Measuring Improvements in the Movement of Highway and Intermodal Freight

Final Report Prepared for:
Federal Highway Administration 400 Seventh Street, SW Washington, DC 20590

Prepared by:
Hagler Bailly Services, Inc. 1530 Wilson Boulevard Arlington, VA 22209 703-351-0300

Under Contract:
DTFH61-97-C-00010, BAT 99-021
March 20, 2000

Table of Contents

Executive Summary
1. Introduction
1.1 Background and Purpose
1.2 Report Organization
2. Overview of Indicators Identified in Previous Research
2.1 Focus of Past Research and Policy Efforts
2.2 Indicators Identified
2.2.1 Travel Time Measures
2.2.2 Reliability Measures
2.2.3 Cost Measures
2.2.4 Safety or Damage Measures
2.2.5 Highway Condition Measures
2.2.6 Economic Impact Measures
2.2.7 Transportation Industry Productivity Measures
3. Recommendations
3.1 Initial Screening
3.1.1 Potentially Valuable (First-Tier) Indicators
3.1.2 Second-Tier Indicators
3.1.3 Corridor or Facility Measures
3.1.4 Not-Useful Measures
3.2 Evaluation of First-Tier Indicators
3.2.1 Criteria Used
3.2.2 Findings
3.2.3 Analysis of Individual Indicators
Appendix A: Evaluations of Individual Studies
3.3 U.S. DOT Efforts
3.4 State and Local Efforts
3.5 Academic Studies
Appendix B: Individuals Contacted

Executive Summary

The Government Performance and Results Act (GPRA) of 1993 established a requirement for Federal agencies to identify goals and measurable outcomes to gauge performance in meeting program objectives. In response to this requirement and in seeking to advance its own performance, the Federal Highway Administration (FHWA) has developed a National Strategic Plan. In order to measure performance under the plan, FHWA has sought to develop performance measures for productivity and efficiency improvements in relation to the highway system. Productivity is one of the five strategic goals in the plan: to continuously improve the economic efficiency of the Nation's transportation system to enhance America's position in the global economy."

In this regard, it is important that FHWA develop measures of the performance of the highway system in carrying freight and supporting the intermodal freight system. FHWA contracted with Hagler Bailly Services to provide a limited, introductory review of what indicators may be available for use by FHWA to detect and assess, on an annual basis, productivity and efficiency in the movement of commercial goods by motor vehicles.

The work began with a review of the results of a number of recent studies and conferences where various groups and individuals made efforts to identify performance measures for freight. These results were summarized, evaluated, and passed through a preliminary screening process to identify measures potentially valuable enough to warrant further analysis and development by FHWA. That preliminary screen yielded thirteen potentially valuable indicators (referred to as first-tier" indicators in the report). These were:

• Cost of highway freight per ton-mile
• Cargo insurance rates
• Fuel consumption of heavy trucks per ton-mile
• On-time performance for highway-freight deliveries

These measures all address the cost or quality of freight service to shippers.

• Point-to-point travel times for selected freight-significant highways
• Hours of delay per 1000 vehicle-miles on freight-significant highways
• Ratio of peak period travel time to off-peak travel time at freight-significant nodes
• Ratio of variance to average minutes per trip in peak periods at freight-significant nodes Hours of incident-based delay on freight-significant highways

These measures all address travel time and reliability of highway performance as it relates to freight.

Annual miles per truck

This is a measure of freight equipment utilization that may be affected by highway condition.

Crossing time at international border crossings

International border crossings are of particular importance to efficient international freight movement.

Conditions on connectors between NHS and intermodal terminals

The conditions on the connecting links between the NHS and intermodal freight terminals are an important measure of the highway system's ability to handle intermodal freight.

Customer Satisfaction

The judgments on performance of the firms and people that use the system every day could be very valuable to FHWA as an indicator of how well the system is performing.

The final screening and evaluation led to recommendation of the following seven indicators for further development by FHWA:

• Cost of highway freight per ton-mile
• Cargo insurance rates
• Point-to-point travel times on selected freight-significant highways
• Hours of delay per 1,000 vehicle miles on selected freight-significant highways
• Crossing times at international borders
• Condition of connectors between NHS and intermodal terminals
• Customer satisfaction.

These measures were selected in an evaluation process that balanced the inherent value of an indicator as a measure of performance against the difficulty and cost of obtaining the necessary data. No rigid scoring methodology was used for the selection of recommended indicators. In general, the measures that were recommended are those that ranked highest in terms of descriptive value and technical appropriateness. Data availability and costs are important considerations for FHWA as it considers the use of these measures. However, this does not mean that measures with relatively high data costs should not be pursued. Customer satisfaction, for example, would require considerable effort to design a survey, obtain the cooperation of private firms, and carry out the survey on an annual basis. Nonetheless, it was recommended because of the high value of the information it could provide to FHWA.

Further development, and use, of this set of measures will provide FHWA with valid measures of the effectiveness of the highway system's contribution to national productivity through the efficient movement of domestic and international freight.

1. Introduction

1.1 Background and Purpose

The Government Performance and Results Act (GPRA) of 1993 established a requirement for Federal agencies to identify goals and measurable outcomes to gauge performance in meeting program objectives. In response to this requirement and in seeking to continually advance its own performance, the Federal Highway Administration (FHWA) has developed a National Strategic Plan to chart goals and objectives over the ten-year period, 1998 to 2008. The agency is also developing annual Performance Plans in connection with the its budget submittals to define and report on the performance goals and indicators that measure progress toward achieving strategic goals.

In developing its performance plans, FHWA has sought to develop performance measures for productivity and efficiency improvements in relation to the highway system. "Productivity" is one of the five strategic goals in FHWA's National Strategic Plan, with a target to continuously improve the economic efficiency of the Nation's transportation system to enhance America's position in the global economy." An efficient and productive transportation system is viewed as important for advancing America's economic growth and competitiveness domestically and internationally.

FHWA is interested in development of performance measures for freight. Highway freight movement is a key area of program responsibility for FHWA, and the agency needs indicators to assess progress toward the "productivity" goal in relation to freight movement. FHWA contracted with Hagler Bailly Services to provide a limited, introductory review of what indicators may be available for use by FHWA to detect and assess, on an annual basis, productivity and efficiency improvements in the movement of commercial goods by motor vehicles. This work involved two tasks:

Task 1: A Review and Assessment of Previous Efforts to Develop Indicators

This task involved a summary and assessment of previous efforts to develop indicators for highway and intermodal freight. Indicators developed in previous studies were identified and categorized into four groups based on their potential usefulness for FHWA: 1) potentially valuable (first-tier) indicators; 2) second-tier indicators; 3) corridor or facility measures; and 4) not-useful measures.

Task 2: An Initial Analysis of Potential Indicators

This task involved further evaluation of first-tier indicators identified in Task 1. Based on this work, a small set of indicators worthy of further analysis and development by FHWA is recommended in this report.

This report presents the results of both Tasks 1 and 2.

1.2 Report Organization

The remainder of this report is organized as follows:

Section 2: Overview of Indicators Identified in Previous Efforts— This section provides a summary and assessment of various studies and conferences that attempted to develop freight performance measures. It categorizes potential measures and assesses their potential usefulness for FHWA and other highway-related organizations.

Section 3: Recommendations— This section recommends performance measures worthy of further investigation by FHWA. It begins by grouping potential measures into four categories: 1) potentially valuable (first-tier) indicators; 2) second-tier (less valuable) indicators; 3) corridor or facility measures; and 4) not-useful measures. First-tier indicators are then evaluated along various criteria and the indicators with the most potential are selected.

Appendix A: Reviews of Individual Efforts— This section provides a synopsis and assessment of each of the prior studies and conferences reviewed.

Appendix B: Contacts— This section lists individuals contacted for this research.

2. Overview of Indicators Identified in Previous Research

2.1 Focus of Past Research and Policy Efforts

This review draws on papers and reports that address attributes of freight movement and characteristics of the highway system. The papers that resulted from these efforts, as well as conversations with contacts, suggest that prior efforts to develop measures to gauge the performance of the highway system as a mover of freight have been limited. Previous research efforts have largely looked at one of two issues:

1. Measures of transportation industry productivity that are not clearly linked to the performance of the highway system; or
2. Measures of highway system performance that are important to highway users in general but not specifically linked to freight.

The first set of measures addresses the efficiency of freight service, but does not address the link between freight productivity and the transportation system. Indicators of labor productivity (e.g., ton-miles per employee), logistics efficiency, and equipment utilization (e.g., percent of truck-miles empty) fall into this category, as do multifactor productivity measures (output per unit of combined labor, capital, and intermediate outputs, weighted in some fashion). These indicators are only indirectly affected by the highway system and fail to provide any indication of the quality of service that shippers are receiving.

The second set of measures addresses aspects of the highway system that are important to highway users, such as speed, safety, and pavement condition. While these characteristics affect freight movement, most studies do not attempt to develop indicators of particular relevance to the productivity of freight movement. They are focused on general indicators of highway performance that affect both commercial traffic and personal travel.

The challenge for FHWA is to identify, and focus on, attributes of the highway system that have a particular significance for freight movement and can be linked to the characteristics of freight service that are important for shippers. The prior effort that most directly tackled the issue of identifying and assessing freight performance indicators is FHWA's Workshop on Productivity Performance Indicators, held in March 1998. This effort, however, was not focused exclusively on freight movement. A number of other efforts yield useful insights into aspects of the transportation system that are important to freight movement, including costs and quality of service, and potential indicators for measuring freight performance. Taken together, these studies provide a basis for further exploration of this problem.

2.2 Indicators Identified

Indicators identified from prior studies tend to fall into the following seven categories:

1. Travel time measures (e.g., average travel time in peak period, annual hours of delay, average time at border crossings)
2. Reliability measures (e.g., variability of travel time; hours of incident-based/non-recurrent delay)
3. Cost measures (e.g., average cost per ton-mile)
4. Safety or damage measures (e.g., accident rate)
5. Highway condition measures (e.g., percent of roads with surface condition classified as good, number of weight restricted bridges)
6. Economic impact measures (e.g., contribution of investment to GDP growth, employment impacts)
7. Industry productivity measures (e.g., ton-miles per employee, percent of truckloads empty)

Each of the seven categories of measures is discussed further below, with an initial assessment of strengths and weaknesses.

