2015 Business Advisory Council Spring Meeting

April 20-21, 2015

Monday, April 20, 2015: Industry Technical Workshop & Patterson Lecture

Time

Event

2:00 – 4:30 pm

Industry Technical Workshop - "Unmanned Aerial Vehicles: Applications and Emergent Technologies"

Cocktails & Dinner

Location: James L. Allen Center | 2169 Campus Drive, Evanston

5:00 PM

Reception and Cocktails – James L. Allen Center | 2169 Campus Drive, Evanston

6:00 PM

Dinner – James L. Allen Center | 2169 Campus Drive, Evanston

Patterson Lecture

Location: OLC Forum, Donald P. Jacobs Center | 2001 Sheridan Road, Evanston

7:30 PM

34th Annual William A. Patterson Transportation Lecture

Speaker:
Doug Parker
CEO
American Airlines Group

Tuesday, April 21, 2015: BAC Meeting

Location: Northwestern University Transportation Center Ruan Conference Center, Chambers Hall | 600 Foster St., Evanston

Time

Event

7:30 AM

Continental Breakfast

8:00 AM

Call to Order & Opening Comments - BAC Chair Justin Zubrod presiding

8:10 AM

Welcome: Julio Ottino, Dean, Northwestern University McCormick School of Engineering

Dean Ottino described academia as a business, and noted a goal across the University to increase the acceptance of offers to attend. The Dean delivered three main themes: 1) the McCormick School invested vigorously in entrepreneurship several years ago, which now pervades the entire University community; 2) McCormick has spearheaded horizontal connections across all sectors of the University with an effort to cross-link ideas; and 3) he envisions a move from “departmental structures to network structures” in the university of the future. 

8:20 AM

Director’s Report: Hani Mahmassani – followed by discussion

Presentation (PDF)

Director Mahmassani thanked the Council for its continued support, announced the publication of NUTC’s new BAC Directory, and thanked members for their continued and generous financial support of the Center.

The Director highlighted NUTC’s 60th Anniversary Celebration, and cited our alumni and friends celebration in Washington, DC in October 2014, and our 60th Anniversary Transportation Summit, Technical Symposium, and Gala Dinner featuring Northwestern alumnus and president and COO of SpaceX, Gwynn Shotwell. He acknowledged the many BAC members who contributed “TED” type talks at the Summit, including Allen Adler, Price Blackford, Rob Martinez, Craig Philip, Jeff Silver, and Doug Waggoner. Videos and slides of all presentations are available on the Transportation Summit web page. New member companies to the BAC were shared with members: the Port of Los Angeles at the Leadership level, and Accufleet International, Eyefreight TMS, Headhaul Capital Partners, Load Delivered Logistics, OmniTRAX, and Progress Rail Services at the Sustaining level.

Director Mahmassani also thanked members for industry-supported research that started or completed since our last meeting, notably Boeing which is supporting a study on air cargo, BNSF which is supporting a study on grain logistics, and USBank which sponsored a study to examine using freight payment data for service planning and operations. Notable upcoming events led by NUTC include an executive short course, Freight Transportation and Logistics: Securing Capacity in a Dynamic Industry on June 15-17, 2015; and the 7th biennial William O. Lipinski Symposium on Transportation Policy and Strategy on June 22, 2015. Numerous BAC members and companies are contributing to the success of both programs.

The Director reiterated the Center’s ongoing fundraising campaign to develop a strategic research fund to support Center research with the following initial target areas: Freight, Logistics & Economic Competitiveness; Data-Driven Operations & Analytics; Sustainable Practices; Safety; and Urban Logistics and Smart Cities. Giving opportunities include: naming the Transportation Center; supporting the Dissertation Year Fellowship program; naming of space in Chambers Hall (atrium, lower level seminar room, for example); the Diana Marek Student Enterprise Fund; and individual benefactor levels.

In sum, Hani noted that the Center is focused on the future and cited, for example, that NUTC is pursuing research that is pushing the limits on logistics and supply chain operations, as well as investigations into automated and connected vehicles and trucks. This focus on the future was exemplified by Gywnn Shotwell’s SpaceX 60th Anniversary Gala Dinner presentation, and our BAC meeting Industry Workshop on unmanned aerial vehicles, “Applications and Emergent Technologies.”

9:00 AM

Membership Committee Report and New Member Introductions

Justin Zubrod introduced new BAC members attending a meeting for the first time:

  • David Arganbright, Vice President Government Affairs, OmniTrax;

  • Robert Chapman, Chief Executive Officer, Centerpoint Properties; and

  • Jim Davis, Chief Executive Officer, Accufleet International. 

9:10 AM

Speaker: Gene Seroka – “The Changing Landscape of Seaborne Trade” 

Presentation (PDF)

Gene Seroka, Executive Director, Port of Los Angeles, spoke on how sea trade is changing dramatically in the twenty-first century. He opened with an overview of the Port of LA, which is the ninth-largest port in the world in terms of container volume and by far the largest trade gateway in the Western Hemisphere. In fact, 41% of all US exports flow through the combined ports of Los Angeles and Long Beach. Unlike many of the other top worldwide ports, the Port of Los Angeles is a full-service port, featuring 27 terminals, 270 berths, 86 container cranes, and even amenities like a hotel, restaurants, and three museums.

