1. Transportation leadership you can trust. presented to Canada/U.S. Transportation Border Working Group presented by Stephen Fitzroy & Brian Alstadt, Economic Development Research Group Andreas Aeppli, Cambridge Systematics, Inc. November 19, 2008 Economic Impacts of the Border on Transportation Study Update

2. 1 Presentation Overview Project Summary Task 4 – Analysis/Methodological Concept Remaining & next steps

3. 2 Overview of Project Main objective is to determine the economic consequences of delay at the US/Canada border, including: impacts at specific border facilities or regions macroeconomic effects for entire border impacts of policy alternatives Some key questions: What are the impacts of freight versus passenger delay? What commodities/industries are affected most? How does the transport sector respond? What role does reliability play?

4. 3 Review of Study Tasks Task 1: Work Plan Identify data sources Technical Approach & Detailed Work Plan (Technical Memo #1) Task 2: Overview of Transborder Trade Data Collect data and identify trends Technical Memo #2 Task 3: Literature Review Summarize relevant work Identify benefits and limitations of applied methodologies Technical Memo #3

5. 4 Review of Study Tasks - Continued Task 4: Develop Analytic Methodology Present logic Compare to methods from literature review Discuss data requirements Draft Technical Memo #4 to be distributed shortly Task 4-D: Define Select Sample Scenarios Three impact scenarios that could be used to validate model −We need your input! Differentiate between low, medium and high delay scenarios for each of the four border regions Results incorporated into final version of Technical Memo #4 Task 5: Summary Report

6. 5 Summary of Literature Review Most relevant studies: HDR|HLB (2006) – San Diego/Baja Border Taylor et al. (2003) – US/Canada Border DAMF (2005) – US/Canada Border (impacts to trucking firms) Two broad approaches: macroeconomic – measure supply and demand elasticities of response to time delay microeconomic – measure costs at vehicle-level, determine how costs “flow” through economy Room for improvement: “delay” is not the only cost of crossing border address travel time variability add commodity dimension recognize multiple freight carrier types

7. 6 Transborder Data Overview

8. 7 Key Considerations for Methodology Many types of costs travel time and variability operating costs (fuel, capital, maintenance, labor, etc.) administrative costs Costs affect many economic players passenger (commute, leisure, on-the-clock) freight carriers (own-account, for-hire, common carriers) freight shippers (bulk, mixed freight, small package, JIT firms) Many possible responses to costs Vehicle: mode/ route/ time-of-day Firm: inventory management/ production technology/ site location Household: tourism, employment, residential location Data

9. 8 Overview of analytic approach Scenarios: Changes in fees or charges Change in processing time Change in inspection policy Change in hrs of operation Change in security procedures Facility Capacity Response: Change in processing time Change in idle time Change in reliability Change in tolls Demand Response: Change in crossing demand by trip purpose Change in vehicle/freight mix Change in crossing location Change in crossing time of day Change in user costs by vehicle Analyzing Border Delays

10. 9 Methodology blends micro- and macro- approaches Veh. Costs: Trucks Cars Vehicle Users: Households Industry (pass.) Freight shippers Freight carriers Users’ Responses: Travel demand Traveler spending Carrier response Shipper response Regional Impacts: Employment Output Value Added Wages microeconomic elements macroeconomic elements Overview of Methodology

11. 10 Data Requirements

12. 11 Detailed Methodology

13. 12 Implications Addresses limitations of surveyed approaches Vehicle based Incorporates industry and macroeconomic responses Includes travel time variability Recognizes different truck carrier types Impacts revealed at industry level Additional features Benefit/Cost analysis Challenges Appropriate data Demand responses to cost changes

14. 13 Sample Application: Single Border Crossing Hypothetical Scenario: Assess economic impacts of expanding usage of FAST or NEXUS programs Data Passenger travel – survey based, for example 2007 IMTC Cascade Gateway Passenger Intercept Survey Freight travel – public sources Economic forecasts Model Setup Establish “baseline” and “policy” scenarios Determine capacity effects of scenarios (changes in wait times) Estimate any applicable program fees Enter changes in delay and program fees Results Direct benefits by trip type, “user” type, industry, and region Macroeconomic impacts by industry Benefit/cost ratios

15. 14 Next Steps Wrap-up “Phase I” study Complete Task 4 – Analysis/Methodological Concept −Delivery of draft Tech Memo to TBWG by end of November −Final Tech memo with Task 4D scenarios by mid-December −Comments back by January 15, 2009 Task 5 – Summary Report −Complete in February, 2009 Optional Phase II – Test Model Determine Identify critical policy issues to evaluate Determine proper scale of analysis Identify information requirements

16. The End

17. 16 Cost Savings by Vehicle

18. 17 User Responses to Cost Savings