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8 CHAPTER 2 Estimating Methodology--The Algorithms This chapter presents the summary methodology used in freight movement will be redistributed through a wider net DIETT to estimate the transportation and economic costs of a (multiple detours) within mode and among modes and will disruption to a TCP. The methodology is designed to generate last until the TCP is rebuilt. The degree of redistribution is a net national economic impacts as a function of commercial function of cost and risk. The cost factor is considered here, and shipments (used interchangeably with freight movement) by the risk factor is considered in Section 2.2. truck, rail, and waterways. These impacts are derived by esti- The increases in costs of freight movement were calculated mating and then adding the values for the using the following: Increased cost of freight movement associated with the Length of Detour--the distance traveled to bypass the dis- detours, and abled TCP. This value is provided by the NBI database and Increased inventory costs imposed by the relative uncer- expressed in miles of detour, Md. tainty of deliveries through the detour. Level of Congestion--a factor that indicates the difference in throughput between the original route (the TCP) and Net economic and societal dislocations are not considered. the detour. It is expressed as a throughput factor, T, where Such dislocations are very important in determining the total T = throughput on detour (Td) divided by throughput on impact of a disruption. However, the process of determining the TCP (TTCP), or T = Td/TTCP. the total impact of dislocations is a very complex analytical Unit Cost of Shipment--this value is expressed as cost ($) and modeling exercise that is best performed through complex per ton of freight, per mile, C. This is a user input (default econometric models. Net total economic and societal disloca- values are provided). tions are less important for calculating relative values of direct impact from disruptions to freight movement--the focus of The formula used for calculating the net cost of freight this project. shipment through the detour (NCFSd) is NCFSd = M d * T * C 2.1 Increased Cost of Freight Movement Because there are generally multiple options for delivering freight to a point of destination, (alternative routes, different Increases in the cost of freight movement result from addi- modes, different suppliers, etc.) the net cost of freight ship- tional vehicle operating costs associated with the added travel ment through a detour, as expressed by NCFSd, is the "ceiling" distance of a detour. These costs include driver salaries, fuel, or maximum net cost incurred per unit of shipment. If other operation and maintenance, shipper profit, and other business options are more costly, they will not be taken. costs and are implicitly part of DIETT's estimating method- ology. There may be other costs associated with the detour, such 2.2 Increased Business as tolls, road wear, traffic regulations, etc. These are not consid- Inventory Costs ered herein, but they can be included in a DIETT analysis. The detour distance-related costs are compounded by the The introduction of a detour into freight shipments dic- capacity limitations of the detour. The initial traffic congestion tates additional business costs beyond those considered commonly subsides within about a week. However, long-term above. These are due to the following: