Transportation leadership you can trust.

presented to

Border Transportation Working Group

presented by

Michael FischerCambridge Systematics, Inc.

April 22, 2008

Economic Impacts on Transportation of the US/Canada BorderWorkplan & Expected Study Outcomes

2

Overview of Project

Main objective of study is to assess the impact of delay at border crossings and resulting changes in user benefits and broad macroeconomic measures

Key issues:

• Definition and measurement of delay

• Trends of delay patterns at border crossings

• Breakdown of impacts across different modes− Truck traffic

− Passenger vehicles [if data available]

• Outputs of analytical task are user dis-benefits by mode and macroeconomic impacts

3

Progression of Study Tasks

Phase I: Methodology and Background Research

• Collection of available/relevant data

• Assessment of trends

• Case study comparisons

• How can impacts be measured and modeled using economic impact tool?

Phase II: User Dis-benefits and Macroeconomic Impacts• Employment• Income• GDP

Task 1: Work Plan

Task 2: Overview of Trade Data

Task 3: Literature Review

Task 4: Development of Methodology

Task 5: User Dis-benefits & Macroeconomic Impacts

(TREDIS)

4

Task 1: Detailed Work Plan

Workplan defines the specific tasks and deliverables of Phase I

Deliverables are technical memoranda for each task and a final report that combines individual documents

Workplan outlines how individual tasks will feed into each other and allow for the quantifiation of economic impacts of border delay

5

Task 2: Overview of Economic Trade Data

Aggregate Economic and trade data obtained from a variety of sources [Global Insight, Statistics Canada, BTS, US Census, etc]

• Trade data by commodity & time series

• Border Crossing Information

• Data measured in dollars [trade] and vehicle movements [traffic] differentiated by surface mode

• Passenger trip purpose unlikely to be available

Aggregate trade forecasts between US and Canada to be obtained from Global Insight

6

Task 3: Literature Review

Literature review captures previously completed studies on border delay and transportation costs

Emphases gathered from previous studies:

• Selected methodologies

• Available and collected data

• Outputs from previous studies [performance measures]

• Impacts of new border security measures on delay

• Typical cost of delay based on previous studies

Task will guide the development of the methodology [Task 4] and calibration of economic model [Task 5]

7

Data Requirements

Literature review allows for assessment of available data sources and how data was used in other studies

Methodology includes separate impacts for passenger and truck traffic

Source of any passenger traffic data is still uncertain whereas data exists on truck traffic

Development of Methodology will determine specific data requirements for economic model

• Definition of “delay” at the border

• Congested vs. free flow conditions

• Changes in traffic performance measures [VMT, VHT]

8

Data Requirements [cont.]

Truck data for different ports of entry will likely be obtained from ATRI

• Data can be differentiated by time-of-day and distance from border

• Data obtained for main border points of entry

ATRI/Qualcomm data on truck traffic

• Captures approximately 10% of truck traffic in US

• Average day measure of delay compared to uncongested conditions [peak vs. off-peak]

• Reliability Index

Access to data as part of FHWA data sharing process

9

Task 4: Development of Methodology

Scope of Methodology:

• Population and Employment

• Business and Industry

• Tourism and Visitor Industry

Impacts differentiated

• Passenger Impacts

• Freight Impacts

Measurement of Impacts using TREDIS

Increased travel time as a result of delay

Higher user dis-benefits, such as travel costs for passengers

and businesses

Passengers alter trips & business experience lower

productivity

Higher product prices and resource costs

Macroeconomic Impacts on GDP, Employment, Income

10

Task 4: Development of Methodology [cont.]

Definition of Study Area

• Consideration of four different regions handling in excess of 70% of all truck traffic− Michigan/Ontario

− New York/Ontario

− Lacolle/Champlain

− Pacific Highway

Each border crossing region is likely to have a different mix of passenger and freight traffic, and different mix of commodities

Different sensitivities to recurrant and non-recurrant delays

11

Task 4: Development of Methodology [cont.]

Measurement of impacts based on microeconomic theory

Border delays affect households and businesses by increasing their respective direct and indirect travel costs and therefore cause shifts in supply/demand

Passenger trips may be altered which will affect consumption expeditures at travel destination

Passengers have different sensitivities depending on purpose of travel [commuting, leisure, vacation, business]

Impact on commuters as a result of delay affects the access to labor pool by employers

12

Task 4: Development of Methodology [cont.]

Businesses experience impacts as a result of delay:

• higher costs

• lower productivity

• Impact also felt on reliability due to just-in-time delivery schedules

Depending on relative cost and price elasticities, impacts increase wages and subsequently product prices

Changes in product and resource markets [labor & materials] impacts overall trade patterns

Exchange rate fluctuations provide additional complication

13

Task 5: Estimation of Economic ImpactsPhase 2 – currently not included in WP

Inputs to model are travel-related changes resulting from new [security] policy or changing in infrastructure

TREDIS is based on:

• Travel Cost Response Module [VHT and VMT turned into user benefits]

• Market Access Response Module [measures changes in accessibility and connectivity]

• Economic Adjustment Module [estimated indirect and induced effects]

• Benefit Cost Module [accounting of all benefits/costs and computation of B-C ratios]

Evaluation of different scenarios possible

14

What will we learn from this analysis?

Determination of the economic impacts of delay on freight and passenger traffic

• Estimation of wait time/delay

• User dis-benefits

Impacts on different type of travellers

• Freight [Impacts by industry]

• Passenger [vacation, recreational, commuting, business]

Trends in border delays and future projections

15

Decision-points and next steps

Revision of detailed workplan

Development of specific schedule & timeframe for tasks deliverables

Adjusted cost estimate

Obtain feedback and direction from Transportation Border Working Group regarding:

• Other sources of critical data for analysis

• Direction & outputs of study