Transcript Binghamton Regional Freight Study

Economic Impacts of the Border on
Transportation
presented to
Canada/U.S. Transportation Border Working Group
presented by
Stephen Fitzroy, Economic Development Research Group
Andreas Aeppli, Cambridge Systematics, Inc.
April 13, 2010
Transportation leadership you can trust.
Presentation Overview
Project Summary
Case studies
Application of model on a real situation
Some thoughts for further action
1
Economic Impacts on Transportation of the
United States/Canada Border
Main objective was to determine the economic
consequences of delay at the US/Canada border,
including:
• impacts at specific border facilities or regions
• macroeconomic effects for entire border
• impacts of policy alternatives
Some key questions:
• What are the impacts of freight versus passenger delay?
• What commodities/industries are affected most?
• How does the transport sector respond?
• What role does reliability play?
2
Study Elements
Overview of Transborder Trade Data
• Collect data and identify trends
Literature Review
• Summarize relevant work
• Identify advantages and limitations of applied
methodologies
Develop Analytic Methodology
•
•
•
•
3
Logical approach
Compare to methods from literature review
Data requirements
Define three sample scenarios that reflect range of potential
model application
Literature Review
Most relevant studies:
• HDR|HLB (2006) – San Diego/Baja Border
• Taylor et al. (2003) – US/Canada Border
• DAMF (2005) – US/Canada Border (impacts to trucking firms)
Two broad approaches:
• macroeconomic – measure supply and demand elasticities of
response to time delay
• microeconomic – measure costs at vehicle-level, determine how
costs “flow” through economy
Room for improvement:
• “delay” is not the only cost of crossing border
• address travel time variability
• add commodity dimension
• recognize multiple freight carrier types
4
Key Considerations for Methodology
Many types of costs
•
travel time and variability
•
operating costs (fuel, capital, maintenance, labor, etc.)
•
administrative costs
Costs affect many economic players
•
passenger (commute, leisure, on-the-clock)
•
freight carriers (own-account, for-hire, common carriers)
•
freight shippers (bulk, mixed freight, small package, JIT firms)
Many possible responses to costs
•
Vehicle: mode/ route/ time-of-day
•
Firm: inventory management/ production technology/ site location
•
Household: tourism, employment, residential location
Data
5
Analyzing Border Delays
Overview of analytic approach
Scenarios:
• Changes in fees or charges
• Change in processing time
• Change in inspection policy
• Change in hrs of operation
• Change in security procedures
Facility Capacity Response:
• Change in processing time
• Change in idle time
• Change in reliability
• Change in tolls
Change in
user costs
by vehicle
Demand Response:
• Change in crossing demand
by trip purpose
• Change in vehicle/freight mix
• Change in crossing location
• Change in crossing time of day
6
Overview of Methodology
Methodology blends micro- and macro- approaches
Veh. Costs:
• Trucks
• Cars
Vehicle Users:
• Households
• Industry (pass.)
• Freight shippers
• Freight carriers
microeconomic elements
7
macroeconomic elements
Users’ Responses:
• Travel demand
• Traveler spending
• Carrier response
• Shipper response
Regional Impacts:
• Employment
• Output
• Value Added
• Wages
Flow of Model Interactions
8
Detailed Border Crossing Methodology (BCM)
Figure 1. Overview of Model for Estimating Delay Impacts at U.S./Canada Border Crossings
Input Variables
Time Cost Factors
 Passenger Time
 Crew Time
 Freight Time
 Buffer Time
Vehicle Cost Factors
 VOC/mi-Congested
 VOC/mi-Free Flow
 VOC/hr-Idle
Travel Demand Factors
 Vehicle-Trips
 VMT (VKT)
 VHT
 Congestion Level
 Buffer Time
 Average Crew per Vehicle
 Average Pass per Vehicle
 Average Freight per Vehicle
 Freight Commodity Mix
 Average Toll/Fare per Trip
 Average Passenger Spending
 Local Portion of Trip Ends
Industry Factors
 Modal Utilization
 Production Elasticities
 Output Multipliers
 Passenger Spending Patterns
9
1 – Travel Savings
by Cost Type
