Data-Driven Analysis of Short-Distance Freight Rail Transportation Potential: A Case Study of Log Movements in the US Lake Superior Region

As freight rail transportation in the U.S.A. increasingly concentrates on high-volume and longer distance train movements, shippers in rural areas with fragmented freight volumes, lighter line densities, and shorter distances have struggled to maintain the rail share of their shipments. The forest products industry in the mostly rural Lake Superior region is no exception and has seen a transition toward truck transportation for its main raw material, logs. The forest industry has attributed the phenomenon to reduced rail access and increased rail rates, and asked us to use their log shipment and rail operations network data to explore if (1) improved access through shared sidings, re-opened sidings, or both, and (2) rail rate reductions would encourage a modal shift from trucks back to rail. We developed four integer/mixed-integer programming models and several scenarios to research the problem. We concentrated on (1) allowing log consolidation from multiple companies at rail sidings and (2) rail rate reductions with and without volume thresholds. Our results showed that additional flexibility through shared rail sidings, re-opening of unused/closed sidings, or both, has minimal impact on increasing the rail modal share. Rail rate discounts with or without minimum volume thresholds were able to encourage a modal shift, but growing volume through rate reductions may not be attractive from the rail service provider perspective. While the results were not encouraging, our models offer the industry a data-based approach for further investigations, such as the impacts of potential shifts to a shortline cost model, or targeted analysis of specific mills that showed greater promise for a modal shift.