Asset Management

Relationships Between Asset Management and Travel Demand:
Findings and Recommendations from Four State DOT Site Visits

Chapter 1. Executive Summary

1.1 Background

For more than 80 years, growth in highway travel in the United States has exceeded the growth of the public roadway network (see Exhibit 1-1). Over time, this divergence has resulted in increasing traffic congestion, travel time delays, and infrastructure deterioration, which have in turn generated a range of responses by both providers and users of the nation's highways (e.g., capacity expansions, new construction materials, and both spatial and temporal changes in travel demand). Despite these efforts, the nation's motorists and the trucking industry continue to experience ongoing reductions in roadway performance, increasing travel times, and lost productivity. In response, state highway departments (departments of transportation), county governments, and local agencies continually seek new ways to address ongoing growth in highway travel demand.

Exhibit 1-1 : Growth of U.S. highway miles and VMT, 1936 to 2004 ¹ (Description)

Over the past decade, state highway departments have also been adopting transportation assessment management (TAM) practices. TAM represents a long-term, strategic approach to the management of transportation infrastructure. A key TAM objective is the optimal allocation of limited resources to competing uses - including system preservation and capacity improvement - with the objective of maximizing transportation system performance (e.g., as measured by mobility, reliability, and safety). TAM helps to attain performance goals through the establishment of clear organizational objectives, performance measures, quality information sources, effective business processes, and robust decision-making tools.

1.2 Study Objectives

This study seeks to determine how state departments of transportation (DOTs) are using TAM and related techniques to address existing and anticipated future travel demand. Correspondingly, this study attempts to identify and document all cases in which state DOTs have incorporated travel demand measures within TAM and related analyses and decision-making processes. At a minimum, the study set out to determine how state DOTs are addressing the following issues:

Current and projected travel demand measures as inputs to the TAM process

1. Infrastructure deterioration (e.g., roadway wear): Increasing traffic volumes and vehicle weights result in increasing rates of roadway deterioration. How do state DOTs take current and projected travel demand measures into account when evaluating the current maintenance and rehabilitation needs of existing roadway infrastructure? Are state DOTs using current and/or projected travel demand measures to help project the timing and magnitude of future rehabilitation and replacement needs?
2. Re-investment prioritization: The benefits of reinvesting in existing infrastructure tend to be highest for segments with relatively greater customer utilization. How are state DOTs using TAM and related techniques to prioritize roadway re-investment between and within regions based on current and projected future utilization?
3. Project benefit-cost and alternatives analysis: The cost effectiveness (or return on investment) of major new investments and the relative benefits of project alternatives are heavily influenced by travel-time savings. How are state DOTs incorporating travel-time savings into their selection processes for major projects?

Using the TAM process to address issues related to travel demand

4. Capacity improvements: As noted above, the rate of growth in travel demand remains well above the rate of growth in roadway capacity, which leads to increasing congestion and travel times. Have state DOTs adopted TAM-related practices to help identify capacity improvement strategies or for prioritizing potential expansion investments?
5. Safety improvements: Increasing roadway utilization also brings increasing opportunities for crashes, injuries, and fatalities. How are the safety implications of current and future travel demand for both light- and heavy-duty vehicle traffic factored into system management decisions?
6. Trade-offs between preservation and capacity needs: All state DOTs face the problem of balancing investment in existing roadway capacity with the need for additional capacity to address growing demand, all within limited financial resources. How have TAM and related processes been used to allocate funds between these and other competing needs, and how do travel demand measures inform this allocation?
7. Objectives and performance measures: TAM emphasizes the need to establish long-term system objectives and develop processes and measures to evaluate success in attaining those objectives. How do state DOTs propose to measure and report performance relative to travel demand? Have they identified or established desired performance standards with respect to roadway volumes, congestion, and other travel demand related measures? If not, why?
8. Long-term planning and budgeting: TAM emphasizes the need to take a long-term, strategic view in establishing attainable organizational objectives within realistic resource constraints. Given these objectives, how do state DOTs incorporate travel demand forecasts into their long-term investment plans? How are those plans constrained by existing resources? How are long-term travel demand and budgeting concerns incorporated into agencies' strategic plans? How long is the long term?