2.2.1 Travel Time Measures

Measures of average travel time, such as:

• average travel time in peak period in major metro areas or corridors
• freight transfer time between modes (for intermodal)
• crossing time at border crossings
• city-to-city travel time
• shipper point-to-point travel time

Measures of delay (or added travel time), such as:

• hours of delay per 1000 vehicle-mile
• percent of PM peak travel experiencing delay
• average hours of delay per 1000 vehicles processed at border crossings
• hours spent waiting at toll plazas per 1000 vehicle-mile
• hours spent waiting at weigh stations per 1000 ton-mile

General Assessment

A major strength of travel time measures as freight productivity indicators is that travel time and congestion are very important to shippers. Rapid service is a critical element of competition. Package carriers and long haul truckers alike offer one-day and two-day service in many markets, and customers expect rapid delivery of goods. Businesses typically expect package delivery early in the morning and pickups late in the afternoon, pressuring delivery services to be on the roads during congested peak hours and to move goods as quickly as possible. Transit time also affects the costs of shipping goods, which is important for shippers. As a result, efforts to reduce traffic congestion and bottlenecks are very important for freight movers. Travel time measures are also generally easy to understand. Currently available data streams, however, do not provide information on actual travel times. Travel time would have to be measured directly at selected sites.

A weakness occurs when it comes to developing indicators that are specific to freight but not too narrowly focused. Indicators such as average travel time in peak period in major metro areas" and "percent of PM peak travel experiencing delay" are general mobility measures that address both freight and passenger traffic. On the other hand, measures that focus on specific freight bottlenecks, such as border crossings and toll plazas, are limited because they focus on a very small portion of total freight travel. In order for a travel time indicator to be most useful as a national indicator, specific routes of importance to freight or point-to-point combinations need to be identified.

Average Travel Time

Using a measure of average travel time requires identifying specific point-to-point (or city-to-city) combinations to examine. Point-to-point transit time directly addresses what is important to freight movers. It accounts for the full range of components of travel time, including time on the road, in intermodal transfers, and at toll plazas. Although many companies maintain such data and have their own targets, these data may not be readily available (this issue will be explored further in Task 2).

Time at Border Crossings, Weigh Stations, and Toll Plazas

International border crossings are of particular importance to international freight; as such, they are important from a national perspective. This indicator is limited, however, because it only addresses a portion of total freight traffic. Measures like hours spent waiting at weigh stations or toll plazas are also limited and are less relevant from a national perspective.

Hours of Delay

An "hours of delay" measure focuses on excess" travel time associated with incident-based or recurring congestion. The measure would be limited as a freight measure if data are only available for total traffic delays. Much of traffic delay is associated with commuter traffic during peak periods and freight traffic may be scheduled to avoid much of this delay.

2.2.2 Reliability Measures

Indicators of reliability include:

• hours of incident-based delay
• ratio of variance to average minutes per trip in peak periods in major metro areas
• percent of on-time arrivals

General Assessment

Reliability is an attribute of key importance to highway shippers. In fact, a number of reports noted that having predictable travel times may be even more important than average travel times. More than ever, logistics management emphasizes "just-in-time" delivery to reduce or eliminate storage and warehousing costs. Shippers schedule freight movements to account for travel delays and avoid peak period congestion to the extent possible. As a result, the rate of variation in travel time (unexpected delay) is of key concern.

Just like travel time measures, reliability measures are less useful if they focus on all travel. It would be important to focus on routes of particular importance to freight. Another weakness of these measures is that a high level of reliability does not necessarily reflect that conditions are good, only that they are consistent (e.g., it could reflect consistently slow or high-cost service). As a result, it would be useful to combine a reliability measure with a travel time or cost measure.

Hours of Incident-based Delay

Incident-based delay reflects increases in travel time that are unexpected, and therefore would be of particular importance for freight delivery schedules. It may be difficult, however, to identify what portion of total delay results from recurrent versus incident-based congestion. A composite measure of delay in various metropolitan areas or key freight nodes would need to be developed to be used as a national measure.

Variance in Travel Time

Variation in travel time also is a potentially useful measure that would be useful to examine for specific corridors or routes of importance to freight. However, depending on how the measure is developed it might reflect not only unexpected incident-based delay but also more expected seasonal, day-of-week, or time-of-day fluctuations in travel time.

Percent On-time Arrivals

Percentage of on-time arrivals is a potentially useful measure since it focuses directly on freight movements and reflects highway conditions. The advantage of the other reliability measures is that they directly represent highway conditions; the percent of on-time arrivals may reflect other factors as well. In terms of tracking progress over time, the measure is also limited because it could be a "moving target" in that schedules may be adjusted to account for worsening congestion or other factors that reflect lower quality service. Data availability also is an issue. On-time arrivals are tracked by private firms, but such information may not be publicly available.

2.2.3 Cost Measures

Cost measures were identified in a number of earlier efforts for potential use as transportation system indicators. Transportation cost measures identified in previous efforts include:

• cost of highway freight per ton-mile
• fuel consumption per ton-mile
• total public and private costs of travel
• maintenance cost of connector links

General Assessment

Transportation costs are important to freight shippers. Lower transportation costs per unit shipped are beneficial to shippers; lower transportation costs contribute to more efficient use of resources in production and distribution. Greater efficiency ultimately benefits consumers in better quality and/or lower prices for goods. Declining costs, however, are not necessarily all positive for freight performance. Lower costs could be the result of lower quality of service (e.g., reduced reliability). There are a number of different types of transportation costs that can be tracked, as described below. Potentially useful cost measures focus on the costs associated with freight transport. Less useful cost measures focus on highway infrastructure costs and expenditures, which may or may not reflect improved freight performance.

Cost per Ton-mile

The first of these measures, cost of highway freight per ton-mile, is certainly a useful measure. It is specific to freight, and is affected by highway conditions. It is also affected by factors unrelated to the highway system, however, such as truck technology, drivers' wages, fuel costs, and trucking companies' skill in managing their fleets. As a result, it may be skewed by factors that have nothing to do with transportation infrastructure.

Fuel Consumption per Ton-mile

Fuel consumption per ton-mile, is not really a cost" measure but it does reflect one of the costs associated with transport that is related to highway condition. It reflects the same things as costs per ton-mile, but would not be affected by the prices of labor and fuel. As a result, it may be a better measure of the performance of highway-system performance in freight carriage because it reflects fewer costs unrelated to highway conditions. It may be more difficult to grasp intuitively as an indicator of freight performance, however.

Total Public and Private Costs of Travel

As noted above, one weakness with cost measures is that they do not account for the quality of service. A measure of total costs attempts to account for this problem by focusing not only on the costs of shipping goods but also costs associated with damage to goods, constructing roads, expanding and maintaining highways, etc. As a result, a measure of total public and private costs of travel takes into account all the resource costs associated with travel.

Unfortunately, tracking total costs instead of unit costs can be highly misleading. Total costs would be expected to increase due to increased population and economic growth (benefits would also increase: mobility, economic activity, etc.). As a result, rising total costs would be normal effects of an expanding economy. A composite measure of total travel costs is also analytically complex and difficult to develop.

Maintenance Costs

A number of State DOT efforts identified funds expended on highway maintenance on roads of importance to freight or intermodal traffic as an indicator of freight performance. Although investment clearly signifies that priority is being placed on these routes, it is not a measure of freight productivity. It is not clear whether higher or lower maintenance costs is good or bad. More spending on highway maintenance does not necessarily indicate an improvement in road condition; it could indicate wasteful spending.

2.2.4 Safety or Damage Measures

A number of efforts identified safety- or damage-related measures as indicators of highway performance. These include:

• accident rates
• fatality rates
• insurance cost (for freight)

General Assessment

Loss and damage to cargoes provides a measure of the quality of freight service. A number of earlier efforts identified loss and damage of goods through accidents and pilferage as important aspects of relevance to the productivity and efficiency of freight service.

Accident / Fatality Rates

Accident and fatality rates are general safety measures that are tracked by the National Highway Transportation Safety Administration (NHTSA) and are already included in FHWA's performance plan. Most data related to safety focus on the number of fatalities or injuries. The most important concern in regard to freight productivity is the value of goods damaged or lost due to accidents, and potentially greater insurance costs associated with accidents that cause loss of life or injury. Data on these costs are limited.

Insurance Cost

Cost of cargo insurance could provide a useful proxy for loss and damage. From the shipper's perspective, loss and damage is an important aspect of quality. As a result, insurance cost is a potentially useful performance measure. There are certain limitations: it reflects factors other than road conditions, e.g., level of driver experience and levels of theft. The proper metric (e.g., cost per ton of cargo) would need to be developed and data availability examined.

2.2.5 Highway Condition Measures

Many previous efforts identified measures of highway condition as potential indicators for freight or intermodal freight. These relate to either the degree of wear on facilities or design features that might restrict freight movement (measures reflecting congestion are discussed above either under travel time or reliability):

Measures of quality or wear:

• lane-miles of high-level highway requiring rehabilitation
• percent of roads with surface condition classified as good
• percent of bridges in good condition

Measures related to design features:

• number of at-grade railroad crossings
• number of overpasses that have vertical clearance restrictions
• number of weight restricted bridges
• intersections with inadequate turning radii for large trailers

General Assessment

These indicators do not measure performance directly. They provide FHWA with information on the highway system's ability to perform but not actually how it performs as a freight mover. Information for tracking most of these measures is available.

Quality Measures

Measures of road quality or wear are generally available and reported to FHWA as part of the Highway Performance Monitoring System (HPMS). A weakness of these measures is that they are not specific to freight: they represent the quality of road conditions experienced by all travelers. If road conditions improve, presumably freight movement benefits, but it is not clear how much freight is affected. A way to focus on freight would be to identify a set of facilities of particular importance to freight movement and track their condition.

Impedances to Freight Movement

Measures that focus on the number of impedances to freight movement are specific to freight but tend to be somewhat narrow. One problem is that the number of facilities with impedances is probably not a good measure of impact on freight movement. Many of these impedances may not be on segments of importance to freight.

2.2.6 Economic Impact Measures

A number of the efforts identified measures of economic impact. These measures include:

• contribution of investment to GDP growth
• direct and indirect jobs created
• net present value of improvements
• benefit-cost ratio of highway improvements
• value of transportation-related goods and services delivered to the final customer

General Assessment

These measures focus on the economic benefits associated with investment in transportation facilities. Although transportation investments certainly can support efficient freight movement, the economic impacts of infrastructure investment are greater than those associated solely with freight movement. Transportation investment results in savings in travel time, reduction in vehicle operating costs, and a reduction in accident costs that accrue to all users, freight and non-freight.

Several economic studies supported by the Office of Transportation Policy Studies have measured the effects of public highway capital on national output and economic performance. [1] This work has examined the contributions of highway capital to the output growth and productivity of various industry sectors comprising the U.S. economy. It provides empirical evidence of the positive impacts of public highway capital on private sector costs of production and calculates the net social rate of return on highway infrastructure spending. This work is discussed further below:

Contribution of Investment to GDP Growth

This refers to the substantial body of work carried out by Professor Ishaq Nadiri of New York University. This is a statistical analysis of the relationship of businesses' costs to investment in highways (technically, changes in the highway capital stock). In large measure, response of business costs to highway investment reflects improvement in the highways as freight carriers. However, reduction in firms' costs could also reflect an improvement in passenger travel on highways (by expanding the pool of potential employees). There is no way to separate the effects of passenger travel from the effects of freight carriage in this type of analysis.

