SRF No. 0158856 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
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 2017. 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 2037. The present value of all benefits and costs was calculated using 2015 1 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.
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 2002-2006. 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, 2015. 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.
Libby Ogard 4 May 26, 2015 8. 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 22.9 14.2 \\vs-mpls1\projdata\projects\8856\ts\nrtc TIGER\NRTC TIGER BCA 20150527.doc
Attachment A Benefit-Cost Analysis Worksheet
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) 2015 2018 115 11 2) 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) 90% @ 30 tons 10% @ 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
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 2017 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 2018 $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 $14,573,653 2019 $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 $13,646,711 2020 $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 $12,773,433 2021 $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 $11,950,448 2022 $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 $11,193,580 2023 $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 $10,479,821 2024 $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 $9,812,440 2025 $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 $9,188,405 2026 $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 $8,604,883 2027 $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 $8,064,681 2028 $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 $7,554,258 2029 $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 $7,076,919 2030 $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 $6,630,503 2031 $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 $6,208,145 2032 $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 $5,822,495 2033 $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 $5,457,252 2034 $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 $5,115,612 2035 $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 $4,796,036 2036 $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 $4,497,083 2037 $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 $6,448,598 2017 $6,900,000 $0 $0 $0 $6,900,000 $6,900,000 $6,503,912 $6,026,727 2018 $0 $230,000 $0 $0 $230,000 $230,000 $210,483 $187,749 2019 $0 $230,000 $0 $0 $230,000 $230,000 $204,352 $175,466 2020 $0 $230,000 $0 $0 $230,000 $230,000 $198,400 $163,987 2021 $0 $230,000 $0 $0 $230,000 $230,000 $192,621 $153,259 2022 $0 $230,000 $0 $0 $230,000 $230,000 $187,011 $143,232 2023 $0 $230,000 $0 $0 $230,000 $230,000 $181,564 $133,862 2024 $0 $230,000 $0 $0 $230,000 $230,000 $176,276 $125,105 2025 $0 $230,000 $0 $0 $230,000 $230,000 $171,142 $116,920 2026 $0 $230,000 $0 $0 $230,000 $230,000 $166,157 $109,271 2027 $0 $230,000 $0 $0 $230,000 $230,000 $161,317 $102,123 2028 $0 $230,000 $0 $0 $230,000 $230,000 $156,619 $95,442 2029 $0 $230,000 $0 $0 $230,000 $230,000 $152,057 $89,198 2030 $0 $230,000 $0 $0 $230,000 $230,000 $147,628 $83,363 2031 $0 $230,000 $0 $0 $230,000 $230,000 $143,328 $77,909 2032 $0 $230,000 $0 $0 $230,000 $230,000 $139,154 $72,812 2033 $0 $230,000 $0 $0 $230,000 $230,000 $135,101 $68,049 2034 $0 $230,000 $0 $0 $230,000 $230,000 $131,166 $63,597 2035 $0 $230,000 $0 $0 $230,000 $230,000 $127,345 $59,436 2036 $0 $230,000 $0 $0 $230,000 $230,000 $123,636 $55,548 2037 $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 22.92 14.21 1) 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.
