Longer Combination Vehicles on Exclusive Truck Lanes: Interstate 90 Corridor Case Study
5.0 Performance Measures
While toll revenue might be the single most important performance measure when making an investment decision in new infrastructure, there are several other quantitative and qualitative impacts worthy of consideration. Among the important impacts of any freight transportation proposal are productivity, congestion, pavement, safety, and air quality. This section estimates these impacts for the exclusive truck lane facility, and monetizes them to serve as an additional consideration against the costs of the project. These benefits – both public and private – may warrant outside investment beyond traditional infrastructure bonding to move exclusive truck lanes forward to development.
The change in VMT, either by single-trailer trucks or freight-rail, serves as the source of impacts. The impacts are calculated by measuring the difference in cost per unit mile of the following factors:
LCVs are more productive than conventional trucks, even though they have slightly higher operating costs per vehicle mile. This is because fewer LCV trips are required to carry a given amount of freight.
Impacts on trucking productivity were estimated by updating unit costs from Working Paper 7 of the 2000 U.S. DOT Comprehensive Truck Size and Weight Study. This source provides costs per vehicle mile for selected vehicles by configuration, trailer type, and gross vehicle weight. Costs are separated into the following categories: drivers, vehicle, fuel, tires, repair, and overhead. This source also provides estimates of the costs associated with assembling and disassembling combinations in staging areas.
Pavement cost savings on other roads due to the exclusive truck lanes were estimated as follows:
The analysis was performed using ESALs for rigid pavements since I-90 in Pennsylvania and both I-90 and I-271 in Ohio are either rigid or composite pavements.
The average cost of 2.1 cents per-ESAL-mile was developed based on the following data sources and assumptions:
The average value of 2.1 cents per ESAL mile developed from the above information is consistent with estimates of cost per ESAL mile from Transportation Research Board (TRB) Special Report 211, Twin Trailer Trucks. Special Report 211 reviewed the literature on pavement cost per ESAL mile, and found plausible estimates for Rural Interstates ranging from 0.7 to 5.0 cents per ESAL mile. An independent estimate of cost per ESAL mile was also developed in that report using nationwide data on pavement costs and ESAL miles on rural Interstates. Their estimate, when updated for inflation and adjusted for differences in pavement types, is about 2.5 cents per ESAL mile, close to the average value of 2.1 cents developed using the data and assumptions listed above.
Diversion of traffic from the general purpose lanes will reduce congestion in those lanes and provide time and fuel savings. These impacts were estimated based on the following information:
Safety benefits result from the shift of single-trailer trucks (STT) to LCVs and the reduced truck vehicle-miles traveled. The benefits were estimated based on the following data sources:
To account for the effects of truck type and gross vehicle weight, crash rate adjustment factors from the TRB Special Report 225, Truck Weight Limits: Issues and Options were used. With these adjustments, multiple trailer trucks have crash rates per vehicle mile that are 10 percent higher than those of single trailer trucks, when both are operated under similar conditions. Also, crash rates per vehicle mile increase with gross vehicle weight so that, other things being equal, a 10-percent increase in weight results in a 2.5-percent increase in crash rate. It should be noted, however, that because of the higher payloads carried by LCVs, they have lower crash rates per payload ton-mile than single trailer trucks.
To account for the reduced vehicle interactions associated with the ETLs, an AADT adjustment factor from HERS was used. With this adjustment, crash rates on Interstate highways vary in proportion to AADT 0.155, implying that a 10-percent decrease in volume produces a 1.55-percent decrease in crash rates.