In order to be useful as a performance measure, this kind of analysis would need to be carried out on an annual or biennial basis; some question might arise as to the statistical validity of year-to-year changes in these results.

Jobs Created

While this measure can be important to a local community, it is not a measure of freight productivity. The number of direct jobs created by a highway project tells nothing of how the project will affect freight movement or whether the project is worthwhile. These figures relate to the impacts of project spending, not to the value of the project for freight.

Net Present Value or Benefit/Cost Ratio

Net present value and benefit/cost ratios are a measure of the value of highway investments. Both measures involve a comparison of the benefits and costs associated with infrastructure investment, but with slightly different implications. Since the benefits of transportation projects include travel time savings, vehicle operating cost savings, safety improvements, etc., these measures capture a range of economic effects beyond the impact on freight movement. These measures do not isolate impacts associated with freight movement, and in fact, most of the economic benefits measured probably are associated with personal travel.

Value of Transportation-related Goods and Services Delivered

The value of transportation-related goods and services delivered to customers provides a measure of the how much of the economy is associated with transportation. This is not really a measure of freight productivity or the implications of highway investment on freight.

2.2.7 Transportation Industry Productivity Measures

Industry productivity measures include the following metrics:

• average load factors / percent of vehicle miles empty
• average length of haul
• annual miles per truck
• ton-miles per unit of labor
• multi-factor productivity measures

General Assessment

These measures all are a measure of output per unit of input. They provide information about the utilization of labor and equipment. They are good measures of the productivity of the freight industry, but fail to directly address the relationship to the highway system. They also fail to address the quality of service. Of these measures, the one that has the greatest linkage to the highway system is annual miles per truck, since miles per truck is affected by road and traffic conditions.

3. Recommendations

Section 2 reviewed and summarized types of freight performance-measures presented in prior studies and investigations. This section indicates which of the specific measures appear to be most promising for use by FHWA. It recommends the following limited set of measures for further analysis and development by FHWA:

• Cost of highway freight per ton-mile
• Cargo insurance rates
• Point-to-point travel times on selected freight-significant highways
• Hours of delay per 1,000 vehicle miles on selected freight-significant highways
• Crossing times at international borders
• Condition of connectors between NHS and intermodal terminals
• Customer satisfaction

These recommendations were developed based on a two-stage evaluation process:

1. Initial Screening —Potential indicators were screened and grouped into four general categories: 1) potentially valuable (first-tier) indicators; 2) second-tier national indicators; 3) corridor or facility measures; 4) not-useful measures.
2. Criteria-based Evaluation—The first-tier indicators identified in step 1 were further evaluated and a small set are recommended as meriting further development by FHWA.

3.1 Initial Screening

This section summarizes the findings from the initial screening analysis of potential indicators. Potential indicators were grouped into the following categories:

Potentially Valuable (First-tier) Indicators— These indicators were judged as potentially valuable as national indicators based on an initial screening analysis.

Second-tier Indicators— These indicators have a definite bearing on freight performance but are limited in some way, so they were not recommended for further development; many of these measures may already be available to FHWA.

Corridor or Facility Measures— These indicators are potentially good measures of freight performance but are specific to a particular corridor, site, or facility (e.g., intermodal terminals). They were viewed as inappropriate for FHWA as national indicators but may be useful at other levels.

Not-Useful Measures— These indicators have little or no use as a measure of freight productivity.

The distinctions between potentially valuable, useful, and not useful are necessarily somewhat subjective; however, these assessments were based on best judgement regarding the nature of these indicators. Indicators were categorized based on an initial screening assessment of their technical appropriateness and descriptive value.

3.1.1 Potentially Valuable (First-Tier) Indicators

Potentially valuable indicators are those that are most reflective of the highway system's impact on freight performance or of the efficiency of the freight system. These include direct measures of the quality or cost of freight service nationally. They also include measures of the performance of parts of the highway system that have special importance for goods movement, e.g., highway segments or corridors that carry comparatively large volumes of freight or are otherwise significant links in the national freight system. Expenditure of resources to develop these measures further may be justified. Potentially valuable measures include:

• Cost of highway freight per ton-mile
• Cargo insurance rates
• Fuel consumption of heavy trucks per ton-mile
• On-time performance for highway-freight deliveries

These measures all address the cost or quality of freight service to shippers.

• Point-to-point travel times for selected freight-significant highways
• Hours of delay per 1000 vehicle-miles on freight-significant highways
• Ratio of peak period travel time to off-peak travel time at freight-significant nodes
• Ratio of variance to average minutes per trip in peak periods at freight-significant nodes
• Hours of incident-based delay on freight-significant highways

These measures all address travel time and reliability of highway performance as it relates to freight. Use of any of these measures would require that FHWA designate portions or segments of the National Highway System (NHS) as having special significance for freight carriage and designate certain cities or metropolitan regions as key nodes in the highway freight network. These could be referred to as freight-significant highways and freight-significant nodes.

Annual miles per truck

This is a measure of freight equipment utilization that also is affected by highway condition.

Crossing time at international border crossings

International border crossings are of particular importance to efficient international freight movement. As such, this measure is important from a national perspective, even though it only addresses a segment of travel time for a portion of all goods carried. This measure gives information on freight-system performance, but it largely reflects processing time required for immigration and customs on both sides of the border not highway conditions or operations.

Performance on connectors between NHS and intermodal terminals

The connecting links between intermodal freight terminals and the NHS are the road segments that make intermodal freight transportation possible. Pavement and traffic conditions on these links are an important measure of the highway system's ability to handle intermodal freight.

Customer Satisfaction

An important measure of the performance of the highway-freight system is the degree of satisfaction of the principal customers: shippers, receivers, and carriers. The judgments on performance of the firms and people that use the system every day could be very valuable to FHWA as an indicator of how well the system is performing. A satisfaction indicator could be measured through surveys.

3.1.2 Second-Tier Indicators

Second-tier indicators provide useful information about aspects of the highway system that are meaningful for freight movement but are not specific to freight. They are standard highway performance indicators that reflect the quality of travel conditions for all users. If these indicators are already available to FHWA, those interested in freight performance might find it useful to track them. However, it is not worthwhile to develop them solely for freight purposes.

• Average travel time for all trips
• Average travel time for all peak-period trips in major urban areas
• Average speed for inter-city travel

All of these measures address travel time, which is important for freight, but do not focus on routes or links of particular importance to freight.

• Hours of delay per 1,000 vehicle-miles on the NHS
• Percent of PM peak-travel in major urban areas experiencing delays
• Ratio of variance to average minutes per trip in all urbanized areas

These measures provide information about traffic delays, but are limited as a freight measure since they simply are based on average speeds for all vehicles. A large portion of traffic delay is associated with commuter traffic during peak periods and freight traffic may be scheduled or routed to avoid much of this delay.

Heavy truck accident / fatality rates

Although these indicators address freight, the focus is on human safety. The most important concern in regard to freight productivity is the value of goods damaged or lost due to accidents, and potentially greater insurance costs associated with accidents that cause loss of life or injury.

• Percent of NHS with pavement meeting a certain standard
• Percent of non-deficient bridges on NHS

These measures provide an indication of the quality of highways. Although highway condition is important for freight, these measures do not focus on routes of particular importance to freight. As a result, the indicator may not reflect changes in quality experienced by freight movers.

Contribution of investment to GDP growth

In large measure, response of business costs to highway investment reflects improvement in the highways as freight carriers; it also reflects improvement in passenger travel on highways, and there is no way to separate the effects of passenger travel from the effects of freight carriage. Perhaps the greatest challenge for this kind of measures is that a fairly complicated analysis must be carried out on an annual or biennial basis, and it is likely that small year-to-year changes would be lacking in statistical significance.

3.1.3 Corridor or Facility Measures

Many of the indicators identified above could also be used at a regional- or local-level to examine freight performance along specific corridors or at specific points. The indicators identified below provide a measure of freight performance but are limited to specific routes or facilities. As a result, they are not appropriate for FHWA to use as national performance measures, but would be useful for other purposes.

• Freight-transfer times at selected intermodal terminals
• Hours waiting at toll plazas
• Hours waiting at weigh stations

3.1.4 Not-Useful Measures

The following measures were judged to be not useful. These measures focus on the economic impacts of highway investment, which include a large number of effects unrelated to freight movement.

Total public and private costs of travel

This measure would be very much dominated by effects that have little or nothing to do with freight movement given that most travel takes places for personal mobility. Further, even if it were limited to costs of freight movement, it would not be providing a useful measure of performance. Rising total costs could simply reflect rising freight shipments in an expanding economy, or rising use of freight movement relative to other inputs to production and distribution.

Maintenance costs

Spending on highways is not a measure of freight productivity, even if one focuses on routes of particular importance to freight. More spending could indicate an improvement in road condition or it could indicate wasteful spending.

Jobs created

The number of direct and indirect jobs created by a highway project tells nothing of how the project will affect freight movement or whether the project is worthwhile.

Net present value or benefit/cost ratio

These are measures of the value of highway investments. They do not tell one the degree to which project benefits reflect freight performance.

Value of transportation-related goods and services delivered

This is not really a measure of freight productivity or the implications of highway investment on freight.

• Number of at-grade railroad crossings
• Number of overpasses with inadequate vertical clearance
• Number of weight-restricted bridges
• Number of intersections with inadequate turning radii for large trailer

These are all design features which can be impedances for freight movement. Their total number is not a useful measure because many of them are likely to be on routes not heavily used for freight purposes. Further, these features are unlikely to be common on the NHS.

• Average load factors / percent of vehicle miles empty
• Average length of haul
• Ton-miles per unit of labor
• Multi-factor industry productivity measures

These are all measures of equipment utilization or labor productivity used within the motor carrier industry. They do not bear a direct relationship to the highway system or address quality or satisfaction with freight service.

3.2 Evaluation of First-Tier Indicators

3.2.1 Criteria Used

First-tier indicators were evaluated using the following criteria:

Descriptive value— Is the indicator clear and understandable for a range of audiences? Does it communicate clearly or does it require a detailed explanation in order to be understood?

This criterion concerns the comprehensibility of the indicator for general audiences. A useful performance measure might require some explanation to make it understandable to a generalist audience, but the best indicators according to this criterion would be readily understood without more than a paragraph or two of plain English.

Technical appropriateness— How useful is the indicator in describing the productivity of freight movement in the U.S.? Is it conceptually appropriate as a measure of productivity or a measure of FHWA's contribution to productivity?

This criterion concerns the usefulness of the indicator as a measure of productivity. Technical appropriateness depends on the degree to which the measure truly reflects a significant aspect of cost, quality, or productivity of the highway-freight system and its intermodal connections. A major thrust of this effort is to measure the contribution of highway-freight movement to overall U.S. productivity, not just the productivity of highway freight. Therefore, it is appropriate to measure quality and cost of the highway system as it related to freight.