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 2018 4,818,814 524,629 139,990,441 1,376,804 149,894 503,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,714,490 $1,529,309 Table 1 Average Trip Length (miles) 2019 4,818,814 524,629 139,990,441 1,376,804 149,894 503,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,664,554 $1,429,261 Old Trucks 496 2020 4,818,814 524,629 139,990,441 1,376,804 149,894 503,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,616,071 $1,335,758 New Trucks 54 2021 4,818,814 524,629 139,990,441 1,376,804 149,894 503,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,569,001 $1,248,372 Rail 442 2022 4,818,814 524,629 139,990,441 1,376,804 149,894 503,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,523,302 $1,166,703 2023 4,818,814 524,629 139,990,441 1,376,804 149,894 503,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,478,934 $1,090,376 Table 2 Payload 2024 4,818,814 524,629 139,990,441 1,376,804 149,894 503,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,435,858 $1,019,043 Truck (tons/truck) 32.6 2025 4,818,814 524,629 139,990,441 1,376,804 149,894 503,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,394,037 $952,377 Rail (tons/railcar) 83 2026 4,818,814 524,629 139,990,441 1,376,804 149,894 503,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,353,434 $890,072 2027 4,818,814 524,629 139,990,441 1,376,804 149,894 503,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,314,014 $831,843 Table 3 Number of Trips By Mode 2028 4,818,814 524,629 139,990,441 1,376,804 149,894 503,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,275,742 $777,423 Trucks 9,715 2029 4,818,814 524,629 139,990,441 1,376,804 149,894 503,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,238,584 $726,564 Rail 3,816 2030 4,818,814 524,629 139,990,441 1,376,804 149,894 503,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,202,509 $679,032 2031 4,818,814 524,629 139,990,441 1,376,804 149,894 503,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,167,484 $634,609 Table 4 Fuel Economy 2032 4,818,814 524,629 139,990,441 1,376,804 149,894 503,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,133,480 $593,093 Truck (mpg) 3.5 2033 4,818,814 524,629 139,990,441 1,376,804 149,894 503,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,100,466 $554,292 Rail (ton miles/gal) 278 2034 4,818,814 524,629 139,990,441 1,376,804 149,894 503,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,068,414 $518,030 2035 4,818,814 524,629 139,990,441 1,376,804 149,894 503,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,037,295 $484,140 Table 5 Diesel Cost ($/gal) 2036 4,818,814 524,629 139,990,441 1,376,804 149,894 503,563 $3,565,923 $388,225 $1,304,227 $1,873,470 $1,007,082 $452,467 $2.59 2037 4,818,814 524,629 139,990,441 1,376,804 149,894 503,563 $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) (http://www.fra.dot.gov/elib/details/l04317). 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 (http://www.motortrend.com/gas_prices/33/michigan/dickinson/iron_mountain/) (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.
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) 2018 78,546,673 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) 2019 78,546,673 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 496 2020 78,546,673 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 54 2021 78,546,673 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 442 2022 78,546,673 8,551,452 69,995,220 $15,553,797 $1,693,357 $1,887,626 $15,564,658 $12,655,491 $9,692,886 2023 78,546,673 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 2024 78,546,673 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) 32.6 2025 78,546,673 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) 83 2026 78,546,673 8,551,452 69,995,220 $15,553,797 $1,693,357 $1,887,626 $15,564,658 $11,244,240 $7,394,657 2027 78,546,673 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 2028 78,546,673 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 9,715 2029 78,546,673 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 3,816 2030 78,546,673 8,551,452 69,995,220 $15,553,797 $1,693,357 $1,887,626 $15,564,658 $9,990,361 $5,641,348 2031 78,546,673 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 2032 78,546,673 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 $ 0.20 2033 78,546,673 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 $ 0.03 2034 78,546,673 8,551,452 69,995,220 $15,553,797 $1,693,357 $1,887,626 $15,564,658 $8,876,307 $4,303,758 2035 78,546,673 8,551,452 69,995,220 $15,553,797 $1,693,357 $1,887,626 $15,564,658 $8,617,773 $4,022,203 2036 78,546,673 8,551,452 69,995,220 $15,553,797 $1,693,357 $1,887,626 $15,564,658 $8,366,770 $3,759,068 2037 78,546,673 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 2002. 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 (http://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/publications/freight_in_america/html/table_01.html). 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 (http://www.ops.fhwa.dot.gov/freight/freight_analysis/econ_methods/lcdp_rep/index.htm#toc112735358) (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 (http://www.bls.gov/data/inflation_calculator.htm).
