Multi-State, Multimodal, Oversize/Overweight Transportation (2016)

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65 C H A P T E R 6 6.1 Private and Public Costs of Inefficient OSOW Transportation Carriers seek to deliver their load in the most efficient way possible, factoring in the need to maximize asset utilization and minimize cost. Carriers prefer to take the shortest path from origin to destination (referred to as the optimal route). In some instances, however, carriers will bypass a state to avoid having to comply with a particularly challenging or costly state require- ment, making their journey longer as a result (referred to as the actual route). Carriers elect to take the actual route to avoid a state requirement, thereby increasing the number of miles trav- eled. This can increase both operating and societal costs. This section seeks to quantify these additional costs. 6.1.1 Additional Cost for Carriers Additional cost for the carrier consists of direct expenses incurred by providers of freight transportation, including direct operating costs as well as investments in capital equipment such as rolling stock. The research team used an actual cost per mile obtained from the industry to represent the cost of operating an escort, a tractor used for routine OSOW, and a tractor used for a superload. The research team used a multiplier on the cost of a routine load and superload to account for the cost of the trailer. Trailers can increase the per mile cost by three to 10 times depending on the trailer.1 A carrier may select an actual route that is hundreds of miles longer than the optimal route to avoid a state with a low maximum axle weight relative to the other states along the actual route. Therefore, the cost of the additional miles is compared to the cost of using a more expensive, heavier, and longer trailer with more axles to comply with the axle weight regulations in one state. The use of the trailer with more axles may trigger additional regulations in states along the route, further adding to cost. This example illustrates the seemingly counterintuitive reality that carriers will sometimes elect to use a longer route to decrease the total cost of a move. Total per Mile Cost Figure 6-1 displays the incremental costs for escorts and the tractors for routine loads and superloads. In addition to the values presented in Figure 6-1, costs for the trailer and equivalent single axle loads (ESALs) are added depending on the configuration. The values presented in Figure 6-1 include the cost of fuel, equipment, driver, and emissions but do not include safety, Inefficient Oversize/ Overweight Transportation 1 The trailers used to move superloads can cost $1 million and may have 80 tires or more.

66 Multi-State, Multimodal, Oversize/Overweight Transportation noise, and the institutional cost to issue extra permits. The research is limited in its ability to measure and monetize the difference between routes for safety and noise. Both safety and noise are expressed in per mile charges, making the longer route more costly to society because of the increased noise generated and the greater exposure to risk. Additionally, the research team does not have information on the institutional cost for each state to issue a permit. Therefore, instead of monetizing this factor, the total number of permits issued for each route is compared to display the difference. 6.1.2 Additional Cost for Society In addition to the price paid by the carriers, freight transportation services generate external costs that are paid by society as a whole. These costs are not fully reflected in the prices paid by carriers, which is an inefficient outcome for society. A description of the major external costs is presented in Figure 6-2.2,3 It is important to note that carriers pay for some of the social costs when they operate. Registration, fuel tax, and permitting costs cover some of the damage done to the roadway. The research team recognizes that carriers pay a permitting fee, which covers all, or a portion of the total cost of administering the permitting process. 2 Middleton, D., Y. Li, J. Le, and N. Koncz. Accommodating Oversize and Overweight Loads: Technical Report. Texas Transpor- tation Institute, 2012. 3 Forkenbrock, D. External Costs of Intercity Truck Freight Transportation. Transportation Research Part A, Vol. 33, 1999, pp. 505–526. Vehicle Low (2013$) High (2013$) Escorts $1.89 $3.23 Roune OSOW loads $4.23 $4.26 Superloads $6.45 $6.48 Figure 6-1. Escort and tractor cost per mile for OSOW loads. Cost Type Descripon of Cost Emissions from Fuel Consumpon • Air pollutants including carbon dioxide (CO2), nitrogen oxides (NOx), parculate ma
er (PM) and sulfur oxides (SOx) contribute to serious health problems including asthma, lung and heart disease, as well as being a cause of acid rain • CO2 is the most significant component of greenhouse gas emissions that contribute to climate change Public Facility Costs • Unrecovered costs associated with the provision, operaon, and maintenance of public facilies, including roads and bridges • Congeson associated with slow-moving OSOW loads Accidents • The cost of fatalies, injuries, and property damage Noise • Inconvenience and impacts from trucking noise Permiˆng Resources • Unrecovered cost to issue a permit for OSOW load Source: Forkenbrock, D. 1999. Figure 6-2. Social costs of trucking.

