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Leadership in Transportation

~ John L. Craig Consulting, LLC

Leadership in Transportation

Category Archives: Government & Policy

The Mobility Ecosystem: the changing landscape and the need for fresh, new ideas. (Part 4: Economics of Autonomous Vehicles)

06 Saturday Feb 2021

Posted by John L. Craig in Autonomous Vehicles, Business Transformation, Clean Energy, Collaboration, Connected and Autonomous Vehicles (CAV), Dynamic Transportation Management, Economics, Electric Vehicles, Future, Government & Policy, Internet of Things or IoT, Mobility, Mobility as a Service, Mobility Ecosystem, Relationships, Ride Sharing, Safety, Smart Cities, Society, Strategic Planning, Technology, Transportation

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Motorized vehicles began with the advent of electric vehicles as evidenced by the first recorded powered vehicle fatality in the United States in 1899, from an electric taxi (see Part 2 of this series). Technology advances in the intervening 100 plus years have given rise to fully autonomous vehicles which are on the horizon.

The summary (abstract) provided by Clements and Kockelman (2017) is superb and provided in full.

“Connected and fully automated or autonomous vehicles (CAVs) may soon dominate the automotive industry. Once CAVs are sufficiently reliable and affordable, they will penetrate markets and thereby generate economic ripple effects throughout industries. This paper synthesizes and expands on existing analyses of the economic effects of CAVs in the United States across 13 industries and the overall economy. CAVs will soon be central to the automotive industry, with software composing a greater share of vehicle value than previously. The number of vehicles purchased each year may fall because of vehicle sharing, but rising travel distances may increase vehicle sales. The opportunity for heavy-truck drivers to do other work or rest during long drives may lower freight costs and increase capacity. Personal transport may shift toward shared autonomous vehicle fleet use, reducing that of taxis, buses, and other forms of group travel. Fewer collisions and more law-abiding vehicles will lower demand for auto repair, traffic police, medical, insurance, and legal services. CAVs will also lead to new methods for managing travel demand and the repurposing of curbside and off-street parking and will generate major savings from productivity gains during hands-free travel and reduction of pain and suffering costs from crashes. If CAVs eventually capture a large share of the automotive market, they are estimated to have economic impacts of $1.2 trillion or $3,800 per American per year. This paper presents important considerations for CAVs’ overall effects and quantifies those impacts.”

See Table 1 for a summary of the economic impacts of autonomous vehicles.

TABLE 1. Table 1. Summary of economic effects (industry- and economy-wide) (source: Clements, L. M. and Kockelman, K. M., “Economic effects of automated vehicles”, Transportation Research Record: Journal of the Transportation Research Board Volume 2606, Issue 1, January 2017, pages 106-114)

In the columns headed “Dollar Change in Industry” and “Percent Change in Industry,” signs “+” and “-”, respectively, denote a gain and a loss for the industry, whereas the industry-specific total for the dollar change in industry is the sum of their absolute values. Figures in the “$/Capita” columns and provided as overall total represent the sum of net economic benefits enjoyed by consumers.

According to an estimate by Intel Corporation and Strategy Analytics, announced in June 2017, the economic effects of autonomous vehicles will total $7 trillion in 2050 (Figure 6). The dollar amount represents a newly created value or a new ‘passenger economy’, calculated based on the assumption that fully automated Level 5 vehicles will be on the roads by 2050.

Figure 6. Global service revenue generated by autonomous driving in 2050 (US$ millions) (source: Lanctot, R. Strategy Analytics, Accelerating the Future: The Economic Impact of the Emerging Passenger Economy, June 2017)

They also assumed that consumers and businesses will use Mobility-as-a-Service (MaaS) offerings instead of owning cars, and those who had been commuting to work by car will become passengers and spend the commuting time doing something else. Furthermore, transportation companies suffering from a serious labour shortage – such as long-haul truck operators and home delivery service providers – will introduce autonomous driving services, thereby enabling them to change their business models drastically. As such, the estimate reflects a very broad range of potential effects, which also include a wide variety of new commercial services such as onboard dining and retailing (Tomita, 2017).

Advancements continue almost daily. CNN Business (Farland, 2020) reports a self-driving and electric robotaxi from Amazon’s Zoox can travel up to 75 mph and never has to turn around, reversing directions as needed to navigate crowded city streets. In an effort to become a leader in this sector, China is advancing autonomous vehicles quickly, including fully autonomous highways (Metha, 2019; KPMG International, 2019).

There are a myriad of challenges to realize fully automated vehicles and that will require an accumulation of massive quantities of data and learning processes to enable the development of AI capable of coping with navigating the rules, laws, traffic control devices, unique infrastructure, and nuances in each city, county, and state, not to mention internationally. Moreover, developing soft infrastructure, including laws and regulations, and setting rules for liability arising from accidents involving autonomous vehicles will be challenging. Similar to the open ITS architecture established by USDOT, there is a need to establish AV architecture within the U. S., if not internationally.

The advent of fully automated driverless vehicles will have a tremendous impact on our society, bringing fundamental changes to the entire economic and social systems. When fully automated vehicles come into operation, they will become a major means of mobility for the elderly and infirmed in rural areas, in addition to agriculture uses. Urban areas will likely experience the greatest changes, the number of cars owned for personal use will drop, eliminating congestion and the need for parking spaces, and car-sharing services will continue to grow.