Data Availability and Cost— Data issues include the following considerations:

Availability— Are data available in existing databases? If data are available, is it easy to collect, or are there difficulties in obtaining the data? Are there new ways to develop or collect the data?

This criterion addresses the issues of data measurability and collectability. One key issue is whether data are collectable even if the data are available, e.g., some potentially useful data may be proprietary to private firms.

Cost— How expensive would it be to collect the appropriate data?

For descriptive value and technical appropriateness, numerical scores on an ascending scale of one to three were used. For data availability and cost, qualitative descriptors were used. For availability, the following descriptors were used: easy, not easy, and difficult. Easy means the data series already exists or the required information is readily obtainable. Not easy means some extra institutional effort is required to obtain the data, e.g., if FHWA would have to go to State or local governments to get some additional information, that is scored as not easy. Difficult is used for cases where FHWA would have to obtain the cooperation of private firms, and such firms might regard the data as proprietary. For cost, the following descriptors were used: low, medium, and high.

3.2.2 Findings

The following table provides a summary of the ratings for each potential measure.

 

Summary of Evaluations

Indicator	Descriptive Value	Technical Appropriateness	Data Availability	Data Cost
Cost per ton-mile	3	3	Easy	Low
Fuel Consumption of Heavy Trucks per ton-mile	1	2	Easy	Low
Cargo Insurance Rates	2	2	Easy	Low
On-time Performance	3	1	Difficult	High
Point-to-Point Travel Times on Freight-Signif. Hwys.	2	3	Not easy	Medium to High
Hours of Delay on Freight-Signif. Hwys.	2	3	Not easy	Medium to High
Incident Delay on Freight-Signif. Hwys.	2	3	Not easy	High
Ratio: Peak Travel Time to Off-peak Travel Time	1	2	Not easy	High
Ratio: Variance to Average for Peak Trip Times	1	2	Not easy	High
Annual Miles per Truck	2	1	Easy	Low
Border Crossing Times	3	2	Not easy	Medium
Conditions on Intermodal Connectors	2	2	Not easy	High
Customer Satisfaction	2	3	Difficult	High

Based on these evaluations, the following indicators are recommended as worthy of further development by FHWA:

• Cost of highway freight per ton-mile
• Cargo insurance rates
• Point-to-point travel times on selected freight-significant highways
• Hours of delay per 1,000 vehicle miles on selected freight-significant highways
• Crossing times at international borders
• Condition of connectors between NHS and intermodal terminals
• Customer satisfaction

No rigid scoring methodology was used for the selection of recommended indicators. In general, the measures that were recommended are those that ranked highest in terms of descriptive value and technical appropriateness. Data availability and costs are important considerations for FHWA as it considers the use of these measures. However, this does not mean that measures with relatively high data costs should not be pursued. Customer satisfaction, for example, would require considerable effort to design a survey, obtain the cooperation of private firms, and carry out the survey on an annual basis. Nonetheless, it was recommended because of the high value of the information it could provide to FHWA.

Further development, and use, of this set of measures will provide FHWA with valid measures of the effectiveness of the highway system's contribution to national productivity through the efficient movement of domestic and international freight.

3.2.3 Analysis of Individual Indicators

Descriptive Value

This indicator is readily understood as an indicator of freight performance. Some clarification, however, may be required that this is a measure of freight shipper cost, rather than a measure of carrier cost or full social cost.

Technical Appropriateness

Cost of highway freight per ton-mile is technically appropriate as an indicator of freight performance. However, it is important to recognize that the cost of freight haulage by truck is affected by many factors, among which the performance of the highway system is but one. Cost of highway freight also reflects drivers' wages and benefits, vehicle depreciation, fuel cost, tax and insurance charges, and fees paid for road and roadside facilities. As a result, this measure reflects freight performance, but not solely in relation to the highway system. It also only reflects costs, not the quality of service.

Data

Data are available for cost of highway freight per ton-mile from the Financial and Operating Statistics (F&OS) maintained by the American Trucking Associations (ATA). The total cost measure can be taken directly from the F&OS. One of the primary strengths of this measure is that data on costs and ton-miles can be taken from the same source, which ensures that the data are comparable.

 

Scores

Descriptive Value	3
Technical Appropriateness	3
Data Availability	Easy
Data Cost	Low

Fuel Consumption of Heavy Trucks per Ton-Mile

Descriptive Value

This measure is not easy to grasp as an indicator of freight performance. Although the measure itself is comprehensible, the link between fuel consumption and freight productivity is not readily apparent to the public.

Technical Appropriateness

If the interest is in the impact of the highway system on truck costs, fuel consumption per ton-mile is technically appropriate because it strips out the effects of drivers' wages and fuel prices, both of which affect cost and neither of which depends on highway performance. Fuel consumption is affected, in part, by highway conditions especially congestion. Fuel consumption per ton-mile is also, of course, affected by changing technology of engines and fuels. Whether it would be possible to find some effective way to normalize for changing technology is an open question.

Data

Fuel costs are available from the ATA's Financial and Operating Statistics (F&OS). In order to extract fuel consumption, one would need to develop an average fuel price (most likely for diesel fuel). Alternatively, one could use data from FHWA's Highway Statistics on fuel consumption by single-unit 2-axle 6-tire or more trucks. These data are derived from state fuel tax records and may not be comparable to figures on ton-miles (e.g., they may reflect impacts of improved tax compliance, improved reporting methods, or other factors).

 

Scores

Descriptive Value	1
Technical Appropriateness	2
Data Availability	Easy
Data Cost	Low

Cargo Insurance Rates

Descriptive Value

This indicator would require some explanation for a generalist, but the explanation could readily be accomplished in a single paragraph.

Technical Appropriateness

Changes over time in cargo insurance rates will track very closely with the value of loss-and-damage claims. From the point of view of shippers and receivers, loss-and-damage is a significant aspect of the quality of freight service. As a result, cargo insurance rates are appropriate as a measure of one aspect of quality of service. Cargo insurance rates, however, do not solely reflect the quality of the highway system; they also reflect driver experience and loss and damage resulting from pilferage and handling. Changing rates could also reflect changing cargo values. Nonetheless, loss and damage is an important aspect of the quality of freight service, and this measure merits further examination.

Data

Data should not be a significant problem. Two potential sources have been identified. One is the insurance companies themselves. They routinely supply quotes for cargo insurance, and it is not proprietary information. One viable approach would be to select a panel of a small number of insurance companies and survey them once a year to get quotes. Another source would be State insurance commissions. Insurance companies regularly file their rates with the offices of the State commissions. One could select a panel of States and arrange to obtain the data from them on a regular basis.

 

Scores

Descriptive Value	2
Technical Appropriateness	2
Data Availability	Easy
Data Cost	Low

On-Time Performance for Highway-Freight Delivery

Descriptive Value

Descriptive value is high. It is clear that on-time performance means performance in terms of meeting a stated goal for delivery time. The definition of "on time," however, could present serious problems. The very concept of being on time is different in different circumstances. For some receivers, on time means delivery by a specified date and time. Others demand delivery within a specific window of time, often specified as a particular hour, e.g., between 10:00 AM and 11:00 AM.

Technical Appropriateness

This indicator reflects an aspect of the quality of service that is very important to shippers and receivers. The definition of "on time" in a systematic way that would work with data collection and manipulation could present serious problems, however. While all the actors in the freight business carriers, shippers, receivers, and others have their own concepts of "on time" that is important for them, there is probably significant variation in the details of their definitions. Nonetheless, it is a very important measure of quality. It may well be the case that this indicator may be better addressed within the framework of the customer-satisfaction measure discussed below.

Data

Many of the required types of data are proprietary. Obtaining it in any systematic way would be difficult. It is also likely to be costly because it would require the development of a survey of some sort. It is fairly easy to gather anecdotal information by talking with third-party marketers, logistics firms, and the like, but this is not the kind of data that will support an official performance measure.

 

Scores

Descriptive Value	3
Technical Appropriateness	1
Data Availability	Difficult
Data Cost	High

Point-to-Point Travel Times for Freight-Significant Highways

Hours of Delay per 1000 Vehicle-Miles on Freight-Significant Highways

Hours of Incident-Based Delay on Freight-Significant Highways

Descriptive Value

These three indicators are grouped together because they are concerned with measures of speed and delay on freight-significant highways. This is an important class of measures. They all rank high in terms of descriptive value. Terms like speed, delay, and travel time require little explanation. The term freight-significant highways" requires some description, however.

Technical Appropriateness

All three of these measures are technically appropriate as indicators of freight performance in relation to the highway system. The concept of the freight-significant highway is intended to link highway performance more closely with freight performance. Without the connection to freight-significant highways they would be measures of overall highway-system performance, but would not tell much about the performance of the system as a freight carrier. If certain stretches of the NHS can be identified, in some way, as road segments with particular significance for freight carriage, then these speed and delay indicators would have real value as freight performance-measures. Incident-based delay is especially important for trucking firms as this is the component of transit time that is most difficult to predict.

In both conceptual and data terms, the greatest challenge in developing these measures would be the identification of the freight-significant highways. FHWA would have to develop a method or standard for designating such roads, e.g., a disproportionately high percentage of combination trucks in the traffic mix or some special significance of a corridor because of the high levels of freight movement in it.

Data

Data from the Highway Performance Monitoring System (HPMS) may be used to designate freight-significant highways. The HPMS contains data on traffic volumes and the percent of vehicles that are combination trucks in the vehicle mix. One could determine which HPMS segments have high truck traffic flows and use these to designate freight-significant highways.

Once the freight-significant highways are identified, the data issues are straightforward for travel time and delay but actual gathering of data would require on-site observations. For the stretches of highway designated (which could be 50 miles or 500 miles), it would be necessary to make arrangements for direct measurements, e.g., with license plate readers. Data on incidents on the relevant segments would have to be gathered on a systematic basis and matched with observed delay in some fashion. All of these direct observations would require special arrangements with State and local governments and significant resources would likely be required.

 

Scores: Point-to-point travel times for freight-significant highways

Descriptive Value	2
Technical Appropriateness	3
Data Availability	Not easy
Data Cost	Medium to high

Scores: Hours of delay per 1000 vehicle-miles on freight-significant highways

Descriptive Value	2
Technical Appropriateness	3
Data Availability	Not easy
Data Cost	Medium to high

Scores: Hours of incident-based delay on freight-significant

Descriptive Value	2
Technical Appropriateness	3
Data Availability	Not easy
Data Cost	High

Ratio of Peak-Period Travel Time to Off-Peak Travel Time at Freight-Significant Nodes

Ratio of Variance to Average for Peak Period Trip Times at Freight-Significant Nodes

Descriptive Value

These two indicators measure congestion and reliability of travel in metropolitan areas of special importance to freight movement. The first of these is intended to measure the relative severity of peak-period congestion, the second to measure the predictability of travel times in peak periods. The term freight-significant node" refers to cities or metropolitan areas that are designated as especially important nodes in the national freight network. These measures do not score well in terms of descriptive value. They are somewhat technical in character; the notion of a freight-significant node might be difficult to explain to a generalist audience. The terms "ratio of peak-period travel time to off-peak travel time" and "ratio of variance to average for peak period trip times" also are somewhat difficult to understand.

