INTEGRATIVE FREIGHT DEMAND MANAGEMENT IN THE NEW YORK CITY METROPOLITAN AREA Cooperative Agreement #DTOS59-07-H-0002 Final Report Submitted to: United States Department of Transportation Prepared by: José Holguín-Veras, Ph.D., P.E. Professor, Rensselaer Polytechnic Institute Kaan Ozbay, Ph.D. Professor, Rutgers University Alain Kornhauser, Ph.D. Chairman, ALK Technologies Anthony Shorris Director, Rudin Center for Transportation Policy and Management Satish Ukkusuri, Ph.D. Associate Professor, Purdue University September 30, 2010 DISCLAIMER STATEMENT The contents of this report reflect the views of the authors who are responsible for the facts and the accuracy of the data presented herein. The contents do not necessarily reflect the official views or policies of the United States Department of Transportation. This report does not constitute a standard, specification or regulation. ACKNOWLEDGEMENTS The project team would like to acknowledge the significant contributions made by the various participants and collaborators in this path breaking project. It is important to start with the project‘s industrial partners: Sysco, Whole Foods Market, Foot Locker, and New Deal Logistics, and the other participants: Just Salad, Gotham Bistro, 63 bites, Midtown Restaurant, Overlook, brgr, Kolache Mama, Pipa Restaurant, Baldor Specialty Foods, Chris‘s Cookies, Gourmet Guru, McMahon‘s Farm, Mossé Beverage Industries, and Peet‘s Coffee. These businesses deserve all the credit, not only for taking proactive steps toward sustainable deliveries, but for the leadership demonstrated by participating in a research project. Their participation in the project brought into the picture the real life challenges and potential of the effort. The project team acknowledges the significant contributions of: Mr. Caesar Singh, USDOT Project Manager, who—through the ups and downs typical of complex projects—provided sound guidance and support, and a steady guiding hand; Ms. Stacey Hodge, Director of Freight Mobility at New York City Department of Transportation (NYCDOT), and Mr. John Karras (NYCDOT) for being such outstanding partners and providing great help, sound criticisms, and support at critical stages; Mr. David Woloch, Deputy Commissioner for External Affairs and Senior Policy Advisor (NYCDOT), and Mr. Steve Weber (NYCDOT) for going the extra mile on behalf of the project. The project would not have achieved the same level of success without the support and enthusiasm of a number of graduate students that made significant contributions to the project. Among them it is important to highlight: • Mr. Matthew A. Brom who took upon his shoulders a huge component of the coordination effort, and did such an outstanding job that he became the embodiment of the project; • Mr. Shri Iyer and Mr. Wilfredo Yushimito who went beyond the call of duty to ensure the highest quality of the traffic modeling effort; • Dr. Michael A. Silas and Mr. Brandon Allen (now former students) who made contributions to the early stages of the project creating the foundations for the project‘s success. The project team wants to thank the United States Department of Transportation‘s Commercial Remote Sensing and Spatial Information Technologies Program at the Research and Innovation Technology Administration (USDOT/RITA) for recognizing the potential of this project and depositing its trust in the project team; and the New York State Department of Transportation for funding the original research project on off-hour deliveries, which opened the door to this important line of research. This project was funded by a grant from the United States Department of Transportation‘ Commercial Remote Sensing and Spatial Information Technologies Program at the Research and Innovation Technology Administration (USDOT/RITA) to the Rensselaer Polytechnic Institute. i Table of Contents 1. EXECUTIVE SUMMARY .................................................................................................... 1 1.1 Project Background ....................................................................................................................... 2 1.2 Methodology ................................................................................................................................. 4 1.3 Results from Base Case Data and Pilot Test ................................................................................. 8 1.4 Economic Impacts of a Full Implementation .............................................................................. 13 1.5 Conclusions and Suggested Next Steps ...................................................................................... 21 2. INTRODUCTION................................................................................................................. 26 2.1 Freight Road Pricing and Comprehensive Carrier-Receiver Policies ......................................... 26 2.2 Previous Experiences with Off-Hour Deliveries ......................................................................... 29 2.3 Project Background ..................................................................................................................... 30 2.4 Funding ....................................................................................................................................... 31 2.5 Goals and Objectives .................................................................................................................. 31 2.6 References ................................................................................................................................... 32 3. INSTITUTIONAL ANALYSIS, COORDINATION, OUTREACH, AND ARRANGEMENTS .............................................................................................................. 34 3.1 Description of Institutional Setting ............................................................................................. 34 3.2 Public Outreach and Institutional Analysis ................................................................................. 35 3.3 Institutional Arrangements Suggested ........................................................................................ 38 3.4 References ................................................................................................................................... 41 4. MARKET ANALYSES ........................................................................................................ 42 4.1 Identification and Quantification of Potential Target Markets ................................................... 42 4.2 Behavioral Analyses: Behavioral Micro-Simulation (BMS) ...................................................... 47 4.3 Behavioral Analyses: Approximation model .............................................................................. 61 4.4 Assessment of Impacts ................................................................................................................ 74 4.5 References ................................................................................................................................... 74 5. PILOT TEST PREPARATIONS ........................................................................................ 76 5.1 Process Followed to Assemble the Companies for the Pilot Test ............................................... 76 5.2 Phases of the Pilot Test ............................................................................................................... 78 5.3 Additional Details of the Pilot Test ............................................................................................. 80 6. PILOT TEST RESULTS: REMOTE SENSING AND OPINION SURVEYS ............... 81 6.1 Sysco Base Case Conditions ....................................................................................................... 81 6.2 Foot Locker/New Deal Logistics Pilot Test ................................................................................ 91 6.3 Sysco Pilot Test ......................................................................................................................... 104 6.4 Whole Foods Market/Baldor Specialty Foods Pilot Test .......................................................... 118 6.5 Overall Results: Analysis of Pooled Data ................................................................................. 130 6.6 Results from the Opinion Surveys from Carriers and Receivers .............................................. 134 7. TRAFFIC SIMULATION.................................................................................................. 144 7.1 Introduction ............................................................................................................................... 144 7.2 Traffic Modeling Tools Evaluated ............................................................................................ 144 7.3 Research Methodology ............................................................................................................. 151 7.4 Network Calibration .................................................................................................................. 161 7.5 Simulation Results for Broad-Based Incentive Policy .............................................................. 188 7.6 Pricing Analysis ........................................................................................................................ 199 7.7 Targeted OHD Program Analysis – Large Traffic Generators ................................................