The National Academies Press

Currently Skimming:

Pages 69-88

The Chapter Skim interface presents what we've algorithmically identified as the most significant single chunk of text within every page in the chapter.
Select key terms on the right to highlight them within pages of the chapter.

From page 69... ... 69 5.1 Overview of High-Level Methodology The following discussion and methodology template (Table 5-1) describe a high-level methodology that can be applied by transportation officials to estimate the economic impacts of transportation system disruption. Read the entire page →
From page 70... ... Supply Chain Response Geographic Scope Economic Impact Economic Metric Economic Impact Economic Metric local/regional increased in-region shipper costs - transporta�on costs for in-region shipments; based on FAF data direct regional transportation cost increases - apply modal cost factors to change in ton miles and hours, to inregion TM/TH increase - apply ton to truck conversion factors as needed inventory cost increases - cost of increased �me in transpor�ng freight to market and/or holding freight in inventory �me value of freight - calculated as change in regional ton hours x cost of capital per hour for private sector state increased in-state shipper costs transport costs for in-state Same as above applied to in-state TM/TH increase Same as above for state Same as above for state na�onal increased U.S. shipper costs - transport cost for total U.S. Read the entire page →
From page 71... ... Supply Chain Response Geographic Scope Economic Impact Economic Metric local/regional persistent transport and inventory cost increases reduce business produc�vity and output - shippers aﬀected reduce output as a func�on of increased produc�on costs total reduction in economic output, employment and earnings: output elas�ci�es applied to shipper cost increases, by industry; IMPLAN or other mul�pliers used to es�mate total direct, indirect and induced economic losses for earnings, employment, output and value added state Same as above for state Same as above for state na�onal Same as above for U.S. Same as above for U.S. Read the entire page →
From page 72... ... Supply Chain Response Geographic Scope Economic Impact Economic Metric Economic Impact Economic Metric local/regional increased in-region shipper costs - transporta�on costs for in-region shipments; based on FAF data direct regional transporta�on cost increases - apply truck mile and truck hour unit cost factors to in-region TM/TH increase - apply ton to truck conversion factors as needed inventory cost increases - cost of increased �me in transpor�ng freight to market and/or holding freight in inventory �me value of freight - calculated as change in regional ton hours x cost of capital per hour for private sector state Same as above for state Same as above applied to in-state TM/TH increase Same as above for state Same as above for state na�onal Same as above for U.S. Same as above applied to U.S. Read the entire page →
From page 73... ... Supply Chain Response Geographic Scope Economic Impact Economic Metric Economic Impact Economic Metric Economic Impact Economic Metric local/regional persistent transport and inventory cost increases reduce business produc�vity and output - shippers aﬀected reduce output as a func�on of increased produc�on costs employment and earnings: output elas�ci�es applied to shipper cost increases, by industry; IMPLAN or other multipliers used to es�mate total direct, indirect and induced economic losses for earnings, employment, output and value added aﬀected port worker hours reduced; local/ regional port support businesses lose sales - es�mated based on current port cost information, earlier port economic impact studies; IO-based models total regional output, employment, earnings and GDP reductions - MARAD Port Economic Impact Kit or other IO-based models used to es�mate multiplier effects cargo throughput suspended - all in-port revenue genera�ng ac�vi�es lost for dura�on of disrup�on revenues loss - es�mated based on current revenues or revenue per container or per freight ton throughput state Same as above for state Same as above for state aﬀected port worker hours reduced; local /regional port support businesses lose sales - same as above only if freight diverted to out-of-state port Same as above for state cargo throughput suspended - all in-port revenue genera�ng ac�vi�es lost for dura�on of disrup�on only if freight diverted to out-of-state port revenues loss - es�mated based on current revenues or revenue per container or per freight ton throughput na�onal Same as above for U.S. Same as above for U.S. Read the entire page →