Crash costs were estimated using Unit Costs of Medium and Heavy Truck Crashes, a Pacific Institute report prepared for the Federal Motor Carrier Safety Administration. The report provides estimates of the monetary losses associated with crashes, as well as the nonmonetary losses due to shortened life, pain and suffering, physical impairment, etc. Crash costs from that study, updated to 2008 dollars, are as follows:
Estimates of emissions reductions and associated costs were developed for carbon dioxide, nitrogen oxides, and particulate matter based on fuel consumption. The American Trucking Research Institute (ATRI) report, Energy and Emissions Impacts of Operating Higher Productivity Vehicles Update 2008, provides the following estimates of emissions per gallon of fuel consumed:
Emissions reductions for nitrogen oxides and particulate matter were monetized using information compiled by the FHWA for the HERS model and updated to 2008 dollars. For nitrogen oxides, the damage costs are $4,532 per ton in rural areas and $6,798 per ton in urban areas. For particulate matter, the damage costs are $3,016 in rural areas and $6,033 per ton in urban areas.
Emissions reductions for carbon dioxide was monetized based on Richard S. J. Tol, “The Marginal Damage Costs of Carbon Dioxide Emissions: An Assessment of the Uncertainties.” Tol compiled 103 estimates from 38 published studies. The median value from the estimates was $14 per tonne of carbon. Updating to 2008 dollars and converting from metric tonnes of carbon to tons of carbon dioxide produces $4.06 per ton.
Table 5.1 shows annual benefits of the ETLs for 2010 and 2040. About 70 percent of the benefits accrue from the shift to double-trailer trucks while the remaining 30 percent accrue to triple-trailer configurations.
An average trip length of 500 miles for LCVs was assumed in developing the estimates of annual benefits shown in Table 5.1. The trip length includes travel on the exclusive truck lanes and other turnpikes (Massachusetts, New York, Ohio, and Indiana) on which LCVs are allowed.
The largest benefit category is transport cost savings, which result from larger payloads. The estimates of transport cost savings take into account 1) the reduction in vehicle miles required to carry a given amount of freight due to the larger payloads per trip for LCVs; 2) the higher per vehicle mile operating costs of LCVs; and 3) the cost associated with assembling and disassembling LCVs in staging areas.
Transport cost savings due to higher speeds on the exclusive truck lanes are modest in 2010 since most trucks operate at close to free-flow speeds in the general purpose lanes parallel to the exclusive truck lanes. By 2040, however, there will be significant congestion in the general purpose lanes leading to great time savings for vehicles using the uncongested exclusive truck lanes.
Because of the higher congestion levels predicted for 2040, the diversion of truck traffic from the general purpose lanes to the exclusive truck lanes, together with the reduction in total truck miles due to the higher payloads of LCVs will provide considerable time savings to other vehicles. However, construction of the exclusive truck lanes will make it much more difficult to widen the I-90 general purpose lanes in the future. To the extent that construction of the ETL precludes future widening of the general purpose lanes, it has a huge opportunity cost for effective congestion management in the future because most of the traffic (85 percent) will not be eligible for the ETL facility.
Estimates of pavement cost savings on other roads take into account: 1) the net reduction in truck traffic on other roads; and 2) differences between the pavement wear effects of LCVs and single-trailer trucks. The pavement cost analysis included all savings on all general purpose lanes, including those in the corridor itself. Though LCVs have higher gross weights than the vehicles they replace, the weight is spread over more axles so that pavement wear per ton-mile of freight carried is generally less for LCVs.
Estimates of safety benefits take into account: 1) the reduction in truck miles on the highways due to the higher payloads of LCVs relative to single-trailer trucks, 2) the increase in truck miles associated with diversion from rail to truck, and 3) the slightly higher crash rates per mile of LCVs. The first of these three effects is dominant, so that the exclusive truck lanes provide net safety benefits.
Estimates of air quality impacts are of smaller magnitude, but take into account the ability of LCVs to handle higher payloads with fewer vehicles. Any negative air quality impact of shifting freight from rail, which can generate lower emissions on a ton-mile basis, is compensated by higher positive gains from consolidating single-trailer trucks to LCVs.
Appendix A of this report provides additional insight on the impact findings using several sensitivity tests for distance, mix of doubles versus triples, empty backhauls, and fuel costs.
