CONTENTS

• Chicago Congestion
• 2005 3PL Financial Results
• Hanson Velocities
• Cole's Quality Foods
• ATA Agenda
• Letter from the President

• Front Page

• Visit the Hanson Website
     
Congestion and Chicago - it comes with the territory

If you’re moving products through the Midwest and Central States, the odds are high that your products will travel through or even stop in Chicago. As the third busiest container-moving port in the world, behind Hong Kong and Singapore, Chicago is considered the freight capital of America and has more rail lines and interstate highways branching out from the city than any other city in the country. The trucking industry alone moves $572 billion worth of goods to, from, or through the distribution hub year after year. The six largest railroads in North America, along with 14 smaller railroads, move $350 billion in goods to, from, and through the Chicago area. The importance of Chicago to different industries and economies is obvious.



Doing business in and around Chicago has it pros and cons - one of the cons being congestion. In the April issue of Hanson News, we featured an article from the American Trucking Association titled, “Highway Bottlenecks Cost Truckers Millions of Lost Hours in 2004.” The article highlights the impacts of bottleneck congestion relating to lost time and money for U.S. trucking companies - roughly 243 million hours and $7.8 billion worth. Let's examine some of the impacts of congestion in the Chicago area.

Did you know that:

  • Chicago appears three times on “America’s 25 Worst Highway Bottlenecks” as follows:
    • #3 - I-90/94 at the I-290 Interchange (“Circle Interchange”)
    • #11 - I-94 (Dan Ryan Expressway) at the I-90 Skyway Split
    • #19 - I-290 (Eisenhower Expressway) between Exits 17b and 23a

  • Congestion costs Chicago area businesses, truckers and commuters over $4 billion per year.
  • The number of trucks on Chicago area roads is expected to increase by at least 80% in the next 25 years.
  • Congestion is the result of several key factors such as:
    • Physical bottlenecks - when a certain section of roadway reaches its maximum carrying capacity.
    • Traffic incidents or any event that disrupts the flow of traffic including debris and vehicle crashes/breakdowns.
    • Work zones or any physical change to the roadway including lane shifts, lane reductions, shoulder closures, and temporary roadway closures.
    • Weather and other natural phenomenon that change driver behavior and roadway conditions.
    • Traffic control devices such as railroad crossings and poorly timed traffic signals.
    • Special events such as a sports game or concert that causes the area of the event to have a surge in traffic demands.
    • Fluctuation in normal traffic such as the morning and mid-day rush hour.

  • Because of congestion, approximately 5.7 billion gallons of fuel are wasted annually - nationwide.
  • Research for the trucking industry has shown that shippers and carriers value transit time in the range of $25 to $200 per hour, depending on the product being carried. The cost of congestion and unexpected delays can add another 20 to 250 percent.
  • Other costs to businesses include:
    • The cost of remaining open for longer hours to process late deliveries.
    • Penalties or lost business revenue associated with missed schedules.
    • Costs of spoilage of time-sensitive, perishable deliveries.
    • Costs of maintaining greater inventory to cover the undependability of deliveries.
    • Costs of reverting to less efficient production scheduling processes.
    • The additional costs incurred because of access to reduced markets for labor, customer, and delivery areas.



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    Published by Hanson Logistics • © 2006 • All Rights Reserved