1.3 Study Approach and Sample States

The study collected data on the asset management, travel demand forecasting, and related practices of four state DOTs: California (Caltrans), Michigan (MDOT), North Carolina (NCDOT), and Utah (UDOT). The data were collected during two to three full days of onsite interviews with key staff at each agency, including asset managers, travel demand modelers, short- and long-range planning staff, short- and long-term programming and budgeting staff, roadway maintenance staff, operations personnel, and IT and database maintenance staff. Interviews were intended to document the following:

1. The extent and maturity of each state's asset management program
   • Structure and role within broader DOT organization
   • Program goals and objectives
   • History and development
   • Capabilities
   • Future plans
   • Dedicated resources
2. How DOTs use TAM to address travel demand issues
   • Collection of current and projected travel demand measures
   • Uses of travel demand measures in support of asset management
   • Intermodal, interstate, and international traffic flow considerations
   • Current operations and maintenance
3. How DOTs address their long-term investment needs
   • Long-term transportation planning
   • Long-term budgeting
   • Strategic transportation planning (How does asset management inform or shape each state's infrastructure and financial plans?)

The sample states were selected to provide a broad representation of highway network features, travel-demand characteristics, system size, population growth, urban concentration, industry, climate, and topology. States were also selected to include some of the more advanced in the adoption of TAM practices.

California, Michigan, North Carolina, and Utah met these selection criteria. For example, these states encompass a wide range of state-maintained network sizes (NCDOT is responsible for close to 170,000 lane miles versus just 15,000 for UDOT), varying shares of urban versus rural roadways (25 percent of Caltrans-maintained roadways are urban versus just 12 percent for NCDOT), a range of population and vehicle miles traveled (VMT) growth rates (urban annual VMT growth is 2 percent in California and Michigan but exceeds 3 percent in Utah and North Carolina), and wide variations in congestion (urban average annual daily traffic (AADT) per lane mile exceeds 17,000 in California but is only 4,000 in North Carolina).

1.4 Key Findings

State DOTs have made great strides over the past decade in implementing TAM processes for a broad range of investment and strategic management activities. These TAM processes required significant investments in data collection and database maintenance, decision-support tool development, business process re-engineering, and human-resource development. However, even with these significant investments, progress in incorporating travel-demand measures into state TAM programs remains in its infancy. The following is a summary of the study's key findings:

• TAM programs: Each of the agencies interviewed already has either elements of or strong foundations for a TAM program. For example, three of the agencies studied have established asset management programs. All of the states utilize both pavement and bridge management systems and data collection processes for maintaining the asset inventories used by management systems. In addition, most states maintain current databases of some other highway assets, including the location and condition (or age) of guard rails, drainage, signage, and a variety of other ancillary assets. Beyond these core programs, most states also maintain one or more decision-support tools designed to assist in selecting among a mix of potential rehabilitation options. For two of the study states, asset management analyses were either reflected in or very closely tied to development of the Statewide Long-Range Transportation Plan (SLRP). Each state indicated a strong interest in further advancing its asset management program with several agencies actively participating in further development actions.

  The TAM programs for each of the four participant states remain primarily focused on system maintenance and preservation. This focus reflects the history of each program's development (developing from a kernel of pavement and bridge management systems) and the particular investment needs, legislative requirements, and "color of money" limitations within each state. Moreover, most agencies tend to focus on the short- to medium-term investment needs, but place less emphasis on long-term objectives (e.g., mitigating congestion). This emphasis is reflected in their TAM program goals and objectives, which are also primarily focused on maintenance and preservation.

• Travel demand forecasts and TAM: Each of the agencies interviewed maintains some level of travel demand forecasting capability. These resources are used primarily as either technical support to local metropolitan planning organizations (MPOs) and rural planning organizations (RPOs) - in many instances, the state's travel demand modelers develop and operate the travel demand models for the smaller MPOs and RPOs - or to support cost-effectiveness analyses of major investment projects. Two of the four states interviewed maintained statewide travel demand models of sufficient quality to support development of a long-term, strategic assessment of state-wide capacity requirements or future performance expectations.

• Measures of current travel demand: In addition to generating long-term travel demand forecasts, each state also actively maintains databases of current travel demand (e.g., traffic counts, VMTs, truck counts) for all state-maintained facilities. Measures of current travel demand are generally available to all interested DOT staff, but are most often used by: (1) travel demand modelers as raw model input data, (2) managers with responsibilities for the preservation of bridges, pavement, and highway asset types, and (3) external users including MPOs, RPOs, municipalities, researchers, and even state residents.

Current and projected travel demand measures as inputs to the TAM process

• Infrastructure deterioration (e.g., roadway wear): Increasing traffic volumes and vehicle weights should result in increasing rates of roadway deterioration.

  While current travel demand volumes are frequently considered implicitly by agency management systems (e.g., through annual segment-by-segment roadway condition evaluations), these measures are rarely incorporated explicitly into assessments of asset deterioration rates or the subsequent maintenance and rehabilitation requirements. Similarly, projected future travel demand volumes have not been used to model long-term maintenance and preservation needs.

• Re-investment prioritization: The benefits of reinvesting in existing infrastructure tend to be highest for segments with the highest travel demand (i.e., as there are more users to benefit from the improvements).

  Only one of the four study states (Utah) has developed a decision support tool that utilizes travel demand-driven investment benefits to help prioritize near-term preservation investments between locations or regions (i.e., where preservation activities in high utilization links can be prioritized over low demand links for a similar deficiency based on the higher benefits associated with higher volume traffic). While the other states do not explicitly include travel demand measures in their statewide investment prioritization, travel demand considerations are implicitly reflected through their traditional project review processes.

• Project benefit-cost and alternatives analysis: The cost-effectiveness (or return on investment) of major new investments and the relative benefits of project alternatives are heavily influenced by aggregate travel-time savings.

  Virtually all of the participant states regularly conduct benefit-cost analyses (or other cost-effectiveness assessments) of proposed major investment projects as well as their investment alternatives. A primary source of investment benefits for these projects is the estimate of aggregate travel-time savings for all travelers projected to use a proposed investment.

Using the TAM process to address issues related to travel demand

• Capacity improvements: As noted above, the rate of growth in travel demand remains well above the rate of growth in roadway capacity, leading to increasing congestion and travel times. Have state DOTs adopted TAM-related practices to help identify capacity improvement strategies or for prioritizing potential expansion investments?

  As noted above, two of the four participant states (Michigan and California) maintain statewide travel demand models, and one (Michigan) maintains a truck model. Development of these tools is critical to the objective and consistent identification and assessment of those travel corridors (both current and future) expected to suffer most from travel demand growth and, hence, having the highest priority investment needs. Combing the data from these forecasting tools with other travel-related metrics, Michigan has identified and prioritized capacity investment needs for several "corridors of highest significance."

• Trade-offs between preservation and capacity needs: All state DOTs face the problem of balancing investment in existing roadway capacity with the need for additional capacity to address growing demand - all within limited financial resources. How have TAM and related processes been used to allocate funds between these and other competing needs, and how do travel demand measures inform this allocation?

  None of the four states interviewed has yet succeeded in developing an objective process or a decision-support tool to optimize the allocation of funds across multiple investment uses (e.g., preservation, capacity improvements, safety, roadside maintenance). To a certain extent, these states have not addressed this possibility due to the existence of state legislation requiring the prioritization of preservation activities over capacity improvements (or the reverse) or due to "color-of-money" constraints at both the state and federal levels. A key exception here is Utah, which is working through the problem of establishing a robust benefit-cost process capable of making "apples-to-apples" comparisons between preservation and capacity improvement activities.

• Objectives and performance measures: TAM emphasizes the need to establish long-term system objectives and to develop processes and measures to evaluate success in attaining those objectives.

  The current goals and objectives of the participant states' TAM programs reflect the current focus of these programs (i.e., maintenance and preservation) and, hence, place little emphasis on travel demand-related concerns (e.g., congestion). In contrast, each DOT's agency-wide goals and objectives, as expressed in strategic documents such as their SLRPs, tend to be broader in scope and typically include the maintenance and improvement of mobility as a key goal.