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




Passenger Time Cost
Crew Time Cost
Freight Time Cost
Reliability Time Cost
Toll/Fare Cost
Vehicle Operations Cost
2 – Travel Savings
by “User” Type





Households-Time
Households-Out-of-Pocket
Vehicle Operator (carrier)
Industry-Freight (shipper)
Industry-Nonfreight
3 – Travel Savings
by NAICS Industry
 Transportation Sectors (481-485)
 Other Industry Sectors
4 – Direct Industry Impacts
(output)
 Expanded Industry Production
 Changes in Final Demand
5 – Total Industry Impacts






All Industry Sectors
Direct + Indirect + Induced
Employment
Output
Value Added
Wage Income
Implications
Addresses limitations of surveyed approaches
• Vehicle based
• Incorporates industry and macroeconomic responses
• Includes travel time variability
• Recognizes different truck carrier types
• Impacts revealed at industry level
Additional features
• Benefit/Cost analysis
Challenges
• Appropriate data
• Demand responses to cost changes
10
Three Sample Scenarios to Test BCM
Niagara Falls Peace Bridge improvements:
• Analyze options for operational improvements to more
efficiently handle traffic
Detroit – Windsor tunnel:
• Assess the impact of the Western Hemisphere Travel
Initiative (WHTI) on cross-border travel
Pacific Highway border crossing:
• Examine the impact on travel times from expanded FAST
implementation
11
Niagara Falls Peace Bridge Improvements
Problem: Assess proposed post-9/11 physical and
operational improvements to approaches and processing
plazas
Criteria/Needs to be addressed:
• Inspection/Security
• Safety
• Structural Improvements/Renovations
• Capacity/Reliability (during and after structural
improvements)
• Environmental/Externality Issues
12
Modeled Economy-Freight Relationship
•
•
•
•
Taxes, Fees
Regulations
Facilities Investment
Services Affected
Freight-Focused
Project or
Policy
Speed, Cost
Productivity
Market Access
•
•
•
•
Industry Output
Profit
Value Added
Jobs & Wages
Economic
Change
Connectivity
Throughput
Freight
Flows
13
•
•
•
•
Commodity Value
Import/Export
Tonnage
Containers/Vehicles
Niagara Falls Peace Bridge Solutions
Multi-criteria investment evaluation
• More than one “solution” must be implemented and tested in
combination with others
• Extended construction and interaction effects must be
addressed
• Costs and responses vary over time and differentially affect
user segments and markets served
• Timing, regional scale and industry impacts vary by
policy/investment configurations and duration of activity
14
Detroit – Windsor Tunnel
Problem: Assess impact of WHTI on cross-border travel
and the corresponding impacts on business sales,
employment, tax revenue, wages, and output.
Criteria/Needs to be addressed:
• Effect of current border crossing policies and restrictions on
economy of Detroit and Windsor
− Local spending (especially tourism)
• Effects of labor markets and market access
− Labor productivity impacts
• Impacts on both US and Canadian economies
15
Modeled Economy - Passenger Relationship
• Regulations
• Facilities Investment
• Security Procedures
Alternative
Border
Policies
Speed, Cost
Productivity
Market Access
•
•
•
•
Industry Output
Profit
Value Added
Jobs & Wages
Economic
Impacts
Connectivity
Throughput
Travel
Decisions
16
• Value of Time
• VHT/VMT Savings
• Household
Spending
Modeled Passenger-Economy Relationship
Key issues to be addressed:
• Benefits and costs of tunnel approach improvements
• Procedural innovations to respond to alternative security
levels
• Robustness of procedures to respond to security alerts *and
costs associated with implementing these procedures
• Overall economic impacts of Detroit/Windsor region
• Key employment and retail sectors believed to be affected
• Effects of tunnel connectivity (and options – both capital and
operational)
17
Detroit-Windsor Tunnel Solutions
Assessment must address:
• Full range of regional economic impact measures
− Ability to assess local, metro (two cities) and regional scales
• Assessment of benefits and costs for multiple scenarios
• Scenarios that include both policy and capital investment
solutions
− Include parking and traffic management at bridge approaches