Seroka’s experience at the Port of LA, since taking over as Executive Director in June 2014, has been during a time of profound transformation. Currently, shipping lines are struggling through the worst slump on record, ushering in an era of low growth and intense competition. This has led to severe vessel overcapacity, with demand only growing about 3-5% per year. However, this is also driving innovation: capacity, increasing at a rate of about 7.5% each year, has allowed ship size to quadruple since 1988—and more big ships are on the way. These big ships, Seroka explained, help reduce costs: a 14,000 TEU vessel costs up to 60% less per port slot than a 4,800 TEU vessel.

While this is going on, carrier alliances are helping create a new business and logistics dynamic unlike any ever before seen. Four major mega-alliances now control about 95% of container volume moving in the major east-west trades. These large alliances tend to favor major gateways (such as the Port of Los Angeles) because such large ports can accommodate larger vessels while providing warehouse, distribution, and transloading facility space, all of which allows management flexibility. Port survival in the future will thus depend on being “big-ship ready” to meet the demand for mega-alliance business. It also means these ports will need to improve and innovate solutions to sort cargo more efficiently; enhance ship-to-rail efficiency in order to service inland destinations; improve secondary conveyance with real-time data and productivity tools; and find chassis solutions that can provide more availability where chassis are needed. Ultimately, Seroka believes that these improvements, combined with a broader dialogue with supply chain stakeholders, will allow ports like Los Angeles to survive and thrive. 

10:00 AM

Faculty Introductions

David Morton, Professor, Industrial Engineering and Management Sciences
Theme: new strategies to build optimal, prioritized action lists.
Presentation (PDF)

Amanda Stathopoulos, Assistant Professor, Civil and Environmental Engineering
Themes: crowd sourced urban delivery and benefits of various sources data
Presentation (PDF)

Notes:
Click here to view the latest Faculty Affiliates and Researchers Guide.

10:30 AM

Break

11:00 AM

Speaker: Disrupting Barriers: Printer in Three Dimensions

Michael Beltran, Lecturer, Mechanical Engineering, Segal Design Institute, Northwestern University

Presentation (PDF)

Themes:

  • Hype v. Reality: initially 3D printing will impact the tinkerer, more than widespread manufacturing

  • 3D printing can drive innovation, lower prototyping costs, shorten the product development

  • 3D can currently replace low volume production methods, but scaling to larger production is still in the future

12:00 PM

Panel: Crude Oil By Rail – A Roadmap Toward Enhancing Safety

Moderator: Norm Carlson, Carlson Consulting International

Notes: The final panel of the meeting, Crude Oil by Rail: A Roadmap Toward Enhancing Safety, was chaired by Norman Carlson, Chairman, Carlson Consulting International, and Chair of the NUTC Hagestad Sandhouse Gang. To open the panel, Pat Brady, Director of Hazardous Materials for BNSF Railway, discussed the potential for derailment. In 2014, Brady explained, there were 116 total releases of hazardous materials on BNSF-controlled rails, out of a total of 1.8 million shipments—less than 0.006%. He went on to describe the four main causes of derailment: human-related error, engineering issues, mechanical error, or “miscellaneous” problems. To combat these challenges, new technologies are being developed and deployed, such as positive train control (PTC) systems based on a global positioning system that will go live this year, and ASKRAIL, a smartphone application that allows the company to track rail cars.

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Next, Robert S. Hulick, Executive Vice President and Chief Mechanical Officer for Trinity Rail, noted an industry “transition from hazardous materials in trains to hazardous-material trains.” He described Trinity’s holistic approach to safe transportation by rail—prevention, mitigation, and response—and highlighted its strategies in each category. He called for a harmonization of safety regulations within North America, particularly the United States and Canada, and charged that “regulatory certainty is necessary.” Hulick subsequently laid out how tank cars are designed and manufactured and how they can be improved.

In laying out the public interest viewpoint, Karen Darch, Village President of Barrington, Illinois, offered her opinions on the human, economic, and environmental challenges following hazardous materials derailments. She outlined the Lac-Megantic incident outside Québec, Canada, in July 2013, in which a derailment killed 47 and devastated the town’s downtown area. Her talk focused on how to address liability, ultimately concluding that operators must either accept the near-term costs of enhanced safety or accept enormous liability in the future from another Lac-Megantic-like incident which could destroy an American community. She recommended direct reports of all hazardous materials on rail to 911 Centers and advocated for industry insurance pools.

To close out the session, Professor Sridhar Krishnaswamy of the Northwestern University McCormick School of Engineering & Applied Science spoke about the reasons structures fail—and how such failures can be prevented. He contrasted the current practice of scheduled maintenance with “maintenance on demand” through the application of intelligent structural health monitoring (ISHM). ISMH systems facilitate taking timely remedial actions in order to prevent catastrophic structural failure by incorporating real-time diagnostic sensor data for closed-loop prognosis of remaining structural integrity. Using smart structures imbedded with various sensor systems, such as optical and acoustic sensors, could continuously monitor the state of tracks, bridges, trains and the presence of other trains.

A final question posed and discussed, but not resolved, is whether pending FRA regulations, potentially resulting in billions of dollars of infrastructure investments and retrofits, will ultimately result in safer systems and outcomes. 

12:25 PM

Introduction of Transportation Students

12:30 PM

Buffet Luncheon with Transportation Students