Economic Impacts on Transportation of the US/Canada Border Workplan & Expected Study Outcomes Transportation leadership you can trust. presented to Border Transportation Working Group presented by Michael Fischer Cambridge Systematics, Inc. April 22, 2008

Overview of Project Main objective of study is to assess the impact of delay at border crossings and resulting changes in user benefits and broad macroeconomic measures Key issues: Definition and measurement of delay Trends of delay patterns at border crossings Breakdown of impacts across different modes Truck traffic Passenger vehicles [if data available] Outputs of analytical task are user dis-benefits by mode and macroeconomic impacts

Progression of Study Tasks Task 1: Work Plan Phase I: Methodology and Background Research Collection of available/relevant data Assessment of trends Case study comparisons How can impacts be measured and modeled using economic impact tool? Phase II: User Dis-benefits and Macroeconomic Impacts Employment Income GDP Task 2: Overview of Trade Data Task 3: Literature Review Task 4: Development of Methodology Task 5: User Dis-benefits & Macroeconomic Impacts (TREDIS)

Task 1: Detailed Work Plan Workplan defines the specific tasks and deliverables of Phase I Deliverables are technical memoranda for each task and a final report that combines individual documents Workplan outlines how individual tasks will feed into each other and allow for the quantifiation of economic impacts of border delay

Task 2: Overview of Economic Trade Data Aggregate Economic and trade data obtained from a variety of sources [Global Insight, Statistics Canada, BTS, US Census, etc] Trade data by commodity & time series Border Crossing Information Data measured in dollars [trade] and vehicle movements [traffic] differentiated by surface mode Passenger trip purpose unlikely to be available Aggregate trade forecasts between US and Canada to be obtained from Global Insight

Task 3: Literature Review Literature review captures previously completed studies on border delay and transportation costs Emphases gathered from previous studies: Selected methodologies Available and collected data Outputs from previous studies [performance measures] Impacts of new border security measures on delay Typical cost of delay based on previous studies Task will guide the development of the methodology [Task 4] and calibration of economic model [Task 5]

Data Requirements Literature review allows for assessment of available data sources and how data was used in other studies Methodology includes separate impacts for passenger and truck traffic Source of any passenger traffic data is still uncertain whereas data exists on truck traffic Development of Methodology will determine specific data requirements for economic model Definition of “delay” at the border Congested vs. free flow conditions Changes in traffic performance measures [VMT, VHT]

Data Requirements [cont.] Truck data for different ports of entry will likely be obtained from ATRI Data can be differentiated by time-of-day and distance from border Data obtained for main border points of entry ATRI/Qualcomm data on truck traffic Captures approximately 10% of truck traffic in US Average day measure of delay compared to uncongested conditions [peak vs. off-peak] Reliability Index Access to data as part of FHWA data sharing process

Task 4: Development of Methodology Scope of Methodology: Population and Employment Business and Industry Tourism and Visitor Industry Impacts differentiated Passenger Impacts Freight Impacts Measurement of Impacts using TREDIS Increased travel time as a result of delay Higher user dis-benefits, such as travel costs for passengers and businesses Passengers alter trips & business experience lower productivity Higher product prices and resource costs Macroeconomic Impacts on GDP, Employment, Income

Task 4: Development of Methodology [cont.] Definition of Study Area Consideration of four different regions handling in excess of 70% of all truck traffic Michigan/Ontario New York/Ontario Lacolle/Champlain Pacific Highway Each border crossing region is likely to have a different mix of passenger and freight traffic, and different mix of commodities Different sensitivities to recurrant and non-recurrant delays

Task 4: Development of Methodology [cont.] Measurement of impacts based on microeconomic theory Border delays affect households and businesses by increasing their respective direct and indirect travel costs and therefore cause shifts in supply/demand Passenger trips may be altered which will affect consumption expeditures at travel destination Passengers have different sensitivities depending on purpose of travel [commuting, leisure, vacation, business] Impact on commuters as a result of delay affects the access to labor pool by employers

Task 4: Development of Methodology [cont.] Businesses experience impacts as a result of delay: higher costs lower productivity Impact also felt on reliability due to just-in-time delivery schedules Depending on relative cost and price elasticities, impacts increase wages and subsequently product prices Changes in product and resource markets [labor & materials] impacts overall trade patterns Exchange rate fluctuations provide additional complication

Task 5: Estimation of Economic Impacts Phase 2 – currently not included in WP Inputs to model are travel-related changes resulting from new [security] policy or changing in infrastructure TREDIS is based on: Travel Cost Response Module [VHT and VMT turned into user benefits] Market Access Response Module [measures changes in accessibility and connectivity] Economic Adjustment Module [estimated indirect and induced effects] Benefit Cost Module [accounting of all benefits/costs and computation of B-C ratios] Evaluation of different scenarios possible

What will we learn from this analysis? Determination of the economic impacts of delay on freight and passenger traffic Estimation of wait time/delay User dis-benefits Impacts on different type of travellers Freight [Impacts by industry] Passenger [vacation, recreational, commuting, business] Trends in border delays and future projections

Decision-points and next steps Revision of detailed workplan Development of specific schedule & timeframe for tasks deliverables Adjusted cost estimate Obtain feedback and direction from Transportation Border Working Group regarding: Other sources of critical data for analysis Direction & outputs of study