MEMORANDUM. For the purpose of this analysis, a No Build Alternative and a Build Alternative were under consideration.

Transcription

1 SRF No MEMORANDUM TO: FROM: Libby Ogard, President, Prime Focus Ryan Loos, PE, Senior Engineer Nick Semeja, EIT, Engineer DATE: May 26, 2015 SUBJECT: NORTHWOODS RAIL TRANSIT COMMISSION GREAT LAKES FORESTS LOG CAR FLEET 2015 TIGER BENEFIT-COST ANALYSIS INTRODUCTION This memorandum summarizes the assumptions, methodology and results developed for the benefit-cost analysis of the alternatives evaluated as part of the Northwoods Rail Transit Commission proposal to receive TIGER grants to aid in the purchase of 115 railcars. These additional railcars will compete directly with trucks currently hauling lumber through the Great Lakes Forests Region. The objective of a benefit-cost analysis (BCA) is to bring all of the direct effects of a transportation investment into a common measure (dollars), and to allow for the fact that benefits accrue over a long period of time while costs are incurred primarily in the initial years. The primary elements that can be monetized are operating costs, roadway maintenance savings, vehicle crashes, air quality savings, and remaining capital value. DESCRIPTION OF ALTERNATIVES For the purpose of this analysis, a No Build Alternative and a Build Alternative were under consideration. No Build Alternative The No Build Alternative assumed that trucks were to continue hauling lumber freight as they do today. To quantitatively compare the two scenarios, the truck freight hauled per year was set to the same amount the 115 railcars were able to transport. Cost associated with truck hauling operations were computed based on the assumption that trucks were required to travel from log landing to delivery location (mill), and back again, a 496 mile roundtrip. Build Alternative The proposed Build Alternative assumed that 115 railcars are to be constructed to serve the Northwood Rail Transit Commission in the Great Lakes Forest Region. The amount of freight the 115 railcars are capable of hauling on an annual basis compare to 13,359 truckloads. This scenario also assumes that trucks were required to transport the freight from the log landing to

2 Libby Ogard 2 May 26, 2015 the rail head, a 54 mile roundtrip. Using the same methodology as the No Build Alternative, truck costs were computed using a shorter roundtrip distance. PROPOSED BCA METHODOLOGY The following methodology and assumptions were used for the benefit-cost analysis: 1. Main Components: The main components analyzed included: Operating costs Fatal crash frequency Roadway maintenance costs Air quality Railcar maintenance costs Initial capital costs: The costs for the proposed number of railcars were applied evenly over the duration of the construction period (2016 and 2017). Remaining Capital Value: The remaining capital value (value of improvement beyond the analysis period) was considered a reduction in cost and was subtracted from total cost to obtain a net cost. 2. Analysis Years: This analysis assumed that the Build Alternative would be constructed over a two-year period, starting in 2016, with completion in Therefore, 2018 was assumed to be the first full year that benefits will be realized from the project. The analysis focused on the benefits for the twenty-year period from 2018 to The present value of all benefits and costs was calculated using as the year of current dollars. 3. Freight Accommodation: The proposed number of railcars and the duration for the freight rail to make a roundtrip were utilized to determine the amount of freight that could be transported for each mode. Based on existing haul routes, the assumption that these railcars are dedicated to the logging industry in this region, and input from Canadian National Railway the roundtrip and turnaround time for freight rails was assumed to be 11 days. Payload for both trucks and railcars were provided by members of Great Lake Timber Professionals and JML Heirs, as well as lumber truck and rail operators in northern Wisconsin and Upper Peninsula, Michigan. Allowable truck loads differ in Wisconsin and Michigan. Therefore, a weighted average between the weight limits in each state and the distribution of tons hauled in the region was used for the truck payload. The potential amount of freight transported per year was a function of the number of railcars being produced, the rail roundtrip duration (includes turnaround time), and the payload per railcar. This value was kept constant between modes to reflect the accrued benefits hauling a set amount of freight by way of rail compared to hauling with trucks. 1 Relevant project costs were factored into 2015 dollars using an inflation factor obtained from the Bureau of Labor Statistics Consumer Price Index calculator depending on the sources year of dollars.

