Transportation Systems Management and Operations Benefit-Cost Analysis Compendium

CHAPTER 1. INTRODUCTION

The Transportation Systems Management and Operations Benefit Cost Analysis Compendium (Compendium) is a continuation of the series of reference documents and tools developed by the Federal Highway Administration (FHWA) Office of Operations designed to assist planners and operations professionals in evaluating the benefits and costs of transportation systems management and operations (TSMO)⁽¹⁾ strategies and technologies.  This body of work is part of a larger initiative in the Office of Operations referred to as Planning for Operations and designed to better integrate planning and operations activities.

Project Background and Purpose

Due to an increasingly competitive fiscal environment, state, regional, and local transportation planning organizations around the country are being asked more than ever to justify their programs and expenditures. TSMO programs have not escaped this scrutiny, and project managers are routinely asked to rank their projects against traditional expansion and other TSMO projects, as well as conduct other "value-related" exercises.

This requirement can put TSMO projects at a disadvantage since many specialists in this arena have limited experience in performing benefit cost analyses (BCA); and often, many of the established tools and data available for conducting BCA for traditional infrastructure projects are poorly suited to analyzing the specific performance measures, project timelines, benefits, and life-cycle costs associated with operational improvements.

In response to the needs of system operators to conduct these analyses, a number of initiatives have been undertaken in recent years at the national, State, and regional levels to develop enhanced analysis tools, methodologies, and information sources to support BCAs for many specific road weather management (RWM) strategies. It often remains difficult, however, for practitioners to weed through the multiple information and guidance sources in order to understand and apply an appropriate methodology for meeting their specific analysis needs.

The Transportation Systems Management and Operations Compendium

This Compendium is a collection of cases from across the country where BCAs have been applied to one or more TSMO technologies/strategies. The actual project evaluations involve the use of custom spreadsheets developed by the agency or its contractors, or the application of available software tools to the BCA. The Compendium also includes hypothetical cases designed to demonstrate how BCA can be used for one or more TSMO technologies/strategies. FHWA has developed a sketch planning BCA tool, called the Tool for Operations Benefit Cost Analysis (TOPS-BC), for application to TSMO projects. For the hypothetical cases TOPS-BC is used to assist in the measurement of benefits and costs and in the calculation of the benefit-cost ratio. More information about TOPS-BC can be found at https://ops.fhwa.dot.gov/plan4ops/topsbctool/index.htm.

Each case demonstrates how planners have or could in the future conduct a BCA on one or more TSMO technologies or strategies. There are over two dozen cases presented in the Compendium and they cover a wide range of TSMO technologies and strategies where each case addresses one or more specific issues or procedures. Readers should become familiar with the Operations Benefit/Cost Analysis Desk Reference (Desk Reference), which is described below, and use it in conjunction with the Compendium. The technologies included in the Compendium are discussed in more detail in the Desk Reference.

The Operations Benefit/Cost Analysis Desk Reference

The FHWA Office of Operations developed the Operations Benefit/Cost Analysis Desk Reference   in recognition of practitioners' need for relevant and practical guidance on how to effectively conduct a BCA for a wide spectrum of transportation system management and operations strategies.  The Desk Reference provides practitioners with relevant guidance on how to effectively and reliably estimate the benefits and costs of TSMO strategies. 

The Desk Reference meets the needs of a wide range of practitioners looking to conduct a BCA of operations strategies. The guidance provided in the Desk Reference includes basic background information on conducting a BCA, such as basic terminology and concepts intended to support the needs of practitioners just getting started with a BCA who may be unfamiliar with the general process. Building from this base, the Desk Reference also describes some of the more complex analytical concepts and latest research in order to support more advanced analyses. Some of the more advanced topics include capturing the impacts of travel time reliability; assessing the synergistic effects of combining different strategies; and capturing the benefits and costs of supporting infrastructure, such as traffic surveillance and communications.

