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Benefit-Cost Analysis 63 tors are adjusted for inflation for the future years using average rate of inflation of 3% derived from historic growth in the consumer price index [CPI]). 4.4 Unit Cost Data Table 4.2 provides unit cost estimates associated with the implementation of truck-only lane and mixed-flow lane facilities. The unit costs in Table 4.2 include capital costs associated with right-of-way acquisition and construction costs (including lanes, interchanges, and staging areas in the case of LCV operations). Since the costs may also vary depending on the type of corridor (long-haul versus urban), the cost information is presented separately for the two corridor sce- narios. O&M costs are estimated based on the assumptions in the Georgia Statewide Truck Lane Needs Identification Study, which assumes O&M costs for truck-only toll lane corridors to be 0.5% of total project capital costs in the base year, which increase each year at a 3% rate of inflation (based on historic growth in CPI). 4.5 Economic Assumptions for Net Present Value Analysis For the purpose of the B-C analysis, it is assumed that the corridor is operational beginning in 2008, and benefits are accrued for a study time horizon up to 2030. The discount rate is assumed to be 7%, as recommended by the Office of Management and Budget (OMB) for proj- ects providing societal benefits. Average annual growth rate in truck and auto traffic for the NPV analysis is assumed to be 3.3% and 1.8%, respectively, based on truck and auto VMT growth esti- mates from FHWA's Freight Analysis Framework (FAF).44 Annual rate of inflation for truck freight rates and operating costs (which are used as inputs in the calculation of truck productiv- ity benefits) is assumed to be 3% based on historic trends in the CPI. Key assumptions used in the NPV analysis are summarized as follows for annual changes from 2008 to 2030: Growth rate for autos--1.8% (based on FHWA FAF VMT growth estimates), Growth rate for trucks--3.3% (based on FHWA FAF VMT growth estimates), Rate of inflation--3.0% (based on historic trends in CPI), and Discount rate--7.0% (based on OMB recommendations). 4.6 Corridor Descriptions and Corridor-Specific Benefit-Cost Methodologies 4.6.1 Long-Haul Corridors Long-haul corridors can experience a wide range of traffic conditions. Unlike urban corridor scenarios where truck-only lanes are generally part of a strategy to meet capacity improvement needs (in cases where truck traffic has a disproportionate impact on corridor congestion), the rationale for truck-only lanes along long-haul corridors can sometimes be to address congestion moving in, out, or around metropolitan areas, to increase truck productivity in low-volume rural corridors, or to achieve freight efficiency and reduce costs to businesses. Examples of long-haul corridor rationales other than to address congestion include the following: Need to operate LCVs to enhance trucking productivity along long-haul corridors. Oper- ating LCVs on general purpose lanes is known to have safety issues due to interactions of LCVs with passenger vehicles; 44 See http://www.ops.fhwa.dot.gov/freight/presentations/lambert_nasto.htm, Slide 7.

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64 Separation of Vehicles--CMV-Only Lanes Table 4.2. Unit costs for truck-only and mixed-flow lane facilities. Corridor Scenario Cost Category Alternative Value Source Urban Construction costs--lanes Mixed-flow lane 2.8 Middleton, D., S. Venglar, C. Quiroga, D. Lord, Corridors ($ million per lane mile) and D. Jasek, Strategies for Separating Trucks from Passenger Vehicles: Final Report, Texas Transportation Institute (TTI), September 2006. Truck-only lane 5.5 Middleton, D., S. Venglar, C. Quiroga, D. Lord, and D. Jasek, Strategies for Separating Trucks from Passenger Vehicles: Final Report, Texas Transportation Institute (TTI), September 2006. Construction costs-- Mixed-flow lane 80 Cambridge Systematics (assumption based on interchange ($ million per Highway Economic Requirements System [HERS] interchange) base case value) Truck-only lane 80 HERS Right-of-way (ROW) Mixed-flow lane 1.2 Woudsma, C., T. Litman, and G. Weisbrod, A acquisition costs ($ Report on the Estimation of Unit Values of Land million per lane mile) Occupied by Transportation Infrastructures in Canada, Transport Canada, 2006. Truck-only lane 1.2 Woudsma, C., T. Litman, and G. Weisbrod, A Report on the Estimation of Unit Values of Land Occupied by Transportation Infrastructures in Canada, Transport Canada, 2006. Long-Haul Construction costs--lanes Mixed-flow