3 Libby Ogard 3 May 26, 2015 The annual number of trips required for each mode was calculated from the amount of freight the 115 railcars could transport per year and the payload per truck or railcar. Truck and rail ton-miles were then obtained by taking the average freight trip distance per mode, which were kept constant between the No Build and Build alternatives, and multiplying by the respective number of modal trips per year. 4. Operating Costs: The operating costs were estimated by obtaining year of 2002 data for total logistics costs from the U.S. Department of Transportation Federal Highway Administration, Logistics Costs and U.S. Gross Domestic Product, and by collecting total freight transported (ton-miles) in the year of 2002 from the U.S. Department of Transportation Bureau of Transportation Statistics, Freight in America, for each transportation mode. A rate was developed by taking cost divided by the number of ton-miles of freight. Those rates were then applied to the freight hauled (ton-miles) per travel mode in each scenario to generate an operating cost. Because freight will be unloaded halfway through the round-trip distance, operating costs were halved for each mode to account exclusively for the time lumber was being transported. Since truck operating costs are greater than operating costs for rail, this should be considered a conservative estimate. 5. Roadway Maintenance: The decrease in annual truck VMT between the No Build and Build scenarios generated savings in future road maintenance costs. Pavement restoration costs caused by both loaded and unloaded truck weights were averaged together to account for freight drop-off. The resulting roadway maintenance cost savings was eight cents per mile diverted off of rural roads. Maintenance costs were obtained from the U.S. Department of Transportation Federal Highway Administration, Addendum to the 1997 Federal Highway Cost Allocation Study Final Report, and were in year of 2000 dollars. 6. Safety Analysis: Safety benefits were estimated based on the change in truck VMT for the Build alternative compared to the No Build. Fatal crash rates involving commercial motor vehicles, in terms of commercial motor vehicle miles traveled, were obtained for the state of Wisconsin. Crash rates were collected from Fatal Analysis Reporting System and Federal Highway Administration s Highway Statistics for the years of This crash rate was then applied to the reduction in truck VMT between the alternatives to produce a crash savings. Crash costs by severity were obtained from the TIGER Benefit-Cost (BCA) Resource Guide, dated March 27, Fatal crashes used a value of 9.4M in 2013 dollars. 7. Air Quality: Emissions savings were generated by calculating the decrease in metric tons of carbon. Emission rates were obtained for both truck and rail in terms of grams per ton-mile from the Evaluation of Potential Transload Facility Locations in the Upper Peninsula (UP) of Michigan. Emission rates were applied to the ton-miles transported by mode in each alternative to produce total emissions. The societal cost of carbon was valued in accordance to the TIGER Benefit-Cost (BCA) Resource Guide, dated March 27, 2015, for each year in the analysis period.

4 Libby Ogard 4 May 26, Calculation of Remaining Capital Value: Since the railcars have an assumed service life of 50 years, the remaining capital value after the 20 year analysis period was calculated for the Build Alternative. This value was then subtracted from the initial capital cost to determine the net capital cost and the final value expressed in terms of 2015 dollars. 9. Maintenance Costs: Annual maintenance costs for the railcars were realized starting with the first year of benefits. This cost was provided by Escanaba and Lake Superior Railroad in 2015 dollars. Costs were calculated using a flat rate per railcar, and were discounted back to the year of analysis. 10. Factors Not Quantified: Several factors were not quantified as part of the analysis because review of initial data indicates low potential to yield substantial benefit. These factors included the following: Crash cost savings for crashes that didn t involve fatalities were excluded from benefits. Additional project benefits may be realized that were not included in this analysis. Maintenance costs for trucks were not included in the analysis. Since truck trips were assumed to be a shorter distance under the Build Alternative, the associated maintenance costs to trucks would also be less under the Build Alternative. This should be considered a conservative estimate. BCA RESULTS The benefit-cost analysis provides an indication of the economic desirability of a scenario, but results must be weighed by decision-makers along with the assessment of other effects and impacts. Projects are considered cost-effective if the benefit-cost ratio is greater than 1.0. The larger the ratio number, the greater the benefits per unit cost. Results of the benefit-cost analysis are included in Table 1 below. See Attachment A for the complete benefit-cost analysis workbook. Table 1 - Results 3% 7% Benefits $250.8 million $167.7 million Costs $10.9 million $11.8 million B/C Ratio \\vs-mpls1\projdata\projects\8856\ts\nrtc TIGER\NRTC TIGER BCA doc

5 Attachment A Benefit-Cost Analysis Worksheet

6 ASSUMPTIONS Table 1 General Assumptions 1) Based on existing haul routes and the assumption that these cars will be dedicated to the logging industry in this area it was assumed that the round trip haul and turnaround duration was 11 days (see Table 1). Year of Analysis First Year of Benefits Number of Railcars to be Produced Duration of Roundtrip for Rail (days) (1) ) Payloads for each mode were obtained from members of Great Lake Timber Professionals, J. Carey Logging, Inc., and JML Heirs, notable lumber truck and rail operators in northern Wisconsin Table 2 Payload By Mode and the Upper Peninsula, Michigan. Since the allowable truck payload across each state varies, a WI MI Payload (tons) weighted average was copmuted by taking the weight limit in Wisconsin and Michigan with the Truck (2) 30 tons 56 tons 32.6 distribution of tons hauled in the region (see Table 2). Railcar (2) N/A N/A 83 Table 3 Freight Transported per Year (tons) (3) 3) The amount of freight transported per year was calculated based off of the tons the proposed 316,720 number of railcars could deliver given its roundtrip and turnaround duration (see Table 3). The corresponding number of modal trips were then based off of this freight value (see Table 4). Table 4 Trips per Year to Accommodate Freight (3) 4) The new trip length for trucks was based on the round trip distance from the log landing to the rail head (see Table 5). Trucks 9,715 Railcars 3,816 Table 5 Average Trip Length (miles) Old Trucks 496 New Trucks (4) 54 Rail 442

