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119 APPENDIX A Traditional Benefit/Cost Tools There are a number of distinct classes of benefit/cost analy- outgoing freight or the consignees who receive the freight and sis tools that correlate to the needs of different stakeholder ultimately pay the shipper cost). types, study goals, and data resources. These tools provide diverse functions for use at different points in the freight project planning and development process. Descriptions of A.4 Transportation System each set of tools are included in the following section and Efficiency Models summaries describing each of the various tools are provided These tools, often defined as benefit/cost analysis systems, in Tables A.1 through A.7. are intended to evaluate the benefit and cost streams over a specified period of analysis to determine whether a proposed A.1 Strategic Planning Tools investment will yield benefits in excess of its cost. These include tools used to assess long-term needs and deficiencies impacting the transportation system and the life- A.5 Economic Development cycle costs of operating and maintaining transportation infra- Impact Models structure (for asset providers), as well as longer-term market These tools estimate impacts of transportation projects on analyses, production, and site selection alternatives (for ser- income and jobs in the economy, and are primarily used by vice providers and end users). public-sector (local, regional, or state) transportation agencies to explicitly consider business productivity and economic A.2 Carrier Cost and Performance development impacts that are not represented by transporta- Analysis Tools tion system efficiency tools. These operational analysis tools, which estimate the oper- ational performance and cost of freight carrier operations A.6 Financial Impact under alternative scenarios to represent the impact of trans- Accounting Tools portation projects, programs, or policies, are primarily used by freight infrastructure providers and carriers. These tools, typically used by those who have a direct stake in the cost of a project, provide estimates on how the proposal will affect outgoing cost streams, incoming revenue streams, A.3 Shipper Cost and cash flow, borrowing or bond requirements, net profit or loss Performance Models over time, upside/downside risk, and rate of return. These tools estimate the cost and time characteristics of alternative freight mode and service options, and are A.7 Risk Assessment Tools intended to represent the total logistics time, cost, and safety/reliability tradeoffs available for a shipment so that These tools assist private-sector asset providers and end users optimal shipping decisions can be made. These tools are pri- in understanding and quantifying critical areas of uncertainty marily used by end users (i.e., the businesses that generate related to making investment decisions.

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120 Table A.1. Summary of strategic planning tools. Tool Description Source The technology application to support forecasting and the strategic plans include Caliper (http://www.caliper.com/tcovu.htm) Travel demand data available from agency or company financial systems, operations forecasting and INRO (http://www.inro.ca/en/index.php) management systems, and others. Forecasting, a central aspect of the planning network process, is where infrastructure needs are determined, market estimations are Citilabs (http://www.citilabs.com/) optimization made, and facility locations, equipment specifications, or carrier requirements tools are evaluated. Table A.2. Summary of carrier cost and performance analysis tools. Tool Description Source TMW Systems Monitor truck movements that allow a unit to change routes for congestion (http://www.tmwsystems.com), Routing avoidance, toll choices, and to improve overall fuel efficiency. On the end user ALK Associates' PCMiler Tools side, product and transportation tracking allows a shipper to shift product quickly to (http://www.alk.com/pcmiler), an alternate point of sale while the goods are still in transit. Manhattan Associates' X-Suite (http://www.manh.com/solutions/x-suite-solutions) Berkeley Simulation Software's Rail Traffic Controller (http://www.berkeleysimulation.com/rtc/rtc.html), CANAC/Savage Industries' RAILS 2000 Estimate how a given rail infrastructure improvement would actually change Railroad (http://www.canac.com/index.php?page=products-rail2000), volumes, speeds, and reliability. The source data include specific track, siding and Operations Systra's RAILSIM yard conditions, plus road, local, and work train characteristics, and schedules that Tools (http://www.railsim.com), are proprietary to the railroads. Federal Railroad Administration's General Train Movement Simulator (http://www.decisiontek.com/Solutions/RailSafetyandCapacityAnalysiswithG TMS/tabid/72/Default.aspx) Total Airport and Airspace Modeler (TAAM) system (http://www.jeppesen.com/industry-solutions/aviation/government/total- airspace-airport-modeler.jsp), Airfield Capacity