One of the critical ways that traffic congestion affects regional economies and national productivity is by affecting industry supply chains and distribution channels. Yet the ways that businesses respond to congestion have not been well understood and as a result, the implications for public policy and economic development planning have been ill defined. This new book chapter by Weisbrod and Fitzroy of EDR Group provides a framework and examples to explain the six ways that rising traffic congestion leads to broader business impacts:
1. Freight and Service Delivery – markets served, vehicle/fleet configuration, delivery cost, shipment schedule;
2. Business Scheduling – time schedule shifts, backhaul operation shifts, relief driver use;
3. Business Operations – inventory management, retail stocking, cross-docking;
4. Intermodal Connections – access to truck/rail/air/sea interchange terminals;
5. Worker Travel – schedule reliability
6. Business Location Issues
Each of these classes of business impact differentially affects different parts of the supply chain. These systematic differences are important because they vary by industry, affect the ability of affected industries to mitigate congestion costs through work-around operational changes, and ultimately affect local economic competitiveness in different ways. The chapter explains how effects on economic competitiveness can be modeled by distilling supply chain impacts into a manageable set of key changes that can be taken into account by economic impact models. An example is provided, using the TREDIS model to illustrate how scenarios to reduce congestion can lead to differential supply chain and regional economic growth impacts.
The chapter is entitled "Traffic Congestion Effects on Supply Chains: Accounting for Behavioral Elements in Planning and Economic Impact Models,"and can be found as Chapter 16 in the book, Supply Chain Management - New Perspectives, ISBN 978-953-307-633-1, edited by Sanda Renko.
Click Here to view the chapter.