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Economic Impacts on Transportation of the US/Canada Border. Transportation leadership you can trust. Workplan & Expected Study Outcomes. presented to Border Transportation Working Group presented by Michael Fischer Cambridge Systematics, Inc. April 22, 2008. Overview of Project.

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Economic impacts on transportation of the us canada border

Economic Impacts on Transportation of the US/Canada Border

Transportation leadership you can trust.

Workplan & Expected Study Outcomes

presented toBorder Transportation Working Group

presented byMichael FischerCambridge Systematics, Inc.

April 22, 2008

Overview of project
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

Progression of study tasks
Progression of Study Tasks

Task 1: Work Plan

  • 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 2: Overview of Trade Data

Task 3: Literature Review

Task 4: Development of Methodology

Task 5: User Dis-benefits & Macroeconomic Impacts (TREDIS)

Task 1 detailed work plan
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

Task 2 overview of economic trade data
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

Task 3 literature review
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]

Data requirements
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]

Data requirements cont
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

Task 4 development of methodology
Task 4: Development of Methodology

Increased travel time as a result of delay

  • Scope of Methodology:

    • Population and Employment

    • Business and Industry

    • Tourism and Visitor Industry

  • Impacts differentiated

    • Passenger Impacts

    • Freight Impacts

  • Measurement of Impacts using TREDIS

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

Task 4 development of methodology cont
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

Task 4 development of methodology cont1
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

Task 4 development of methodology cont2
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

Task 5 estimation of economic impacts phase 2 currently not included in wp
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

What will we learn from this analysis
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

Decision points and next steps
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