Technical Appropriateness

The notion of freight-significant nodes" is parallel to that of freight-significant highways. Data on peak-period conditions in all large cities would have little focus on freight; hence the idea of identifying certain cities as of special importance for freight movement. Such an identification, however, appears more difficult for cities than for highways. Clearly, some cities originate or receive more freight than others, but that does not necessarily mean they are more critical in terms of movement of freight on the national network. There appear to be real conceptual difficulties in finding a simple, unambiguous standard for designating some metropolitan areas as freight-significant.

Data

Data problems relating to identification of freight-significant nodes are closely entwined with the conceptual problems, i.e., it is not clear what data one would seek. Regarding the actual measures, ratio of peak to off-peak travel time should be derivable from the HPMS data on volumes and capacity based on assumptions about peaking patterns. It is known that, at one time, Cambridge Systematics developed a set of empirically derived relationships between AADT/capacity ratios and percentage of AADT in the peak period. Estimating the variance of peak-period travel times could not be done with data from the HPMS. Collection of data on the variance of travel time would require arrangements for on-site observations.

 

Scores: Ratio of peak-period travel time to off-peak travel time at freight-significant nodes

Descriptive Value	1
Technical Appropriateness	2
Data Availability	Not easy
Data Cost	Medium to high

Scores: Ratio of variance to average for peak period trip times at freight-significant nodes

Descriptive Value	1
Technical Appropriateness	2
Data Availability	Not easy
Data Cost	High

Annual Miles per Truck

Descriptive Value

Annual miles per truck is a measure of equipment utilization. It gets a middle score on descriptive value. The concept itself is very easy to understand; however, a generalist audience would not immediately perceive its significance in regard to productivity or performance of freight.

Technical Appropriateness

Annual miles per truck is a measure of utilization of equipment. In that sense, it is a measure of the productivity of the trucking industry. Its only significance to the users of the highway-freight system, however, is that higher levels of equipment utilization have a favorable effect on cost. It is doubtful that it would add much information if there were another indicator measuring total cost. While miles per truck would reflect, in part, speed and congestion conditions, it would also reflect changing abilities of carriers to manage their fleets (including the sizes of their fleets), changing characteristics of the trucking market, i.e., length of haul, and other factors.

Data

The data are directly available from the F&OS.

 

Scores

Descriptive Value	2
Technical Appropriateness	1
Data Availability	Easy
Data Cost	Low

Crossing Time at International Borders

Descriptive Value

This indicator scores high on descriptive value. This measure is easy to conceptualize.

Technical Appropriateness

The strength of this indicator is that it is a direct measure of freight performance at specific points of some importance. Its weakness is the obverse of its strength; it measures performance regarding a small proportion of total freight movement. International border crossings, however, are a highly visible component of international trade and are of importance to the nation in terms of international commerce. As a result, it would be appropriate for FHWA to focus on international border crossings as a measure of freight performance even though this measure only addresses a small portion of total freight movement.

Data

Existing information on border crossing time is not tracked consistently. It should be possible, however, to arrange for observation of time in queues at selected crossings on the Mexican and Canadian borders.

 

Scores

Descriptive Value	3
Technical Appropriateness	2
Data Availability	Not easy
Data Cost	Medium

Performance on Connectors between the NHS and Intermodal Freight Terminals

Descriptive Value

This indicator receives a middle score for descriptive value. Its meaning and importance are fairly easy to grasp. Conditions, particularly congestion and pavement condition, on the links between the intermodal terminals and the main highways are important parts of the system for carrying intermodal freight. A generalist audience may not immediately understand how connectors are defined or how conditions are measures (e.g., pavement quality measures, levels of service).

Technical Appropriateness

This indicator is a measure of the condition of roadway connectors. As a result, it is not a direct measure of freight performance but rather a measure of conditions that affect freight performance. Connectors are of particular importance to intermodal freight movement, so it makes sense to focus on these links.

Data

Data are a problem for this indicator. Regarding congestion, intermodal connectors are tagged as such in the HPMS, so there are some data on congestion. But there has been no systematic effort to establish a sample of connectors. Those in the HPMS are there by happenstance. They would constitute a small sample and, more importantly, a badly designed one or, rather, one that has not been designed at all. This could be rectified by asking the States to add a substantial fraction of the 600-odd connectors to the HPMS. A willingness to cooperate on the part of a large number of States would be necessary and, almost certainly, resources to assist the States with the effort would be required. Regarding pavement condition, data for all connectors are in the HPMS, but there are doubts about the quality of these data. A similar effort with the States would be necessary to make sure of good pavement-condition data.

 

Scores

Descriptive Value	2
Technical Appropriateness	2
Data Availability	Not easy
Data Cost	High

Customer Satisfaction

Descriptive Value

Customer satisfaction is an easy concept to grasp. However, it is a somewhat fuzzy" term that could be interpreted differently by different audiences.

Technical Appropriateness

Customer satisfaction is a very appropriate measure of the performance of highway and intermodal freight. This indicator could be defined in many ways, however. It would, perhaps, be most useful if it were to be based on a survey designed to identify how shippers, receivers, and carriers view the performance of highway-freight movement (e.g., on-time performance) and the performance of the highway system in supporting freight movement. Views of carriers should be useful on the latter point.

Data

Data collection would involve issues associated with proprietary information from businesses and the expense of designing a survey and implementing it. Firms would need to be convinced that their anonymity would be protected. Design of the survey would be a major undertaking and one requiring, and meriting, substantial resources.

 

Scores

Descriptive Value	2
Technical Appropriateness	3
Data Availability	Difficult
Data Cost	High

Appendix A: Evaluations of Individual Studies

This section provides a summary and evaluation of each study that was examined. For each effort, we systematically document relevant information about the effort (sponsors, report authors, participants, date), summarize the relevant findings as they pertain to measures of freight productivity performance, and assess the findings. Our focus in evaluating each study is on the strength of conclusions and the applicability of recommendations to FHWA.

Efforts have been divided into three categories:

• U.S. DOT efforts: efforts sponsored by the Federal Highway Administration or other parts of the U.S. Department of Transportation;
• State and local efforts: initiatives undertaken by State DOTs, metropolitan planning organizations, or local transportation agencies, typically as part of a transportation plan; and
• Academic efforts: studies undertaken at universities or other institutions, typically with a focus on theoretical aspects of measuring freight productivity

3.3 U.S. DOT Efforts

REPORT: Examination of Transportation Industry Productivity Measures. Searching for Solutions (No. 8): An Examination of Transportation Industry Productivity Measures, Summary of Proceedings: Highway-Related Transportation Industry Productivity Measures Symposium held in Arlington, Virginia on November 19-20, 1992.

SPONSORS: U.S. Department of Transportation, Federal Highway Administration (FHWA)

AUTHORS: FHWA

PARTICIPANTS: Approximately 80 participants from the U.S. Department of Transportation (FHWA, Federal Railroad Administration, Federal Transit Administration, Federal Aviation Administration, Office of the Secretary, Volpe National Transportation Systems Center), other federal government agencies (Bureau of Labor Statistics, U.S. Department of Commerce, Army Corps of Engineers, Oak Ridge National Laboratory, Interstate Commerce Commission), the Virginia Department of Transportation, trade associations, transportation industry representatives, consultants, and academia.

DATE: Symposium held on November 19-20, 1992. Report published July 1993.

SUMMARY:

The symposium focused on issues in measuring transportation industry productivity and, in particular, the difficulty of measuring productivity in the motor carrier industry. It provided an opportunity for participants to discuss technical issues and users' needs related to transportation productivity measures, with a focus on the transportation industry's economic performance. The overall focus was productivity of transportation industries (including the trucking industry), not the performance of the highway system or of FHWA relative to freight productivity. It was noted, however, that transportation infrastructure investment has an effect on transportation productivity, which in turn can be a big contributor to the bottom line of U.S. industry and the economy.

The panelists generally agreed on the difficulties in measuring transportation industry performance. Randall Eberts, Assistant Vice President and Economist of the Cleveland Federal Reserve Bank maintained that several levels of economic performance must be considered in linking public capital infrastructure with overall economic productivity: 1) performance of the transportation facility (e.g., efficiency, condition); 2) performance of the transportation industry as a whole (e.g., how elements work together to provide productive service); and 3) aggregation from the local economy to the international economic picture.

Traditional industry measures of physical productivity and performance, such as route-miles, number of terminals, and percentage of empty vehicle-miles, were identified, as well as labor productivity and multifactor productivity measures (e.g., output per unit of combined labor, capital, and intermediate outputs). Firm-level measures were also identified, such as dock productivity, pickup and delivery productivity, freight bills handled per hour, and average load factors.

Difficulties in measuring productivity in the motor carrier industry were noted. In particular, Paul Roberts, President of Transmode Consultants, noted that the measure of productivity is complicated because of difficulties in measuring inputs and outputs, as well as the different outlooks of economists and engineers (e.g., economists measure productivity in dollars, while engineers use physical measures). Some of the presentations suggested that traditional measures in terms of ton-miles carried are deficient because they fail to account for the quality of service provided; that is, more ton-miles carried per unit of labor appears to be a productivity improvement, but it does not capture improvements in reliability and on-time delivery.

Bahar Norris, Senior Economist at the U.S. DOT Volpe Center noted that changes in price are not the same as changes in productivity and made a distinction between "performance" measures and "productivity" measures. For example, she suggested that price reductions that occurred in the 1980s were the result not of productivity factors but of declines in fuel prices and a reduction in excess profits due to increased competition. Norris also noted that single factor productivity measures, such as those considering only a change in labor units, are deficient because they fail to consider all factors in production. According to Thomas Corsi, Professor of Transportation, Business, and Public Policy at the University of Maryland, multifactor productivity measures are also suspect because they are highly sensitive to the specific inputs and outputs selected and to the weights given to each measure.

Instead of multifactor productivity measures, the motor carrier industry tends to use three indicators:

• Annual miles per truck
• Average load per truck
• Average length of haul

Other potential measures of highway freight transportation productivity identified by participants were:

• Ratio of inventory to monthly sales of manufactured goods (reflects speed and reliability)
• Route-miles of less-than-truckload (LTL) carriers
• Tons, or number of shipments, per terminal - a measure of terminal performance
• Percentage of empty vehicle-miles

Questions raised by the panelists included:

• How should transportation productivity be defined and measured across and within different transportation modes
• How can methods of acquiring data be developed to include all transportation activity?
• To what extent are transportation productivity measures related to service quality measures?
• What role should customer satisfaction and private-sector performance have in productivity measurements?