Model (http://web.mit.edu/aeroastro/www/labs/AATT/reviews/acm.html), Airport Estimate the capacity of runway systems and the level of delay that they present Federal Aviation Administration's Airport and Airspace Simulation Model Operations when faced with alternative demand levels. (SIMMOD) Tools (http://www.faa.gov/about/office_org/headquarters_offices/ato/service_units/ nextgen/research_tech_dev/at_sys_con_dev/sim_analysis_team/models/sim mod) , Massachusetts Institute of Technology's LMI Runway Capacity Model (http://web.mit.edu/aeroastro/www/labs/AATT/reviews/lmircm.html) Aurigo (http://www.aurigo.com/Ports.aspx) Typically account for passenger and freight traffic, recognizing local differences in PortOps types of freight (bulk, break bulk, and containers), mix of ship characteristics, water Marine Port (http://www.aecom.com/What+We+Do/Transportation/Ports+and+Marine/Po depth and wave motion, and positions of terminals. Typical port planning tools Operations rt+Operations+Simulation) include computer simulation models for port operations, port terminal container Tools Flexsim (http://container-port-simulation.com/) handling, and terminal expansion and development (including investment in quays, Simio (http://www.simio.com/applications/port-simulation-software/port- quay cranes, and storage space). simulation-software.htm)

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Table A.3. Summary of shipper cost and performance models. Tool Description Source Forecast how freight movements shift in response to changes in the availability, cost, and/or time performance of available modal IHS Global Insight Intermodal Diversion Model Modal Diversion alternatives. Most modal diversion models used in transportation facility (http://www.ihsglobalinsight.com/ProductsServices/ProductDetail1025.htm) Models planning are focused on truck-rail-intermodal options, due in large part to Intermodal Competition Model (http://www.fra.dot.gov/downloads/Policy/ITIC- the tradeoffs that shippers face when considering ground transportation IM%20documentation%20v1_0.pdf) options for medium- and long-distance travel. Predict how shippers respond to changes in the costs of modal and Total Logistics service alternatives. They actually estimate the total logistics cost of SAP (www.sap.com) Cost Models shipping, including direct transportation expense and inventory cost associated with modal lot sizes and service profiles. Intermodal Attempts to calculate the logistics cost and decision tradeoffs seen by Transportation shipper logistics managers, and then assigns the truck/rail diversion to Federal Railroad Administration (http://www.fra.dot.gov/rpd/freight/1543.shtml) and Inventory alternatives that minimize total logistics cost. Cost (ITIC) Model Estimates the truck/rail mode choice for 48 typical types of customers. This is done on the basis of given customer characteristics (use rate and Massachusetts Institute of Technology Spreadsheet trip length), commodity characteristics (value/pound), and mode (http://stuff.mit.edu/afs/athena/course/urop/uic/www/uic- Logistics Model characteristics (e.g., price, trip time, and reliability) for rail, truck, and TRF.PBTS.2002.revised.pdf) intermodal options. An alternative predictor of freight shipper choices based on a statistical Market Share correlation between modal performance factors and traffic capture IHS Global Insight Models (revealed preferences), and project traffic swings when relative (http://www.ihsglobalinsight.com/ProductsServices/ProductDetail1025.htm) performance changes. Estimates changes in shipper productivity associated with rail system The Uniform Rail performance changes. The model uses data on average carrier cost and Surface Transportation Board Costing System performance measures to estimate the cost of providing service, so it can (http://www.stb.dot.gov/stb/industry/urcs.html) (URCS) Model estimate how a change in facility capacity or speed (affecting rail cars per day) would translate into average shipper dollar savings per ton-mile. Table A.4. Summary of transportation system efficiency models (benefit/cost systems). Tool Description Source Spreadsheet model for benefit/cost analysis of highway and transit California Department of Transportation (Caltrans) Cal-B/C projects in a corridor that already contains a highway facility or a transit (http://www.dot.ca.gov/hq/tpp/offices/ote/benefit_cost/models/calbc.html) service. Tool designed to analyze seven types of highway improvements in a corridor: (1) capacity enhancement, (2) bypass construction, National Cooperative Highway Research Program MicroBENCOST (3) intersection or interchange improvement, (4) pavement rehabilitation, (http://www.dot.ca.gov/hq/tpp/offices/ote/benefit_cost/models/microbencost.html) (5) bridge improvement, (6) highway safety improvement, and (7) railroad grade crossing improvement. Surface Transportation Model designed to assess multimodal urban transportation investment Efficiency Federal Highway Administration (http://www.fhwa.dot.gov/steam) and policy alternatives at the regional and corridor