lane 2.8 Middleton, D., S. Venglar, C. Quiroga, D. Lord, Corridors ($ million per lane mile) and D. Jasek, Strategies for Separating Trucks from Passenger Vehicles: Final Report, Texas Transportation Institute (TTI), September 2006. Truck-only lane-- 5.5 Middleton, D., S. Venglar, C. Quiroga, D. Lord, without LCV and D. Jasek, Strategies for Separating Trucks from Passenger Vehicles: Final Report, Texas Transportation Institute (TTI), September 2006. Truck-only lane-- 5.9 Incremental costs due to LCV operations derived with LCV from data presented in the Western Uniformity Scenario Analysis Construction costs-- Mixed-flow lane 80 Cambridge Systematics (assumption based on interchange ($ million per HERS base case value) interchange) Truck-only lane-- 80 HERS without LCV Truck-only lane-- 86 Incremental costs due to LCV operations derived with LCV from data presented in the Western Uniformity Scenario Analysis Construction costs-- Mixed-flow lane N/A N/A staging areas ($ million per staging facility) Truck-only lane-- N/A N/A without LCV Truck-only lane-- 2.8 U.S.DOT's Comprehensive Truck Size and Weight with LCV (staging Study, area in rural http://www.fhwa.dot.gov/reports/tswstudy/tswfinal. location) htm. Truck-only lane-- 4.5 U.S.DOT's Comprehensive Truck Size and Weight with LCV (staging Study, area in urban http://www.fhwa.dot.gov/reports/tswstudy/tswfinal. location) htm.

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Benefit-Cost Analysis 65 Table 4.2. (Continued). Corridor Scenario Cost Category Alternative Value Source ROW acquisition costs ($ Mixed-flow lane 0.1 Trans-Texas Corridor (TTC) cost assumptions and million per lane mile) Washington State Department of Transportation, Washington Commerce Corridor Feasibility Study, December 2004, http://www.wsdot.wa.gov/NR/rdonlyres/5A1D7325 -AFAF-4BD1-9336- BECCDEE92ADF/0/WCC_FinalReport.pdf.. Truck-only lane-- 0.1 Trans-Texas Corridor (TTC) cost assumptions and without LCV Washington State Department of Transportation, Washington Commerce Corridor Feasibility Study, December 2004, http://www.wsdot.wa.gov/NR/rdonlyres/5A1D7325 -AFAF-4BD1-9336- BECCDEE92ADF/0/WCC_FinalReport.pdf. Truck-only lane-- 0.1 Trans-Texas Corridor (TTC) cost assumptions, and with LCV Washington State Department of Transportation, Washington Commerce Corridor Feasibility Study, December 2004, http://www.wsdot.wa.gov/NR/rdonlyres/5A1D7325 -AFAF-4BD1-9336- BECCDEE92ADF/0/WCC_FinalReport.pdf. Need to meet truck oversize/overweight (OS/OW) requirements. Operating OS/OW trucks on general purpose lanes is known to have safety issues, and is expected to have a detrimental impact on pavements; and Need to separate trucks from autos along corridors. Terrain and other system configura- tional issues may be leading to safety problems due to truck-auto operational conflicts. Based on these observations, the representative baseline scenario for long-haul corridors assumes modest overall traffic volumes (some congestion) with high levels of truck traffic. Both average daily total and truck traffic volumes grow over the forecast period, but truck traffic grows at a faster rate. To evaluate the travel time benefits of truck-only lanes, in addition to a no-build alter- native, an alternative with additional general purpose lanes has been considered in the analysis. In addition to analyzing congestion reduction benefits (in terms of travel time savings), a major feature of the analysis involves examining the benefits and costs of LCV operations on the truck- only lanes (OS/OW truck operations were not considered as part of the current analysis since there was a limited body of research available to provide inputs to allow for a robust assessment of the performance benefits of truck-only lanes with OS/OW truck operations). Considering the increased interest of states to allow special permit OS/OW truck operations based on permit fees, however, the performance and feasibility of these operations on truck-only lanes would be an important issue to consider as part of future research on truck-only lanes. Generic Corridor Characteristics The characteristics of the generic baseline corridor for the B-C analysis of truck-only lanes along long-haul corridors were derived from the characteristics of the long-haul corridors analyzed in the Reason Foundation study45 for the selection of pilot corridors for the implementation of toll truckways. Table 4.3 summarizes these characteristics for the base year (2008). 45 R. W. Poole, Jr. and P. Samuel, Policy Study 316: Corridors for Toll Truckways: Suggested Locations for Pilot Projects, Reason Foundation, February 2004.