• Long-term planning for growth in travel demand: What are state DOTs doing to plan for long-term travel demand growth?

  Each of the state DOTs interviewed has identified long-term strategies to address the issue of ongoing, long-term growth in travel demand. These strategies are most clearly expressed in each DOT's SLRP. While the mix of strategies to address travel demand issues varied by state, these strategies generally included the following measures:

  • Increased capacity (e.g., lane and bridge widening)
  • Travel demand management (TDM) strategies (e.g., telecommuting, real-time information, ridesharing)
  • Operational improvements (e.g., ITS, improved incident management)

• Long-term budgeting: TAM emphasizes the need to take a long-term, strategic view in establishing attainable organizational objectives within realistic resource constraints.

  The long-range budgeting processes used by state DOTs are somewhat rudimentary and have the primary objective of supporting preparation of the SLRP. According to state DOT staff interviewed for this study, long-range budget analyses have no regular "audience" beyond production of the SLRP. The SLRP for each of the four study states provides an analysis of its current revenue situation, while three of the four plans provide an analysis of the projected gap between long-term needs and anticipated future funding. Only one of the four participant states (Utah) prepared a long-term budget cash-flow projection showing the sources and uses of DOT capital and operating funds over the time horizon covered by its SLRP.

1.5 Recommendations

This study resulted in the following recommendations for state DOTs to enhance their existing transportation asset management programs. Also, based on comments received from state DOT staff participating in this study, a second subsection identifies ways in which the Federal Highway Administration (FHWA) may provide related support to the state DOTs.

1.5.1 Suggestions for State DOTs

• Refine asset deterioration models (short- and long-term): While some participant states (most notably Utah and Michigan) have worked hard to develop good preservation investment tradeoff tools (focused on short-term preservation needs and strategies for a specific asset type - for example, pavement), none of the four states has developed a comprehensive long-term (i.e., 20-year) asset deterioration model that estimates capital reinvestment needs across all asset types and all regions (i.e., similar to HERS-ST). On the broader asset management front, such tools are critical in evaluating long-term funding requirements for asset preservation. Such models can also be used to evaluate the impact of changes in travel demand volumes (e.g., current and projected auto and truck VMTs) on asset deterioration rates and reinvestment needs. This analysis can help pinpoint which network assets are likely to most require future preservation investments.
• Develop statewide auto and truck travel demand models: Statewide travel demand and truck forecasts provide the data required to think strategically about where to focus long-term preservation and capacity investment funds. The construction of such models is key to ensuring an understanding of current and future system performance (volumes, congestion, trade flows) across their highway network. In support of this objective, FHWA may wish to help foster informational exchanges in the design and maintenance of statewide auto and truck travel demand models.
• Ensure consistency in project prioritization across regions and districts: For many state DOTs, the process of project prioritization takes place primarily within the DOT's district or regional offices (typically followed by some limited reprioritization between regions by headquarters staff). Moreover, it is not uncommon for this project prioritization process to vary appreciably from one state DOT district to the next. Such processes lack interregional consistency and, hence, may yield sub-optimal allocations of scarce investment funds. If they are not already doing so, state DOTs need to develop objective and consistent processes and tools to help prioritize investments by region. Such processes should recognize that investment benefits are generally higher on those segments with high travel demand.
• Ensure consistency between TAM program and SLRP: State DOTs should view their SLRPs as a key component of their asset management programs. At a minimum, the goals, objectives, and strategies of the SLRPs should be highly consistent and/or complementary with those of the asset management programs and developed in coordination with asset management staff. Optimally, the SLRP should be recognized as a key component of the asset management program (providing a strategic roadmap for the future), with joint production responsibilities across planning, asset management, budget, upper management, and other key agency staff.
• Long-range budgeting: State DOTs should consider adopting the practice of preparing and maintaining a comprehensive long-range (i.e., 20-year) budget as a means of more effectively identifying and prioritizing financially attainable long-term investment solutions and performance objectives. A comprehensive long-term budget should include a detailed cash-flow analysis showing the anticipated sources and uses of all capital and operating funds over a long-term forecast horizon. Plans should also be founded on realistic and conservative assumptions regarding rates of inflation and the future funding capacity of state and federal funding sources.
• Improved coordination with county and local governments: With the exception of North Carolina DOT (which holds responsibility for more than 80 percent of all roadway miles statewide), the state DOTs interviewed for this study are responsible for, at most, 15 percent of the total roadway miles within each state. Hence, the vast majority of the roadway investment and maintenance activities conducted within each state are managed independently by a number of county and local governments. Therefore, the effective development and deployment of a truly statewide strategic TAM program requires both (1) the existence of TAM programs at the local and regional level, and (2) coordination of program metrics, objectives, and execution across all levels of government including state, regional, county, and local. Note that Michigan and Utah both have local and regional TAM programs that coordinate with and frequently obtain technical support from their state's DOT. State DOTs should work to promote TAM practices within the state at the county and local level and work with the state's regional, county, and municipal governments to jointly identify, define, and pursue consistent, statewide TAM practices and objectives.

