Conclusions

This study provides a snapshot of truck/rail container intermodal shipping in and out of North Dakota. Cost estimates for an intermodal facility also are presented. The study revealed the benefits of intermodal transportation including: lower overall transportation costs, increased economic productivity and efficiency, reduced congestion and burden on over-stressed highway infrastructure, higher returns from public and private infrastructure investments, reduced energy consumption, and increased safety.

The Commodity Flow Survey conducted by the Commerce Department was analyzed to estimate possible container shipments from North Dakota. The CFS survey displayed that North Dakota shipped an estimated 88 million tons in 1997. The Commodity Flow Survey estimated nationally that the portion of all freight that was truck/rail intermodal was 1.1 percent. If North Dakota's truck/rail intermodal freight potential was the same as the national trend then it could be estimated that North Dakota could have the potential of more than 48,000 TEUs or 20-foot containers for truck/rail intermodal shipments. Factors determining the shipments include the type of freight, distance to an intermodal facility, rates for shipments, lift costs, or total landed costs of shipments. However, because North Dakota's farmers are searching for new ways to market and demand for identity-preserved commodities, larger portions of the agricultural products are being shipped direct from the farmer or marketing company in much smaller lots in container.

Because of North Dakota's natural resource-based economy some adjustments must be made to the CFS numbers. An estimation of potential shipments should eliminate the coal and petroleum-based and other shipments. A large portion of North Dakota shipments are large-volume low-value raw agricultural products. However, there is some evidence that consistently larger portions of raw agricultural commodities are being shipped as identity-preserved product in smaller lots to a final market for processing. Because of this it is now impossible to rule out raw agricultural commodities for truck/rail container intermodal movements. An estimation of potential container movements was made eliminating the previously mentioned commodities. When ruling out this freight, only 53.3 percent of the freight was eligible for truck rail intermodal leaving North Dakota. The next step was to use only the portion of identified freight movements that were shipped adequate distance to best use the economies of rail. Only movements of more than 500 miles were used, which was 17.5 percent. Using this method it was estimated that more than 490,000 tons of freight potentially could move in containers over truck/rail intermodal. The estimated shipments could equate to more than 24,500 containers annually if intermodal loading facilities were available along with acceptable rates and service levels.

Lower transportation costs are realized with container intermodal shipping by using each mode for the portion of the trip for which it is best suited. However, it was discovered that the BNSF published rates for shipping a container out of Dilworth to Tacoma were higher than shipping that same container out of Chicago. It also was discovered that BNSF published rates to Chicago from Dilworth would cost more than trucking the 600-plus miles. With the convenience and time factors associated with trucking or unless a reduced rate could be negotiated with the railroad, trucking would be the less expensive mode.

A survey developed for this study identified containers now being shipped in and out of the state. This survey asked about a companies freight and expected growth. The survey results estimates that 8,999 containers leave the state annually. The Southeast portion of the state represented some 63 percent of all traffic and more than 90 percent of all truck/rail container intermodal traffic. The two main factors contributing to the majority of container traffic originating in the Southeast are location of an intermodal loading facility, and the size and number of businesses located in Fargo and surrounding areas. The Southcentral area of the state identified the next most traffic. There were many more respondents from Southeastern and Southcentral North Dakota than from the rest of the state. Of the 195 respondents, 85 were from Southeastern North Dakota and 28 were from Southcentral North Dakota.

A spreadsheet model was developed to estimate costs associated with starting an intermodal loading facility in North Dakota. The model in this study has many useful features. Costs can be estimated for different equipment configurations and sizes of facilities. The base case estimated and investment of more than $2 million and operating expense at more than $400,000 annually. Sensitivity analysis provided insight into investment decisions where the proportions of annual operating costs increased at a much lower rate than proportionately larger investment costs. This leads to the conclusion that underinvesting may limit capacity of the loading facility limiting potential of handling larger volumes.

The truck/rail container intermodal shipping problem in North Dakota is circular in nature. Problems exist in the form of rates and service. Rates are high and service levels low because there is no volume and there is no volume, because rates are high and service levels are low.

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