Economic Implications of Traffic Congestion by jbw10297

VIEWS: 28 PAGES: 27

									    Talking Freight Seminar
Freight and Economic
    Development
                   Glen Weisbrod
                   Economic Development
                   Research Group, Inc.
                   2 Oliver Street, 9th Floor
                   Boston, MA 02109 USA

                   www. edrgroup.com
         Three Themes
1. Freight Flows: changing due to
   National & Global Economic Markets.

2. Economic Development: depends on
   Market Access & Competitiveness.

3. Infrastructure Investment: directly
   affects Costs & Competitiveness.




                                         2
Trends…

   Freight Growing Faster than Pop.
          25%

                                                               Mfg
          20%
                                       Value of Mfg
                                                               Shipment
                                                               Value
          15%                                                  Population


          10%
                                        Freight Ton-Miles      Freight ton-
                                                               miles
          5%
                                            Population


          0%
                1992 1993 1994 1995 1996 1997 1998 1999 2000



                                                                          3
Trends…

          Changing Freight Patterns

 •   Higher value/weight
 •   Higher time sensitivity
 •   Overnight delivery
 •   Small package delivery trucks
 •   Air & Marine port dependence on rail & hwy
 •   Rail & truck companies focus on long-hauls


                                                  4
Economic Development…

     Congestion Costs of Delay
   Overnight Delivery Services –earlier pickup
      deadlines, fewer deliveries per driver
   Manufacturers –overtime for handling deliveries
   Concrete mixer trucks –shrink delivery area
      (spoilage)
                        Shippers, Air/Water Ports,
                        Rail – miss delivery deadlines
                        or pad schedules

                                                         5
Economic Development…

     Competitiveness & Productivity

 Effects on Business Location & Growth…

 •   Breadth of Suppliers & Labor Inputs
 •   Size of Customer Delivery Markets
 •   Economies of Scale in Serving Markets
 •   Transportation Choice: Reliability, Modes



                                                 6
Economic Development…

          Urban Freight Limitation
    • Higher Cost to Serve Markets
    • Reduced Schedule Reliability
    • Reduced Access & Scale Economies


 Reduced Opportunity for Attracting and Growing Business …

  Smaller Market Area can be served within
  requirements for cost and service quality
                                                             7
Urban Econ Development…
                   Example: Vancouver BC
                   International Trade Gateway




                                                 8
Urban Econ Development…

           Vancouver No Build Scenario
 Ground Transport                          Diff: Build vs. Not
 • Cars – increase in travel expense         ($134 million/yr)
 • Trucks – raise shipper costs; reduce business
   competitiveness & attraction             ($280 million/yr)
 • Rail – capacity limitation: businesses seek
   alternative routes at higher cost     (1100 railcars/day)
 Ports
 • Marine ports – higher cost, shift activity elsewhere
 • Airport – raise costs for airport use


                                                                 9
Urban Econ Development…

     Vancouver Economic Implications
  Economic Value of Gateway
   30 Port Terminals, 22 Rail Yards, Airport, Border Crossings
   On Site: 75,000 jobs, W. Canada: 145,000 jobs

  Economic Impact of Constraint on Growth:
  • 7,300 to 16,300 jobs
  • $ 475 million to $ 1.1 billion of GDP /year

  Economic Stakes for Cost Competitiveness:
  • Over 150,000 jobs in production industries produce over
    $30 billion of exports /yr that depend on Vancouver
    Gateway competitiveness

                                                                 10
Urban Econ Development…



                          Vancouver…




                                       To Trans
                                       Can Hwy 




                          To US
                          Border             11
Urban Economic Development…

     Strategies for Port/Gateway Areas
  • Access Corridor
    – Los Angeles (Alameda Corridor)
  • Satellite Ports
     – NY Port Inland Distribution Network
  • Feeder System
     – Rotterdam (Inland Ports)




                                             12
Urban Econ Development…

       Example: Chicago Rail Yards
         • 74 rail yards, 17 for intermodal
         (rail-truck)
         • delays at 600 grade crossings
         • congestion from 3200
         daily truck trips
         transferring cargo from
         yard to yard
         •Abandoned & under-
         utilized rail yards
                                              http://hometown.aol.com/chirailfan/watchmap.html
                                                                                                 13
Urban Econ Development…

          Chicago Scenario Impacts
  Scenarios (with & without reuse of abandoned rail yards)

  • Base Case: existing facilities, adjust over time
  • Shift Intermodal to Rim: periphery of region
  • Rationalization: Consolidate w/upgraded infrastructure
  • Minimal Rail Freight in City: Intermodal moves to periphery;
    loose-car business de-marketed
  • Bypass Chicago: Impacts in 2020 Across All Scenarios
         Summary of City Reroute trains to bypass routes

        City’s Total Job Impact in 2020
        Scenario                        With Re-Use    Without
        Bypass                            15,400        -5,100
        Intermodal-to-Rim                  7,500        -6,400
        Rationalization                   19,700        8,300
        Minimal Rail                      13,600       -15,700