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) 2018 4,818,814 524,629 4,294,185 $467,207 $427,561 $381,380 Table 1 Average Trip Length (miles) 2019 4,818,814 524,629 4,294,185 $467,207 $415,108 $356,430 Old Trucks 496 2020 4,818,814 524,629 4,294,185 $467,207 $403,017 $333,112 New Trucks 54 2021 4,818,814 524,629 4,294,185 $467,207 $391,279 $311,320 2022 4,818,814 524,629 4,294,185 $467,207 $379,882 $290,953 Table 2 Number of Trips per Mode 2023 4,818,814 524,629 4,294,185 $467,207 $368,818 $271,919 Trucks 9,715 2024 4,818,814 524,629 4,294,185 $467,207 $358,076 $254,130 2025 4,818,814 524,629 4,294,185 $467,207 $347,646 $237,505 Table 3 Road Maintenance Cost Savings per Truck Mile Diverted Off Roads 2026 4,818,814 524,629 4,294,185 $467,207 $337,521 $221,967 $0.08 2027 4,818,814 524,629 4,294,185 $467,207 $327,690 $207,446 2028 4,818,814 524,629 4,294,185 $467,207 $318,145 $193,874 2029 4,818,814 524,629 4,294,185 $467,207 $308,879 $181,191 2030 4,818,814 524,629 4,294,185 $467,207 $299,883 $169,337 2031 4,818,814 524,629 4,294,185 $467,207 $291,148 $158,259 2032 4,818,814 524,629 4,294,185 $467,207 $282,668 $147,906 2033 4,818,814 524,629 4,294,185 $467,207 $274,435 $138,230 2034 4,818,814 524,629 4,294,185 $467,207 $266,442 $129,187 2035 4,818,814 524,629 4,294,185 $467,207 $258,681 $120,735 2036 4,818,814 524,629 4,294,185 $467,207 $251,147 $112,837 2037 4,818,814 524,629 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 (http://www.fhwa.dot.gov/policy/hcas/addendum.htm). 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 (http://www.bls.gov/data/inflation_calculator.htm).
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 2018 4,818,814 524,629 4,294,185 0.147 1,394,300 $1,275,982 $1,138,164 Table 1 Average Trip Length (miles) 2019 4,818,814 524,629 4,294,185 0.147 1,394,300 $1,238,817 $1,063,705 Old Trucks 496 2020 4,818,814 524,629 4,294,185 0.147 1,394,300 $1,202,735 $994,116 New Trucks 54 2021 4,818,814 524,629 4,294,185 0.147 1,394,300 $1,167,704 $929,081 2022 4,818,814 524,629 4,294,185 0.147 1,394,300 $1,133,693 $868,300 Table 2 Number of Trips By Mode 2023 4,818,814 524,629 4,294,185 0.147 1,394,300 $1,100,673 $811,495 Trucks 9,715 2024 4,818,814 524,629 4,294,185 0.147 1,394,300 $1,068,615 $758,407 2025 4,818,814 524,629 4,294,185 0.147 1,394,300 $1,037,490 $708,791 Table 3 WI Traffic Fatalities Per 100 Million VMT 2026 4,818,814 524,629 4,294,185 0.147 1,394,300 $1,007,272 $662,422 3.42 2027 4,818,814 524,629 4,294,185 0.147 1,394,300 $977,934 $619,086 2028 4,818,814 524,629 4,294,185 0.147 1,394,300 $949,450 $578,585 Table 4 Value of Injuries 2029 4,818,814 524,629 4,294,185 0.147 1,394,300 $921,796 $540,733 AIS Level Severity Fraction of VSL Unit value ($2013) 2030 4,818,814 524,629 4,294,185 0.147 1,394,300 $894,948 $505,358 AIS 0 no injury 2031 4,818,814 524,629 4,294,185 0.147 1,394,300 $868,881 $472,298 AIS 1 Minor 0.003 $28,200 2032 4,818,814 524,629 4,294,185 0.147 1,394,300 $843,574 $441,400 AIS 2 Moderate 0.047 $441,800 2033 4,818,814 524,629 4,294,185 0.147 1,394,300 $819,004 $412,523 AIS 3 Serious 0.105 $987,000 2034 4,818,814 524,629 4,294,185 0.147 1,394,300 $795,150 $385,535 AIS 4 Severe 0.266 $2,500,400 2035 4,818,814 524,629 4,294,185 0.147 1,394,300 $771,990 $360,314 AIS 5 Critical 0.593 $5,574,200 2036 4,818,814 524,629 4,294,185 0.147 1,394,300 $749,505 $336,742 AIS 6 Unsurvivable 1 $9,400,000 2037 4,818,814 524,629 4,294,185 0.147 1,394,300 $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 (2002 2006) (http://www.ncwrpc.org/northwoodsrail/wp content/uploads/2015/05/rsic crash data 0803 2006 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 (http://www.dot.gov/policyinitiatives/tiger/tiger 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 (http://www.bls.gov/data/inflation_calculator.htm).