Companies are investing enormous money in both electric and autonomous vehicles. For example, Microsoft is investing $2 billion in Cruise, that is majority owned by GM, for a valuation of over $30 billion (Colias, 2021). Apple and Hyundai-Kia are planning to start production of a fully autonomous electric car in 2024 (Lebeau, 2021). It is interesting to note that the smart phone market is about $500 billion annually of which Apple has roughly one-third of that market. By contrast, the mobility market is about $10 trillion annually so Apple would only need two percent of that market to match their iPhone business. It is little wonder the interest in the autonomous and electric vehicle space.

Although some estimates are that it will be at least 2040 before fully autonomous vehicles will be dominant, how should we cope with these forthcoming changes? How should we redesign and change the urban and rural infrastructure and landscapes, land use, and the economic and social systems?

There are test beds spreading around the nation in an effort to bring these and other technologies to market—Contra Costa County California formed a Transportation Authority (CCTA) and developed the leading facility in the nation—GoMentum (https://gomentumstation.net), the University of Michigan established Mcity some years ago (https://mcity.umich.edu), Waymo is planning a test facility in Ohio (Moderation Team, n.d.), and Missouri just formed a Missouri Center for Transportation Innovation (https://mcti.missouri.edu). These test beds, and other efforts, reflect the drive toward an autonomous and safe mobility ecosystem future. What do they have in common? They are built on partnerships and collaboration. Of course, the National Academies Transportation Research Board (https://www.nationalacademies.org/trb/transportation-research-board), U. S. Department of Transportation, state departments of transportation, universities, and the private sector represent the best minds around and continually add to our body of knowledge on all aspects of mobility and transportation.

Autonomous marine, freshwater, river, air, truck, and train vessels

This discussion does not even mention other modes and types of autonomous vehicles such as marine, riverine, freshwater, trucks, trains, planes, drones or unmanned aerial vehicles, aircraft, or space craft. Although they share many of the same challenges as cars and similar vehicles, many of these are likely years away before widespread use. Nonetheless, they are on the horizon. Of course, the elimination/reduction of operators will require careful planning to help people find other jobs in addition to negotiations with unions, changes in business models, and changes in society. The following links provide more information on these topics.

“What Will the Autonomous Ship of the Future Looks Like?” Smithsonian Magazine: https://www.smithsonianmag.com/innovation/what-will-autonomous-ship-future-look-180962236/

“The Marine Corps is eyeing a long-range robot boat that can nail targets with kamikaze drones” Task & Purpose: https://taskandpurpose.com/news/marine-corps-long-range-unmanned-surface-vessel-contract/

“A New Generation of Autonomous Vessels Is Looking to Catch Illegal Fishers” Smithsonian Magazine: https://www.smithsonianmag.com/innovation/new-generation-autonomous-vessels-looking-catch-illegal-fishers-180976336/

“Autonomous Shipping: Trends and Innovators in a Growing Industry” Nasdaq Technology: https://www.nasdaq.com/articles/autonomous-shipping%3A-trends-and-innovators-in-a-growing-industry-2020-02-18

“The Future of Autonomous Aircraft” TechXplore: https://techxplore.com/news/2020-12-future-autonomous-aircraft.html

“Xwing Unveils Autonomous Flight System for Regional Planes” VentureBeat: https://venturebeat.com/2020/08/20/xwing-unveils-autonomous-flight-system-for-regional-planes/

“Rail in on the way to autonomous trains” International Railway Journal: https://www.railjournal.com/opinion/rail-autonomous-trains

“Autonomous vessels on inland waterways” De Vlaamse Waterweg: https://ec.europa.eu/transparency/regexpert/index.cfm?do=groupDetail.groupMeetingDoc&docid=38717

“Automated Trucking, A Technical Milestone That Could Disrupt Hundreds of Thousands of Jobs, Hits the Road” CBS News 60 Minutes: https://www.cbsnews.com/news/driverless-trucks-could-disrupt-the-trucking-industry-as-soon-as-2021-60-minutes-2020-08-23/

“Robots exploring on their own and self-piloting spacecraft are a long way off, says NASA computer scientist” Arizona State University News: https://news.asu.edu/20200220-discoveries-autonomous-spacecraft-baby-steps

Citations

Clements, L.M. and K.M. Kockelman. (2017, January 1). Economic effects of automated vehicles. Research Record: Journal of the Transportation Research Board. Retrieved February 6, 2021, from https://journals.sagepub.com/doi/abs/10.3141/2606-14

Colias, M. (2021, January 19). Microsoft bets bigger on driverless-car space with investment in GM’s Cruise. The Wall Street Journal. Retrieved February 6, 2021, from https://www.wsj.com/articles/microsoft-bets-bigger-on-driverless-car-space-with-investment-ingms-cruise-11611064940#

KPMG International. (2019). 2019 autonomous vehicles readiness index: assessing countries’ preparedness for autonomous vehicles. KPMG International. Retrieved February 6, 2021, from https://assets.kpmg/content/dam/kpmg/xx/pdf/2019/02/2019-autonomous-vehicles-readiness-index.pdf

Korosec, K. (2017, June 1). Intel predicts a $7 trillion self-driving future. The Verge. Retrieved February 6, 2021, from https://www.theverge.com/2017/6/1/15725516/intel-7-trillion-dollar-self-driving-autonomous-cars

