Economic Implications of Traffic Congestion

Talking Freight SeminarTalking Freight Seminar Freight and Economic Freight and Economic

DevelopmentDevelopmentGlen WeisbrodGlen WeisbrodEconomic Development Economic Development Research Group, Inc.Research Group, Inc.

2 Oliver Street, 92 Oliver Street, 9thth Floor FloorBoston, MA 02109 USABoston, MA 02109 USA

www. edrgroup.comwww. edrgroup.com

22

Three ThemesThree Themes1. Freight Flows: changing due to

National & Global Economic Markets.

2. Economic Development: depends on Market Access & Competitiveness.

3. Infrastructure Investment: directly affects Costs & Competitiveness.

33

Freight Growing Faster than Pop.Freight Growing Faster than Pop.Trends…

0%

5%

10%

15%

20%

25%

1992 1993 1994 1995 1996 1997 1998 1999 2000

MfgShipmentValue

Population

Freight ton-miles

Value of Mfg

Freight Ton-Miles

Population

44

Changing Freight PatternsChanging Freight Patterns

• Higher value/weight• Higher time sensitivity• Overnight delivery • Small package delivery trucks• Air & Marine port dependence on rail & hwy• Rail & truck companies focus on long-hauls

Trends…

55

Congestion Costs of Delay

Overnight Delivery Services –earlier pickup deadlines, fewer deliveries per driver

Manufacturers –overtime for handling deliveries

Concrete mixer trucks –shrink delivery area (spoilage)

Shippers, Air/Water Ports, Rail – miss delivery deadlines or pad schedules

Economic Development…

66

Competitiveness & ProductivityCompetitiveness & Productivity

Effects on Business Location & Growth…

• Breadth of Suppliers & Labor Inputs• Size of Customer Delivery Markets• Economies of Scale in Serving Markets• Transportation Choice: Reliability, Modes


77

Urban Freight LimitationUrban Freight Limitation

• Higher Cost to Serve Markets• Reduced Schedule Reliability• Reduced Access & Scale Economies

Smaller Market Area can be served within requirements for cost and service quality


Reduced Opportunity for Attracting and Growing Business …

88

Example: Vancouver BC International Trade Gateway

Urban Econ Development…

99

Vancouver No Build ScenarioVancouver No Build ScenarioGround Transport • Cars – increase in travel expense ($134 million/yr)• Trucks – raise shipper costs; reduce business

competitiveness & attraction ($280 million/yr)• Rail – capacity limitation: businesses seek

alternative routes at higher cost (1100 railcars/day)

Ports • Marine ports – higher cost, shift activity elsewhere• Airport – raise costs for airport use

Diff: Build vs. Not


1010

Vancouver Economic ImplicationsVancouver Economic Implications

Economic Value of Gateway 30 Port Terminals, 22 Rail Yards, Airport, Border Crossings On Site: 75,000 jobs, W. Canada: 145,000 jobs

Economic Impact of Constraint on Growth:• 7,300 to 16,300 jobs• $ 475 million to $ 1.1 billion of GDP /year

Economic Stakes for Cost Competitiveness:• Over 150,000 jobs in production industries produce over

$30 billion of exports /yr that depend on Vancouver Gateway competitiveness


1111

Vancouver…

To Trans Can Hwy

To US Border


1212

Strategies for Port/Gateway AreasStrategies for Port/Gateway Areas

• Access Corridor – Los Angeles (Alameda Corridor)

• Satellite Ports– NY Port Inland Distribution Network

• Feeder System – Rotterdam (Inland Ports)

Urban Economic Development…

1313

Example: Chicago Rail YardsExample: Chicago Rail Yards• 74 rail yards, 17 for intermodal (rail-truck)

• delays at 600 grade crossings

http://hometown.aol.com/chirailfan/watchmap.htmlhttp://hometown.aol.com/chirailfan/watchmap.html

• congestion from 3200 daily truck trips transferring cargo from yard to yard

•Abandoned & under-utilized rail yards


1414

Chicago Scenario ImpactsChicago Scenario ImpactsScenarios (with & without reuse of abandoned rail yards)

• Base Case: existing facilities, adjust over time• Shift Intermodal to Rim: periphery of region• Rationalization: Consolidate w/upgraded infrastructure• Minimal Rail Freight in City: Intermodal moves to periphery;

loose-car business de-marketed • Bypass Chicago: Reroute trains to bypass routes


1515

NCHRP Study 8-42NCHRP Study 8-42How Can We Use Rail Freight Solutions to

Address Roadway Congestion • Converging interests of private sector transport

carriers and public planning agencies

• Reducing Congestion and Road/Rail conflicts that adversely affect business profits, public safety and economic development opportunities