From page 74... ... Su ppl y Chai n Re sp on se Ge ogra phi c Sc op e Ec on om ic Im pact Ec on om ic Me tr ic Ec on om ic Im pact Ec on om ic Me tr ic air fr ei ght suspensi ons fo r a ﬀe ct ed US air carg o mo veme nt s na ti on al US sh i ppe rs su sp en d pr o ducti on /s al es : indus tr y output re du ce d fo r dur at ion of su sp en si on re duce d st at e ou tput , em pl oy me nt , ea rn in gs a nd va lu e a dde d for i ndus tr y se ct ors aﬀe ct ed - output of a ﬀected indus tr ie s de ri ved from BEA or other state- level data so urce s di re ct ou tput lo ss es ex pande d fo r mu lt ip lier e ﬀe ct s - output mu ltipli er s from RI MS or IMPL AN us ed to es ti ma te total st at e econom ic lo sse s in di re ct and to ta l ec on om ic losses for in dus tr y se ct or s aﬀe ct ed - to ta l im pact s ar e su m of di rect and indirect output lo sse s; mu ltipli er s us ed to derive tota l im pact s for output , em ploy me nt , ea rnin g s, value adde d air fr ei ght suspensi ons fo r a ﬀe ct ed US air carg o ex por ts na ti on al US sh i ppe rs su sp en d pr o ducti on /s al es : indus tr y output re du ce d fo r dur at ion of su sp en si on; US sh ippe rs ba se d on FA F data re duce d nati on al ou t put , em pl oy me nt , ea rn in gs a nd va lu e a dde d for i ndus tr y se ct ors aﬀe ct ed - output of a ﬀected indus tr ie s de ri ved from BEA or othe r national data so urce s di re ct ou tput lo ss es ex pande d fo r mu lt ip lier e ﬀe ct s - output mu ltipli er s from RI MS or IMPL AN us ed to es ti ma te total national econom ic lo sse s in di re ct and to ta l ec on om ic losses for in dus tr y se ct or s aﬀe ct ed - to ta l im pact s ar e su m of di rect and indirect output lo sse s; mu ltipli er s us ed to derive tota l im pact s for output , em ploy me nt , ea rnin g s, value adde d ma jo r re sour ci ng of US air fr ei gh t im po rt s fr om ot he r co unt ri es na ti on al in cr ea se d US sh ip pe r co st s - tran sp or t co st for US sh ip me nt s; US sh ippe rs ba se d on FA F data di re ct nati on al tr an sp or tati on co st in cr ea se s - apply mo da l co st fa ct or s to ch ange in ton mi le s a nd hour s, to US TM/T H in crea se - apply ton to tr uck co nv er si on fa ct or s as needed in ve nt or y co st in cr ea se s - co st of increa se d ti me in tr an sp or ti ng frei gh t to ma rket and/ or holdin g frei gh t in inventor y ti me va lu e of freigh t - ca lc ul at ed as ch ange in re gi on al to n hour s x co st of ca pital per hour for private se ct or Im pact # 1 - Di re ct Sh i ppe r Co st Im pact s - Ai r ca rgo sh ip me nt s rein st at ed from ot he r s uppl ie r co unt ries or region s Im pact # 2 -I ndi re ct Ec on om ic Lo ss es Im pact # 2 - In ve nt ory Co st In cr ea se s Im pact # 1 - Di re ct Ec on om ic Output Lo sses Im pact # 1 - Di re ct Ec on om ic Output Lo sses Im pact # 2 -I ndi re ct Ec on om ic Lo ss es Table 5-1E. Major air cargo disruptions -- short term impacts (<90 days) Read the entire page →
From page 75... ... Supply Chain Response Geographic Scope Economic Impact Economic Metric Economic Impact Economic Metric air freight suspensions for aﬀected US air cargo movements na�onal direct loss in industry output and sales - industry output from BEA or other data total reduction in economic output, employment and earnings: output mul�pliers used to es�mate total direct, indirect and induced economic losses for earnings, employment, output and value added multiple long term responses - 1) Shipper ﬁrms relocate out of US or 2) Read the entire page →