Lanctot, R. (2017, June). Accelerating the future: the economic impact of the emerging passenger economy. Strategy Analytics. Retrieved February 6, 2021, from https://newsroom.intel.com/newsroom/wp-content/uploads/sites/11/2017/05/passenger-economy.pdf

LeBeau, P. and Reeder, M. (2021, February 3). Apple and Hyundai-Kia pushing toward deal on Apple Car. CNBC. Retrieved February 6, 2021 from https://www.cnbc.com/2021/02/03/apple-and-hyundai-kia-driving-towards-deal-on-apple-car.html

McFarland, M. (2020, December 14). This robotaxi from Amazon’s Zoox has no reverse function. CNN Business. Retrieved February 6, 2021 from https://www.cnn.com/videos/business/2020/12/14/zoox-robotaxi-amazon-orig.cnn-business

Mehta, Ivan. (2019, April 15). How China’s new highway for self-driving cars will boost its AV ambitions. The Next Web. Retrieved February 6, 2021, from https://thenextweb.com/cars/2019/04/15/how-chinas-new-highway-for-self-driving-cars-will-boost-its-av-ambitions/

Moderation Team. (n.d.). Waymo to open new autonomous testing facility in Ohio. Self Driving Cars 360. Retrieved February 6, 2021, from https://www.selfdrivingcars360.com/waymo-to-open-new-autonomous-testing-facility-in-ohio/

Tomita, H. (2017, December 17). Awaiting the realization of fully automated vehicles: potential economic effects and the need for a new economic and social design. VOXEU CEPR. Retrieved February 6, 2021, from https://voxeu.org/article/potential-economic-and-social-effects-driverless-cars

Transportation and Mobility: Past, Present, Future

10 Wednesday Apr 2019

Posted by John L. Craig in Business Transformation, Collaboration, Future, Government & Policy, Strategic Planning, Transportation

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Setting the stage: a brief history

Transportation and transportation infrastructure (heretofore referred to simply as mobility) have been around since the beginning of humans. In fact, the history of people and civilization could be told in terms of mobility. Mobility allowed our species to move out of Africa and around the world in roughly 50,000 years (starting around 60,000-80,000 years ago and completing this global journey around 15,000 years ago). Early components included walking on animal trails and along waterways (rivers, lakes, and ocean), increasingly large and sophisticated floating craft (boats, canoes, ships, and others), and animals domesticated to increase transport (horses, alpacas, camels, and others) over larger and larger expanses. The invention of the wheel (and associated axle) appears to date back to about 5,000 years ago and was a milestone that has resulted in vehicles of increasing size and capability ever since. For at least the last few thousand years virtually all of the mobility system developed based on available data, mathematics, and trial and error. Over time, these components have evolved into an increasingly sophisticated mobility system. The Apian Way allowed the Roman Empire to travel and dominate much of the known world. The Silk Road and others increasingly expanded trade and cultural exchange over vast areas of the globe.

Our forefathers had a great interest in roads, particularly in a “National Road” to connect the emerging United States of America. What eventually became the National Road (also known as the Cumberland Road, Cumberland Pike, National Pike, and Western Pike) was created by an Act of Congress in 1806 and signed into law by President Thomas Jefferson. In many ways, it was an early precursor to the Interstate Highway System. The Act was revolutionary and called for a road connecting the waters of the Atlantic with those of the Ohio River. Federal funding began in Cumberland, Maryland. The predecessors of the National Road included buffalo trails, Native American footpaths, Washington’s Road, and Braddock’s Road. The latter two were developed over part of the Nemacolin Trail, an Indian pathway, as part of the British campaign to evict the French from the forks of the Ohio River. Congress paid for the National Road, in part, by establishing a “2 percent fund” derived from the sale of public lands for the construction of roads through and to Ohio. Construction took longer than expected and the costs of maintenance were underestimated. As a result, tolls were eventually collected to pay for maintenance. To this day underestimating the cost of maintenance is likely true in many states and communities.

In 1919, Oregon was the first to develop a reliable funding mechanism—the fuel tax—which has been the primary funding mechanism for roads and bridges. By 1929, all states had a fuel tax. It was not until 1956, that the federal government created a federal fuel tax—Federal Highway Trust Fund— to pay for construction (not maintenance) of the Dwight D. Eisenhower National System of Interstate and Defense Highways, commonly known as the Interstate Highway System. As of December 2007 (“Peters Quick Action” in Better Roads), the U. S. Secretary of Transportation reported that 40 percent of the Federal Highway Trust Fund is used for other purposes. While much of the first half of the 20th Century was spent “getting out of the mud”, the 50 years subsequent to 1956 were spent building and maintaining the interstate highway system under the responsibility of state departments of transportation. In large part, the 21st Century appears to be ushering in an era of system preservation, due largely to inadequate funding.

As indicated earlier, data for improving mobility is not new and it is reflected in virtually every aspect of the mobility ecosystem. These include engine oil diagnostics which serve to extend engine life, data-based preventative maintenance checks and services and scheduled services for all types of vehicles, data-based structural and functional capacities of roads and bridges, data-based pavement management systems, data-based bridge management systems, data-based needs assessments and estimated costs for repair and replacement of infrastructure (roads, bridges, buildings, runways, etc), data-based asset management for determining priorities of spending within and between modes, analytic tools such as life-cycle costs, return on investments, and many others. In fact, it would be difficult to identify an element of the mobility ecosystem that is not or cannot be managed by data. Of course, this requires good data and that does not always exist. There are many examples of entities that attempt management without good data that is fairly analyzed and with actionable outputs.