7 TIGER VII BCA SUMMARY BENEFITS Economic Competitiveness State of Good Repair Safety Environmental Sustainability Analysis Year Operational Cost Savings Fuel Cost Savings (1) Road Maintenance Savings Crash Savings CO 2 Discounted at 3% Subtotal Without Carbon 3% Discount Without Carbon 7% Discount Without Carbon 3% Discount Total 7% Discount Total 2016 $0 $0 $0 $0 $0 $0 $0 $0 $0 $ $0 $0 $0 $0 $0 $0 $0 $0 $0 $ $15,564,658 $1,873,470 $467,207 $1,394,300 $348,712 $17,426,165 $15,947,409 $14,224,941 $16,296,121 $14,573, $15,564,658 $1,873,470 $467,207 $1,394,300 $352,374 $17,426,165 $15,482,921 $13,294,337 $15,835,295 $13,646, $15,564,658 $1,873,470 $467,207 $1,394,300 $348,819 $17,426,165 $15,031,963 $12,424,614 $15,380,781 $12,773, $15,564,658 $1,873,470 $467,207 $1,394,300 $338,659 $17,426,165 $14,594,138 $11,611,789 $14,932,797 $11,950, $15,564,658 $1,873,470 $467,207 $1,394,300 $341,441 $17,426,165 $14,169,066 $10,852,139 $14,510,507 $11,193, $15,564,658 $1,873,470 $467,207 $1,394,300 $337,635 $17,426,165 $13,756,375 $10,142,186 $14,094,010 $10,479, $15,564,658 $1,873,470 $467,207 $1,394,300 $333,761 $17,426,165 $13,355,704 $9,478,679 $13,689,465 $9,812, $15,564,658 $1,873,470 $467,207 $1,394,300 $329,826 $17,426,165 $12,966,703 $8,858,578 $13,296,529 $9,188, $15,564,658 $1,873,470 $467,207 $1,394,300 $325,837 $17,426,165 $12,589,032 $8,279,045 $12,914,869 $8,604, $15,564,658 $1,873,470 $467,207 $1,394,300 $327,256 $17,426,165 $12,222,361 $7,737,425 $12,549,617 $8,064, $15,564,658 $1,873,470 $467,207 $1,394,300 $323,019 $17,426,165 $11,866,370 $7,231,239 $12,189,389 $7,554, $15,564,658 $1,873,470 $467,207 $1,394,300 $318,752 $17,426,165 $11,520,748 $6,758,167 $11,839,500 $7,076, $15,564,658 $1,873,470 $467,207 $1,394,300 $314,459 $17,426,165 $11,185,192 $6,316,044 $11,499,651 $6,630, $15,564,658 $1,873,470 $467,207 $1,394,300 $305,300 $17,426,165 $10,859,410 $5,902,845 $11,164,710 $6,208, $15,564,658 $1,873,470 $467,207 $1,394,300 $305,818 $17,426,165 $10,543,116 $5,516,677 $10,848,934 $5,822, $15,564,658 $1,873,470 $467,207 $1,394,300 $301,478 $17,426,165 $10,236,035 $5,155,773 $10,537,514 $5,457, $15,564,658 $1,873,470 $467,207 $1,394,300 $297,132 $17,426,165 $9,937,898 $4,818,480 $10,235,031 $5,115, $15,564,658 $1,873,470 $467,207 $1,394,300 $292,784 $17,426,165 $9,648,445 $4,503,252 $9,941,228 $4,796, $15,564,658 $1,873,470 $467,207 $1,394,300 $288,436 $17,426,165 $9,367,422 $4,208,647 $9,655,858 $4,497, $15,564,658 $1,873,470 $467,207 $1,394,300 $288,152 $17,426,165 $9,094,585 $3,933,315 $9,382,737 $4,221,467 Total Benefit $244,374,894 $161,248,175 $250,794,545 $167,667,826 Check $244,374,894 $161,248,175 $250,794,545 $167,667,826 COSTS State of Good Repair Analysis Year Capital Costs Maintenance Costs RCV (3%) RCV (7%) Subtotal (3%) Subtotal (7%) 3% Discount 7% Discount 2016 $6,900,000 $0 $0 $0 $6,900,000 $6,900,000 $6,699,029 $6,448, $6,900,000 $0 $0 $0 $6,900,000 $6,900,000 $6,503,912 $6,026, $0 $230,000 $0 $0 $230,000 $230,000 $210,483 $187, $0 $230,000 $0 $0 $230,000 $230,000 $204,352 $175, $0 $230,000 $0 $0 $230,000 $230,000 $198,400 $163, $0 $230,000 $0 $0 $230,000 $230,000 $192,621 $153, $0 $230,000 $0 $0 $230,000 $230,000 $187,011 $143, $0 $230,000 $0 $0 $230,000 $230,000 $181,564 $133, $0 $230,000 $0 $0 $230,000 $230,000 $176,276 $125, $0 $230,000 $0 $0 $230,000 $230,000 $171,142 $116, $0 $230,000 $0 $0 $230,000 $230,000 $166,157 $109, $0 $230,000 $0 $0 $230,000 $230,000 $161,317 $102, $0 $230,000 $0 $0 $230,000 $230,000 $156,619 $95, $0 $230,000 $0 $0 $230,000 $230,000 $152,057 $89, $0 $230,000 $0 $0 $230,000 $230,000 $147,628 $83, $0 $230,000 $0 $0 $230,000 $230,000 $143,328 $77, $0 $230,000 $0 $0 $230,000 $230,000 $139,154 $72, $0 $230,000 $0 $0 $230,000 $230,000 $135,101 $68, $0 $230,000 $0 $0 $230,000 $230,000 $131,166 $63, $0 $230,000 $0 $0 $230,000 $230,000 $127,345 $59, $0 $230,000 $0 $0 $230,000 $230,000 $123,636 $55, $0 $230,000 $10,512,576 $12,408,370 $10,282,576 $12,178,370 $5,366,399 $2,748,818 Total Cost $10,941,899 $11,802,834 Check $10,941,899 $11,802,834 SUMMARY 3% 7% Benefits $250,794,545 $167,667,826 Costs $10,941,899 $11,802,834 B/C Ratio ) Fuel costs were included in the methodology used to compute operational costs. Therefore, fuel cost savings shown here were excluded from total project benefits. This additional computation of fuel costs was completed to determine the magnitude of fuel costs proportional to overall operations costs.

