A Quantitative Decision Support Framework for Optimal Railway Capacity Planning

Railways around the world are facing capacity constraints. In North America, railway freight traffic has increased nearly 30% over the past 10 years, and this demand is projected to increase 88% by 2035. It is clear that network capacity has to be increased by a combination of several engineering options, but the question is how railroads can allocate investment in infrastructure in the best possible way. In this paper, we demonstrate a new decision support framework to help capacity planners determine how to optimize the allocation of capital investment for capacity expansion projects. This framework has three stand-alone tools: (1) an “Alternatives Generator” that enumerates possible expansion options along with their cost and capacity effects; (2) an “Investment Selection Model” that determines which portions of the network (at the subdivision level) need to be upgraded with what kind of capacity improvement options; and (3) an “Impact Analysis Module” that evaluates the tradeoff between capital investment and delay cost. Based on the network characteristics, estimated future demand, and available budget, the proposed decision support framework can successfully determine the optimal solution regarding which subdivisions need to be upgraded and what kind of engineering options should be conducted. Such a tool will help railroads maximize their return from capacity expansion projects and thus be better able to provide reliable service to their customers, and return on shareholder investment.