        City’s GRP Impact in 2020 ($Billion)
        Scenario                         With Re-Use   Without     14
        Bypass                               2.0        -1.0
Economic Development…

                 NCHRP Study 8-42
  How Can We Use Rail Freight Solutions to
   Address Roadway Congestion
  • Converging interests of private sector transport
    carriers and public planning agencies
  • Reducing Congestion and Road/Rail conflicts
    that adversely affect business profits, public
    safety and economic development opportunities
  • Developing Framework for Decision-making


                                                       15
Rural Economic Development…

   Rural Freight Limitations
   Higher Trucking Cost –due to “deadheading”
   Lower Availability When Needed –reliability
     reduced by vehicle shortages, delays
   Higher Rail Cost –full line cost for rail service
     to/from intermediate locations


    Reduced Opportunity for Attracting and Growing Business …

    Smaller Market Area can be served within
    requirements for cost and service quality
    Lower Value Added of existing products
                                                                16
Rural Economic Development…

   Example: Appalachian Corridor T
                              NY-17, Now I-86, Southern Tier
                              Expressway
                              Mountain Region of Southwest NY
                              State, Near Pennsylvania Line
                              Area had been economically
                              distressed and losing jobs
                              I-86 designation brought new
                              freight distribution, manufacturing,
                              and traffic-serving businesses.

FHWA Study compared it to a similar area with no new
highway connections

                                                                     17
Rural Economic Development…

       Highway & Mfg Employment
            4%
                                                   Southern Tier West
            2%                                        Southern Tier West
            0%
           -2%       1995                      1997                            2000
           -4%
           -6%
           -8%                                              N. Country Central
                                                                N. Country Central

          -10%
          -12%
                                                   NY minus NYC
          -14%
          -16%


                              Manufacturing                1995         1997          2000
                              Southern Tier West           0.0%         -0.3%         1.6%

                              North Country Central        0.0%         -4.9%         -13.2%

                              NY State Total               0.0%         -6.2%         -14.0%



                                                                                               18
Rural Economic Development…

          Example: Janesville, WI
 Regional automotive mfg cluster
 • Auto Mfg – GM, Chrysler
 • Parts Mfg –to S Carolina (BMW),
   Mexico & Mich. (Ford), Ontario &
   Missouri (Chrysler)

 • Reliance on just-in-time mfg, increasing needs for air
   and reliable truck movements
 • Current facilities cannot meet this need, reducing
   productivity and efficiency in mfg
 • Potential loss of jobs to Mexico or Canada

                                                            19
Rural Economic Development…


WisDOT: Multi-Modal Freight Access
 Road Delay           Rail Delay   Airport Constraints




       Airport Improvements ($9.1 million)
       Highway Access & Rail Crossing
        Improvements ($13.5 million)



                                                         20
Rural Economic Development…

 ARC Export Transportation Study

    Overseas Exports are Intermodal
    Truck   to Air
       Rail or Truck to Sea




                                      21
Rural Economic Development…

Appalachian Development Highways
                               Serve historically
                                isolated areas;
                                improve access

                               Link to major markets
                                and trade routes

                               Motivated by econ
                                development


                                                        22
Rural Economic Development…

            ARC Export Export Study

  Auto Parts, Upholstered Furniture     Food Processing Machinery


         Michigan   New York
                    York                                 New York
                                              Michigan
                                                               Maryland




                                      Texas
                    Florida
                                                            Florida




                                                                          23
Rural Economic Development…

              ARC Study Findings
• There are limited E-W freeways, rail lines &
  inter-modal connections across Appalachia,
  raising costs & constraining export opportunities.
• States in eastern side export more to Europe
  because of easier access to east coast ports.
• States in the western side export more within
  North America because of better access to
  industrial parts of Canada and Mexico.



                                                       24
Conclusions…

Freight Connections Alone Do Not
Cause Economic Development


   …business growth &
    attraction depends on
    connections to markets,
    not just presence of a
    highway…

ARC Guide: help planners identify opportunities related
to new highways, and actions needed to pursue them.

                                                          25
Conclusions…

But Failure to Provide Freight
Access Constrains Economic
Development
  • Lost opportunity for economic
    growth, good-paying jobs,
    new jobs for next generation.



 Potential Benefits of Infrastructure Investment…
 • Opportunity for success is not lost.


                                                26
                 …On the Web
FHWA Economic Development Studies (incl. I-86)
     www.fhwa.dot.gov/planning/econdev
Vancouver Freight Gateway Study
      http://www.edrgroup.com/pages/n32.html
North Country Transportation Studies
      www.danc.org/ncts
Chicago Rail Freight Study
      www.edrgroup.com/pages/n25.html
ARC Guide to Economic Opportunities from Highways
      www.edrgroup.com/pages/n11.html
Library of Economic Impact Studies
       www.edrgroup.com




                                                    27

								
To top