8 ECONOMIC COMPETITIVENESS FUEL SAVINGS Analysis Year Old Truck VMT New Truck VMT New Train Ton Miles Old Truck Gallons Use (1) New Truck Gallons Used (1) New Train Gallons Used (2) Old Truck Fuel Cost (3) New Truck Fuel Cost (3) New Rail Fuel Cost (3) Yearly Fuel Cost Savings in Current Dollars 3% Discount 7% Discount ,818, , ,990,441 1,376, , ,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,714,490 $1,529,309 Table 1 Average Trip Length (miles) ,818, , ,990,441 1,376, , ,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,664,554 $1,429,261 Old Trucks ,818, , ,990,441 1,376, , ,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,616,071 $1,335,758 New Trucks ,818, , ,990,441 1,376, , ,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,569,001 $1,248,372 Rail ,818, , ,990,441 1,376, , ,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,523,302 $1,166, ,818, , ,990,441 1,376, , ,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,478,934 $1,090,376 Table 2 Payload ,818, , ,990,441 1,376, , ,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,435,858 $1,019,043 Truck (tons/truck) ,818, , ,990,441 1,376, , ,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,394,037 $952,377 Rail (tons/railcar) ,818, , ,990,441 1,376, , ,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,353,434 $890, ,818, , ,990,441 1,376, , ,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,314,014 $831,843 Table 3 Number of Trips By Mode ,818, , ,990,441 1,376, , ,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,275,742 $777,423 Trucks 9, ,818, , ,990,441 1,376, , ,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,238,584 $726,564 Rail 3, ,818, , ,990,441 1,376, , ,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,202,509 $679, ,818, , ,990,441 1,376, , ,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,167,484 $634,609 Table 4 Fuel Economy ,818, , ,990,441 1,376, , ,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,133,480 $593,093 Truck (mpg) ,818, , ,990,441 1,376, , ,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,100,466 $554,292 Rail (ton miles/gal) ,818, , ,990,441 1,376, , ,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,068,414 $518, ,818, , ,990,441 1,376, , ,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,037,295 $484,140 Table 5 Diesel Cost ($/gal) ,818, , ,990,441 1,376, , ,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,007,082 $452,467 $ ,818, , ,990,441 1,376, , ,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $977,750 $422,867 Total Benefit $26,272,502 $17,335,631 1) The value for truck fuel economy was provided by Schultz Equipment and Parts (Iron Mountain, MI) (see Table 4). 2) The fuel economy for rail was obtained from Federal Railroad Administration, Comparative Evaluation of Rail and Truck Fuel Efficiency on Competitive Corridors (page 83) ( The minimum value for the mixed use train type was utilized to provide the best representation of the current regional train system and to generate a conservative estimate of fuel savings (see Table 4). 3) Diesel cost was obtained from local diesel prices in Dickinson County, MI during the week of April 20th, 2015 ( (see Table 5). 4) Fuel savings were included in the methodology used to compute operational costs. Therefore, fuel cost savings shown here were excluded from total project benefits. This additional computation of fuel costs was completed to determine the magnitude of fuel costs proportional to overall operations costs.

