The effects that a project has on business operating cost are net profitability, and household cost of living. Extreme care must be taken to avoid double counting of economic cost savings that are already counted in travel time, travel cost, emission or safety benefits. In general, these are additional economic effects that accrue to non-travelers who are nonetheless dependent on transportation system performance.
Examples
- A new highway increases the accessibility of a local community to outside communities and regions. For businesses, this can mean access to a greater selection of specialized workforce skills and specialized materials, and in some cases a greater range of customers for their specialized products. That may enable greater "economies of scale" in production processes, which means higher productivity through lower costs per unit of output.
- For workers, enhanced accessibility can also mean availability of broader job options that may be a better fit to their skills, while residents have access to broader choices of recreation and culture, as well as consumer goods and services. That may directly increase net income, or indirectly increase wealth as a result of increased housing values.
- An upgrade to transportation facilities and services leads to greater reliability of travel time. For businesses, this can mean reduced need to pad delivery schedules to allow for delay uncertainty, leading to tighter scheduling that increases worker and vehicle productivity. It can also mean reduced need for keeping backup inventory. The end result may be a reduction in logistics and scheduling costs that is above-and-beyond the savings in average travel time costs.
- New transportation links between cities and ports, and new types of inter-modal facilities and services at those locations, make it possible for new patterns of international trade to develop. In some cases, the new links may improve the efficiency of business customer/client visits as well as product deliveries. The end result may be greater productivity for businesses at the affected sites.
Relationship to Other Benefits and Costs
In all of the above examples, the benefits flow to parties that depend on transportation facilities and services for their activities. In some cases, the ultimate beneficiary is the business operation that can achieve operating cost savings or greater productivity (output per unit of cost). In the case of cargo deliveries, the beneficiaries may be senders and receivers rather than the transportation company that actually does the traveling.
It is also possible to account for many business operations and scheduling benefits, as well as logistics benefits and production economies of scale, as additions to the valuation of travel time benefits for truck trips. Alternatively, they can be addressed separately as additional economic benefits.
Finally, it is important to note that there are many broader forms of economic impacts on communities, regions and states — in which transportation facilities lead to business expansion, additional job creation and additional tax revenues. Those economic impacts reflect a combination of the productivity benefits discussed here and broader business attraction impacts that also affect local economies. This is discussed further in the separate section on economic impact analysis.