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66 Separation of Vehicles--CMV-Only Lanes Table 4.3. Generic baseline long-haul corridor characteristics. Parameter Value Rationale Length of Corridor 400 mi Long-haul corridors considered in the Reason Foundation study ranged in length from 15 to 973 mi and the average length was estimated to be 400 mi Number of Lanes 6 Corridors ranged in number of lanes between 4 and 7 lanes and average was estimated to be 6 lanes Average Daily Total Traffic 105,000 Corridors ranged between 57,000 and 196,000 average daily traffic (ADT) and average was estimated to be 105,000 Average Daily Truck Traffic 14,000 Corridors ranged between 6,000 and 20,000 average daily truck traffic (ADTT) and average was estimated to be 14,000 Truck Share of Total Traffic 13.3% For the baseline analysis, assumptions were needed for the level of usage of the truck-only lanes (otherwise termed truck diversion to truck-only lanes). This information is used to deter- mine V/C ratios, speeds, and travel time benefits. However, the results of the benefits analysis suggest that the level of diversion is critical to the potential success of truck-only lanes, particu- larly when LCV operations are involved. In the case of truck-only lanes without LCV operations, truck lane usage largely will be a function of the difference in speeds between the mixed-flow lanes and the truck-only lanes and the availability of access points. Generally, this can be deter- mined using standard travel demand models and commodity flow and truck O-D data. In the case of truck-only lanes with LCV operations, a more comprehensive analysis of markets that take into account the O-D patterns of the trucks, the types of commodities carried, locations of staging areas, and business characteristics of the motor carriers is required to accurately deter- mine the diversion from standard trucks to LCVs. None of the studies reviewed for this project included this type of market analysis. These studies arbitrarily hypothesized ranges of utilization that tended to be fairly high (40% or more). The I-15 Comprehensive Corridor Study in South- ern California and recent work for FHWA have made high-level estimates of diversion to LCV lanes based on data on commodities typically carried in LCVs on the existing LCV network, O-D patterns of trucks relative to the existing LCV network, and configurations that might switch to LCV operations. These estimates suggest that diversion markets might be substantially smaller than the ranges represented in the studies reviewed for this project. Therefore, a wider range of diversion rates was examined in this project as part of a sensitivity analysis approach. Description of Alternatives In addition to the baseline no-build corridor, three build alternatives were developed for the B-C analysis of long-haul corridors, which included the following: Additional mixed-flow lanes. Although long-haul intercity corridors generally do not have high levels of congestion, in certain high-potential corridors, particularly in the industrial midwestern United States and along the U.S. coasts in certain key corridors, there are high lev- els of congestion around cities and sufficient volumes that over the time horizon of the analy- sis, congestion levels are expected to grow. Thus, the evaluation of travel time benefits would tend to favor truck-only lane solutions if they are only compared with no-build conditions, because the truck-only lanes have more capacity. In many of the studies used in the perfor- mance evaluations presented in the previous chapter, this was a shortcoming since they only compared truck-only lanes with a no-build alternative (without considering an additional mixed-flow lane alternative). Therefore, in the generic corridor analysis, a build alternative was defined that included additional mixed-flow lanes. In the long-haul corridor, this alternative

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Benefit-Cost Analysis 67 includes two additional mixed-flow lanes in each direction along the entire length (400 mi) of the corridor. Truck-only lanes without LCV operations. This alternative is comprised of two truck lanes in each direction along the entire length (400 mi) of the corridor. This alternative was included to analyze the performance benefits and relative costs of truck lanes (without LCV operations) in comparison with additional mixed-flow lanes. Truck-only lanes with LCV operations. As discussed earlier, many long-haul corridor con- cepts are focused on improving freight operations through productivity improvements while at the same time gaining the operational and safety benefits of truck-auto separation. There- fore, this generic corridor analysis includes an alternative with LCV operations. This alterna- tive is comprised of two truck lanes in each direction along the entire length of the corridor, and these truck lanes allow LCV operations. Calculation of Benefits Net present value of productivity benefits. For the purposes of this study, the calculation of productivity benefits follows the methods used by the Reason Foundation