9 ECONOMIC COMPETITIVENESS OPERATIONAL BENEFITS Analysis Year Old Truck Tonmiles (1) New Truck Tonmiles (1) New Train Tonmiles (1) Old Truck Operating Cost (1) New Truck Operating Cost (1) New Rail Operating Cost (1) Yearly Operations Savings in Current 3% Discount 7% Discount Dollars (3) ,546,673 8,551,452 69,995,220 $15,553,797 $1,693,357 $1,887,626 $15,564,658 $14,243,867 $12,705,397 Table 1 Average Trip Length (miles) ,546,673 8,551,452 69,995,220 $15,553,797 $1,693,357 $1,887,626 $15,564,658 $13,828,997 $11,874,203 Old Trucks ,546,673 8,551,452 69,995,220 $15,553,797 $1,693,357 $1,887,626 $15,564,658 $13,426,210 $11,097,386 New Trucks ,546,673 8,551,452 69,995,220 $15,553,797 $1,693,357 $1,887,626 $15,564,658 $13,035,156 $10,371,389 Rail ,546,673 8,551,452 69,995,220 $15,553,797 $1,693,357 $1,887,626 $15,564,658 $12,655,491 $9,692, ,546,673 8,551,452 69,995,220 $15,553,797 $1,693,357 $1,887,626 $15,564,658 $12,286,884 $9,058,772 Table 2 Payload ,546,673 8,551,452 69,995,220 $15,553,797 $1,693,357 $1,887,626 $15,564,658 $11,929,014 $8,466,142 Truck (tons/truck) ,546,673 8,551,452 69,995,220 $15,553,797 $1,693,357 $1,887,626 $15,564,658 $11,581,567 $7,912,283 Rail (tons/railcar) ,546,673 8,551,452 69,995,220 $15,553,797 $1,693,357 $1,887,626 $15,564,658 $11,244,240 $7,394, ,546,673 8,551,452 69,995,220 $15,553,797 $1,693,357 $1,887,626 $15,564,658 $10,916,738 $6,910,894 Table 3 Number of Trips per Mode ,546,673 8,551,452 69,995,220 $15,553,797 $1,693,357 $1,887,626 $15,564,658 $10,598,774 $6,458,780 Trucks 9, ,546,673 8,551,452 69,995,220 $15,553,797 $1,693,357 $1,887,626 $15,564,658 $10,290,072 $6,036,243 Rail 3, ,546,673 8,551,452 69,995,220 $15,553,797 $1,693,357 $1,887,626 $15,564,658 $9,990,361 $5,641, ,546,673 8,551,452 69,995,220 $15,553,797 $1,693,357 $1,887,626 $15,564,658 $9,699,380 $5,272,288 Table 4 Operating Cost per ton mile ,546,673 8,551,452 69,995,220 $15,553,797 $1,693,357 $1,887,626 $15,564,658 $9,416,874 $4,927,372 Trucks $ ,546,673 8,551,452 69,995,220 $15,553,797 $1,693,357 $1,887,626 $15,564,658 $9,142,596 $4,605,021 Rail $ ,546,673 8,551,452 69,995,220 $15,553,797 $1,693,357 $1,887,626 $15,564,658 $8,876,307 $4,303, ,546,673 8,551,452 69,995,220 $15,553,797 $1,693,357 $1,887,626 $15,564,658 $8,617,773 $4,022, ,546,673 8,551,452 69,995,220 $15,553,797 $1,693,357 $1,887,626 $15,564,658 $8,366,770 $3,759, ,546,673 8,551,452 69,995,220 $15,553,797 $1,693,357 $1,887,626 $15,564,658 $8,123,078 $3,513,148 Total Benefit $218,270,149 $144,023,237 1.) When computing operating cost the vehicle ton miles were halved to account only for the distance lumber was being transported. Since the operating cost per ton mile in the no build scenario is greater, and trains are more likely to backhaul lumber compared to truck shipments (increasing efficiency), this should be considered a conservative estimate. 2.) 3.) Operation costs were computed by taking the total logistics cost divided by the total ton miles of freight for each travel mode in the U.S. during the year of The ton miles of freight for each mode was obtained from the United States Department of Transportation Bureau of Transportation Statistics, Freight in America, Table 1 ( Total logistics costs were obtained from the United States Department of Transportation Federal Highway Administration, Logistics Costs and U.S. Gross Domestic Product, Table 2 ( (see Table 4). Note that operation costs include fuel costs for both modes. The estimated logistics costs for each transportation mode are available in 2002 dollars. This value was inflated to 2015 dollars using a factor 1.30 obtained from the Bureau of Labor Statistics Consumer Price Index Calculator (

