still be substantial railroad traffic flows in the North- east and Midwest in 1990. The north-south flows in the Midwest appear to be growing and becoming as large as the east-west flows through that area. Railroad traffic to‘and from New England will continue to be limited as the economy of that area continues to be based primarily on electronics and other light manufactures. Many of the major origin—destination flows go beyond railroad corporate boundaries. Even with mergers, much traffic will be handled by more than one railroad. Literally and figuratively, the network has been defined by the traffic flows. Railroad Freight Traffic PROJECT STAFF Federal Railroad Administration: Steven R. Ditmeyer, Associate Administrator for Research and Development: William R. Fromme, Director, Office of Systems Analysis and Information; Raphael Kedar, Chief, Research and Analysis Division; Jewel Y. Primas; Joanne M. Naughton; Carl J. Fischer; Bernice Tell; Joyce Grant; Bea Kruckow; Martha Marshall Data Resources, Inc.: David L. Anderson, Vice President, Transportation Services; Robert W. Schuessler, Director, Transportation Studies; Ruth S. Carey; Peter Stumpp; Jonathan A. Neuberger; J..P. A. Clark K , .; H V ' ' "‘ r ,1 * 4 '9. . . , I ‘ ‘1. ‘ J , b ) k ,. U L, \ L‘ . N ‘ ‘ r “3 ’ . ‘ , ‘ ‘ ‘ ‘ / . i \ ' V \ A r V 3 , v‘ _ l. V ‘ ~ 1". L I \ X ) l I 1, .~ v» ‘ _ K ‘ ( " ‘ 4, , L \ " ,r\, 1 \ \, s ; ‘ y 7 .