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20 CHAPTER 2 Key Issues to Address in Evaluating Freight Projects Both public- and private-sector freight stakeholders face a It is important to develop a more nuanced understanding number of different challenges when evaluating potential of the types of freight stakeholders involved in freight invest- freight investments. It was critically important to understand ment decisions, as well as their concerns and interests. This these key issues in order to develop an evaluation framework definition is useful in understanding the types of benefits these to address them. As described earlier, freight projects are par- stakeholders are most concerned about, and the methods used ticularly challenging for planning, evaluation, and decision to measure them. In general, freight projects can affect four making for the simple reason that they frequently involve types of stakeholders, which the study team grouped as: some element of access, connection, or use of rail, marine, or aviation facilities that are owned and operated by private Asset providers who develop, lease, maintain, or finance companies. That tends to make many freight projects both freight investments (both fixed and mobile); multimodal and multilayered in terms of the roles of various Service providers who provide transportation or logistics public and private stakeholders. services for freight shipments; Balancing public, private operator, and shipper/industry End users who include both shippers/consignees, as well as interests and benefits can help engage all potential stakehold- end customers for finished goods; and ers in planning and development of freight investments and Other impacted parties who include neighborhood/ foster meaningful discussions about how costs, benefits, and community interests, environmental/land use interests, risks should be shared. The following sections describe the business interests, and others. types of challenges affecting the evaluation of freight invest- ments and how they could be addressed within an evaluation Table 2.1 describes the typical public- and private-sector framework. roles of these stakeholder types. It is important to note that some freight stakeholders play 2.1 Addressing the Motivations of dual roles. Railroads, for instance, are both asset providers Different Types of Stakeholders and service providers; commercial real estate developers pro- Many previous research efforts have discussed stakeholder vide infrastructure and can be impacted by the freight invest- types that are involved in the identification, planning, ment decisions made (or not made) by service providers or financing, and implementation of freight improvement end users; and government agencies may be both asset pro- projects. Typically, these efforts have categorized freight viders and impacted parties representing their citizens. Under- stakeholders as public or quasi-public (i.e., DOTs, MPOs, standing these and other interrelationships is important port authorities) and private (i.e., shippers and carriers). when assessing the types of benefits different stakeholders This structure, however, does not fully account for the are concerned with at different points in the investment broad range of stakeholders who stand to gain or lose from decision-making process. freight transportation investments, which provides the foun- dation for determining appropriate benefits and impacts. In Stakeholder Perspectives addition, it does not fully recognize emerging public-private partnerships and interactions, which are an important (and It also is critically important to describe the interest points growing) aspect of freight projects. and perspectives of different stakeholder types--essentially,

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21 Table 2.1. Freight investment stakeholder types. Stakeholder Type Stakeholder Examples Asset Provider State DOT Concessionaire Railroad Financier Commercial Real Estate Developer Port Service Provider Railroad Trucking Company Logistics Provider End User Freight Shipper/Consignee End Customer Other Impacted Party Neighborhood/Community Residents and Property Owners Environmental Resource Agency Chamber of Commerce/Economic Development Agency Commercial Real Estate Developer what "stake" these stakeholders have in the success of a freight project outcome but no direct investment stake in the improvement project. Understanding the perspectives of dif- project itself. However, the interests of these parties are an ferent stakeholders--and how they can change depending on important consideration in making investment decisions, the type of project and/or role the stakeholder is playing in because impacts and benefits to these stakeholders can project development--is important in developing an under- influence the net benefit-cost calculation made by those standing of the types of benefits with which they are most with direct financial stakes. concerned and the adequacy of the tools, techniques, and Parties that have a major nonfinancial stake in the result processes to measure them. of a freight investment. These typically include nearby land The research team has identified the following four types owners and occupants affected by access, noise, safety, or of stakeholder interest/perspectives: livability impacts; or community organizations or resource agencies concerned about broader environmental impacts Parties with a direct financial stake in the development related to the construction or operation of facilities. There and performance of a freight investment. These are prima- is a clear path in which the project may affect these parties, rily asset providers (both development and ongoing and those concerns need to be considered as factors in maintenance/operation) that have a vested financial inter- project design and decision making. These impacts can be est in a freight improvement project. These stakeholders quantified in monetary terms, although it is sometimes are providing capital (public funding, in the case of a state desirable to consider them in the context of nonfinancial DOT; private capital in the case of a concessionaire or tradeoffs. developer) in the hope of attaining particular goals, mis- Parties that have a tangential stake in the result of a freight sions, or mandates. Without this group's concurrence on infrastructure project, either financial or nonfinancial. how a proposed improvement meets criteria for moving These stakeholders may include private companies (or a forward, there is no project. consortium of companies) affected by indirect and Parties that have an indirect financial stake in the result of induced economic growth impacts, or local or regional a freight investment. These stakeholders typically consist taxpayers affected by project financing strategies. Many of of service providers that operate transportation services on their interests are likely to be in the form of concerns (that freight infrastructure, as well as shippers who are the true potentially can be addressed) and more general policy "users" of freight infrastructure capacity and services. In interests, rather than measurable direct effects of an indi- practice, these two groups are connected because service vidual project. These stakeholders should be kept informed carriers pass on a significant share of their net costs to ship- and given the opportunity to air their views and provide pers. Together, these parties have a financial interest in the input to the decision process.