Management and Operations Strategies

Together, the Desk Reference and this Compendium are intended to support the analysis of a wide range of the available TSMO strategies. These "strategies" include the direct application of technologies and infrastructure to roadside application (e.g., deployment of freeway service patrol vehicles), as well as many harder-to-define, nonphysical strategies (e.g., interagency coordination). While it is not possible to comprehensively provide guidance on every type and variation in application of the many diverse TSMO strategies (especially in light of the fact that new strategies and technologies are constantly emerging), TSMO strategies covered in the Compendium and/or the Desk Reference include the physical strategies listed below (see Chapter 3 of the Desk Reference for a more complete description of the TSMO strategies and sub-strategies that comprise each category):

1. Arterial Signal Coordination – Improves the coordination of traffic signal timing to improve traffic flow and reduce delay. 
2. Arterial Transit Signal Priority – Provides the capability to expand or accelerate the green time allotted to traffic signals when a transit vehicle is detected approaching the intersection. 
3. Transit Automatic Vehicle Location – Uses transponder and Global Positioning System (GPS) technologies to track the real-time location of transit vehicles.  Compiled information is typically used to better manage the transit assets or provide traveler information to passengers.
4. Ramp Metering – Applies signals to on-ramp or freeway-to-freeway ramp locations to control and manage the flow of vehicles into the merge area.
5. Incident Management – Various combinations of incident detection, location verification, communication/coordination, and response strategies designed to lessen the time required to respond and clear traffic incidents.
6. Traveler Information
   1. Pre-trip – Traveler information provided through several different available channels (e.g., telephone, web-based, broadcast-media, social-media) intended to reach individuals prior to the initiation of their trip so that they may make informed decisions on destination, mode, route, time of travel, and even whether to forego the trip.
   2. En-route – Traveler information intended to reach the recipients while they are traveling.  The information may be provided through several different channels, including telephone, in-vehicle system, roadside dynamic message signs (DMS) or highway advisory radio (HAR), or broadcast-media. 
7. Work Zone Management – Lessens the congestion, delay, and safety issues associated with construction or maintenance work zones. 
8. High-Occupancy Toll (HOT) Lanes – Allows single-occupancy vehicles (SOV) to pay a toll to use underutilized high-occupancy vehicle (HOV) lane capacity.  The tolls charged may vary according to time-of-day schedules, or may be dynamically assessed in response to traffic conditions and available HOV lane capacity. 
9. Speed Harmonization – Involves the implementation of variable speed limits and the communication of those limits through roadside signs.  The speed limits are modified according to congestion levels to lessen stop-and-go conditions and lower the speed of vehicles as they approach downstream bottlenecks. 
10. Hard Shoulder Running – Involves allowing vehicles to travel on the shoulder facilities of roadways, often for isolated sections of roadway or limited times of operation.  The availability of the shoulder for use is often communicated through the use of overhead gantries or roadside DMS. 
11. Travel Demand Management – Includes a number of strategies that may be employed to lessen travel demand (number of trips).  These may include physical strategies (e.g., employer-based vanpools), as well as nonphysical, policy-based strategies (e.g., alternative work hours).

This Compendium provides brief summaries of the BCAs of TSMO technologies undertaken by transportation agencies, educational institutions, and other organizations. These examples evaluate the benefits and costs of TSMO deployments and identify the lessons that can be learned from the BCA. Hypotheticals examples have been drawn from actual deployments, in part or whole, to demonstrate how the TOPS-BC model or alternative tools such as the ITS Deployment Analysis System (IDAS) can be used and modified to support a TSMO BCA.

Following this introduction, Chapter 2 provides a brief summary of the fundamentals of the BCA as applied to transportation projects in general and to TSMO projects in particular. Chapter 3 introduces several BCA tools developed by FHWA and others for transportation applications and TSMO projects. The final chapters of this Compendium contain a number of case studies illustrating how agencies have applied BCA to TSMO projects.