Methodologies to Estimate the Economic Impacts of Disruptions to the Goods Movement System (2012) / Chapter Skim
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Pages 33-42
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33 3.1 A Five-Step Decision/Analysis Process The sequential five-step process shown in Figure 3-1 was developed as part of this research as a comprehensive and practicable framework for evaluating a wide range of freight network disruption events and their many possible economic impacts. The following sections describe each step in turn and break up the flow chart in the figure into its separate and sequential components.
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Intermediate Modeling Step Step 4 SUPPLY CHAIN RESPONSE MODELING INDUSTRY RESPONSE modal diversion other transport response production suspended- inventory production locations shift FLOW ROUTING RESPONSE Model Inputs Step 1 DEFINE DIRECT FREIGHT TRANSPORT NETWORK IMPACTS - "PHYSICAL CHARACTERISTICS" facilities disrupted modes impacted likely time frame of disruption Model Inputs Step 2 IDENTIFY CURRENT AND FUTURE AFFECTED NETWORK FLOWS BY FACILITY AND LINK current volumes by commodity tonnage and value projected volumes by commodity tonnage and value Step 3 DEFINE SUPPLY CHAIN CHARACTERISTICS AND PARAMETERS, BY FLOW TYPE Model Outputs SOCIAL AND PUBLIC SECTOR COSTS - E.G., INCREASED HIGHWAY CONGESTION AND MAINTENANCE, FROM RAIL TO TRUCK DIRECT SUPPLY CHAIN COSTS - NETWORK TRANSPORT COSTS (TRANSPORT COSTS, RELIABILITY COSTS, INVENTORY COSTS)
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analysis Framework 35 or through traffic or a reassignment of vessels to other berths or terminals, to shifts in operating times to avoid increased on-network congestion, to a net loss of cargo docking/storage/cargo transfer capacity at ports and land freight consolidation/break-bulk terminals. Longer term disruptions involving major damage to port or other terminal facilities may lead to truck, train, vessel, or aircraft rerouting to other locations and to a resulting drop in local freight traffic volumes.
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From page 36... ...
36 Methodologies to estimate the economic Impacts of Disruptions to the Goods Movement System Data Needs The principal data needs at this step are the following: • A link-node representation of the regional transportation network. • Time series data on regional freight traffic counts (or better still, origin-destination and routespecific traffic movements)
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analysis Framework 37 leg in the physical supply chain. However, this may be sufficient for most purposes.
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From page 38... ...
38 Methodologies to estimate the economic Impacts of Disruptions to the Goods Movement System Data Needs There are the following data needs: • Users can assume average diversion distances and travel times based on knowledge of the network for all commodities (e.g., similar to the DIETT Model procedure)
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From page 39... ...
analysis Framework 39 that could express the average relationship between increases in transportation costs or delayed delivery costs, and industry output and sales revenues. The types of data, analysis tools, and the outputs will necessarily differ depending on whether the high-level methodology or the in-depth methodology is being used.
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40 Methodologies to estimate the economic Impacts of Disruptions to the Goods Movement System increase by a given amount, we can estimate, using cost-industry output elasticities, the impacts to industry output, final sales, and from this, impacts on sales, taxes, employment, and earnings)
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analysis Framework 41 sources (e.g., county or zip code area population and economic activity reporting) and a number of flow modeling assumptions.
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From page 42... ...
42 Methodologies to estimate the economic Impacts of Disruptions to the Goods Movement System to use here (not necessarily using the complete U.S. framework)
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