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2014 Economic Impacts of Congestion

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2014 Economic Impacts of Congestion PHOTOS COURTESY OF PORT OF PORTLAND OF PORT OF COURTESY PHOTOS ECONOMIC IMPACTS OF CONGESTION 2014 on the Portland-metro and Oregon economy About this report In 2005, the Portland Business Alliance, Port of As we have learned through other research, our available from four metropolitan planning Portland, Oregon Department of Transportation, region and state are uniquely trade dependent. organizations around the state, including Portland, METRO, and several other public and private Between 2004 and 2011, Oregon’s trade-related mid-Willamette Valley, Bend and Corvallis, were sector partners completed a groundbreaking study employment grew 7.5 times faster than total used to show the results. titled, “The Cost of Congestion to the Economy employment. In addition, about 90 percent of of the Portland Region.” The study provided key Oregon exporters are small- to medium-sized The study seeks to answer the following questions: information about the importance of investing in businesses. Today, it remains critical to our What are the impacts of highway our transportation system, particularly roads and economy and our quality of life that we adequately congestion on the economic performance highways, as a critical part of our economy. invest in improvements that ensure an efficient and of Oregon and major metropolitan areas of reliable transportation system. The study concluded that geography and past the state? investments have made Portland-metro a sea This 2014 study provides a better understanding of How has congestion affected business and air gateway as well as a regional rail and how congestion and transportation barriers affect transportation decisions and operations in highway hub. As a result, the region’s economic the entire state’s economic competitiveness. the state? competitiveness is heavily dependent on an How have the effects of congestion changed efficient and reliable transportation system. It identifies the current economic foundation of since the 2005 Cost of Congestion study? the region and the state. It also shows our reliance The 2005 study found that even with planned What are the effects of transportation on the state’s transportation system to move goods, improvements, our transportation system would investment on the state’s economy? not keep pace with projected increases in freight ensure access to labor and increase productivity, and general traffic. Failing to adequately invest all of which impact revenues accruing to the in our transportation system would result in a state for vital public services. The study then potential loss to the regional economy of $844 compares two scenarios – a congested future based million annually by the year 2025 – that’s $782 per on no additional transportation revenues and Congestion can affect household per year – and 6,500 permanent jobs. an improved future that includes new financial a region’s economy by resources. The result quantifies the benefit to the “ When completed in 2005, the study gained economy and to jobs due to increased investment. reducing its competitiveness national recognition. As recently as July 2014, the resulting in significant White House issued a report titled, “An Economic Like the previous study, business interviews Analysis of Transportation Infrastructure were conducted to gain better insight into how impacts on employment Investment,” which referenced the study’s findings businesses are coping with transportation and and economic output. and the impact of congestion to businesses. congestion challenges. Travel models made ” This study was produced by the Economic Development Research Group, Inc., in partnership with the Portland Business Alliance, Associated Oregon Industries, Greater Portland Inc., METRO, Oregon Business Association, Oregon Business Council, Oregon Department of Transportation and Port of Portland. 1 BY THE NUMBERS: Introduction $300 billion. Oregon’s transportation system is the backbone reduces productivity. Chronic delay linked to Value of all goods moved in Oregon on all modes of the state’s economy. A well-maintained, congestion can affect the economy by reducing of transportation in 2012. resilient, and efficient network of highways, rail, competitiveness resulting in significant impacts air and waterborne transportation is essential. on employment and economic output. Oregon, It supports the businesses that provide the jobs as a West Coast logistical hub, is particularly 346,400. Number of transportation-related and and revenues needed to underpin the resource- vulnerable to the impacts of increasing transportation-dependent jobs in Oregon in based, traditional manufacturing and advanced congestion. 2013. biotech and computer/electronics technologies that characterize the state’s economy. Additional investment is needed to maintain Oregon’s connections with global and domestic Oregon’s ability to retain its quality of life markets and to remain competitive with other 36.9 million. in an increasingly global economy rests to a states that are planning large investments in Total annual hours of travel time saved in Oregon great degree on our ability to provide well- their transportation infrastructure. This report if additional transportation investments are paying jobs in the diverse array of industries finds that: made. This equals 27 hours per household. that trade with the rest of the U.S. and the rest of the world. To maintain its advantage Oregon’s competitiveness is largely as an attractive location for businesses of dependent on efficient transportation. 8,300. all types, including those in the industrial More than 346,400 jobs are Oregon jobs generated as a result of additional sectors that offer middle-income jobs, Oregon transportation related, or transportation transportation investments by 2040. must support, retain and attract workers and dependent, meaning that system businesses best suited to the emerging demands deficiencies threaten the state’s of the domestic and international marketplace. economic vitality. $928 million. Businesses report that traffic congestion Additional Oregon annual economic output/ One of the key business requirements needed and travel delays cost money, forcing sales generated by businesses due to an to grow and succeed in a highly competitive changes in business operations and improved transportation system by 2040. marketplace is the ability to maintain location decisions. consistently high levels of productivity. This Additional investments would generate $1.1 billion. requires that the costs to move materials 8,300 jobs, $1.1 billion in benefits, needed to produce goods in every sector of Annual income and non-monetary benefits of and a $2.40 return for every $1 of additional transportation investments to Oregon, the economy, and the costs to move finished investment, by 2040. products to their final markets, must remain or $788 per household, by year 2040. competitive. Transportation congestion increases the cost of business operations and $2.40. The potential return for every $1 invested in the state’s transportation system. 2 What the data show Role of transportation in freight. The state provides key international shipments. However, all of these modes depend Oregon’s economy air and maritime gateways, as well as an on efficient and reliable highway access for important junction of critical transcontinental freight shipments and business deliveries, as The state’s economy and job base are highways. Oregon is served by 23 port districts, well as passenger travel for business. This is transportation dependent, especially on its including nine with inter-modal freight because trucks are the workhorse of the system, highways, for the connections they provide to terminals; 23 railroads, including high-capacity linking businesses throughout the state to the domestic and international markets. transcontinental mainlines of both western global marketplace and providing the “last mile” Class 1 railroads; and 97 public-use airports, connection to inter-modal facilities, business Oregon’s geographic location makes it a key including seven with commercial airline service. operations and end users, as shown in Figure 1. component of U.S. West Coast logistics, serving Portland-metro in particular ranks fifth among as a major hub for domestic and international western metropolitan regions in international Traded-sector industries – those industries that provide goods and services outside of Figure 1: Major flows by truck to, from and within Oregon, 2040 Oregon and bring money back into the state economy – are particularly reliant on an efficient transportation network. Exports from these industries are shipped through most major ports on the U.S. West Coast. These industries also are critical to statewide economic growth and job creation. In Oregon, the top traded-sector industries include wood product INTEL CORPORATION Intel Corp. is one of the world’s largest designers and producers of essential technologies that serve as the foundation for the world’s computing devices. Hillsboro, Oregon is home to the company’s largest site for fabrication, testing and wafer production. Missed flight connections require Intel to reschedule shipments and are costly due to the limited usable life of dies used in production and manufacturing of chip sets. Source: U.S. Federal Highway Administration. 3 Figure 2: Oregon import and export trade in billions of dollars by trade market Source: Moody’s Analytics, Annual Population Estimates [FPOPA.OR], Accessed November, 2014. manufacturing,
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