1.5.2 Suggestions for FHWA

• Technical guidance: Each of the state DOTs participating in this study indicated a strong interest both in advancing its own asset management program and in learning more about how other states (or other organizations with large asset bases) were addressing similar TAM-related issues. At the same time, these states are striving to derive operational solutions to technical issues associated with the implementation of asset management processes - in many cases, working in isolation from one another in solving the same, fundamental technical problems. Examples include the development of comprehensive capital asset databases, robust decision support tools, deterioration curves that take account of current travel demand and future travel forecasts, and meaningful performance measures.

  Based on these and related observations, it is clear that the states would both benefit from and appreciate technical assistance in solving the technical issues associated with making asset management concepts operational. In this regard, many agencies interviewed were well aware of the problems they wanted to solve (e.g., develop metrics capable of effectively assessing investment tradeoffs between rehabilitation and capacity improvements), but lacked the specific technical methods required to develop the associated support tools. Several respondents also suggested that the current asset management literature has proven highly useful in helping to identify the high-level structure, goals, and objectives of a successful TAM program, but offers less in terms of specific solutions to technical issues. The recommendation here is not to provide a single set of solutions that all agencies are expected to follow, but rather a set of suggested approaches to key technical issues (from which agencies can build their own solutions). Specific technical issues to address include:

  • Prioritization and tradeoff analysis: Many agencies lack analytic methods or capabilities to assess investment tradeoffs among highway asset types (including pavement, bridges, signage, landscaping, etc.); among regions; and among operations, preservation, and expansion.
  • Performance measures: Each of the four states interviewed has adopted or is in the process of adopting statewide transportation performance measures. The types of measures in use or being considered vary widely from state to state. To some extent, this disparity reflects variations in the primary focus of each state's asset management program as well as differences in each state's long-term goals and objectives. However, these differences also reflect varying levels of experience in the development and maintenance of performance measurement systems such that one state suggested it would be beneficial to have further technical support from FHWA in this area (e.g., best practices and information exchange sessions).
  • Comprehensive asset inventory development: While most agencies have quality inventories of pavement and bridges, most agencies do not have a single comprehensive inventory of all highway infrastructure assets (e.g., drainage systems or rest area assets). A comprehensive database is valuable in conducting tradeoff analyses of reinvestment between multiple asset types.

• Legislative constraints: Existing legislation within each of the sample states as well as program requirements for several federal sources (e.g., federal aid funds) can restrict a state DOT's ability to use asset management techniques to optimize the allocation of funds. For example, North Carolina has a legislative requirement to complete build-out of the state's intrastate highway system, a mandate that is counter to the state's increasing need for preservation expenditures. Similarly, federal aid funds such as the Highway Bridge Replacement and Rehabilitation Program limit the application of funding capacity to a specific purpose, which may not reflect prioritized investment needs. Congress may wish to consider options by which funds with specific uses may be diverted to alternate uses if justified by supportable analyses. Similarly, state DOT representatives may wish to work directly with state regulators to loosen the fixed funding priorities embedded within existing state transportation legislation (if they conflict with the findings of their asset management programs).

Notes

1. U.S. Department of Transportation. Highway Statistics to 1995. Updated December 2005. Accessed May 2006. Back