August 2006

Transit in USDOT’sCongestion Initiative

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"Transportation is key to the productivity, and therefore the success, of virtually every business in America. Congestion and delay not only waste our time as individuals, they also burden our businesses and our entire economy with inefficiency and higher costs.”

- Secretary Norman Mineta, 2001

“The era of complacency about our declining transportation system performance is over. We need a new approach and we need it now.”

- Secretary Norman Mineta, May 2006

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Overview

• Congestion causes substantialand unacceptable costs

• Congestion can be reduced; the Congestion Initiative demonstrates how

• Initiative targets congestion in all modes

• Transit plays a critical role

• Transit substantially benefits from initiative

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Costs of Congestion

• Wasted time and fuel

• Costs to businesses

• Threat to the inventory revolution

• Damage to families and civic life

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Cost to U.S. Cities of Time and Fuel Lost to Congestion

Metro AreaTotal Cost in

Wasted Time & Fuel

($ in Millions)

Cost Per

Peak Traveler

Los Angeles-Long Beach-Santa Ana CA $10,686 $1,598

San Francisco-Oakland CA $2,604 $1,224

Washington DC-VA-MD $2,465 $1,169

Atlanta GA $1,754 $1,127

Houston TX $2,283 $1,061

Dallas-Fort Worth-Arlington TX $2,545 $1,012

Chicago IL-IN $4,274 $976

Detroit MI $2,019 $955

Miami FL $2,485 $869

Boston MA-NH-RI $1,692 $853

Phoenix AZ $1,295 $831

New York-Newark NY-NJ-CT $6,780 $824

Philadelphia PA-NJ-DE-MD $1,885 $641

Source: Texas Transportation Institute 2005 Urban Mobility Study

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National retailer keeps $2.5B merchandise on-hand, but adds 10 days of “buffer stock” to its inventory due to rail delays. Additional stock costs $2.7M annually.

In 2000, congestion at the Ambassador Bridge between Detroit, Michigan and Windsor, cost motor carriers between $150M and $200M.

Last year, congestion at the Otay Mesa and Tecate crossings, along the California-Mexico border, cost the U.S. economy $3.7B in output and almost 40,000 jobs.

Atlanta area distributor of pet food with an 11-truck fleet finds it difficult for one truck to make more than 12 daily deliveries; in 1984, one truck made as many as 20 deliveries each day.

Costs to U.S. Businesses

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A Threat to the Inventory Revolution

1 Source: Census Bureau2 Source: Bureau of Economic Analysis, “15th Annual State of Logistics Report” (June 2004)

• Since deregulation, U.S. business inventory requirements have fallen precipitously, making the U.S. supply chain the most efficient in the world

• This reduction has reduced total logistics costs and improved U.S. corporate earnings

• Macroeconomists assert that these trends have played a major role in supporting U.S economic growth

• Growing congestion will require businesses to carry more inventory, effectively reversing these trends

Durable goods inventory/shipments ratio 1

Logistics costs 2

(as % of the goods component of GDP)

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Costs to Families and Civic Life

• More time in the car means less time with families and friends…

– According to a survey by the Washington Family Council, 55% of those surveyed with children at home miss one or more family functions per week due to traffic congestion

• …and less time in the community

– “the evidence suggests that each additional 10 minutes in daily commuting time cuts involvement in community affairs by 10%” (Robert Putnam, Bowling Alone, 2000)

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Causes of Highway Congestion

• Fundamental causes

– No mechanism to manage use and prevent gridlock

– The price of highway travel (gas taxes, registration fees, etc.) bears little or no relationship to the cost of congestion

• Secondary causes

Source: “An Initial Assessment of Freight Bottlenecks on Highways.”FHWA White Paper (Oct. 2005)

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USDOT’s Policy Response Targets Congestion in All Modes

1. Relieving urban congestion through Urban Partnership Agreements• Congestion pricing

• New or expanded bus rapid transit (BRT)

• Expanded telecommuting/flexible scheduling

• Expedited completion of key capacity projects

2. Encourage States to enact public private partnership laws

3. Develop new interstate highway and rail capacity through a “Corridors of the Future” competition

4. Reduce bottlenecks at major freight gateways, including Southern California

5. Find and implement solutions to border congestion

6. Accelerate major airport capacity projects, reform airport pricing policies and overhaul air traffic control system

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• Transit component in Urban Partnership Agreements– BRT/express bus service to complement road pricing

• Emphasis on BRT and express bus for short-term results– Initiative focuses on achieving results in the short term (1-3yr)– Rail systems are valuable, but take years to design and construct– BRT or express bus service could provide a quicker alternative– Increased transit service meets needs of former peak period drivers

• Incorporation of congestion relief into New Starts and Small Starts programs

– Proposed new evaluation criterion: Is the proposed investment part of a comprehensive congestion reduction strategy (including pricing)?

– Criterion included in Proposed Interim Guidance for Small Starts

Role of Transit in Congestion Initiative

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Pricing, Transit, and the Virtuous Cycle

Highertransit

ridership

Lesshighway

congestion

Highertransit speeds& more reliabletransit service

Higher transitridership;

lower costsfor transitproviders

More frequentservice &

lower fares

Congestionpricing

Increased pricefor peak period

highway use

Expandedmobility

The Virtuous Cycle

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The Case for Congestion Pricing

• It can be implemented quickly and cost-effectively

• It takes advantage of travel time flexibility(most rush hour drivers aren’t commuters)

• It reduces traffic and increases travel speeds

• It increases vehicle throughput– During rush hour on CA SR-91, the priced lanes carry twice

as many vehicles/lane as the adjacent toll-free lanes

• A little less traffic can mean a lot less delay– In a recent UK study, a 9% decrease in urban traffic was

projected to yield a 52% decrease in traffic delay0

200

400

600

800

1000

1200

1400

1600

1800

Priced lanes Unpricedlanes

Veh

icle

s/la

ne/h

r

Peak period throughput on California SR-91,

priced vs. unpriced lanes

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Benefits to Transit of Congestion Pricing

• Free flow travel improves bus performance & reliability– London: Since pricing, avg. delay 30%, avg. road speed 37%,

bus delay 50%– Stockholm: Since pricing, traffic 25%– Singapore: Since pricing, peak traffic 13%, avg. road speed 20%– Minneapolis: 85% of users happy with priced lanes’ traffic flow

(allows speeds of 50MPH through 95% of peak travel period)

• Congestion pricing increases transit ridership– By increasing the relative cost of driving, pricing incentivizes

travelers to use other travel modes, including transit– London: Since pricing, bus ridership 14%, subway ridership 1%– Stockholm: Since pricing, demand for public transportation 8%

• Potential to dedicate some toll revenues to transit funding

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PPPs and Transit

• As the London Underground demonstrates, some transit projects might benefit from public private partnerships (PPPs)

• SAFETEA-LU Sec. 3011(c) authorized DOT to create a pilot program examining the costs and benefits of transit PPPs

• In March FTA solicited comments on Public Private Partnership Pilot Program (Penta-P) via Federal Register

• DOT would like to schedule a separate briefing for APTA’s leadership on transit PPPs

Comments, Questions and Discussion