A Framework for Determining Highway Truck-Freight Benefits and Economic Impacts

This paper proposes a method for calculating both the direct freight benefits and the larger economic impacts of transportation projects. The identified direct freight benefits included in the methodology are travel time savings, operating cost savings, and environmental impacts. These are estimated using regional travel demand models (TDM) and additional factors. Economic impacts are estimated using a regional Computable General Equilibrium (CGE) model. The total project impacts are estimated combining the outputs of the transportation model and an economic model. A Washington State highway widening project is used as a case study to demonstrate the method. The proposed method is transparent and can be used to identify freight specific benefits and generated impacts.

Though the Washington State Department of Transportation (WSDOT) has a long standing Mobility Project Prioritization Process (MPPP) (WSDOT 2000), which is a Benefit-Cost Analysis (BCA) framework used for mobility program assessment, it does not separately evaluate or account for the truck freight benefits of proposed highway infrastructure projects. It is therefore unable to evaluate and consider the economic impacts of highway projects that accrue to freight-dependent industries (those heavily reliant on goods movement) or non-freight-dependent firms (service sector) that are perhaps indirectly impacted by the productivity of the freight system. The established evaluation criteria of any transportation project largely influences the project selection and direction, thus for freight to become an integrated component of a managing agency’s transportation program, it must be recognized and acknowledged through the project evaluation criteria (NCHRP 2007). Before implementing any freight project evaluation criteria, an agency must first be able to identify the measures that matter to freight and freight-related systems. At this time there is no known nationally accepted framework for analyzing the full range of freight-related impacts stemming from transportation infrastructure projects. Complex interactions with separate, but not isolated, effects among economic, environmental, and social components with sometimes conflicting priorities make freight impacts more difficult to measure than those of other highway users (Belella 2005).

To successfully compete in a new funding world with significantly reduced monies for transportation infrastructure, states must become even more pragmatic about the means by which they emphasize and prioritize investments. Identification of the necessity to include freight performance measures in local, state, and national transportation plans, and rise above anecdotal understandings of system performance, is becoming evident as more municipalities and state agencies move toward implementing freight-related plans (MnDOT 2008, Harrison et al. 2006). Therefore, WSDOT has undertaken the development of an improved methodology to assess highway truck-freight project benefits designed to be integrated into the department’s existing prioritization processes. This paper lays out the development process of this effort and the resulting methodology. The contribution of this paper to the literature is to present a methodology that includes a truck-specific determination of the economic value of a project in addition to the economic impacts captured by a regional Highway Truck-Freight Benefits 28 computable general equilibrium (CGE) framework. The proposed method is transparent, and can be used to identify freight-specific benefits and generated impacts.

The remainder of this paper is organized as follows: the second section provides a brief review of the state of practice in the evaluation of transportation infrastructure investments; the third section details the process by which the benefits to be included in the analysis were selected and the methodology subsequently developed; the next section applies the methodologies to a case study and provides its result; the last section offers conclusions of the proposed methodology as well as the limitations of the study and directions for future work on fully incorporating freight into state DOT investment decisions.