Framework and Tools for Estimating Benefits of Specific Freight Network Investments (2011) / Chapter Skim
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This Framework defines a wide range of public and private benefits and impacts of freight infrastructure investments and identifies the tools and supporting data necessary to evaluate these benefits and impacts. The Framework is capable of handling projects that span all of the different freight modes and is able to assess benefits from a variety of project types and scales.
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The traditional form of benefit/cost analysis, which compares total benefits and total costs of alternatives, may work for projects that are publicly financed, built, owned, and operated. However, that form of analysis is not always sufficient for freight projects that often require public-sector negotiation with private infrastructure owners and freight service providers.
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Understanding these and other interrelationships is important when assessing the types of benefits different stakeholders are concerned with at different points in the investment decision-making process. 3 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 Table S.1.
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Together, these parties have a financial interest in the project outcome, but no direct investment stake in the project itself. However, the interests of these parties are an important consideration in making investment decisions, because impacts and benefits to these stakeholders can influence the net benefit/cost calculation made by those with direct financial stakes.
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Category 4 (Tangential) Asset Provider Service Provider End User *
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or a single carrier mode (such as benefits from Class I and shortline freight railroads)
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2. Benefit and other impact factors include: • Capacity, which includes alleviating the impact of highway and rail system bottlenecks, as well as the throughput attainable on any transportation infrastructure or facility access point; • Productivity, or the ability to operate a supply chain from start to finish with maximum efficiency; • Loss and damage, or maximizing the safety and security of freight operations and movements to minimize loss to the shipper, carrier, or community; • Scheduling/reliability, or the ability to have predictable and timely delivery of goods, allows for streamlined inventories, less disruption in the manufacturing or supply process, and a more efficient supply chain; • Tax revenue, such as that received by new industrial land development, distribution center, or other freight-intensive land uses; • Wider economic development, such as increased jobs that result from a distribution center, transload, or intermodal facility, as well as multiplier effects to regional economies; • Safety, or minimizing of impacts of freight land uses on neighboring communities, and the safe operation of freight vehicles and facilities; and • Environmental quality, such as mitigation of air or water quality impacts, reduction of truck vehicle miles traveled (VMT)
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of a proposed freight investment often may be muddled, the funding sources and mechanisms are numerous and complex, and the final decision to move forward or not with any given proposal rarely rests Benefit Category Cost Factors Facility Capital Costs Facility Maintenance Costs Operating Costs Benefit and Other Impact Factors Capacity (Includes Bottleneck Congestion) Loss and Damage Scheduling and Reliability Business Productivity Tax Revenue Wider Economic Developments Safety Environmental Quality, Sustainability, or Energy Use Key: Less Important Asset Provider Type of Beneficiary Service Provider More Important End User Other Impacted Party Table S.5.
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to build support for an investment or suite of investments among impacted parties, and/or to allocate costs and benefits across different stakeholder types. Among private-sector freight stakeholders (e.g., railroads, shippers, and industrial site developers)
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, and compares these to the project costs. Economic impact analysis, in contrast, compares the overall economic growth (for example, employment, income, and output)
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Change in Travel Distance Change in Travel Time Change in Travel Quality Change in User Operating Costs (by truck, auto, rail, aircraft, and vessel) Change in Crash/ Incident Costs (by truck, auto, and rail)
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: • Strategic planning tools include tools used to assess long-term needs and deficiencies impacting the transportation system and the lifecycle costs of operating and maintaining transportation infrastructure (for asset providers) , and longer-term market analyses, production, and site selection alternatives (for service providers and end users)
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The following sections provide an overview of the most critical conclusions and 13 Stakeholder Types Asset Provider Service Provider End User Other Party Impacted Key: Strategic Planning Less Important Carrier Cost Performance and Shipper Cost and Performance Tool Types Transportation System Efficiency Economic Development Impact More Important Financial Impact Risk Assessment Table S.6. Importance of analysis tools to freight investment stakeholders.
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This research uncovered a wide variety of investment decision-making techniques and tools that currently are used to assess user benefits, conduct return on investment assessments, and conduct benefit/cost analysis, economic impact analysis, and risk analysis. However, there is general agreement among both public- and private-sector freight stakeholders that the Freight Evaluation Framework is a very useful way to frame an investment decision analysis.
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Finally, there are potentially large differences in the sensitivity to cost, benefits, and risk among different stakeholder types that are not all captured within the existing Framework. This becomes important if the Framework is used to help rank projects from the perspectives of various stakeholder groups.
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16 them. In addition, the risk analysis method used in these cases shows how alternative assumptions about key factors such as freight demand growth can be explored and represented in a report on benefit/cost findings.
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