• Developing Framework for Decision-making


1616

Rural Freight LimitationsHigher Trucking Cost –due to “deadheading”Lower Availability When Needed –reliability

reduced by vehicle shortages, delays Higher Rail Cost –full line cost for rail service

to/from intermediate locations

Rural Economic Development…

Smaller Market Area can be served within requirements for cost and service qualityLower Value Added of existing products

Reduced Opportunity for Attracting and Growing Business …

1717

Example: Appalachian Corridor TExample: Appalachian Corridor TRural Economic Development…

NY-17, Now I-86, Southern Tier ExpresswayMountain Region of Southwest NY State, Near Pennsylvania LineArea had been economically distressed and losing jobsI-86 designation brought new freight distribution, manufacturing, and traffic-serving businesses.

FHWA Study compared it to a similar area with no new highway connections

1818

Highway & Mfg EmploymentHighway & Mfg EmploymentRural Economic Development…

Manufacturing 1995 1997 2000

Southern Tier West 0.0% -0.3% 1.6%

North Country Central 0.0% -4.9% -13.2%

NY State Total 0.0% -6.2% -14.0%

-16%-14%-12%-10%-8%-6%-4%-2%0%2%4%

1995 1997 2000

Southern Tier West

N. Country Central

NY minus NYC

Southern Tier West

N. Country Central

1919

Example: Janesville, WIExample: Janesville, WI

• Auto Mfg – GM, Chrysler• Parts Mfg –to S Carolina (BMW),

Mexico & Mich. (Ford), Ontario & Missouri (Chrysler)

Regional automotive mfg cluster

• Reliance on just-in-time mfg, increasing needs for air and reliable truck movements

• Current facilities cannot meet this need, reducing productivity and efficiency in mfg

• Potential loss of jobs to Mexico or Canada


2020

WisDOT: Multi-Modal Freight AccessWisDOT: Multi-Modal Freight AccessRail DelayRoad Delay Airport Constraints

Airport Improvements ($9.1 million) Highway Access & Rail Crossing

Improvements ($13.5 million)


2121

ARC Export Transportation StudyARC Export Transportation Study

Overseas Exports are IntermodalOverseas Exports are Intermodal Truck to Air Rail or Truck to Sea


2222

Appalachian Development HighwaysAppalachian Development Highways

Serve historically isolated areas; improve access

Link to major markets and trade routes

Motivated by econ development


2323

ARC Export Export StudyARC Export Export Study

Florida

New York York

Michigan

Auto Parts, Upholstered FurnitureAuto Parts, Upholstered Furniture

New York

Florida

MarylandMichigan

Texas

Food Processing MachineryFood Processing Machinery


2424

ARC Study FindingsARC Study Findings• There are limited E-W freeways, rail lines &

inter-modal connections across Appalachia, raising costs & constraining export opportunities.

• States in eastern side export more to Europe because of easier access to east coast ports.

• States in the western side export more within North America because of better access to industrial parts of Canada and Mexico.


2525

…business growth & attraction depends on connections to markets, not just presence of a highway…

Freight Connections Alone Do Not Cause Economic Development

Conclusions…

ARC Guide: help planners identify opportunities related to new highways, and actions needed to pursue them.

2626

• Lost opportunity for economic growth, good-paying jobs, new jobs for next generation.

Potential Benefits of Infrastructure Investment…• Opportunity for success is not lost.

But Failure to Provide Freight Access Constrains Economic Development

Conclusions…

2727

……On the WebOn the WebFHWA Economic Development Studies (incl. I-86) www.fhwa.dot.gov/planning/econdevVancouver Freight Gateway Study

http://www.edrgroup.com/pages/n32.html North Country Transportation Studies www.danc.org/ncts Chicago Rail Freight Study

www.edrgroup.com/pages/n25.html ARC Guide to Economic Opportunities from Highways

www.edrgroup.com/pages/n11.html Library of Economic Impact Studies www.edrgroup.com

http://www.fhwa.dot.gov/planning/econdev

http://www.edrgroup.com/pages/n32.html

http://www.danc.org/ncts



http://www.edrgroup.com/

Economic Implications of Traffic Congestion

Documents

Transcript of Economic Implications of Traffic Congestion