Several ways to improve transportation productivity were also identified: increasing connectivity (adding new links in the highway network to decrease mileage and travel time), increasing service levels on existing links (making improvements to reduce time, fuel, and other inputs), improving the efficiency of operations (e.g., by increasing vehicle utilization, reducing empty miles), and reducing the costs of primary inputs (e.g., reduce costs of labor, equipment, and facilities).

PERFORMANCE MEASURES PRESENTED:

In the final breakout sessions, the following transportation productivity measures were suggested:

• Empty/loaded ratio for truck moves
• Annual miles per truck
• Average length of haul by vehicle
• Energy consumption per ton-mile
• Labor cost per ton-mile

The measures judged most appropriate for public policy evaluation were empty vs. loaded miles, average length of haul, and energy consumption per ton-mile.

ASSESSMENT:

This symposium provides a good overview of issues associated with measuring freight productivity. This effort, however, focused on performance of the transportation industry with generally little relation to the performance of the highway system. As a result, some of the measures identified in the symposium are not strong measures of freight performance as it relates to the highway system. For example, measures such as average load per truck and percent of empty vehicle miles have more to do with logistics and efficiency of schedules than the condition of the transportation system.

Other performance measures suggested at the symposium relate indirectly to highway condition and capacity. For example, energy consumption per ton-mile would be affected by highway quality (as well as other factors like the size of trucks). The condition of the highway system would also have some effect on annual miles per truck and labor cost, since both could be affected by speed.

REPORT: The Productivity Effects of Truck Size and Weight Policies

SPONSORS: U.S. Department of Transportation, Federal Highway Administration (FHWA)

AUTHORS: David Middendorf and Michael Bronzini, Oak Ridge National Laboratory

PARTICIPANTS: N/A

DATE: November 1994

SUMMARY:

The report is concerned with the effect on transportation productivity of allowing longer and/or heavier trucks. Productivity is measured in terms of transportation costs plus logistics costs, with transit time, inventory levels, etc., included in the latter category. It is not concerned with the performance of the highway system as such.

PERFORMANCE MEASURES PRESENTED:

As noted, the study used transportation cost, to the shipper, plus logistics costs, for analyzing the effects of various policy options.

ASSESSMENT:

These are sensible measures of freight-service performance from the point of view of shippers. The problem is linking these measures specifically to the highway system. The report notes that there are major problems in securing data on logistics costs, because firms do not want to divulge such information for fear it will reach their competitors.

REPORT: The Use of Intermodal Performance Measures by State Departments of Transportation

SPONSORS: U.S. Department of Transportation

AUTHORS: Czerniak; R., S. Gaiser; and D. Gerard; Department of Geography, New Mexico State University

PARTICIPANTS: N/A

DATE: June 1996

SUMMARY:

The report identifies intermodal performance measures by State departments of transportation. The Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) mandated that all States implement a performance-based planning process aided by an Intermodal Management System (IMS). States were mandated to develop work plans and inventories of intermodal facilities, to establish performance measures, and to collect data. Although these requirements were subsequently dropped, many states continued with the development and implementation of such systems.

This study identifies intermodal performance measures for freight and passenger movement, categorized by their relationship to a set of goals. The authors found 15 States that had developed performance measures of this type for their intermodal management systems. The report discusses the role of performance measures in the transportation planning process.

PERFORMANCE MEASURES PRESENTED:

Intermodal freight performance measures are classified by six goals as shown below.

Goal 1: Accessibility of intermodal facilities

• Level of service
• Conditions of a transportation route
• Bridge restrictions (e.g., weight restrictions)
• Queuing of vehicles
• Turning radius into facility
• Deficiencies of the facility (e.g., number of structures lacking 21' vertical clearance)

Goal 2. Availability of intermodal facilities

• Volume-to-capacity ratios
• Railroad track capacity
• Storage capacity

Goal 3: Cost and Economic Efficiency

• Cost per ton-mile by mode
• Revenue ton-miles
• Expenditures (e.g., for freight rail, to retire deficiencies)

Goal 4: Safe Intermodal Choices

• Number of accidents
• Cost of accidents
• Number of fatalities

Goal 5: Connectivity between modes or intermodal connectivity ease of connection

• Number of intermodal facilities
• Delay of trucks at facilities
• Travel times

Goal 6: Time

• Total transfer time
• Freight transfer time between modes
• Average travel time

ASSESSMENT:

The narrow focus of this study on intermodal facilities limits its usefulness to FHWA. It is not directly concerned with overall highway system performance in moving freight. Goals 1 and 2, accessibility and availability of intermodal facilities, are more appropriate for a state than FHWA in examining freight performance. A number of the measures are also "internal" measures dealing with the operation of an intermodal facility. Other indicators are really measures of activity, such as the number of vehicles accessing a facility or number of revenue ton-miles carried.

Goals 3 to 6 have somewhat more relevance for evaluation of freight performance as it relates to the highway system. However, again, many of these indicators focus on internal facility measures or general activity measures at facilities. Under Goal 3, the cost per ton-mile measure is potentially useful as a national performance measure, but some of the other cost measures are not. For example, while expenditures to retire deficiencies" does have an impact on freight, it is not a measure of performance. Increased highway spending does not necessarily mean an improvement in freight performance; it could mean inefficient allocation of resources.

REPORT: Workshop on Productivity Performance Indicators: Report of Proceedings.

SPONSORS: U.S. Department of Transportation, Federal Highway Administration (FHWA)

AUTHORS: Hickling Lewis Brod, Inc.

PARTICIPANTS: Various economists and policy analysts from FHWA, the Bureau of Transportation Statistics (BTS), the Volpe Transportation Center, the Congressional Budget Office, freight/logistics companies, and consulting firms.

DATE: May 15, 1998

SUMMARY:

This report summarizes proceedings of a workshop sponsored by the FHWA Office of Policy Development on March 12, 1998 to review and suggest appropriate indicators for the "productivity" element of the agency's Performance Plan. An advisory panel identified 21 potential productivity indicators and ranked these based on conceptual suitability, measurability, and communicative value of the proposed indicators.

PERFORMANCE MEASURES PRESENTED:

The top ten indicators in terms of overall merit as judged by the panel members (and ranking, in scale 1-4) were:

• cost of highway freight per ton-mile (3.9)
• hours of delay per 1000 vehicles processed at border crossings (3.4)
• ratio of variance to average minutes per trip in peak periods in major metro areas (3.3)
• hours of delay per 1000 vehicle-miles (3.1)
• hours spent waiting at toll plazas per 1000 vehicle-miles (2.9)
• hours spent waiting at weigh stations per 1000 ton-mile (2.9)
• contribution of investment to GDP growth (2.6)
• net present value of improvements (2.4)
• average minutes per trip in peak period in major metro areas (2.3)
• total public and private costs of travel (2.3)

Based on the judgement of the consultants, the report recommends six indicators as meriting further investigation as candidates for inclusion in FHWA's Performance Plan:

• cost of highway freight per ton-mile
• contribution of investment in highways to GDP growth
• net present value (or current year benefit-cost ratio) of highway improvements
• average minutes per trip in peak period in major metro areas
• ratio of variance to average minutes per trip in peak periods in major metro areas
• total public and private costs of travel

ASSESSMENT:

This effort identified a number of potentially useful indicators of the impact of the highway system on productivity. The effort is not focused specifically on freight but more broadly on measures that can be used to gauge FHWA's progress in attaining its productivity-related strategic goal, "Continuously improve the economic efficiency of the Nation's transportation system to enhance America's position in the global economy." Each potential indicator is described and issues such as data availability and applicability are discussed at a basic level. The authors do not explain why their recommendations of six indicators that merit further investigation do not match with the top six indicators identified by the panel. The authors appear, however, to have selected indicators that broadly address the economic impacts of highway investments. They did not include measures that only address specific aspects of travel, such as hours of delay at border crossings, toll plazas, or weigh stations. Indicators that focus on these aspects of travel have more of a direct connection with freight traffic but presumably were considered too narrow as national indicators.

Some of the measures recommended by the authors do not address freight specifically, but focus on the overall economic costs and benefits of highway investments. For example, net present value (or current year benefit-cost ratio) of highway improvements accounts for benefits such as travel time savings, accident cost savings, and vehicle operating cost savings. While these cost savings clearly have positive implications for productivity, benefits accrue to both freight and personal travel, with a large portion of the benefits of most highway projects coming from personal travel time savings. As a result, net present value (or current year benefit-cost ratio) of highway improvements is not a measure of freight productivity but rather a measure of the total economic efficiency of highway investment.

"Total public and private costs of travel" appears to be a weak measure, even though it was recommended by authors as worth further consideration (in contrast, the panel ranked this measure relatively low). This measure is difficult to understand conceptually, is difficult to use to track progress over time, and has problems of data availability. The concept behind this measure is that the optimal transportation system minimizes total costs" when one accounts for total public and private costs. In a standard benefit-cost analysis framework, an increase is costs is not necessarily bad if it is more than offset by an increase in benefits (e.g., travel time and vehicle operating cost savings may more than offset the cost of an infrastructure investment). Under this measure, however, beneficial project impacts are viewed as a reduction in cost (e.g., a reduction in travel time costs) rather than as a benefit. In order to use this measure, one must account for all public and private sector transportation costs. This would be fine in a static system. However, in a growing economy, one sees not just changes in travel time costs, operating costs, and infrastructure construction and maintenance, but also changes in the amount of travel. The benefits of new travel are not addressed in this framework since the focus is solely on costs. The measure also has a negative focus.

REPORT: The Role of the National Highway System Connectors: Industry Context and Issues

SPONSORS: U.S. Department of Transportation, Federal Highway Administration (FHWA)

AUTHORS: A. Strauss-Wieder, Inc., KPMG Peat Marwick LLP, Louis Berger and Associates, Parsons Brinkerhoff

PARTICIPANTS: N/A

DATE: February 1999

SUMMARY:

The primary purpose of the report is not the development of performance measures. Its focus is on intermodal connectors and what can be done to improve them. A National Highway System (NHS) connector is a public road leading to a major intermodal terminal; this includes passenger as well as freight facilities.

PERFORMANCE MEASURES PRESENTED:

The report mentions five "qualities" of freight service that are important to shipping firms:

1. Reliability - consistently ensuring that goods are delivered on the specified date at the specified time in the specified amount in the specified condition
2. Transit time - meeting arrival times (time definite service)
3. Efficiency - optimally using transportation equipment to minimize costs
4. Cost - obtaining the lowest possible cost for moving goods (regardless of the number of modes involved)
5. Damage minimization

The report emphasizes that the focus is on these characteristics rather than on individual modes and routes. Intermodal connectors and allow transportation providers to use the best of each mode and increasingly play an essential role in ensuring the reliability, transit time, efficiency, and cost sought by shippers.