levels. Analysis Model (STEAM) Highway Economic System-level optimization framework for analyzing investment strategies Federal Highway Administration Reporting to maintain and improve an existing highway network. (http://www.fhwa.dot.gov/infrastructure/asstmgmt/hersindex.cfm) System (HERS) Strategic-level evaluation method to analyze investment alternatives for expanding and improving a highway system. This tool represents an National Cooperative Highway Research Program StratBENCOST upgrade from previous analysis methods by incorporating cost (http://www.dot.ca.gov/hq/tpp/offices/ote/benefit_cost/models/stratbencost.html) calculations from MicroBENCOST and HERS, and adding consideration of risk and uncertainty. Tool compares and evaluates alternative highway improvement projects (e.g., preservation, lane-widening, lane additions, new alignments, Federal Highway Administration BCA.Net addition of traffic control devices, intersection upgrades). "Projects " for (http://www.fhwa.dot.gov/infrastructure/asstmgmt/bcanet.cfm) comparison in benefit/cost analyses. Tool is a Web-based system for evaluating the safety impacts and the GradeDec.Net benefit/cost of improvements to highway-rail grade crossings in a corridor Federal Railroad Administration (http://gradedec.fra.dot.gov/Default.aspx) or region. Highway Freight Tool measures second-order benefits that come about when firms direct Logistics the money saved on logistics expenses away from maintaining inventory Federal Highway Administration Reorganization and toward other more productive uses. These benefits can then be (http://ops.fhwa.dot.gov/freight/freight_analysis/cba/index.htm) Benefits added to those estimated through BCA to arrive at a complete picture of Estimation Tool total benefits.

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122 Table A.5. Summary of economic development impact models. Tool Description Source Regional impact systems trace how changes direct the flow of Input-Output purchases or sales of one industry lead to broader indirect and Model induced changes in purchases and sales (and ultimately jobs and Minnesota IMPLAN Group (MIG) (http://IMPLAN.com/V4/Index.php), (IMPLAN or income) in other industries in that region. That makes them very Bureau of Economic Analysis (https://www.bea.gov/regional/rims/index.cfm) RIMS II) useful for estimating the local impact of industry openings, closings, expansions, and contractions. Models have a spatial component that tracks transportation Regional connections (and travel times) and trade (industry product flows) Simulation among regions, and an industry component that tracks the cost of Models ASTRA (spatially limited to major regions within Europe), freight transportation, by commodity group, between regions. The (Computable CGE element estimates the economic impact of transportation PINGO (spatial CGE model for Norway) General projects and policies through a process that first calculates their Equilibrium impact on interregional freight transport cost, effective labor [CGE] Models) supply, value of capital stock, and overall factor productivity. REMI models share many of the features of the spatial CGE Regional Model, combining interindustry IO equations with transport price Simulation response and additional impacts on labor supply/demand and Regional Economic Models, Inc. (http://www.remi.com/) Models (REMI migration rates. The models have an ability to assess economic Policy Insight) impacts, benefits, and costs of transportation network alternatives at a statewide level. Major Corridor MCIBAS is an example of an analysis system that provides a more Impact- useful interface for use of REMI Policy Insight macroeconomic Business Cambridge Systematics Inc, Economic Development Research Group, Inc, Indiana DOT models. They have an ability to assess economic impacts, Analysis (http://www.edrgroup.com/pdf/mcibas-system-intro.pdf) benefits, and costs of transportation network alternatives at a System statewide level. (MCIBAS) BEST is an example of an analysis system that provides a more useful interface for use of REMI Policy Insight macroeconomic Michigan DOT BEST models. This particular tool is spreadsheet-based and was (http://www.michigan.gov/documents/mdot/MDOT_economicbenefitreport_202828_7.pdf) developed for the Michigan DOT to perform corridor analysis. Custom-built, modular system that integrates a statewide highway network model and a statewide economic impact model together HEAT (Highway through a geographic information system (GIS) providing graphical Cambridge Systematics, Inc, Montana DOT Economic map-based information on: (1) economic conditions among (http://www.camsys.com/pro_planpro_heat.htm) Analysis Tool) communities, (2) transportation dependence and commodity- specific impacts among industries, and (3) commuting and freight flows along highway networks. CRIO-IMPLAN combines an interregional IO model with trade flows, together with a time series framework for estimating Regional economic growth forecasts over time, and "a series of Simulation econometrically derived functions