From page 76... ... 76 Methodologies to estimate the economic Impacts of Disruptions to the Goods Movement System 5.2 Key Parameters 5.2.1 Type of Disruption Although many types of freight transport/supply chain disruptions can occur and vary in details, the high-level methodology has combined these into three broad types that capture most of the possible incidents and also would be analyzed similarly. These are as follows: • Major land freight transport link disruption (highway/bridge, Class I railroad, short-line railroad, inland waterway, pipeline, land-based international border crossing) Read the entire page →
From page 77... ... high-Level Methodology 77 destinations, and other ports can pick up the slack. An example of this is when the Ports of Seattle and Tacoma served as an alternative port for some containers during the Port of LA/LB shutdown. Read the entire page →
From page 78... ... 78 Methodologies to estimate the economic Impacts of Disruptions to the Goods Movement System to completely overhaul their supply chain networks, as the persisting increases in transport and inventory costs mount. In this case, some firms may seek to change their sourcing of inputs, rely on alternative warehousing locations, or, in the worst case, might consider relocating all or some operations. Read the entire page →
From page 79... ... high-Level Methodology 79 Multipliers are derived from several possible sources, but all are based on an I-O model of the regional, state, or national economies. Reduced economic output on the part of producers, as well as reduced final sales for retailers and wholesalers, are represented in I-O modeling as reductions in final demand. Read the entire page →
From page 80... ... 80 Methodologies to estimate the economic Impacts of Disruptions to the Goods Movement System value analysis, it may be sufficient to break freight into rough time value classes -- high, low and medium time sensitivity. For example, bulk commodities moving by barge are of very low unit value and are not typically time sensitive; by contrast, perishable food or high-value-added electronics (e.g., parts made to assemble an iPhone) Read the entire page →
From page 81... ... high-Level Methodology 81 for the nation's interstates and other major intercity truck routes that can be useful to corridorlevel analysis. Where rail or inland waterway routes are involved, STB's railcar waybill data and the U.S. Read the entire page →
From page 82... ... 82 Methodologies to estimate the economic Impacts of Disruptions to the Goods Movement System The basic economic impacts estimated in the high-level methodology are as follows: • Transport/logistics costs -- These are primarily cost increases incident to shippers/beneficial cargo owners (BCOs) , or transportation providers. Read the entire page →
From page 83... ... high-Level Methodology 83 be viewed as composed of a number of cost elements. As shown in Figure 5-3, inventory costs include direct costs of warehousing (which, in turn, includes items such as real estate carrying costs, maintenance of warehouse structures, etc.) Read the entire page →
From page 84... ... 84 Methodologies to estimate the economic Impacts of Disruptions to the Goods Movement System ports (or other large intermodal facilities such as major intermodal rail hubs or interior ports) slow or become inactive, cargo is not handled, and port revenues cease to be earned. Read the entire page →
From page 85... ... high-Level Methodology 85 • Inventory Costs. Macrosys (2005) Read the entire page →
From page 86... ... 86 Methodologies to estimate the economic Impacts of Disruptions to the Goods Movement System To estimate impacts in greater detail and to refine the "default" values presented above, various sources can be consulted. These include the following: 1. Read the entire page →
From page 87... ... high-Level Methodology 87 and routes to provide alternative capacity. For example, 9/11 temporarily shut all airports, seaports, and U.S. Read the entire page →
From page 88... ... 88 Methodologies to estimate the economic Impacts of Disruptions to the Goods Movement System – By the fourth month, most major shippers using I-5 (96 percent) had returned to predisruption supply chain and routing practices. Read the entire page →

From page 69...

... 69 5.1 Overview of High-Level Methodology The following discussion and methodology template (Table 5-1) describe a high-level methodology that can be applied by transportation officials to estimate the economic impacts of transportation system disruption.