ASSESSMENT:

These are perfectly rational measures in terms of what is important to freight customers. It is not completely clear why a customer would care about a carrier's equipment utilization other than through its effect on cost, but cost is already listed as one of the measures. Conceptually, these are all good measures of the quality or cost of freight service. Specific indicators would need to be developed to measure these characteristics (e.g., measures of reliability, such as percent on-time arrivals or average variability in point-to-point travel times).

3.4 State and Local Efforts

REPORT: Regional Freight Mobility Action Packages

SPONSORS: Regional Freight Mobility Roundtable, Puget Sound Regional Council

AUTHORS: Harvey Consultants, Inc., Transmode Consultants, Inc., Ellen Kret Porter

PARTICIPANTS: Regional Freight Mobility Roundtable includes shippers, carriers, and third-party interests in the Puget Sound region. The Roundtable is concerned with freight movement by highway, rail, ship, and air. The Puget Sound Regional Council is the MPO for the Seattle area.

DATE: September 6, 1994

SUMMARY:

The purpose of the report and an ensuing meeting of the Regional Freight Mobility Roundtable was to develop a package of freight actions for inclusion in the Metropolitan Transportation Plan prepared by the MPO (Puget Sound Regional Council). The plan includes highway improvements but does not have an exclusive highway focus. The performance measures were developed as a by-product of the package of freight actions. Performance measures were not the focus of the effort.

PERFORMANCE MEASURES PRESENTED:

1. Transit time (and order-cycle time)
2. Transportation and logistics costs
3. Schedule reliability
4. Safety

ASSESSMENT:

Transit time is straightforward, especially if read as transit time for highway-freight movements. Transportation costs and reliability are also important, but more specificity would have been useful. The fourth measure, safety, is less a measure than a goal. Something like number of truck crashes might be more useful. The report, however, appears to be concerned with overall transportation safety in this case, not reduction of accidents linked to freight movements. It should be noted that a later report, the 1998 Progress Report of the Puget Sound Regional Council, a follow-up to the 1995 Metropolitan Transportation Plan, made no reference to these performance measures. There is a reference to a requirement for good data, but the context is not clear.

REPORT: Intermodal Performance Measures for the Bay Area Transportation System

SPONSORS: Metropolitan Transportation Council (San Francisco MPO)

AUTHORS: David W. Jones

PARTICIPANTS: N/A

DATE: June 20, 1995

SUMMARY:

This report addresses multi-modal performance measures designed to track effectiveness and efficiency of the San Francisco Bay Area's transportation system. The focus is on measures of mobility that are user-oriented and multi-modal. The report includes four case studies of the Bay Area's transportation system, one of which addresses goods movement.

The goods movement case study discusses effectiveness of freight movement in the context of United Parcel Service (UPS), a package-express company and Consolidated Freightways (CF), a major less-than-truckload (LTL) operator. Both types of operation use large trucks (plus airplanes and rail intermodal in the case of UPS) for the line haul and smaller vehicles for delivery. It notes that both companies are 24-hour operations, which enable them to schedule line-haul movements during hours when congestion is minimal and the highway system is operating most reliably. The report notes that because most trucking companies have optimized their operations to avoid freeway congestion during peak commute hours, the highway system's day to day reliability is the performance attribute most important for shippers and carriers. It also suggests that relatively narrow peak periods are an important highway-system attribute for freight.

PERFORMANCE MEASURES PRESENTED:

While the report does not explicitly put forward performance measures, the two attributes mentioned above, reliability and narrow peaks, are certainly important for freight productivity and could be used to develop performance measures.

ASSESSMENT:

This study provides a good discussion of highway-system characteristics that are important for the effectiveness and efficiency of urban goods movement.

REPORT: Report to Statewide Model Task Force on Freight Modeling and Forecasting Techniques

SPONSORS: State of Florida

AUTHORS: Draft prepared by Florida Department of Transportation

PARTICIPANTS: N/A

DATE: February 1998

SUMMARY:

This report was requested by the Stateside Model Task Force to provide an overview of freight planning and modeling processes in Florida and around the nation. It reports on the Florida's Intermodal Management System (IMS) Pilot Project, which was designed to address ISTEA mandates. A highlight of Florida's IMS Pilot was the development of performance measures designed for intermodal system evaluations.

PERFORMANCE MEASURES PRESENTED:

The following possible measures were put forward:

• cost per ton-mile by mode
• revenue per ton-mile by mode
• maintenance cost of connector links
• insurance cost (for freight)
• direct and indirect jobs created
• change in fuel consumption per ton-mile

ASSESSMENT:

Although the focus of this work was intermodal, most of these would be useful for overall highway-freight purposes. The exception is jobs created; aside from the difficulty of measuring this indicator, it is not a valid measure of freight performance or economic efficiency. Insurance cost is a proxy for loss and damage, which is an important aspect of the quality of freight movement. As a result, insurance cost could be used as a performance measure.

REPORT: CommunityLink 21: 1998 Regional Transportation Plan

SPONSORS: Southern California Association of Governments

AUTHORS: N/A

PARTICIPANTS: N/A

DATE: April 16, 1998

SUMMARY:

SCAG's 20-year transportation plan includes goals, objectives, and policies for Southern California. It offers performance indicators to compare a 2020 baseline with the 2020 plan. The discussion is not focused specifically on freight, but addresses topics of general highway-performance, two of which relate to freight movement: mobility and reliability.

PERFORMANCE MEASURES PRESENTED:

• Mobility: PM peak highway speed; percent of PM peak travel in delay
• Reliability: percent of on-time arrivals

ASSESSMENT:

The mobility measures are basic measures of highway-system performance that are reflective of general highway traffic (primarily personal travel). They are relevant to freight-movement performance, but, as offered here, are quite general. To be more focused on freight performance, the measures may need to be more specific to freight movement, such as PM peak highway speed on highway routes of particular importance to freight or on roads with a relatively high portion of truck traffic. The reliability measure is freight-specific but is difficult to develop as an indicator because of data availability problems.

REPORT: 1998 California Transportation Plan: Statewide Goods Movement Strategy

SPONSORS: California Department of Transportation (Caltrans)

AUTHORS: California Department of Transportation (Caltrans)

PARTICIPANTS: Caltrans received input from a California Transportation Plan Policy Advisory Committee (PAC) and Statewide Intermodal Goods Movement Advisory Committee (SIGMAC). These committees were composed of stakeholders from local governments, metropolitan planning organizations (MPOs), ports, railroads, shippers, FHWA, consultants, and other stakeholders.

DATE: August 1998

SUMMARY:

The Statewide Goods Movement Strategy was developed as part of the overall transportation plan in a conscious decision to make improvement of freight movement an explicit component of the overall plan. The document is a strategic policy and action blueprint that identifies strategic policies, goals, and objectives. Further, the report identifies development of freight performance measures as a long-term action item in the strategy. Some performance measures are offered, although their development is not the main focus of this initial effort.

PERFORMANCE MEASURES PRESENTED:

1. Hours of incident-based delay.
2. Hours of recurrent delay.
3. Lane-miles of high-level highway requiring rehabilitation.
4. Crossing time for trucks at Mexican border.
5. Crossing time for trucks at the state's domestic borders.

ASSESSMENT:

The first three are standard highway-performance measures. They reflect highway conditions, which certainly have a bearing on freight travel. However, they are not specific to freight or focused particularly on freight productivity. They address issues related to travel time, reliability, and safety. The last two are certainly truck-specific and probably important. However, they focus only on border crossings, and are not reflective of performance of the highway system as a whole. Only a portion of freight traffic crosses state or international borders. These measures are useful as facility-specific types of measures that could be used to compare and track progress among border crossings, but are somewhat less useful as a national measure of freight performance.

REPORT: Goods Movement Issue Paper

SPONSORS: East-West Gateway Coordinating Council (St. Louis region MPO)

AUTHORS: East-West Gateway Coordinating Council, with input from freight stakeholders

PARTICIPANTS: N/A

DATE: August 1998

SUMMARY:

The goods movement issue paper was developed in conjunction with the long-range transportation plan for the St. Louis region, called "Transportation Redefined." Efficient movement of goods is one of seven focus areas established in the plan to guide strategic problem solving. As background, the issue paper highlights the importance of goods movement efficiency, identifies and describes the region's multi-modal and intermodal freight system and facilities, and describes commodity flows. It also provides the overarching vision and goals for freight movement in the region, including 22 objectives and 23 investment projects. The final section of the White Paper is focused on performance measures. It provides a brief background on performance measures, those considered, and the proposed performance measures for the region. Rather than selecting a few specific data measures, the paper presents a hybrid of measures for major categories of issues.

PERFORMANCE MEASURES PRESENTED:

1. Connectivity/Congestion measures:

   - Average speed on the regional roadway network.

   - Truck counts at several key locations on the region's Priority Goods Movement Network (PGMN).
2. Reliability measure: Level-of-service below C on PGMN roadways.
3. Intermodal measures:

   - Tons of air freight departing Lambert-St. Louis International Airport

   - Tons of cargo transported through the port
   - Number of intermodal lifts that occur yearly at the local intermodal facilities
4. Safety measures:

   - Number of at-grade railroad crossings in the Region/or on the PGMN.

   - Number of overpasses in the Region (or on the PGMN) that have vertical clearance restrictions.
   - Number of weight restricted bridges in the Region (or on the PGMN).
   - Intersections with inadequate turning radii for 53' trailers in the Region (or on the PGMN).
   - High accident locations on the PGMN as well as total number of accidents (to detect trends).
   - Ramp geometry where site distance to poor or sharp turns are required.
   - Pavement life remaining on PGMN routes.
5. Economic / Environmental measures:

   - Value of the freight that is moved from, to and within the region to develop an overall (Direct, indirect and induced) economic impact.

   - Number of people employed in five (5) or so major economic sectors in the St. Louis Region such as transportation, distribution, and manufacturing.
   - Amount of warehouse space available in the St. Louis region and Current Occupancy Rate of the warehouse space.
   - Number of projects and dollars expended on the PGMN.

ASSESSMENT:

Although most of these measures relate directly to freight travel, they do not focus directly on productivity. Many of the measures are indicators of freight transport activity, but none are real indicators of how productive or efficient freight transport is.

REPORT: Act 51 White Paper State Trunklines: Performance Measures

SPONSORS: Michigan Department of Transportation

AUTHORS: Act 51 Transportation Funding Study Committee

PARTICIPANTS: N/A

DATE: 1999

SUMMARY:

This White Paper summarizes Michigan DOT's strategic objectives and highway performance measures as identified in the Michigan DOT's FY 2000 budget. There was not a specific focus on freight movement.

PERFORMANCE MEASURES PRESENTED:

• Increase the percent of miles of state trunklines with surface condition classified as good
• Increase the number of trunkline bridges rated as good
• Reduce the percent of state trunklines experiencing congested traffic flow
• Reduce the rate of fatal accidents

ASSESSMENT:
These are general highway-system measures. They have some relevance to freight movement, as do all general measures of highway performance, but they lack a freight focus.