Inefficient Oversize/Overweight Transportation 67 6.2 Monetizing the Social Costs of Inefficient OSOW Routings It is challenging to assign dollar amounts to many of the societal costs noted above and even harder to allocate such costs accurately to truck transportation. Where possible, the research team has attempted to quantify the amount and the value of societal costs from OSOW shipping. In some cases, a range of estimated impacts is used to reflect the uncertainty in available estimates. 6.2.1 Emissions Cost The emissions of a vehicle, especially nitrogen oxides (NOx) and particulate matter (PM), are dependent on a variety of factors including vehicle class, year, speed, and driving patterns. In contrast, CO2 emissions are largely independent of vehicle type, class, and operating attributes. 4 As a result, making some assumptions to define emissions is required. The research team used emission factors used by the EPA’s SmartWay Truck Tool as a simplified approach.5 In order to account for the age of vehicles, values for trucks produced in 2010 and 2015 were used. The monetized value of important pollutants from the burning of fuel is presented in Figure 6-3, for diesel-consuming OSOW vehicles as well as for gasoline-consuming escort vehicles. 6.2.2 Pavement Cost All vehicles cause damage to the roadways they travel but, by virtue of their weight, trucks cause exponentially more damage than cars. Figure 6-4 illustrates a range of costs per ESAL mile based on a 2012 study for the Indiana DOT on the pavement costs associated with OSOW 4 Technical Documentation 2014 Data Year. Smartway Transportation Partnership, U.S. Environmental Protection Agency, 2014. http://www.epa.gov/otaq/smartway/forpartners/documents/trucks/tool-guide/420b15002.pdf. Accessed April 29, 2015. 5 Technical Documentation 2014 Data Year. Smartway Transportation Partnership, U.S. Environmental Protection Agency, 2014. Emission Type Societal Cost per Mile (2013$) OSOW Truck/Trailer (diesel) Escort Vehicle (gasoline) Nitrogen Oxides (NOx) $0.007—$0.028 $0.002 Parculate Maer (PM2.5) $0.004—$0.016 $0.001—$0.002 Carbon dioxide (CO2) Regular OSOW—$0.10 Superload— $0.17 $0.04 Total Cost Per Mile $0.11—$0.214 $0.043—$0.044 Notes: • NOx and PM2.5 calculations are based on two sources: 1) emissions/mile from EPA, Truck Carrier Partner 2.0.14 Tool (http://www.epa.gov/otaq/smartway/forpartners/documents/trucks/tool-guide/420b15002.pdf), using data for vehicle class 8b, combination long-haul trucks, and vehicle class 2b, passenger trucks, and 2) monetized value of tonne of emissions from U.S.DOT, “TIGER Benefit-Cost Analysis (BCA) Resource Guide,” updated 4/18/14 (http://www.dot.gov/sites/dot.gov/files/docs/TIGER%20BCA%20Resource%20Guide%202014.pdf). • CO2 calculations are based on two sources: 1) U.S. Energy Information Administration, Voluntary Reporting of Greenhouse Gases Program Fuel Emission Coefficients, Table 2: Carbon Dioxide Emission Factors for Transportation Fuels (http://www.eia.gov/oiaf/1605/coefficients.html#tbl2, accessed April 15, 2015), and 2) monetized value of tonne of emissions from U.S.DOT, “TIGER Benefit-Cost Analysis (BCA) Resource Guide,” updated 4/18/14 (http://www.dot.gov/sites/dot.gov/files/docs/TIGER%20BCA%20Resource%20Guide%202014.pdf). Figure 6-3. Social cost of emissions: costs for OSOW and escort vehicles.