In 2007, the first iPhone was fielded, and this serves to mark the beginning of a new era, one driven largely by rapidly evolving digital technology but other elements as well. These elements include other technologies and increasing demand for collaboration. While 2007 was not the beginning it is convenient to view it as an inflection point, especially for mobility. The United States is, and has been, a leader in mobility and that has been a significant multiplier in building our nation’s strong economy.

While much of the rest of the world has lagged behind the United States in the mobility space, it is rapidly catching up. Two examples are China’s “One Belt, One Road” which will result in the largest road network in the world and India’s National Highways Development Project which will result in a road network of over 30,000 miles as an element of their industrial revolution.

Introduction

Transportation is the aging term. Mobility reflects the emerging mobility ecosystem and marketplace. This ecosystem is at an inflection point coupled with the Internet of Things (IoT) and new ways of thinking in the 21st Century. It is an exciting time, with more changes in the next 10 years than perhaps the previous 100, driven by increasing demand for technology and collaboration. It is not an overstatement that today’s new gadgets are tomorrow’s antiques.

While some things will remain the same, this new mobility ecosystem will move inextricably forward as it evolves. We’ll increasingly think and speak in terms of one seamless, connected, efficient, user-friendly, intuitive, multimodal mobility system. Over time we will speak less in terms of buying and owning vehicles, “hard” infrastructure without embedded technology and planning individual modes to get where we want to go. Moreover, this new emerging mobility ecosystem will better connect one global community and economy, with all of its challenges, risks, and opportunities.

In short, mobility is being reimagined.

Current Situation

The mobility ecosystem is complex if it is anything. Modes vary across the world. These modes and some components include planes, trains, automobiles, trucks, transit providers of all types, buses, bicycles, motorcycles, pedestrians, airports, marine/lake/river ships, roads, rail, bridges, marine and freshwater ports, dredging to enable navigable ports and rivers, pipelines, public safety providers, governance in both the public and private sectors, and many others. These provide us access to jobs, medical care, food, fuel, emergency response, vacations, and many others. The size and capacity of many vehicles are growing increasingly from large to gigantic in an effort to gain economies of scale in moving people and goods as much of the supporting infrastructure races to keep up.

Using the United States as a yardstick, the first half of the 20th Century was marked by increasing motorized road, rail, air, and river and blue water conveyance. The second half of the 20th Century was marked by improvements in all areas of conveyance but largely by the creation of the Interstate Highway System. Simplistically, these can be referred to as the motorized conveyance era and Interstate era, respectively. I think it is important to note that the Interstate era also increased the emphasis on safety in an effort to decrease losses in lives and property. This is critical and continues to this day, as it should.

According to historian Jonathan Kenoyer, the concept of using a valueless “technology” instrument to represent transactions dates back 5,000 years, when the Mesopotamians used clay tablets to conduct trade with the Harappan civilization. While cumbersome, a slab of clay with seals from both civilizations certainly beat the tons of copper each of which had to be melted down to produce coins. Fast forward to the mid 20th Century, the Diners Club Card was the first credit card in widespread use by 1951. American Express introduced the first plastic card in 1959. Within five years, one million American Express cards were in use. In the 1950s-1960s my father, who worked for DX Oil Company, talked about them working on a card that could be used to pay for gas and enable self-service dispensing of fuel. The card became one of the ubiquitous credit cards. While credit cards have been upgraded over time to include passwords, security codes, and chips, today’s technology changes at increasingly rapid rates (the iPhone with its camera, GPS, apps and other associated technologies is just one example).

With the rapid advances in technology in the early 21st Century, the opportunities for mobility to be reimagined has never been greater and this has only just begun.

New technologies do not have to function on their own and frequently do not. For example, Iteris and Lindsay Corporation recently announced a smart work zone collaboration, leveraging the existing Lindsay Road Zipper for placing concrete jersey barriers and the industry-leading technology of Iteris. This collaboration promises to improve safety while getting more capacity at a lower cost with existing infrastructure. This also holds promise, on a temporary or permanent basis, for real-time lane reconfiguration in separating today’s traffic from autonomous and connected vehicles.

Currently, much of the mobility ecosystem is siloed to protect proprietary interests, growth, and profits. Silos must be broken down to achieve one efficient, connected, and seamless mobility system focused on the movement of people and goods, not vehicles alone. This can require a significant change in mindset.

New models and methodologies are developing. The emerging 5G coming out in 2019 is estimated to be 100 times faster than current mobile technologies, have more capacity, and dramatically reduce power consumption and communication response times. Artificial Intelligence (AI) is advancing, driven partly by more effectively “mining data” such as IBM’s Watson. Use of Unmanned Aerial Vehicles (drones) has undergone dramatic growth in recent years in an increasing number of markets. Fully autonomous vehicles have arrived although it will likely take longer to have a significant impact than many have projected. Semiautonomous vehicles are increasingly mainstream as manufacturers add new technologies. Final destination methodologies are increasingly deployed whether through mobility as a service, Amazon, FedEx, ridesharing (Uber, Lyft, and others), high-speed transport such as high-speed rail, Hyperloop, and others. Finally, we are on the cusp of technology providing “one-stop shops”, such as Expedia does for airlines and hotels, for simple, connected, seamless, user-friendly trips for people. This has been ongoing in the primarily private sector-based freight industry which is driven by economies of scale, efficiency, and profit. Business to business has recognized for a long time the value of breaking down silos in spite of their need to protect their proprietary interests, growth, and profit. The public sector is more dominant in the movement of people and they seem to struggle more in breaking down silos, in part, to protect public interests including personal data and privacy. Breaking down the silos between public, private, and public and private entities, makes the task of creating one mobility ecosystem enormous. Still, this is an opportunity as the demand for collaboration increases to provide more efficient, cost-effective, environmentally and economically sustainable mobility for the movement of people and goods. This has become a quality of life issue for our planet and our global society.

