United States Department of Transportation
i
Logistics Solutions in the Supply Chain: Economic Benefits of Safety and Environmental Impacts
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2024-09-01
[PDF-734.88 KB]
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Edition:Final Report
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Abstract:State and federal highway officials regularly consider supporting investments in private infrastructure which reduce highway truck traffic including rail transload and truck cross-docking facilities. Public contributions to support the formation and expansion of such facilities can potentially contribute to the efficiency of our national transportation system. This is because shipping firms can reduce freight costs and the public at large can benefit from the avoided costs of congestion created by heavy trucks. Benefit costs analysis is typically used to evaluate the efficiency of highway capacity expansion projects. There is a similar need for benefit costs analysis techniques to analyze the efficiency of public investments in transload and cross-docking facilities. A challenge arises because the methods for benefit costs analysis may be different for transload and truck cross-docking facilities than for other highway capacity expansion projects. Benefit cost analysis of highway capacity expansion projects such as adding lanes to highways typically examine aggregate changes in travel time and miles traveled for all vehicles traveling on the highways of an impacted region. Benefit cost analyses of rail transload facilities appropriately focus on freight cost savings for shippers when long-haul freight is transferred from trucks to rail, a mode which has significantly lower freight costs per ton-mile. Road user savings related to truck travel from these investments are largely captured by these freight cost savings. However, this method does not capture benefits for other vehicles on the road, such as passenger cars, or other trucks. Freight trucks impose congestion “externalities” on these other vehicles such as increased travel times, increased risk of an accident and increased vehicle operating costs. Freight trucks and trains also impose pollution externalities on society at large. Benefit costs analysis of transload facilities and cross-docking facilities need to capture the benefits of reducing these externalities along with estimates of freight costs savings. This report provides a proposed approach for conducting benefit costs analyses for transload and cross docking facilities and examines two recent studies of potential facilities located in the Upper Midwest. The report further assesses the degree to which existing studies measure and include the value of avoided externalities for other vehicles and society at large in benefit costs analysis, along with freight costs savings. The report also considers whether any additional, unnecessary benefits are included.
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