68 Multi-State, Multimodal, Oversize/Overweight Transportation vehicles.6,7 The Indiana study develops three cost per ESAL mile estimates based on simplified roadway categories and weights per axle group. Figure 6-4 displays the total cost per mile of a legal 5-axle 80,000 lb truck and a permitted 5-axle 100,000 lb configuration on interstates, non- interstates on the National Highway System (NHS), and non-NHS roadways. Carriers pay for their impact on pavements through OSOW permitting fees, various trucking fees, fuel taxes, and registrations required to operate a commercial vehicle. In fact, the Indiana DOT credits loads traveling under their “Overweight Commodity Permit” 2.4 ESALs to remove the ESAL fee for the first 80,000 lbs (weight of a legal 5-axle truck). The analysis in this research project compares the actual route to an optimal route to deter- mine the inefficiencies resulting from carriers routing around states. Therefore, this analysis uses the full cost per ESAL mile because all costs paid by the carrier in fees, taxes, and permits above those paid under the optimal route represent an inefficient use of resources. The additional miles of inefficient use of resources are labeled because this damage would not occur under a harmo- nized approach to OSOW permitting and operations. Therefore when comparing the optimal to the actual route we count the total cost per ESAL mile. 6.2.3 Other External Costs Other external costs associated with the operation of heavy vehicles are noise, congestion, and safety. We were not able to identify information on these costs that are generalizable to OSOW loads because of the restrictions on the operation of OSOW loads. Given that these other exter- nal costs are typically expressed on a cost per mile basis (for regular trucks and vehicles), this analysis assumes that these costs increase with the length of the route. Additionally, the research team recognizes that bridge impacts are a critical cost category of OSOW shipping that are not monetized in our analysis. Advances in State DOT Superload Permit Processes and Practices8 highlights the difficulty of assessing the impact of heavier trucks on bridges and points out the importance of collecting better data, specifically on management practices to better estimate these costs. ESAL Esmate Cost per ESAL Mile Cost per Mile (80,000 lb 5-Axle Truck) Cost per Mile (100,000 lb 5-Axle Truck) ESAL Cost (2013$)—Interstate $0.0064 $0.015 $0.037 ESAL Cost (2013$)—Non- Interstate on NHS $0.0588 $0.140 $0.344 ESAL Cost (2013$)—Non-NHS $0.2329 $0.558 $1.36 Source: Ahmed, A., B. R. D. K. Agbelie, S. Lavrenz, M. Keefer, S. Labi, and K. C. Sinha. 2013. Figure 6-4. Cost per ESAL mile estimates. 6 Ahmed, A., B. R. D. K. Agbelie, S. Lavrenz, M. Keefer, S. Labi, and K. C. Sinha. Costs and Revenues Associated With Over- weight Trucks in Indiana. Publication FHWA/IN/JTRP-2013/01. Joint Transportation Research Program, Indiana Depart- ment of Transportation and Purdue University, West Lafayette, Indiana, 2013. doi:10.5703/128828431498. 7 The research team used the generalized fourth power rule to calculate the number of ESALs per truck. This simplified approach was used to approximate the impact of trucks on the pavement because of the lack of data on the properties of the pavement along the optimal and actual route. 8 Scan Team Report. Advances in State DOT Superload Permit Processes and Practices, 2004. http://onlinepubs.trb.org/ onlinepubs/nchrp/docs/NCHRP20-68A_12-01.pdf. Accessed May 25, 2016.