Reimagining Mobility

Some elements

The future will be what we make it. It will likely be messy, and no one has the answers. The Transportation Research Board 2019 report on Critical Issues in Transportation reflects a smorgasbord of issues, challenges, and opportunities. The report states, “Changes are coming at transportation from all directions, including potentially revolutionary technologies such as drones and automated vehicles, rapid innovations in urban transportation services, unreliable funding for infrastructure and operations, and possible changes in national policies affecting trade, climate, environmental protection, and sources of energy. The potential consequences of these changes could make future congestion, fuel consumption, and emissions either markedly better or markedly worse. Correspondingly, these potential changes could positively or adversely affect commercial truck, rail, aviation, and waterborne networks, with significant implications for the delivery of goods and services, personal travel, and the economy.” What will likely not change is the general systematic process for developing vehicles and infrastructure—planning, design, construction, manufacturing, operations, maintenance.

Despite concerns over privacy, identifying travel patterns is important. Technology has enhanced our ability to do this enabling plans and designs to be developed for improvements.

Sharing data is another important component. How? Simple vehicle/people trackers are available and used while protecting privacy.

Gaining trust is critical and that takes time. This is also easily lost, and everyone must stay mindful of how important this is for the system to work properly, even efficiently. The technology should include the ability for the user to turn the location off unless it has potential safety risks or system impacts which may relate to safety and/or efficiency.

So, what’s in it for me? This has the potential to reduce costs financially and environmentally while improving the overall quality of life, decrease travel time, increase the efficiency of the system, maintain and/or increase the profits of data collectors/owners.

A determination should be made of what is the proprietary in both the public and private spheres.

What are some drivers in reimagining mobility? These include reducing costs for users and the environment, reducing congestion, increasing the capacity of existing infrastructure, reducing travel times, and increasing safety.

What are some obstacles? Privacy continues to dominate, including as an issue in exploring a replacement for the fuel tax such as the vehicle miles traveled tax (VMT) initiated by the State of Oregon. Fielding is another issue. How do you efficiently field new technologies into a fleet of varying types and ages? That is likely messy and will require a long transition. Consolidation, analysis and meaningful output is likely another obstacle. Collecting data is only useful if it can provide meaningful outputs. While 5G will greatly enhance rates, the overall capacity of the system is a predictable obstacle to include adequate data storage capacity. Data centers being developed by Facebook, Microsoft and others may be examples of what will be needed to accommodate this new, emerging mobility ecosystem.

How to Move Forward

Finding a framework is key for the needed public-private partnership to develop. The Intelligent Transportation System (ITS) architecture developed by the U.S. Department of Transportation (USDOT) may be a good model. This architecture attempts to define a system of governance and key architectural elements that must be met by participants, public or private, while not being overly prescriptive. This can be a fine line to walk. The Intelligent Transportation Society of America (ITSA) is a consortium that continues to bring the public and private sectors together to augment USDOT in developing and deploying emerging technologies. In 2019 the Transportation Research Board published the results of a three year study on the future of the interstate highway system, originally planned for a 50 year life, that made several recommendations including that its future should be modeled after the original interstate approach, adjusting the federal fuel tax to the original 90 percent federal share, creation of an Interstate Highway System Renewal and Modernization Program (RAMP), increasing the federal fuel tax to a level commensurate with the federal share required of the RAMP investment and adjusting the tax as needed for inflation and vehicle fuel economy, and with an assumption that it would be at least 2040 before large scale automation occurred. These frameworks of governance have worked in the past and there is every reason to believe they will work in the future. It is critical that the federal and state governments, and their conventions such as the American Association of State Highway and Transportation Officials (AASHTO), lead the way.

It is important to tie this effort to safety, congestion reduction, climate change, resilience, security, economics, quality of life, health, business, asset management including the true costs of travel and supporting infrastructure, sustainability, and overall system performance. This also has the potential to improve other associated elements to include social justice, equity, diversity, increased access, reduced energy consumption, and others. Reimagining mobility has the potential to improve all of these.

In a mobility ecosystem, everything is related to everything else and the progression to it will be challenging, messy, and a long road (no pun intended). However, there are some human elements that will enhance, if not be critical to, success. These include being resilient, collaborative, maintaining a focus on the big picture goal, not getting stuck or lost in the details, and continuing to leverage emerging technologies.

Some Common Causes of Program Failures

06 Sunday Mar 2016

Posted by John L. Craig in Government & Policy, Program Management, Transportation

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Throughout complex, long-duration mega-programs, changes occur, many between the “white spaces”. That is events, activities and risks that are not specifically identified and addressed. Some of these might include changes in leadership, changes in technology, changes in staffing, changes in politics, reinterpretation of contracts, and others. The following is a list of common causes for program, or project, failures and problems.