10 STATE OF GOOD REPAIR ROADWAY MAINTENANCE SAVINGS Analysis Year Old Truck VMT New Truck VMT Decrease in Annual Truck VMT Yearly Maintenance Savings in Current 3% Discount 7% Discount Dollars (1)(2) ,818, ,629 4,294,185 $467,207 $427,561 $381,380 Table 1 Average Trip Length (miles) ,818, ,629 4,294,185 $467,207 $415,108 $356,430 Old Trucks ,818, ,629 4,294,185 $467,207 $403,017 $333,112 New Trucks ,818, ,629 4,294,185 $467,207 $391,279 $311, ,818, ,629 4,294,185 $467,207 $379,882 $290,953 Table 2 Number of Trips per Mode ,818, ,629 4,294,185 $467,207 $368,818 $271,919 Trucks 9, ,818, ,629 4,294,185 $467,207 $358,076 $254, ,818, ,629 4,294,185 $467,207 $347,646 $237,505 Table 3 Road Maintenance Cost Savings per Truck Mile Diverted Off Roads ,818, ,629 4,294,185 $467,207 $337,521 $221,967 $ ,818, ,629 4,294,185 $467,207 $327,690 $207, ,818, ,629 4,294,185 $467,207 $318,145 $193, ,818, ,629 4,294,185 $467,207 $308,879 $181, ,818, ,629 4,294,185 $467,207 $299,883 $169, ,818, ,629 4,294,185 $467,207 $291,148 $158, ,818, ,629 4,294,185 $467,207 $282,668 $147, ,818, ,629 4,294,185 $467,207 $274,435 $138, ,818, ,629 4,294,185 $467,207 $266,442 $129, ,818, ,629 4,294,185 $467,207 $258,681 $120, ,818, ,629 4,294,185 $467,207 $251,147 $112, ,818, ,629 4,294,185 $467,207 $243,832 $105,455 Total Benefit $6,551,858 $4,323,174 1) Roadway maintenance costs per truck mile traveled were obtained from U.S. Department of Transportation Federal Highway Administration, Addendum to the 1997 Federal Highway Cost Allocation Study Final Report, Table 13 ( Cost per mile was calculated based on the assumption that trucks would be carrying a full load for half of the trip distance and would be empty for the other half (see Table 3). 2.) The recommended values per vehicle classification are available in 2000 dollars. This value was inflated to 2015 dollars using a factor 1.36 obtained from the Bureau of Labor Statistics Consumer Price Index Calculator (

11 SAFETY CRASH REDUCTION CALCULATIONS Analysis Year Old Truck VMT New Truck VMT Yearly Crash Decrease in Fatality Reduction Savings in Current Annual Truck VMT Rate (1) Dollars (2) 3% Discount 7% Discount ,818, ,629 4,294, ,394,300 $1,275,982 $1,138,164 Table 1 Average Trip Length (miles) ,818, ,629 4,294, ,394,300 $1,238,817 $1,063,705 Old Trucks ,818, ,629 4,294, ,394,300 $1,202,735 $994,116 New Trucks ,818, ,629 4,294, ,394,300 $1,167,704 $929, ,818, ,629 4,294, ,394,300 $1,133,693 $868,300 Table 2 Number of Trips By Mode ,818, ,629 4,294, ,394,300 $1,100,673 $811,495 Trucks 9, ,818, ,629 4,294, ,394,300 $1,068,615 $758, ,818, ,629 4,294, ,394,300 $1,037,490 $708,791 Table 3 WI Traffic Fatalities Per 100 Million VMT ,818, ,629 4,294, ,394,300 $1,007,272 $662, ,818, ,629 4,294, ,394,300 $977,934 $619, ,818, ,629 4,294, ,394,300 $949,450 $578,585 Table 4 Value of Injuries ,818, ,629 4,294, ,394,300 $921,796 $540,733 AIS Level Severity Fraction of VSL Unit value ($2013) ,818, ,629 4,294, ,394,300 $894,948 $505,358 AIS 0 no injury ,818, ,629 4,294, ,394,300 $868,881 $472,298 AIS 1 Minor $28, ,818, ,629 4,294, ,394,300 $843,574 $441,400 AIS 2 Moderate $441, ,818, ,629 4,294, ,394,300 $819,004 $412,523 AIS 3 Serious $987, ,818, ,629 4,294, ,394,300 $795,150 $385,535 AIS 4 Severe $2,500, ,818, ,629 4,294, ,394,300 $771,990 $360,314 AIS 5 Critical $5,574, ,818, ,629 4,294, ,394,300 $749,505 $336,742 AIS 6 Unsurvivable 1 $9,400, ,818, ,629 4,294, ,394,300 $727,675 $314,712 Total Benefit $19,552,887 $12,901,765 1) Fatality rates per 100 million CMV VMT involving commercial vehicles were obtained from the Fatal Analysis Reporting System and Federal Highway Administration's Highway Statistics ( ) ( content/uploads/2015/05/rsic crash data ruralfatality rate commercial vehicles by state.pdf) (see Table 3). 2) A monetary value for fatal crashes was provided in Table 1 of the TIGER Benefit Cost (BCA) Resource Guide March 27, 2015 ( benefit cost analysis bca resource guide) (see Table 4). This value was converted from 2013 to 2015 using a factor of 1.01 obtained from the Bureau of Labor Statistics Consumer Price Index Calculator (