• Assess differential impacts by trip purpose
18
Pacific Highway Border Crossing
Problem: Assess proposed post-9/11 physical and
operational improvements to approaches and processing
plazas and evaluate effects of options to take advantage
of current FAST “excess” capacity
Policy responses to be addressed:
• Increase FAST enrollment
• Mutual recognition of FAST enrolments for empty vehicles
(73% of southbound moves are empty)
• Use of pricing to allow non-FAST users to “purchase”
unused FAST lane capacity when GP lane is congested
• Convert FAST lane to: a) Priced lane; or b) GP lane
• Retain FAST lane and convert one of two GP lanes to priced
lane
19
Modeled Economy-Freight Relationship
•
•
•
•
Taxes, Fees
Regulations
Facilities Investment
Services Offered
Freight-Focused
Project or
Policy
Speed, Cost
Productivity
Market Access
•
•
•
•
Industry Output
Profit
Value Added
Jobs & Wages
Economic
Change
Connectivity
Throughput
Freight
Flows
20
•
•
•
•
Commodity Value
Import/Export
Tonnage
Containers/Vehicles
Pacific Highway Border Crossing Solutions
Assess differential effects of user segments:
• Relationships between delay reduction on commercial and
passenger crossings
Evaluation of industry-specific market effects
• Does commercial traffic increase, and if so, for which
industry groups/commodity shippers
How do benefits move through economy:
• How are operator cost savings passed through to shippers
• How do shipper savings affect operations and markets
served
• What are the effects of non-commercial relay reductions on
household expenditures
21
Application of BCM in Actual Situation
Analysis of fiber optic network installation at Vermont’s
Derby Line/Highgate Springs Border Crossing
Problem: Assess impacts of pre-processing fully-laden
trucks to reduce queuing times for all border traffic.
Criteria/Needs to be assessed:
• Introduction of ITS to speed pre-approval and processing of
laden trucks
• Affect of delay and reliability at crossing and on I-89 and I-91
• Impacts on passenger cars, buses and empty trucks
22
Derby Line/Highgate Springs Border Crossing
Canadian Customs
Canadian Queue
US-Canadian
Border
US Queue
US Customs
23
Derby Line/Highgate Springs Profile
Total Exports
Exports Originating in Vermont
% Originating in Vermont
Total Imports
Source: WiserTrade, 2009; (in $ billion)
24
I-91/
Derby
$0.50
$0.04
8.80%
$2.12
I-89/
Highgate
$2.86
$0.67
23.50%
$4.53
Totals
$3.36
$0.72
21.30%
$6.66
Derby Line/Highgate Springs Border Crossing
Data Available:
• Available vehicle entry data (USDOT, Customs and Border
Protection, OMR database, December 2008)
• DHS Survey of vehicle border crossing times (2008)
Analysis Approach:
• Synthesize queuing distributions using current data
• Estimate new queuing distribution(s) assuming:
− 5-minute reduction in laden-vehicle median crossing time
− average queue mix of passenger cars, laden trucks, empty
trucks, and passenger buses
− Minimum, average and standard deviation of processing time
for each vehicle type
25
Modeled Economy-Freight Relationship
•
•
•
•
Taxes, Fees
Regulations
Facilities Investment
Services Offered
Freight Project
or Policy
Speed, Cost
Productivity
Market Access
•
•
•
•
Industry Output
Profit
Value Added
Jobs & Wages
Economic
Change
Connectivity
Throughput
Freight
Flows
26
•
•
•
•
Commodity Value
Import/Export
Tonnage
Containers/Vehicles
Derby Line/Highgate Springs Queuing
Average delays of 15 minutes propagate through peak
queues and result in more than 5% of trucks experiencing
30-minute delays
Reductions of 5 minutes in median crossing produces 3minute reduction in minimum times; reduction in
standard deviation of 4 minutes; and results in less that
5% of trucks experiencing 20-minute delays
Inputs to model developed using queuing simulations of
the build and no-build scenarios and comparing the
differences
27
Derby Line/Highgate Springs Economic Impacts
Economic Development Benefit
Direct
Jobs
2,700
Output ($ Millions)
$
276
Value Added ($ Millions)
$
138
Wages ($ Millions)
$
97
Indirect &
Induced
Total
2,400
5,100
$
229 $
505
$
125 $
263
$
85 $
182