  1. Inadequate leadership
  2. Inadequate planning
  3. Inadequate relationships, trust, engagement and alignment
  4. Inadequate or dysfunctional organization, including lack of needed skill sets
  5. Inadequately prepared client, stakeholders, partners and/or program manager
  6. Inadequate culture of accountability, responsibility and authority (for decision-making)
  7. Inadequate communications
  8. Inadequate feedback loops, reports and reporting
  9. Inadequate quality control/ assurance plans, execution and/or not inculcated throughout the organization
  10. Inadequate team, defined roles, responsibilities and buy-in
  11. Critical path not identified and followed
  12. Performance metrics not adequately used
  13. Scope does not reflect realities of the program and/or scope creep
  14. Schedule does not reflect realities of the program
  15. Budget does not reflect realities of program
  16. Issues not aggressively resolved
  17. Inadequate continuous improvement, change management, lessons-learned and good practices
  18. Inadequate and/or continuous training, including safety culture
  19. Failure to identify, assess and manage risks
  20. Failure to allow for changes in technology
  21. Inadequate program closeout

This list is not intended to be comprehensive, so please add to it based on your own experience.

“Failure is only the opportunity to begin again, only this time more wisely.”

– Henry Ford

Transportation Asset Management

06 Sunday Mar 2016

Posted by John L. Craig in Asset & Life Cycle Management, Government & Policy, Transportation

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The essence of asset management is to better prioritize resources to optimize outcomes, basically institutionalizing a business-like approach to managing infrastructure. This is not so-called “rocket science”. It is simply what any organization, public or private, should be doing to best use its resources in achieving desired results for its customers and stockholders, whether referred to as asset management or not. To my knowledge, no organization has sufficient resources to do everything it needs or wants to do. Thus, a systematic approach of setting priorities must take place—asset management.

In the bigger picture, asset management is an extension of engineering economics. Utilized for over a hundred years, engineering economics has, and continues to be, a primary means for decision-making for infrastructure development. The ability to retain, retrieve, and analyze increasing amounts of data in recent decades has enabled evidence-based decision-making on a network scale. Made possible by computer and digital technology, other “big picture” analyses are increasingly emerging to include the discipline of sustainability that facilitates decision-making between economic, social and environmental realms.

Every public and private body is under increasing pressure to justify investment and that it is making best use of its resources. It is tempting to generate an office of asset management in addressing these pressures. However, inculcating an asset management approach requires a cultural change where the entire team thinks in more holistic terms on how to better utilize resources to optimize outcomes.

Many organizations have developed a strategic approach that identifies better allocation of resources for the management, operations, preservation and enhancement of infrastructure to meet the needs of current and future customers and stockholders. As an example, in the mid-1990s the American Association of State Highway and Transportation Officials (AASHTO) formed an Asset Management Committee. I was privileged to serve as Vice Chair and Chair. Within a short period of time, the entire transportation industry in the United States recognized the value of asset management and has been refining processes ever since.

At about this same time, the value of performance measures was emerging in conjunction with asset management. There are essentially four traditional elements of asset management that interact:

  1. Performance measures (what target is desired and achievable)
  2. Asset:
    1. Inventory
    2. Condition
    3. Utilization
    4. Value in dollars
  3. Life-cycle cost prediction
  4. Agency or organization cost
  5. User cost
  6. Trade-off analysis and investment strategies (by combining the above to produce an optimized budget)

An example of asset manage, while Director of the Nebraska Department of Roads, determined that the optimal allocation of resources in a broad sense (including budget) was:

  1. Critical bridges
  2. System preservation
  3. New capital investments

Asset management is quite literally the best of continuous improvement. That process never ends. An account of the full collection of resources must be pursued. Some are visible and some are not. This is a partial list of assets commonly owned by transportation agencies:

  • roads, including for all modes
  • trails
  • bridges, including vehicle and pedestrian
  • public transportation assets and systems, including buses and trains
  • culverts and drainage structures and systems
  • other structures such as sound walls
  • signs of all kinds
  • lighting and electrical systems
  • heating and air conditioning systems
  • buildings, including for people, equipment and materials
  • airports and aircraft
  • waterborne ferry systems and craft
  • land
  • roadside vegetation
  • rest stops and visitor centers
  • rail grade crossings
  • traffic control signals, devices and systems
  • changeable message boards, fixed and portable
  • vehicles
  • equipment to include heavy wheeled and track, construction and maintenance, snow and ice, mowing
  • materials of all kinds
  • tools of all kinds
  • intelligent transportation systems
  • intelligent infrastructure systems
  • transportation management centers
  • information systems, including software and hardware
  • data of all kinds
  • economic impacts
  • environmental impacts, including aesthetics and views
  • societal impacts, including access for the disabled
  • user impacts, including to traffic and safety
  • human resources

There are other resources so feel free to add to this list. They must all be managed in an asset management framework to make best use of available resources and to optimize outcomes. This is what customers and stockholders expect.

“Continuous improvement is better than delayed perfection.”

