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The National Academies

NCHRP 20-59(34) [Final]

Methodologies to Estimate the Economic Impacts of Disruptions to the Goods Movement System

  Project Data
Funds: $300,000
Research Agency: Georgia Institute of Technology
Principal Investigator: Michael Meyer
Effective Date: 4/22/2010
Completion Date: 8/31/2012
Comments: Published as NCHRP Report 732.

BACKGROUND
 
The goods movement system in the United States has suffered from many large-scale disruptions in the last 10 years. Examples include disruptions resulting from the terrorist events of September 11, 2001; the lockout of dock labor unions in the Ports of Los Angeles and Long Beach in 2002; infrastructure failures after Hurricane Katrina in 2005; the Baltimore rail tunnel fire in 2001; and the Midwest floods in 2008. Over the last decade, new supply chain management techniques have created demands for highly efficient delivery systems. When disruptions to the system occur, especially to critical components, they can cause significant economic damage locally, regionally, and nationally. Unfortunately, the complex interrelationship between the goods movement system and economic activity is not well understood. As such, research is needed to understand the impacts of bottlenecks and interruptions to the flow of goods through the nation’s major freight corridors and intermodal connectors, the dynamics of that flow in response to disruptions, and the full economic impact on public and private entities — beyond just the critical infrastructure and the carriers — that depend on that flow. Such research will help to increase public understanding of the sensitivity of economic productivity to infrastructure availability, lay the groundwork for improving the resiliency of the freight transportation system, and improve the nation’s ability to rapidly reconfigure the goods movement system to minimize disruptions.
 
OBJECTIVE
 
The objective of this research is to develop and apply one or more conceptual methodologies for identifying and estimating economic impacts, both short and long term, due to disruptions to the goods movement system.
 
TASKS
 
(1). Review and evaluate the methodologies used to measure direct and indirect economic impacts of disruptions to the goods movement system from natural and human causes. Evaluate their applicability for addressing short- and long-term impacts and describe the uncertainties of the measures, their strengths and weaknesses, and cost of use. Provide a summary of the results. (2). Considering a loss of capacity to the goods movement system lasting longer than 7 days and up to 1 year in duration, develop both a high-level (using existing data) and an in-depth methodology to estimate direct and indirect economic impacts over time (e.g., 1 week, 1 month, 6 months, and 1 year from the date of the disruption) and geographic scope (e.g., local, regional, corridor, and national). Discuss the applicability and limitations of the methodologies, including, but not limited to, issues such as capacity constraints, intermodal dependencies, diversion options, existing freight infrastructure, and costs. Describe the sources, availability, quality, and reliability of the data required to use both methodologies. Examine the costs associated with varying levels of data required and the lack of data at the sub-national level. Identify possible proxy measures for data that is unavailable. (3). Eight months after contract award, prepare an interim report that summarizes the results of Tasks 1 and 2 and proposes at least five case studies, both historical and hypothetical, of relevant U.S. incidents dealing with different modes and locations to test the methodology. Case studies should reflect different types of causal incidents, geographies, and ranges of impacts. Meet with the project panel in Washington, DC, to discuss the interim report and selection of the proposed case studies. The project panel will select three case studies for further development in Task 4. The research agency shall not begin work on the remaining tasks without NCFRP approval. (4). Apply the proposed high-level methodology by estimating economic impacts in the three case studies approved by the project panel. Document the results of the high-level methodology in terms of reliability and effectiveness and incorporate lessons learned into the methodology. Identify the additional data needed for application of the in-depth economic impact methodology in each of the case studies. In addition, prepare an electronic presentation of the methodologies that provides practical knowledge and methods to apply the methodologies in real-world situations.  (5). Prepare a final report that includes the conceptual methodologies for identifying and estimating economic losses, both short and long term, due to disruptions to the goods movement system, and the electronic presentation of the methodologies. The final report should discuss the steps necessary to gain national acceptance of the methodologies.
 
STATUS: Published as NCHRP Report 732.   The report is also available electronically at

http://www.trb.org/Main/Blurbs/167969.aspx

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