Sources: Calculated by EDR Group from EDR-LEAP and IMPLAN modeling
packages. Indirect and induced benefits are Vermont-wide; (in $ million)
28
Derby Line/Highgate Springs BCA
Factors
Border Queuing
Safety
Congestion Reduction
Fuel and Emissions Reduction
Benefits
Costs
NPV
BCR
Source: EDRG, 2009; (in $ million)
29
Present
Value
$
265.0
$
0.3
$
1.5
$
0.1
$
267.0
$
77.5
$
189.4
3.44
Derby Line/Highgate Springs Benefits
Border Queuing
• Time savings for all vehicles (commercial and passenger)
attributable to queue reduction at border
Safety
• Crash reduction - injuries, property damage
Congestion Reduction
• Value of congestion reduction on I-89 and I-91 throughout
Vermont
Fuel Used and Emissions Reduction
• Savings in fuel costs and reduced emissions costs
30
Border Crossing Model Advances and
Limitations
Sensitivity of BCM to Transportation Factors Affecting
Cross Border Trade
Spatial Coverage/Geographic Range of Impacts
System Output and Results
31
Sensitivity of BCM to Transportation Factors
Affecting Cross Border Trade
Advantages and Modeling Innovations
• Network operations (delay/Reliability)
• Pricing and cost pass-through structures
• Vehicle/load characteristics
Limitations
• Differing detail on commodity flow information (O/D and
routings) on US versus Canadian networks
32
BCM Spatial Coverage/Geographic Range of
Impacts
Advantages and Model Innovations
• Details on sub-state and sub-provincial economic data
Limitations
• Interactive effects of macro-economic shifts/responses must
be exogenously or iteratively addressed
33
BCM System Output and Results
Advantages and Model Innovations
• Flexible reporting structure and consistent outputs
• Addresses concerns of US DOT on methods and practices
Limitations
• Sensitivity analysis (risk and uncertainty) associated with
inputs and responses
34
Some Further Thoughts
Develop Comparable Cross-Border Economic Interaction
Models
Integrate Cross-Border Commodity and Freight Routing
Algorithms
Develop Financial Modeling and Accounting for Revenue
and Innovative Financing Evaluation
35
Development of Provincial & Sub-Provincial I/O
Enhanced Social Accounting
Structure
User Responses
• Stats Canada I/O
• IMPLAN
− Commodity flows and wage
structure
Industry and commodity
interactions for detailed
industry impacts
• Industry spending on labor
and materials
Wage payments to
employees for induced
economic impacts
36
Statistics
Canada
I/O
Multipliers
IMPLAN
Commodity
& Wage
Structure
Provincial Impacts
Tax Impact Analysis
Tax impacts for federal and state/local govt.
Contribution from households & businesses
TAX IMPACT REPORT ($mil)
Tax/Fee
Collector
Service Operator
Federal
Government
Tax/Fee Description
Tolls & Fees
97.09
446.49
Totals
543.59
0.45
9.49
9.94
Income/Profits
526.97
494.33
1,021.31
Social Insurance Tax (FICA)
420.76
398.62
819.38
-
139.88
139.88
948.18
1,023.34
1,971.52
Motor Fuel Tax
0.33
12.66
12.99
Motor Vehicle License Fees
8.36
6.77
15.12
155.30
106.57
261.87
not available
not available
370.67
3.34
294.09
297.43
Total Federal Government
Income/Profits
Sales tax
Property Tax
Social Insurance Tax
Miscellaneous Fees & Taxes
Total State & Local Government
Grand Total
37
Businesses
Motor Fuel Tax
Miscellaneous Fees & Taxes
State and Local
Government
Taxes/Fees Paid by:
Households
1.29
5.15
6.43
60.30
70.26
130.56
228.92
470.18
1,069.76
1,177.09
1,493.52
3,041.28
Revenue & Cost Sharing Analysis
Input public & private sector responsibilities for
construction, operation, maintenance, revenue collection
Internal rate of return (ROI), payback period, revenue/cost
ratio
REVENUE & COST SHARING REPORT
Cost or Revenue Description
Capital Costs
Project
Costs
($m)
Revenue to
Cost Metrics
Totals
250.00
1,700.00
Operations
-
55.30
55.30
Maintenance
-
75.20
75.20
Lease/Contract Costs
-
750.00
750.00
1,450.00
1,130.50
2,580.50
Tolls
918.25
1,836.50
2,754.75
Lease/Contract Revenues
750.00
-
750.00
Project Revenue Totals
1,668.25
1,836.50
3,504.75
Payback Period
12 years
7 years
7 years
11.5%
26.3%
19.9%
1.15
1.62
1.36
Internal Rate of Return
Revenue/Cost Ratio
38
Private
1,450.00
Project Cost Totals
Project
Revenues ($m)
Government
Questions?