Return on Investment on Freight Rail Capacity Improvement
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RETURN ON INVESTMENT ON FREIGHT RAIL CAPACITY IMPROVEMENT Requested by: American Association of State Highway and Transportation Officials (AASHTO) Standing Committee on Planning Prepared by: David Hunt Cambridge Systematics, Inc. Chevy Chase, Maryland April 2005 The information contained in this report was prepared as part of NCHRP Project 08-36, Task 43, National Cooperative Highway Research Program, Transportation Research Board. ACKNOWLEDGMENT OF SPONSORSHIP This study was requested by the American Association of State Highway and Transportation Officials (AASHTO), and conducted as part of National Cooperative Highway Research Program (NCHRP) Project 08-36. The NCHRP is supported by annual voluntary contributions from the state departments of transportation (DOTs). Project 08-36 is intended to fund quick-response studies on behalf of the AASHTO Standing Committee on Planning. The report was prepared by David Hunt of Cambridge Systematics, Inc. (CS) with assistance from Andreas Aeppli of Reebie Associates, Inc. (Reebie). Other contributors included James Blair (Reebie), Daniel Hodge (CS), Alex Lu (Reebie), Gary Maring (CS), and Donald Vary (CS). The work was reviewed by Mary Lynn Tischer of the Virginia DOT, James Badgley of the New Jersey DOT, John Bell of the New York State DOT, Jane Bachner of the Federal Railroad Administration (FRA), Craig Rockey of the Association of American Railroads (AAR), and David Williams of Parametrix, Inc. The project was managed by Ronald D. McCready, NCHRP Senior Program Officer. DISCLAIMER The opinions and conclusions expressed or implied are those of the research agency that performed the research and are not necessarily those of the Transportation Research Board or its sponsors. This report has not been reviewed or accepted by the Transportation Research Board’s Executive Committee or the Governing Board of the National Research Council. final report NCHRP 08-36, Task 43 Return on Investment on Freight Rail Capacity Improvement prepared for National Cooperative Highway Research Program prepared by Cambridge Systematics, Inc. 4445 Willard Avenue, Suite 300 Chevy Chase, Maryland 20815 and Reebie Associates, Inc. April 2005 NCHRP 8-36, Task 43 Return on Investment on Freight Rail Capacity Improvement Table of Contents Executive Summary .............................................................................................................. ES-1 1.0 Introduction.................................................................................................................... 1-1 2.0 Publicly Supported Freight Rail Projects – Case Studies...................................... 2-1 2.1 Alameda Corridor Transportation Project ........................................................ 2-2 2.2 Chicago Region Environmental And Transportation Efficiency Project....... 2-5 2.3 Congestion Mitigation and Air Quality Improvement Program – Iowa Example ........................................................................................................ 2-10 2.4 Federal Railroad Administration Benefit-Cost Methodology ........................ 2-13 2.5 Freight-Rail Bottom Line Report......................................................................... 2-18 2.6 I-81 Marketing Analysis for Virginia.................................................................. 2-21 2.7 Mid-Atlantic Rail Operations Study – Initial Benefits Assessment ............... 2-24 2.8 New York Cross Harbor Goods Movement Environmental Impact Statement................................................................................................................ 2-28 2.9 Northern Ohio Corridor Study ........................................................................... 2-33 2.10 Palouse River and Coulee City Railroad ........................................................... 2-37 2.11 Shellpot Bridge ...................................................................................................... 2-41 3.0 Methods for Establishing and Evaluating Benefits................................................ 3-1 3.1 Travel Demand Methods ..................................................................................... 3-2 3.2 Transportation Impact Methods......................................................................... 3-11 3.3 External Impact Methods..................................................................................... 3-24 3.4 Economic Impact Methods .................................................................................. 3-33 3.5 Decision Methods.................................................................................................. 3-41 3.6 Summary ................................................................................................................ 3-48 4.0 Program Sources for Freight Rail Investment.......................................................... 4-1 4.1 Federal Programs.................................................................................................. 4-2 4.2 State Programs....................................................................................................... 4-6 5.0 A Framework for Quantifying Public Benefits from Investment in Freight Rail ..................................................................................................................... 5-1 5.1 Public Benefits versus Case Studies.................................................................... 5-1 5.2 Public Benefits versus Methods .......................................................................... 5-4 5.3 Public Benefits versus Revenue Sources............................................................ 5-6 5.4 What We Have, What We Need.......................................................................... 5-8 5.5 Freight Rail Investment Framework................................................................... 5-9 6.0 Conclusions and Future Research.............................................................................. 6-1 6.1 Conclusions............................................................................................................ 6-2 6.2 Future Research..................................................................................................... 6-3 Cambridge Systematics, Inc. i Reebie Associates, Inc. 7307.043 NCHRP 8-36, Task 43 Return on Investment on Freight Rail Capacity Improvement List of Tables 2.1 CREATE Rationalization and Redevelopment Scenario ......................................... 2-9 2.2 Cost Effectiveness of Example Iowa CMAQ Applications ..................................... 2-13 2.3 MAROps Benefits – Shipper Costs ............................................................................. 2-27 2.4 Summary of Estimated Benefits to the MAROps Region from MAROps Improvements, 2005-2025 ............................................................................................ 2-28 2.5 Travel Efficiencies and Cost Savings for the Single Tunnel System (New Jersey Tunnel Alignment) in 2025 .......................................................................................... 2-31 2.6 Net Business Attraction by Region for the Single Tunnel System in 2025............ 2-31 2.7 Results of the REMI Regional Economic Impact Analysis, Single Tunnel System, 2025................................................................................................................... 2-32 2.8 Impact of Rail Intermodal Cost Adjustments for Northern Ohio Corridor ......... 2-36 2.9 Highway Impacts Associated with Reductions in Rail Operating Cost ............... 2-37 4.1 Current and Proposed Federal Funding Programs for Freight Rail-Related Investment...................................................................................................................... 4-4 4.2 Sampling of State Freight Rail Programs................................................................... 4-8 Cambridge Systematics, Inc. iii Reebie Associates, Inc. NCHRP 8-36, Task 43 Return on Investment on Freight Rail Capacity Improvement List of Figures ES.1 Framework for Evaluating Transportation Investments......................................... ES-3 2.1 Main Steps in the CREATE Transportation-Economic Benefits Analysis ............ 2-7 2.2 New York Cross Harbor Benefit-Cost Analysis Framework.................................. 2-33 3.1 Framework for Evaluating Transportation Investments......................................... 3-1 3.2 Travel Demand Methods ............................................................................................. 3-3 3.3 Transportation Impact Methods................................................................................. 3-12 3.4 Overall Structure of the ITS Deployment Analysis System.................................... 3-15 3.5 Overview of the Highway Economic Requirement System ................................... 3-17 3.6 External Impact Methods............................................................................................. 3-24 3.7 Economic Impact Analysis Framework..................................................................... 3-34 3.8 Economic Impact Methods .......................................................................................... 3-35 3.9 Decision Methods.......................................................................................................... 3-42 5.1 Summary of Case Studies by Public Benefits Criteria ............................................. 5-2 5.2 Summary of Methods by Public Benefits Criteria...................................................