relating transportation access (http://www.tredis.com/product-info/modules-and-structure/economic-adjustment- Models and travel cost changes to shifts in local industry output and module.html) (TREDIS with employment growth. " The access factors included same-day truck CRIO-IMPLAN) delivery, labor market and intermodal air, rail, marine, and truck freight terminal access. Provides highly detailed responses to changes in transport costs by mode and commodity. It utilizes econometric (statistical) Global Insight equations that are sensitive to changes in transport costs per ton IHS Global Insight Economic for transporting a wide range of commodities by all available freight (http://www.ihsglobalinsight.com/ProductsServices/ProductDetail1081.htm#solutions) Model modes. Also includes detailed information on freight flows by commodity and mode and forecasts changes in wages, prices, and spending patterns. Models the effect of highway projects on the level of economic University of activity and growth in a zone, based on a wide variety of Maryland transportation indicators. Includes network density and spatial spatial University of Maryland (http://www.econ.umd.edu) agglomeration, as well as changes in access times to airports, econometric intermodal rail/truck freight terminals and rail transit, and the size model of labor, consumer, and supplier markets. LEAP (Local Shows how costs (of land, labor, energy, and taxes) interact with Economic transport costs and access (including ground access time to Economic Development Research Group, Inc, Appalachian Regional Commission Assessment intermodal rail, air and marine ports, and highways) to differentially (http://www.leapmodel.com) Package) affect the attraction of various industries to an area. TREDIS Modular framework operating through a Web-based server to (Transportation integrate various tools for travel impact analysis, spatial access Economic Economic Development Research Group, Inc. (http://www.tredis.com) impact analysis, regional economic impact analysis, and Development benefit/cost analysis. Impact System)

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123 Table A.6. Summary of financial impact accounting tools. Tool Description Source Calculate impacts on public tax and fee revenues, as well as Fiscal Impact requirements for increasing expenditures to serve new population Fishkind Fiscal Impact Model (http://www.fishkind.com/fiam/home.html) Models and economic growth that may result from the projects (including Many others developed in house by public agencies public safety, education, and other municipal and state services). Calculate risk and rate of return associated with proposed, new Pro Forma investment projects. A due diligence study (involving third-party Typically developed by private entities for each project Models confirmation of market demand and revenue assumptions) is commonly required for private-sector financing. Table A.7. Summary of risk assessment tools. Tool Description Source Due Diligence Economic demand estimation is a statistical tool that allows for Tools DecisionTek Risk Analysis determining the level of demand for a service or good based on a (Economic Engine(http://www.decisiontek.com/Home/tabid/37/Default.aspx) host of independent variables. Variables to forecast a dependent Demand variable such as truck volume may include local demographics, fuel Ad hoc spreadsheet tools for probability distributions Estimation and prices, tolls, regulations, and local shocks and events. Forecasting ) In the case of private concessionaires, a technical advisor may review documentation and perform on-site inspections of physical infrastructure and facilities to understand the state of good repair Due Diligence DecisionTek Risk Analysis Engine standards that, in turn, contribute to the overall understanding of Tools (http://www.decisiontek.com/Home/tabid/37/Default.aspx) costs associated to maintenance, rehabilitation, and replacement. (Technical By thoroughly reviewing all factors related to operations and Ad hoc spreadsheet tools for probability distributions Advisory) maintenance, costs can be optimized, and the quantitative product of a technical advisory exercise may include a cost model that feeds into the private party's financial model. A financial model combines the economic and technical aspects for Due Diligence developing a baseline scenario, which provides measures of the DecisionTek Risk Analysis Engine Tools (Financial feasibility and health of a project. A key indicator from the financial (http://www.decisiontek.com/Home/tabid/37/Default.aspx) Model) model is the internal rate of return (IRR), which is the discount rate Ad hoc spreadsheet tools for probability distributions that sets the Net Present Value (NPV) of all cash flows equal to zero. Risks are allocated and quantified to clearly describe the various Risk Evaluation scenarios, costs, and responsibilities involved. Areas of concern Ad hoc risk allocation matrices, typically developed in house Tools may include insurance, permitting, design, and construction among others.