12 ENVIRONMENTAL SUSTAINABILITY AIR QUALITY Analysis Year Old Truck Tonmiles (1) New Truck Tonmiles (1) New Train Tonmiles Old Truck CO 2 New Truck CO 2 New Train CO 2 Decrease in CO 2 (1) Emissions (g) (2) Emissions (g) (2) Emissions (g) (2) (g) Decrease in CO 2 (metric tons) Yearly Emissions Savings in Current Dollars (3) ,546,673 8,551,452 69,995,220 10,556,672,815 1,149,315,185 1,707,883,379 7,699,474,250 7,699 $381,047 $348,712 Table 1 Average Trip Length (miles) ,546,673 8,551,452 69,995,220 10,556,672,815 1,149,315,185 1,707,883,379 7,699,474,250 7,699 $396,600 $352,374 Old Trucks ,546,673 8,551,452 69,995,220 10,556,672,815 1,149,315,185 1,707,883,379 7,699,474,250 7,699 $404,376 $348,819 New Trucks ,546,673 8,551,452 69,995,220 10,556,672,815 1,149,315,185 1,707,883,379 7,699,474,250 7,699 $404,376 $338,659 Rail ,546,673 8,551,452 69,995,220 10,556,672,815 1,149,315,185 1,707,883,379 7,699,474,250 7,699 $419,929 $341, ,546,673 8,551,452 69,995,220 10,556,672,815 1,149,315,185 1,707,883,379 7,699,474,250 7,699 $427,706 $337,635 Table 2 Payload ,546,673 8,551,452 69,995,220 10,556,672,815 1,149,315,185 1,707,883,379 7,699,474,250 7,699 $435,482 $333,761 Truck (tons/truck) ,546,673 8,551,452 69,995,220 10,556,672,815 1,149,315,185 1,707,883,379 7,699,474,250 7,699 $443,259 $329,826 Rail (tons/railcar) ,546,673 8,551,452 69,995,220 10,556,672,815 1,149,315,185 1,707,883,379 7,699,474,250 7,699 $451,035 $325, ,546,673 8,551,452 69,995,220 10,556,672,815 1,149,315,185 1,707,883,379 7,699,474,250 7,699 $466,588 $327,256 Table 3 Number of Trips per Mode ,546,673 8,551,452 69,995,220 10,556,672,815 1,149,315,185 1,707,883,379 7,699,474,250 7,699 $474,365 $323,019 Trucks 9, ,546,673 8,551,452 69,995,220 10,556,672,815 1,149,315,185 1,707,883,379 7,699,474,250 7,699 $482,141 $318,752 Rail 3, ,546,673 8,551,452 69,995,220 10,556,672,815 1,149,315,185 1,707,883,379 7,699,474,250 7,699 $489,918 $314, ,546,673 8,551,452 69,995,220 10,556,672,815 1,149,315,185 1,707,883,379 7,699,474,250 7,699 $489,918 $305,300 Table 4 Pollution Emission (g/ton mile) ,546,673 8,551,452 69,995,220 10,556,672,815 1,149,315,185 1,707,883,379 7,699,474,250 7,699 $505,470 $305,818 Truck ,546,673 8,551,452 69,995,220 10,556,672,815 1,149,315,185 1,707,883,379 7,699,474,250 7,699 $513,247 $301,478 Train ,546,673 8,551,452 69,995,220 10,556,672,815 1,149,315,185 1,707,883,379 7,699,474,250 7,699 $521,023 $297, ,546,673 8,551,452 69,995,220 10,556,672,815 1,149,315,185 1,707,883,379 7,699,474,250 7,699 $528,800 $292,784 Table 5 Social Cost of Carbon 3% Discount ,546,673 8,551,452 69,995,220 10,556,672,815 1,149,315,185 1,707,883,379 7,699,474,250 7,699 $536,576 $288, ,546,673 8,551,452 69,995,220 10,556,672,815 1,149,315,185 1,707,883,379 7,699,474,250 7,699 $552,129 $288,152 Total Benefit $6,419,651 1) When computing emissions costs the vehicle ton miles were halved to account only for the distance lumber was being transported. Since the emissions rate in the no build scenario is greater this should be considered a conservative estimate. 2) 3) Carbon emissions for truck and rail were obtained from the Evaluation of Potential Transload Facility Locations in the Upper Peninsula (UP) of Michigan (page 17) ( (see Table 4). Carbon emissions were valued according to Table 1 of the TIGER Benefit Cost (BCA) Resource Guide March 2015 ( initiatives/tiger/tiger benefit cost analysis bca resource guide). The recommended yearly values are available in Table 5 in 2013 dollars. This value was inflated to 2015 dollars using a factor 1.01 obtained from the Bureau of Labor Statistics Consumer Price Index Calculator ( Annual Societal Cost of CO2/MT in 2013 $ 3% discount Year SCC