analysis of LCV oper- ations. This approach calculates productivity benefits as a private-sector benefit that only accrues to users of the truck-only lanes (both cases, with and without LCVs). The approach is based on the estimation of the net increase in trucking industry earnings due to operations on truck-only lanes and derives from both reduced travel times (which create the opportunity to carry more loads and achieve higher equipment utilization) and the ability to carry higher payloads per unit operating costs. The specific assumptions and approaches used are described in more detail in Appendix C, along with the results of the NPV calculation of these benefits. Net present value of travel time savings for mixed-flow traffic. Travel time savings benefits are quantified for each of the years (2008 to 2030) for each of the build alternatives relative to the no-build alternative, to estimate the total NPV of travel time savings for the B-C analysis. Note that these estimates only include the total travel time savings for mixed-flow traffic (autos and trucks on the general purpose lanes). As discussed earlier, for the truck-only lane alterna- tives, travel time savings for trucks on the truck-only lanes are not included in this performance measure since these benefits are captured in the productivity benefits calculations. A more detailed description of the calculation methodology is presented in Appendix C, along with complete results of the calculations. Net present value of safety benefits. Safety benefits are quantified in terms of the NPV of mon- etary savings in total accidents (fatality, injury, and property-damage only [PDO]) for the 2008 to 2030 time period for each of the build alternatives compared to the no-build alternative. Total accidents for each of the alternatives are estimated using inputs on auto and truck VMTs, level of congestion (V/C) on the general purpose and truck lanes, and accident rates (for fatality, injury, and PDO accidents in terms of accidents per million VMT) as a function of V/C from the IDAS User Manual.46 Additionally, as discussed in the performance evaluation task, for the truck lane alternatives, the total accidents on the general purpose lanes estimated using IDAS inputs are reduced by a factor of 15%, as recommended by the Douglas handbook47 to account for the safety benefits of truck-auto separation. A more detailed discussion of the calculation methodology and results of the NPV calculation are presented in Appendix C. 4.6.2 Urban Corridors The B-C analysis approach for urban corridors compares the relative benefits and costs of truck-only lanes with additional mixed-flow lanes, based on a generic corridor analysis approach, 46 See http://idas.camsys.com/userManual/App_b.pdf. 47 J. G. Douglas, Handbook for Planning Truck Facilities on Urban Highways, August 2004.

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68 Separation of Vehicles--CMV-Only Lanes similar to the one described in the previous section for long-haul corridors. Urban corridors with high auto and truck traffic volumes would be primary candidates requiring such a comparative assessment, since congestion, reliability, and safety are expected to be key issues along such cor- ridors, and adding capacity not only to mitigate congestion, but also to improve reliability and safety would be a primary need. It would be important to analyze if adding capacity while at the same time achieving truck-auto separation (through truck-only lanes) would be more cost effec- tive along these corridors compared to adding mixed-flow capacity. A key consideration in analyzing the differential capacity benefits of truck lanes as com- pared to mixed-flow lanes is the difference in the time-of-day characteristics of truck traffic and auto traffic. Auto volumes tend to peak during the morning and evening commuter hours whereas truck volumes tend to peak in the middle of the day. The benefits of truck- only lanes will therefore depend largely on the degree to which congestion extends through- out the day, truck and auto peaks overlap, and truck volumes are high enough to achieve high levels of truck lane use. Unfortunately, the study team was unable to account for time-of-day variations between trucks and autos in the B-C analysis because of the lack of a travel demand model or a simulation tool to assess the time-of-day variations between trucks and autos. However, future analyses to assess the performance benefits of truck-only lanes should consider time-of-day variations between trucks and autos through the use of travel demand models and/or simulation tools to conduct an accurate assessment of the true performance benefits of truck-only lanes. Since none of the reviewed studies under the urban corridor scenario provide B-C analysis results based on a one-to-one comparison between truck-only lanes and additional mixed-flow lanes, the B-C assessment presented in this section is based on comparing truck-only lanes and mixed-flow lane alternatives that add the same amount of capacity. The benefits included in the B-C analysis include travel time savings, reliability, and