REPORT: Transportation System Performance Measures: Applicability of Indicators to Goods Movement

SPONSORS: California Department of Transportation (Caltrans)

AUTHORS: Booz-Allen & Hamilton

PARTICIPANTS: Received input from Caltrans staff, including the team that developed the freight module of the California Transportation Plan (CTP) and the System Measures Working Group

DATE: June 30, 1999

SUMMARY:

This report addresses the applicability of performance indicators to goods movement as part of the Performance Measurement initiative of Caltrans. It concludes that it is feasible for the State and regional partners to apply performance measures that relate to freight movement. Based on an evaluation of outcomes from the State's Transportation System Performance Measures report, the authors select six outcomes as applicable to goods movement: mobility/accessibility, reliability, economic well-being, environmental quality, safety and security, and equity.

PERFORMANCE MEASURES PRESENTED:

Of the "outcomes" and indicators identified from the State report, the following are most directly related to freight performance and productivity:

Outcome Indicator Mobility/Accessibility Travel time Delay (lost time) Accessibility to intermodal facilities Reliability Standard deviation of travel time Safety and Security - Accident rate

- Fatality rate Economic Well-Being Final demand (the value of all transportation-related goods and services delivered to the final customer) generated by transportation projects

ASSESSMENT:

These indicators all have some relationship to the productivity of freight movements, with the mobility/accessibility and reliability measures most directly useful. Other outcome goals identified as relevant to goods movement—environmental quality and equity—do not really address the issue of productivity.

Safety is critical to the trucking industry for reasons of liability, industry reputation, potential revenue loss and productivity. The industry pays close attention to trends involving accidents, with particular emphasis on specific safety risks such as rail grade crossings and the potential operational disruptions associated with accidents and lack of alternate routes. According to this report, truck safety data are fairly difficult to access. In any case, the number of fatalities, which are probably the most accessible data, relate less to freight productivity than to concerns about loss of life and medical injuries.

The mobility/accessibility and reliability indicators are standard measures of highway-system performance. Reliability is one of the most important outcomes for shippers. Poor accessibility to many delivery locations exacerbates truckers' reliance on the highways to travel just in time for delivery at the point of destination. Travel time and delay information is also of interest to shippers for scheduling, routing, equipment utilization, shift assignment, and overtime management reasons. However, using the same travel time and delay figures experienced by commuters as a measure of that experienced by truck drivers may not be an accurate assessment.

Accessibility to intermodal facilities is the most freight-focused of these measures.

The last indicator, final demand for the value of transportation-related goods and services delivered to final customers, can be applied to goods movement by measuring one of the following final demand generated by transportation improvement projects. This measure is actually quite difficult to develop. Although there are several sources of information on total economic activity, these data do not relate to highway improvement projects, and so are simply measures of total economic activity. Total economic activity, in turn, is affected by such factors as macroeconomic cycles, industry trends, and tax policies. Data are also available on how much transportation services contribute to Gross Domestic Product (GDP), but it is not clear whether more spending on transportation services means that freight transport is more productive or not. According to the Booz-Allen & Hamilton report, input-output models, like the REMI regional economic model, could be used to measure final demand in response to transportation projects. Use of such as model is probably most applicable at a regional level for forecasting rather than monitoring performance.

REPORT: Freight Moves the Oregon Economy

SPONSORS: Oregon Department of Transportation

AUTHORS: Oregon Department of Transportation

PARTICIPANTS: N/A

DATE: July 1999

SUMMARY:

This report identifies several types of performance measures developed in various Oregon transportation plans or similar efforts. The particular planning efforts examined were: Oregon's Intermodal Management System (IMS); the 1999 Oregon Highway plan; and the Oregon Commercial Vehicle Safety Plan. Each of these produced some performance measures.

PERFORMANCE MEASURES PRESENTED:

Oregon IMS:

For connector roads and highways:

• Volume-to-capacity ratios (average weekday PM V/C ratio, intersection average weekday PM peak hour V/C ratio)
• Pavement condition
• Accident rates
• Annual hours of truck delay

For intermodal terminals:

• Annual throughput as a percentage of capacity
• Number of hours daily when service is available
• Number of hours waiting in line outside the terminal gate

1999 Oregon Highway Plan:

For the Highway Plan policy addressing the State highway freight system:

• Percent of freight-system lane miles that meet State highway mobility standards during the peak hour or peak two hours peak period; and
• Number and percent of accidents on the designated State Highway Freight System involving trucks

For the Highway Plan policy addressing travel alternatives:

• Percentage of identified obstacles to freight movement that are eliminated through action of the State or the State in partnership with others
• Percentage (or number) of intermodal connectors improved.

Oregon Commercial Vehicle Safety Plan:

• Reduce sleep/fatigue-related truck crashes
• Reduce truck crashes related to speed, following too closely, unsafe lane change, and unsafe turns
• Decrease mechanical out-of-service percentage for intrastate carriers

ASSESSMENT:

This study is considerably above the average. A number of the measures presented are not only relevant to highway freight but specific to trucks. Annual hours of truck delay is a good example, but it also raises a question about data. The idea of designating a freight system is a good one; the test would be whether roads that carry a disproportionate share of freight or are key links in the freight network were actually selected. If it is simply the high-level roads, then measures based on it are still general highway measures. Percentage of obstacles to freight movement removed would be good in principle. There is an obvious problem of definition and counting; what is an obstacle and how do you establish the base number of obstacles? An appealing feature of this measure is that it actually ties back to actions of the State.

REPORT: Freight Performance Measures: A Yardstick for Minnesota's Transportation System, Preliminary Draft, subject to review and approval.

SPONSORS: Minnesota Department of Transportation

AUTHORS: Mark Berndt and Mark Larson, Minnesota Department of Transportation

PARTICIPANTS: Minnesota Freight Advisory Committee (MFAC) MFAC is made of shippers and carriers that advise MINNDOT on freight issues. To a large extent, the report reflects MFAC recommendations.

DATE: August 25, 1999

SUMMARY:

This is an effort with the explicit goal of developing freight performance measures for a transportation system and largely for the highway system. It is not the result of a concentrated study, rather the result of a one-day meeting at which MFAC members devoted themselves to discussing and proposing performance measures.

PERFORMANCE MEASURES PRESENTED:

The report presents a number of indicators, classified, in part, according to availability of data.

Performance measures with data available:

1. Freeway travel time, by route and time of day
2. Average speed on freeways, by route and time of day
3. Congestion ranking of freeways, by route
4. Relative congestion levels of major metropolitan areas
5. Benefits to heavy trucks from major improvement projects
6. Dollar cost of crashes (apparently heavy-truck crashes, but not obvious) and crash cost comparisons by mode.
7. Number of design impediments" to freight traffic (e.g., grade crossings, truck-restricted roads, deficient bridges)

Performance measures that require data to be developed:

1. City-to-city travel time for major highway routes
2. Point-to-point transit time for shippers
3. Transit time to major regional, national, and global markets
4. Number of design impediments" to access to terminals (truck, rail, air, and water)
5. Crash rate per ton-mile by mode

Other indicators:

1. Minnesota's transportation investment and spending as a percent of gross state product (GSP).
2. Shipment cost per mile (by ton or value), by mode and by major commodity groups

ASSESSMENT:

Many of these are potentially useful. Information on speed and transit times by route and by city pair would be especially helpful if routes and city pairs that have special significance for freight movement could be identified. Transportation spending as a percent of GSP is an odd one; it is difficult to see how that measures performance. Shipment cost per mile makes sense. Design impediments would be useful, but, again, it would be helpful to tie these to routes that are important for freight. A design impediment on a road rarely used by heavy trucks would seem to have little relevance. Crash rate per ton-mile seems useful. Dollar cost of heavy-truck crashes seems to be more about consequences of moving freight than about effectiveness in moving freight. Dollar costs of deaths and injuries and property damage is appropriate for measuring overall highway performance; for freight purposes, it might be useful to focus in more narrowly, e.g., on loss-and-damage costs.

3.5 Academic Studies

REPORT: Demand-based Transportation Planning, Policy, and Performance, an unpublished paper under journal review

SPONSORS: N/A

AUTHORS: Edward A. Morash, Graduate School of Management, Michigan State University

PARTICIPANTS: N/A

DATE: undated (1999)

SUMMARY:

The paper is largely concerned with the notion that public policy should be based, in part, on the effective functioning of the supply chain; put another way, that good private-sector logistics should be a goal of public policy. Development of performance measures is not the main purpose of the work.

PERFORMANCE MEASURES PRESENTED:

The performance measures offered are related to the private-sector supply chain.

1. Transportation cost (including loss and damage and costs of service failures)
2. Productivity of transportation labor and equipment
3. Asset management (inventory levels)
4. Customer service (e.g., on-time delivery)
5. Logistical quality (e.g., damage frequency)

ASSESSMENT:

These are legitimate measures of effectiveness in supply-chain management, and the author is right to point out that public policy can affect these measures. The difficulty would come in trying to isolate the effects of highway-system performance on these indicators. That would not be easy to do.

Appendix B: Individuals Contacted

Federal Government

• Russ Capelle, Bureau of Transportation Statistics, 202-366-5685
• Arthur Jacoby, Federal Highway Administration
• James March, Federal Highway Administration, 202-366-9237
• Beth Pinkston, Congressional Budget Office, 202-226-2940
• Barbara Fraumeni, Bureau of Economic Analysis, 202-606-9603

State and Local Government

• Dan Casshin, Office of Policy Planning, Florida DOT, 850-488-8006
• Mark Berndt, Section Director, Freight Policy and Programs, Minnesota DOT, 651-296-1676
• Matt Garrett, Leader of Freight Group, Oregon DOT, 503-986-4214
• Jahangir Kashkooli, Senior Transportation Planner, California DOT, 916-653-2575
• Doug McLeod, Florida DOT, 850-488-4640

Academia and Industry

• Michael Belzer, University of Michigan Trucking Industry Program, 734-647-9474
• Tina Casgar, Intermodal Association of North America, 301-982-3400
• Bob Czerniak, New Mexico State University, 505-646-3509 (or -2815), rczernia@nmsu.edu
• Edward Morash, Department of Marketing and Logistics, Michigan State University, 517-353-6381
• Lance Newman, Cambridge Systematics, 617-354-0167

Other

• Antii Talvitie, World Bank, 202-473-7017
• Burkhard Horn, independent consultant based in Paris (exchanged e-mails)

¹Notable examples are the studies: Nadiri, M. Ishaq and Theofanis Mamuneas. "Contributions of Highway Capital to Industry and National Productivity Growth." September 1996, Final Report. Prepared for FHWA. Nadiri, M. Ishaq."Contribution of Highway Capital to Output and Productivity Growth in the U.S. Economy and Industries." August 1998. Prepared for FHWA.