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) 2018 78,546,673 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) 2019 78,546,673 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 496 2020 78,546,673 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 54 2021 78,546,673 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 442 2022 78,546,673 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 $341,441 2023 78,546,673 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 2024 78,546,673 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) 32.6 2025 78,546,673 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) 83 2026 78,546,673 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 $325,837 2027 78,546,673 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 2028 78,546,673 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 9,715 2029 78,546,673 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 3,816 2030 78,546,673 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 $314,459 2031 78,546,673 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) 2032 78,546,673 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 134.4 2033 78,546,673 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 24.4 2034 78,546,673 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 $297,132 2035 78,546,673 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 2036 78,546,673 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 $288,436 2037 78,546,673 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) (http://digitalcommons.mtu.edu/cgi/viewcontent.cgi?article=1808&context=etds) (see Table 4). Carbon emissions were valued according to Table 1 of the TIGER Benefit Cost (BCA) Resource Guide March 2015 (http://www.dot.gov/policy 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 (http://www.bls.gov/data/inflation_calculator.htm). Annual Societal Cost of CO2/MT in 2013 $ Values @ 3% discount Year SCC 2015 45 2016 46 2017 47 2018 49 2019 51 2020 52 2021 52 2022 54 2023 55 2024 56 2025 57 2026 58 2027 60 2028 2029 61 62 2030 63 2031 63 2032 65 2033 66 2034 67 2035 68 2036 69 2037 71 2038 72
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 $0 115 2018 $0 $0 $0 $0 2019 $0 $0 $0 $0 Table 2 Cost per Railcar 2020 $0 $0 $0 $0 $120,000 2021 $0 $0 $0 $0 2022 $0 $0 $0 $0 Table 3 Capital Costs per Year 2023 $0 $0 $0 $0 2016 50% $6,900,000 2024 $0 $0 $0 $0 2017 50% $6,900,000 2025 $0 $0 $0 $0 Total Project $13,800,000 2026 $0 $0 $0 $0 2027 $0 $0 $0 $0 2028 $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) $ 13,800,000 0.76 0.90 $ 10,512,576 $ 12,408,370 2033 $0 $0 $0 $0 2034 $0 $0 $0 $0 2035 $0 $0 $0 $0 2036 $0 $0 $0 $0 2037 $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 2017. 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
STATE OF GOOD REPAIR MAINTENANCE COSTS 3% Discount 7% Discount Annual Analysis Year Maintenance Cost 1 2018 $230,000 $210,483 $187,749 Table 1 Number of Railcars 2019 $230,000 $204,352 $175,466 115 2020 $230,000 $198,400 $163,987 2021 $230,000 $192,621 $153,259 Table 2 Annual Maintenance Cost per Railcar 2022 $230,000 $187,011 $143,232 $2,000 2023 $230,000 $181,564 $133,862 2024 $230,000 $176,276 $125,105 2025 $230,000 $171,142 $116,920 2026 $230,000 $166,157 $109,271 2027 $230,000 $161,317 $102,123 2028 $230,000 $156,619 $95,442 2029 $230,000 $152,057 $89,198 2030 $230,000 $147,628 $83,363 2031 $230,000 $143,328 $77,909 2032 $230,000 $139,154 $72,812 2033 $230,000 $135,101 $68,049 2034 $230,000 $131,166 $63,597 2035 $230,000 $127,345 $59,436 2036 $230,000 $123,636 $55,548 2037 $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.