Inefficient Oversize/Overweight Transportation 69 6.3 Case Studies of Social Costs 6.3.1 Impact of Maximum Permitted Axle Weights on Route Selection OSOW carriers consider the regulatory burden and ease of travel when selecting a route and configuration. A carrier interviewed for this study was moving a load from Pennsylvania to Texas with a total loaded weight of 254,000 lbs. The load was transported on a 9-axle trailer, towed by a truck with three drive axles and a steer axle. The configuration placed 20,000 lbs per axle and 14,000 lbs on the steer axle for a total of 254,000 lbs. The carrier submitted permits on a route through Pennsylvania, West Virginia, Ohio, Kentucky, Tennessee, Arkansas, and finally Texas. The carrier was approved for weights in all states except Tennessee. The permit was denied in Tennessee because the axle spacings were too small, resulting in a lower maximum axle weight. The carrier faced two options: increase the number of axles or find a route around Tennessee (Figure 6-5). Adding axles would have put the load into the superload category in Texas, which requires substantial bridge analysis as well as refiling permits for the newly reconfigured load. Routing around Tennessee kept the load out of the time-intensive and costly Texas bridge review, but required permit reordering in Ohio and Arkansas, as well as applying for permits in Indiana, Illinois, and Missouri. By choosing to go around Tennessee, the carrier avoided the additional time and cost of the Texas bridge review. In this case, the axle spacings and weights allowed in Tennessee and the bridge analysis threshold in Texas resulted in a route around Tennessee that added miles, time, and cost to the operations of the load. Figure 6-6 displays a comparison of the routes from a private and social perspective. The car- rier costs aggregate the cost of the truck, trailer, fuel, drivers, civilian escorts, and police escorts. The social costs, including pavement damage and emissions, did not differ significantly between Cost of Issuing an OSOW Permit The cost of issuing an OSOW permit varies between states and also depends on the size of the load. A 2013 study of the Mid America Association of State Trans- portation Officials (MAASTO) states found that the cost of issuing a permit varied significantly from a low of $7 to a high of $480. The study measured the direct and marginal agency costs for six loads (combine, generator, steel bridge girder, mobile home, wind turbine blade, and a wind tower component). When compar- ing the cost of issuing a permit to the fee, some state permitting fees covered costs well and above the direct and marginal costs of issuing, whereas others had a significant shortage. Beyond just the cost of permitting, a 2012 study suggests that Texas DOT spends about $11 to issue a permit based on the permitting division’s operations budget and annual permits issued. This corresponded to a $70 million shortfall in revenues relative to the operating cost of OSOW loads including enforcement, infrastructure damage, hit and run damage to Texas DOT property, and unreimbursed court fees. The studies of permitting fees in MAASTO and Texas display the variation in the marginal cost of permitting OSOW loads, as well as other costs that may not be captured by the permitting fee.

70 Multi-State, Multimodal, Oversize/Overweight Transportation the routes because of the small difference in the total miles traveled. Therefore, the low estimates for social costs are displayed in Figure 6-6. In total, carrier costs increased by 9% and social costs increased by 26% when comparing the most direct route to the actual route taken. While the difference in the cost between the shortest and actual route was highest for the carrier in absolute terms, society had the largest percentage increase in cost. This was largely because of the differences in the number of miles traveled on non-NHS roadways, which resulted in substantially more damage per mile relative to interstate roadways and other non-interstates on the NHS. Other increases in social costs stemmed from increased emissions from the longer route. Figure 6-5. Impact of maximum permitted axle weights on route. Shortest Actual % Change Carrier Costs $48,010 $52,154 9% Social Costs $1,174 $1,478 26% Total Costs $49,319 $53,815 9% Figure 6-6. Private and social costs.

