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The National Academies

NCFRP 46 [Final]

Benefit-Cost Methodologies for Evaluating Multimodal Freight Corridor Investments

  Project Data
Funds: $450,000
Research Agency: Texas A&M Transportation Institute
Principal Investigator: Sharada Vadali
Effective Date: 11/25/2013
Completion Date: 9/30/2016
Comments: Completed. Published as NCFRP Report 38.

BACKGROUND
 
Moving Ahead for Progress in the 21st Century (MAP-21), enacted in July 2012, contains significant freight provisions, including the establishment of a national freight network with three components: (1) a primary freight network (PFN) as designated by the Secretary of Transportation; (2) any portions of the Interstate System not designated as part of the PFN; and (3) critical rural freight corridors. However, there are no accepted methodologies or modeling tools available to quantify the benefits and costs of alternative multimodal freight projects in multi-jurisdictional national corridors. For example, local communities often object to the noise, air pollution, or other negative aspects of trucks and trains as they pass through their neighborhoods with little local benefit, as contrasted with the potentially large benefits on national and regional economies from improved freight flows. There is often limited understanding of such factors as (1) how to appropriately calculate net benefits in the presence of interregional transfers and how to include national and regional perspectives; (2) proper inclusion and exclusion of categories of benefits and costs; (3) how to avoid double counting benefits and costs; (4) valuation of time, reliability, resilience, flexibility, risk, and externalities; (5) proper integration of freight demand forecasting in benefit-cost analysis; (6) the strategic responses of the myriad of decision makers in the supply chain; (7) how to incorporate both public and private perspectives in the same benefit-cost analysis; and (8) how to address equity and distributional issues. In addition, there is often confusion regarding the differences between economic impact analysis and benefit-cost analysis.  These and many other factors prevent decision makers from having complete and well-informed sets of alternatives and may lead to sub-optimal planning and investment decisions. Research is needed to develop robust decision support methods that can more comprehensively evaluate multimodal project packages in multi-jurisdictional freight corridors.
 
OBJECTIVE
 
The objective of this research is to develop a guidebook for practitioners for conducting benefit-cost analyses of proposed infrastructure investments on multimodal, multi-jurisdictional freight corridors to inform public and private decision makers and other stakeholders at local, state, regional, and national levels. 
 
Accomplishment of the project objective will require at least the following tasks.
 
TASKS
 
(1). Conduct a kickoff conference call with the panel to review the work plan.(2). Identify, analyze, and discuss domestic and international benefit-cost methodologies and criteria that are currently used by practitioners at local, state, regional, and national levels to make freight infrastructure investment decisions. (3). Critique the results of Task 2 and identify current best benefit-cost practices and their strengths and weaknesses with respect to evaluating multimodal freight corridor infrastructure investment.  Consider the level of analysis appropriate for conceptual, feasibility, and investment grade studies for the project planning and development cycle of the investment. (4). Within 5 months, prepare an interim report that provides the results of Tasks 2 and 3, a detailed outline of the benefit-cost methodology and guidebook, and five to seven proposed multimodal corridor case studies on which to apply the benefit-cost methodology to be developed in Task 5.  The proposed case studies should be significant, described in detail, and include a wide diversity of modes, geographical locations, and private/public funding sources.(5). Develop a methodology for conducting benefit-cost analyses of proposed infrastructure investments on multimodal, multi-jurisdictional freight corridors that includes all relevant factors (e.g., taxonomy of benefits and costs, time horizon, timing of the investment, monetization of externalities, assumptions, risk analysis, perspectives, data requirements and sources, metrics, geographic scope, boundaries, and models). One month later, conduct a conference call with the project panel to review the methodology.(6). Using the methodology developed in Task 5, conduct the two panel-approved case studies.(7). Prepare a guidebook with the methodology for practitioners for conducting benefit-cost analyses of proposed infrastructure investments on multimodal, multi-jurisdictional freight corridors to inform public and private decision makers and other stakeholders at local, state, regional, and national levels.
 
STATUS: Completed.  Published as NCFRP Report 38.  A report is also available at

http://onlinepubs.trb.org/onlinepubs/ncfrp/ncfrp_rpt_038.pdf

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