A critical measure of project success is the projected return on investment. Cost-effectiveness assesses the cost of a project with respect to corridor usage and related transportation system benefits. Cost-effectiveness is quantified as cumulative benefits and cumulative costs for the corridor through 2040. The only direct revenue source is tolls, but other offsetting benefits – including productivity, delay, safety, and air quality benefits – may help shape the debate over the public role in exclusive truck lane development.
The capital cost estimate for the corridor is $5.679 billion. The annual average capital cost in 2008 dollars over a 30-year period (2010 to 2040) is $189.3 million per year. With financing at a market rate of 5 percent interest, the annual average cost would be $365.8 million per year over 30-years.
Toll Revenue and Maintenance and Operations Cost
All diversion and tolling scenarios result in cumulative (2010 to 2040) revenues that are less than cumulative operations and maintenance costs during the same period (Table 5.2). The medium toll, high diversion scenario shows the highest cumulative revenues at $914.36 million. This cumulative revenue is $489 million or 35 percent short of breaking even with cumulative operations and maintenance costs.
Rate of Return
Combining annualized capital cost, maintenance and operations cost, and revenue through 2040 results in estimates of annual rate of return. In all tolling and diversion scenarios, the annual corridor toll revenue is less than annual operations and maintenance costs.
When including annualized costs to pay back $5.679 billion in capital costs, the annual rate of return remains negative. In 2015, it is $(381.3) million; in 2040 it has only marginally improved to $(380.6) million. This assumes that operating costs are increasing at an average rate of three percent annually while per mile toll rates remain constant. Excluding maintenance and operating costs, the total revenue of $914.4 million in the medium toll/high volume scenario would only pay back 8.3 percent of the total 30-year debt service on the project.
The greatest offsetting factor for the low revenue-to-cost assessment is the potential for long-term public and private benefits. This report monetized the benefits for 2010 and 2040 under high and low scenario estimates. The total benefits for the high diversion scenario (10-percent diversion) over the 25-year analysis period are $5.164 billion, while the low scenario (2-percent diversion) generates $1.036 billion; both expressed in 2008 dollars. Table 5.3 presents the costs, revenues, and benefits of the proposed ETL facility over the 30-year financing period of the project.
Potential Return from Universal Truck Toll Scenario
While this study focused on the potential for LCVs, the other opportunity to increase the revenue stream depends on the utilization of STTs on the ETL facility. The “Universal” scenario in Section 4.0 provides an illustrative example of revenue potential if all combination units utilized the ETL. Under that scenario, STTs could push the rate of return closer to a 1:1 ratio. Specifically, the high toll estimate ($0.50 per mile) under the “Universal” scenario would push revenues to a range of $9.8 billion to $10.7 billion over the 30-year study period. The high toll estimate combined with the high LCV diversion estimate might yield the most favorable return from a public policy standpoint by balancing high toll revenue with from STT diversion and high utilization of LCVs on the facility. This combination could reduce overall VMT by preserving a 10-percent share of LCVs, which in turn would produce logistics, safety, highway maintenance, and environmental benefits.
Examination of a hypothetical LCV exclusive truck lane facility on a high-volume interstate truck corridor shows that costs exceed expected revenues and benefits by a margin of at least 2 to 1. While the joint deployment of LCVs and exclusive truck lane facilities holds theoretical promise as a means of increasing freight productivity, the test application to this corridor demonstrates that exclusive truck lanes may not provide a full return on investment – even accounting for significant positive benefits. Despite these findings, this study should not persuade the U.S. DOT and states to abandon the exclusive truck lanes concept as it may have better fit a different corridor or with a different mix of traffic or operating assumptions. For example, ETLs might provide a better rate of return on higher-density urban corridors that connect major port facilities with inland distribution clusters. Finally, with significant diversion of single-trailer trucks to the new facility, the prospects of financial return are heightened.