Inefficient Oversize/Overweight Transportation 71 In addition to the carrier costs presented in Figure 6-6, a significant extra cost to the carrier and society was the time needed to reapply for and review permits in Ohio and apply for new permits in Indiana, Illinois, Missouri, Arkansas, and Texas after the initial route was denied by Tennessee. The permits used public sector resources above what would have been needed for the original route. Additionally, the equipment needed for this move was on site while the carrier was reapplying for permits, thus reducing the potential revenue generated. 6.3.2 Impact of Regulatory and Infrastructure Constraints on OSOW Routing OSOW routing is a combination of factors relating to infrastructure restrictions and the time and cost needed to move a load from origin to destination. This case study overviews the various routes considered for a move from Lincoln, Nebraska, to Madison, Wisconsin. Figure 6-7 presents the three routes that were considered to move the load. Route A would have been the most direct route from origin to destination, but the height of the load would have triggered utility notification, meaning that the carrier is required to contact all utilities along the route, which is very costly and time-consuming. Additionally, the carrier would have added costs if a line needed to be lifted or if the utility required involvement in the move. Lastly, there Figure 6-7. Impact of regulations and infrastructure constraints on OSOW routing.

72 Multi-State, Multimodal, Oversize/Overweight Transportation is the potential for delay in the movement of the load due to utility involvement and the added cost of coordination with those utilities. Therefore the carrier chose to route through South Dakota and Minnesota to travel from Nebraska to Wisconsin. Route B and Route C were both considered as options to transit Min- nesota. The total mileage for Route B and Route C are roughly the same, but Route C transits a number of small towns along the route, which causes the load to take an additional two days of travel. Conversely, Route B was not able to meet the minimum clearance needed, so the carrier used hydraulics on the trailer to lower the load and passed under a bridge slowly to minimize bouncing. This case required the load to move at night and the state police to escort the load. The additional cost to move under the bridge was $12,500 because of the delay and the additional police escort cost. The case study shown here is interesting because it displays the consideration of three routes: the optimal (Route A), the actual (Route B), and a northern route (Route C). Both the optimal and northern route were shorter distances than the actual route traveled, but due to the delay that would have been caused by utilities and by traveling on the northern route, the carrier opted to use Route B. Figure 6-8 displays the social and total cost for Route A and Route B as well as the difference between the two routes. The difference between the routes is substantial from both a carrier and social cost perspective. Route A is clearly more efficient compared to Route B, but the cost of utility notification and the associated delay made the carrier choose Route B. After selecting to go around Iowa, the carrier had to choose between a northern (Route C) and a southern (Route B) route around Minneapolis and St. Paul, Minnesota. Figure 6-9 displays a comparison of Route B and Route C. The carrier traveled on Route B and realized a 3% decrease in the cost of travel. The social cost of Route B relative to Route C is 37% higher. The savings stem from the delay the carrier would have experienced traveling on Route C, due in part to the route. The difference in social cost is due to Route B having a greater total mileage compared to Route C and thus having greater emissions and pavement damage. In total, the differences between the carrier and social costs of Routes A, B, and C are con- siderable. The decision to use Route B is based on the delay and the cost the carrier would have experienced in Iowa and in Minnesota. The values presented in Figure 6-8 and Figure 6-9 Figure 6-8. Comparison of private and social costs of Route A and Route B. Route A (Opmal) Route B (Actual) % Change Carrier Costs $61,831 $88,725 43% Social Costs $2,435 $3,619 49% Total Costs $64,266 $92,344 44% Figure 6-9. Comparison of private and social costs of Route B and Route C. Route B (Actual) Route C (Northern Route) % Change Carrier Costs $88,725 $91,685 -3% Social Costs $3,619 $2,639 37% Total Costs $92,344 $94,324 -2%

Inefficient Oversize/Overweight Transportation 73 display the potential impact of an OSOW regulation on the carrier and the social cost of an OSOW load. 6.4 Social Costs of Inefficient OSOW Transportation An important takeaway from the comparison of optimal versus actual OSOW routes is that there are real public and private costs associated with OSOW regulations. Additionally, the social costs from the move overviewed in the case studies are transferred from states on the optimal route to those on the actual route. The bearer and magnitude of these costs change because the mileage in each state changes, shifting the impacts on infrastructure, emissions, use of permit- ting resources, noise, and safety to states on the actual route. The multi-state nature of this move provides insight into the magnitude and bearer of the social costs of OSOW moves and how regulatory differences between states affect the distribution of these costs.