13 STATE OF GOOD REPAIR CAPITAL COST AND RESIDUAL PROJECT VALUE Analysis Year Base Capital Cost in Constant 3% Discount 7% Discount Dollars (1) Base RCV in Constant Dollars (3%) Base RCV in Constant Dollars (7%) 3% Discount 7% Discount 2016 $6,900,000 $6,699,029 $6,448,598 $0 $0 Table 1 Number of Railcars 2017 $6,900,000 $6,503,912 $6,026,727 $0 $ $0 $0 $0 $ $0 $0 $0 $0 Table 2 Cost per Railcar 2020 $0 $0 $0 $0 $120, $0 $0 $0 $ $0 $0 $0 $0 Table 3 Capital Costs per Year 2023 $0 $0 $0 $ % $6,900, $0 $0 $0 $ % $6,900, $0 $0 $0 $0 Total Project $13,800, $0 $0 $0 $ $0 $0 $0 $ $0 $0 $0 $0 Table 4 Remaining Capital Value Factors 2029 $0 $0 $0 $0 Initial Capital Remaining Remaining 2030 $0 $0 $0 $0 Costs in Factor (2) Factor (2) Capital Value Capital Value 2031 $0 $0 $0 $0 Cost Category Constant Dollars (1) (3%) (7%) in Constant Dollars in Constant Dollars 2032 $0 $0 $0 $0 Railcars (2018) $ 13,800, $ 10,512,576 $ 12,408, $0 $0 $0 $ $0 $0 $0 $ $0 $0 $0 $ $0 $0 $0 $ $0 $0 $10,512,576 $12,408,370 $5,486,434 $2,800,733 $13,202,941 $12,475,325 $5,486,434 $2,800,733 Net Cost (3%) $7,716,507 Net Cost (7%) $9,674,593 1.) It was assumed that all capital costs were incurred in years 2016 and The total capital cost of the project was divided evenly across these years. Initial capital cost were brought back to 2015 to determine present value. 2.) Remaining capital value factors were calculated using both a 3 percent discount rate and a 7 percent discount rate. This was based on an assumed service life of 50 years, an analysis period of 20 years, and the respective discount rate. RCV = A*(B C)/B A = (1+r)^n r = discount rate B = ((1+r)^L 1)/(r(1+r)^L) n = number of years in the analysis period C = ((1+r)^n 1)/(r(1+r)^n) L = expected lifespan of the asset

14 STATE OF GOOD REPAIR MAINTENANCE COSTS 3% Discount 7% Discount Annual Analysis Year Maintenance Cost $230,000 $210,483 $187,749 Table 1 Number of Railcars 2019 $230,000 $204,352 $175, $230,000 $198,400 $163, $230,000 $192,621 $153,259 Table 2 Annual Maintenance Cost per Railcar 2022 $230,000 $187,011 $143,232 $2, $230,000 $181,564 $133, $230,000 $176,276 $125, $230,000 $171,142 $116, $230,000 $166,157 $109, $230,000 $161,317 $102, $230,000 $156,619 $95, $230,000 $152,057 $89, $230,000 $147,628 $83, $230,000 $143,328 $77, $230,000 $139,154 $72, $230,000 $135,101 $68, $230,000 $131,166 $63, $230,000 $127,345 $59, $230,000 $123,636 $55, $230,000 $120,035 $51,914 Total Cost $3,225,393 $2,128,241 1) Annual maintenance costs were obtained from Escanaba and Lake Superior Railroad.