safety. Generic Corridor Characteristics The I-710 corridor in Southern California serves as a prime example of a corridor in an urban area with configurational, demand, and operational characteristics that are suitable for the com- parative assessment of the relative benefits and costs of truck-only lanes and additional mixed- flow lanes. Some of these characteristics include the following: Location (impacts corridor demand characteristics): Access to major freight facilities. Primary access route to major seaports, thereby resulting in high truck (port-related) volumes on the corridor; and Primary urban area corridor with high auto and truck (port as well as domestic truck) traf- fic volumes. Safety: High accident rates due to congestion in the peak periods, as well as high level of truck-auto interactions. Reliability: Due to congestion and high truck-auto interactions (and associated incident-related issues) and high port truck traffic volumes, improving reliability is not only important for autos, but also for the international goods movement supply chains whose efficiency is affected by reliability issues along the corridor. Consequently, the characteristics of the urban area generic corridor for the B-C analysis, including the length, auto and truck volumes, and number of lanes, draw heavily from analysis of the I-710 corridor. The B-C analysis approach involves conducting sensitivity analyses to pro- vide a basis for drawing conclusions from a wide range of critical urban corridor characteristics and addressing uncertainty in estimates of some of the cost and benefit parameters.

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Benefit-Cost Analysis 69 The demand and configurational characteristics of the generic urban corridor are defined as follows: Length = 20 mi, Number of lanes (bidirectional) under the no-build alternative = 10, Daily auto volume = 200,000, Daily truck volume = 60,000, Daily total traffic volume = 260,000, and Truck share of total traffic = 23%. Description of Alternatives To ensure consistency in the comparisons of relative benefits and costs between the build alternatives (additional mixed-flow and truck-only lanes), it is assumed that these alternatives provide similar levels of additional capacity along the corridor. The characteristics of these alter- natives are as follows: Additional mixed-flow lanes. This alternative includes two additional mixed-flow lanes in each direction over the entire stretch of the corridor; and Truck-only lanes. This alternative includes two truck-only lanes in each direction over the entire stretch of the corridor. The assumptions related to data inputs (study time period, auto and truck volume growth rates, inflation rate, and discount rate) for the NPV analysis of various benefits components have been discussed in Section 4.5. The following sections discuss the performance measures estimated. Calculation of Benefits NPV of travel time savings. The estimation of the NPV of travel time savings associated with the build alternatives (additional mixed-flow lanes and truck-only lanes) relative to the no-build alternative was based on estimating average daily V/C and associated speeds on general purpose lanes and truck-only lanes given the assumptions about utilization of the truck lanes. Since this corridor scenario does not consider productivity benefits, for the truck-only lane alternative the travel time savings for trucks diverting to the truck lanes are included in the total travel time sav- ings benefits. The estimates do not take into account time-of-day variation in traffic volumes for autos and trucks. A complete description of the methodology and the results of the calculations are presented in Appendix C. NPV of reliability benefits. Reliability benefits are quantified in terms of the monetized savings in incident-related delay. Techniques and specific performance metrics for predict- ing and measuring reliability are still very much under development. One approach to assess- ing the value of reliability benefits has been to assume that the value of time for incident-related delays is significantly higher than that of recurrent delay because incident-related delay is inherently unpredictable. For trucking, it is possible to plan for recurrent delay and to incor- porate these plans into cost structures, whereas unplanned incidents can have highly variable (and sometimes very significant) cost implications. Appendix C presents a more detailed review of the approach used to monetize reliability benefits and provides references to the supporting studies justifying this approach. In this project, incident-related delay was calcu- lated using incident-delay rates (delay per vehicle mile) from IDAS as a function of V/C and configuration of the highway and was valued at 1.5 times the recurrent delay VOT (value of time) estimates to arrive at the value of incident-related delay for the monetization of relia- bility benefits. For the truck-only lane alternative, the incident-related delays are reduced by an additional factor of 15%, to account for the reduction in incidents due to truck-auto separation.