– Mark Twain

One Seamless Transportation System

08 Monday Feb 2016

Posted by John L. Craig in Business Transformation, Dynamic Transportation Management, Future, Government & Policy, Strategic Planning, Sustainability, Transportation

≈ Leave a comment

The idea of one seamless transportation system has existed for many years. Currently we have strong transportation modes, but one seamless transportation system is lacking. Over the past 100 years we have become a nation that is car-centric, and our system of roads, highways and interstate allow us largely to travel where we want, when we want. I count myself among the many that are car-centric. In spite of the negative impacts of this surface transportation system, it has driven our economy to be the strongest in the world. However, if we want to connect various modes—public transportation, airports, trains, marine and inland water navigation etc.—we are frequently left to our own devices in getting where we want, when we want. This can be inefficient, ineffective and frustrating. As an example, in many areas of the country public transportation does not connect to airports, train stations or water navigation. While several urban areas have developed these connections, there is still a long way to go.

One Seamless Transportation SystemAlthough infrastructure will continue to be important to add value by connecting these “edges”, digital technology can act as a valuable force-multiplier in bringing a multimodal system to an emerging intermodal system and finally to one seamless system. The value of connecting these edges adds enormously to our economy and quality of life. In many ways these “edges” reflect the richness and value at intersecting biomes, a fact known by ecologists for many years. The freight industry has long recognized that their business relies on one connected freight system. Otherwise, products would be delayed, not delivered and at times products would rot. A national freight program has emerged in recent years, bearing testimony to its importance. While there are still needed improvements in the freight system, the efficient movement of people has lagged. This is an opportunity to be seized.

Strategic planning to achieve one seamless transportation system is a collaborative affair with inclusive interests. There is no entity, to my knowledge, that is not dependent on some form of transportation. Our economy and quality of life depend on a safe and reliable transportation system. In fact, the history of human colonization, societies and economies on planet Earth could be told in the context of transportation with all of its components.

These are exciting and challenging times in transportation, with perhaps more changes in the next 10 years than in the previous 60, or even the previous 100. In spite of the challenges, including to find a replacement for the fuel tax, mobility is the imperative, not infrastructure, vehicles, digital technology or other elements alone. It is about convenience, quality and affordability, using transportation to improve lives. Thus, we are at a watershed moment in time that requires that we change the way we think and act to build one seamless “transportation ecosystem” that will save lives, save costs, reduce congestion, reduce pollution and mitigate climate change, create jobs, grow the economy and increase customer service and satisfaction.

The industry has been slowly moving in this direction for some time but has failed to realize any significant improvement in developing one seamless system. In a previous blog (The Future of Transportation…September 2015) I reviewed the history leading to the start of the interstate highway system. The general concept for an interstate highway system was created during the World War I era as a means for defense and to spur economic growth—the Pershing Map, named for General John J. Pershing. The concept for an interstate highway system was further advanced based on the experience of Dwight D. Eisenhower shortly after World War I where a transcontinental road trip took weeks, and then during World War II as he recognized the efficiency and speed of the German Autobahn. During the intervening 30 years there was general consensus as to what the interstate highway system should look like but there was no agreement as to how it should be paid for. The States did not sit idle then, as they are not now. Oregon invented the fuel tax in 1919 and within 10 years every state had adopted a fuel tax to build the infrastructure (roads) to primarily “get out of the mud”. States, including Kansas, Oklahoma and others, also built toll roads, just as the states and locals had built toll bridges for many years before, to increase connectivity and spur economic development. Finally, agreement was reached to adopt a federal fuel tax and fund the construction (not maintenance) of the interstate system through the National Interstate and Defense Highways Act of 1956. The evidence is overwhelming that the interstate highway system, and transportation in general, has improved our economy and quality of life.

The question now is will it take another 30 plus years to decide what our future transportation system should be and how to pay for it? This does not even include the needs of other forms of infrastructure for water, waste water, power etc. that our society has become dependent on.

Once again, I believe the evidence is clear that states are leading the way in further developing transportation and how to fund it. However, this time there are two other events driving this:

  1. Rapidly evolving digital technology and
  2. Increasing demand for collaboration, especially with the private sector

Technology, especially digital technology, is evolving at breath-taking speed. As such, the public sector is not well suited to rapidly adjust to these changes in technology. The private sector is much better suited and again, I believe, there is evidence that the private sector will drive much of the transportation future. We are already witnessing this with Lyft, UBER, autonomous vehicles, connected vehicles, intelligent infrastructure, continuing to evolve intelligent transportation systems, drones, automated machine control, positive train control, just-in-time delivery services, Internet shopping and delivery, “big data” and resulting useful information, and other changes across all modes of transportation. Many of these technologies and businesses did not even exist a few years ago. This does not even contemplate other rapidly evolving technologies impacted by nanotechnology and other advances in materials.

Our societal values have also evolved. For example, we are much more aware of the risks to life and the economy from driving. Thus a safe transportation system is valued more highly than in the past. We recognize the impact that the built environment can have on our natural environment and the attention to maintaining and improving the natural environment has dramatically increased, largely since the National Environmental Policy Act (NEPA) of 1970. Other aspects such as societal justice has evolved. In reality there is no single solution to the way our society evolves, it is more a matter of weighing informed choices in decision-making. This has resulted in a relatively new field—sustainability—which “balances” our society, environment and economic interests.

The number of licensed drivers and privately owned vehicles is declining. Our society is aging as “baby boomers” move into “retirement” age, an indication of changing demographics. While oil is currently in abundance, it is not a renewable resource and the use of alternative fuels and more efficient vehicles continues to evolve. Debt is increasing, whether our national debt or the result of student loans. Wages are static. These only begin to portend some of the changes in our world, with little deference to the changing international landscape.

So, it is important, if not essential, to be as inclusive as possible when doing strategic planning. While strategic planning is more precise for the relative near-term, the long-term is much less clear. Perhaps the best we can do is to develop and be mindful of a “cone of possibilities” which so-called futurists propose. How many years a plan should be forward looking is open to discussion. However, strategic planning could be easily constructed along time horizons of a few years and up to 50 or more, realizing that longer time frames will be less certain with a point of diminishing returns. In my opinion, these strategic plans should be updated perhaps every five years based on how rapidly our world is changing.

While the visioning of a strategic plan is important, it is also important to identify next steps with specific and measurable performance measures and who is responsible for actions.

Since our economy and quality of life will be impacted by what we do, all citizenry interests must be represented to include pedestrians, bicyclist, motorcyclists, automobile drivers, truckers, rail roads, aviation, digital technology interests, ride sharing/taxi cab providers, public transportation, government, emergency responders (including fire departments and police), utilities, schools and academia, consultants, contractors, economists and economic developers, environmental interests, business owners, marine and inland water shippers, ports and others. While participation by these various interests cannot be guaranteed, outreach is necessary to solicit as much participation as possible. This must be balanced to avoid being “frozen” into inaction. The goal is for general consensus, knowing that complete agreement is rarely, if ever, obtained.

With these efforts, it is hoped that our societal buy-in for transportation strategic plans at the federal, regional, state and locals will advance our progress in developing one seamless system, using transportation to improve lives.

“Explore this next great frontier where boundaries between work and higher purpose are merging into one, where doing good is good for business.”

-Richard Branson

“If your actions inspire others to dream more, learn more, do more and become more, you are a leader.”

-John Quincy Adams

Management – Getting Results

11 Friday Sep 2015

Posted by John L. Craig in Government & Policy, Management, Performance Measurement and Management

≈ Leave a comment

As part of my leadership philosophy, I separate the leadership of people from the management of things. Inherently people cannot be managed, and in fact resist it. However, they can be led with clear goals, direction, and working toward something that highly motivates them and that is greater than themselves.

That said, the management of things is essential.

First and foremost, a mission statement must be clearly established. That is the ultimate aim. For a Department of Transportation (DOT) and depending on their responsibilities, it is generally accurate to say that they “provide a safe, reliable and sustainable transportation system for the movement of people and goods while improving the economy, mobility and environment.”

Based on my experience, I believe a DOT must establish a relatively small list (10-15) of specific and measurable goals (performance measures) that should be divided into two groups:

  1. strategic goals or outcomes (6-8) and
  2. enablers (7-9) that support the achieving of those goals.

It is fairly common to measure too many goals in a DOT. The risk is losing focus on organizational outcomes, especially at the senior executive level. At the senior executive level it is as important to know what to ignore as it is what to focus on. It is important to measure things and at the right organizational level, especially when issues must be drilled into to reveal areas for improvement. Evidence-based decision-making must take place making true the adage that “the data will set you free”. Nearly everyone has a different opinion of what is important, especially if it is the work they are doing. Everyone’s work should be important and support organizational outcomes. However, these goals must be vetted and the organization aligned to achieve these outcomes. There are essentially seven strategic goals/outcomes for DOTs:

  • safety
  • jobs and commerce
  • mobility
  • access
  • environmental stewardship
  • infrastructure preservation
  • customer service/satisfaction

While I have not defined these, there could be subsets, for example for customer service/satisfaction. Customers can be defined as the public but also legislatures, congress and various partners such as construction contractors, consultants, truckers, shippers etc. I mention this because in the end it is the satisfaction of the customers, supported by the partners, that makes funding, political support, collaboration and a lot of other things work.

Kanter (2015) has a similar idea for a win-win-win-win-win:

  • save lives
  • save costs
  • add convenience by easing congestion
  • reduce pollution and mitigate climate change
  • create future growth opportunities that create new jobs

Another example of outcomes, specific to giga-programs such as the Oregon Transportation Act (OTIA) III State Bridge Delivery Program, is to:

  • stimulate Oregon’s economy
  • employ efficient cost-effective delivery practices
  • maintain freight mobility and keep traffic moving
  • build projects sensitive to their communities and landscape
  • capitalize on funding opportunities

Enablers are largely responsible for:

  • project delivery
  • asset management
  • fiscal responsibility/ROI
  • collaboration/partnership
  • workforce development
  • leveraging technology (think digital technology – transforming transportation and the subject of a later blog)
  • risk management

That said, everything is in a constant process of improvement and so it must be for DOTs and the industry to remain competitive.

One of the more intriguing sources I have come across on the subject of people versus goals/results is from the Harvard Business Review, December 27, 2013, entitled “Should leaders focus on results, or on people?” by Matthew Lieberman. His article reports that if a leader has great social skills only 12% of people consider him a great leader. If a leader has great results skills he is considered great by 14% of people. If a leader has both skill sets the percentage of people rating him a great leader skyrockets to 78%. However, less than 1% of leaders are rated high in both goal focus and social skills.

More will be written in future blogs about the dynamics of people-based, results-driven leadership.

“Management is doing things right; leadership is doing the right things.”

– Peter F. Drucker

Kanter, Rosabeth Moss. Move: Putting America’s Infrastructure Back in the Lead. W. W. Norton & Company, 2015. Print.

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