A.10 – Transport Technical and Economic Performance Indicators

Authors: Dr. Jean-Paul Rodrigue and Dr. Claude Comtois

Performance indicators are widely used to empirically assess the technical performance of different transport modes, namely their capacity to move passengers or freight around.

1. Network and Operational Indicators

Multimodal transportation networks rest upon a combination of costs and performance of transport modes, or what is referred to as economies of scope. For instance, a container shipped overseas from its origin can go from road to maritime to rail and road again before reaching its destination. The arrangement of this sequence is seeking the lowest transport cost. For passengers, a commuter may also undertake a journey involving a sequence of modes such a walking, riding a bus and then a subway. The providers of transportation services, therefore, require quantitative tools for decision-making in order to compare performances of various transport modes and transport networks. Time-efficiency becomes a set imperative for both freight and passenger mobility in private as well as in public sector activities.

Performance indicators are widely used to empirically assess the technical performance of different transport modes, namely their capacity to move passengers or freight around. They are ratios since a value such as traffic or capacity does not express a performance, but the ratio of traffic over capacity is a performance indicator. Technical performance should not be confused with economic performance, which mostly relates to how much transport output (e.g. traffic) can be supported with specific inputs (e.g. capital or labor) and how profitable a service is. Performance measures are relative, implying that they mean little by themselves and must be interpreted within a comparative framework, which can be across space (e.g. systems or jurisdictions) or across time (e.g. seasonal variations).

Basic technical performance calculations can be particularly useful for the analysis of global network performance as well as for modal comparison, analysis, and evaluation by bridging both physical attributes (length, distance, configuration, etc.) and time-based attributes (punctuality, reliability, etc.) of networks. Some indicators are currently used to measure the technical performance of freight and passenger transport:

  • Passenger or freight density. A standard measure of transport efficiency representing the number of passengers or units of freight per unit of distance.
  • Mean distance traveled. A measure of the ground covering capacity of networks and different transport modes and used to assess the relative performance of transport modes.
  • Mean per capita ton output (freight) or mean number of trips per capita (passenger). A measure that for freight reflects the material intensity of an economy. Economies having an important manufacturing sector tend to have more tonnage output per capita than service-based economies. For passengers, the measure reflects mobility levels.
  • Mean utilization coefficient. A measure comparing the frequency a transport asset is being used over the total period this asset is available. Especially useful with the increasing complexity of logistics associated with containerization, such as the problem of empty returns. It can also be used to measure transit ridership.

More specifically, such indicators are useful by allowing cross-temporal analysis of a transport nexus or given transport modes. Another fundamental dimension of technical performance concerns operations and relate to specific parts of the transport network such as a segment or a terminal. The most salient indicators include:

  • Transport time / speed / turnover. An expression of the velocity of passengers or freight along segments (speed) and at terminals or distribution centers (turnover).
  • Reliability. The consistence of operations within defined parameters such as capacity, safety, duration and punctuality.
  • Punctuality. The on-time performance of transport services. Particularly important for scheduled services such as flights, public transit, railways and containerized maritime shipping.
  • Load factor. The level of transport asset utilization of modes and terminals in relation to their capacity. High load factors may be indicative of congestion and limited capacity to handle additional traffic.

2. Road Traffic Performance

Technical performance indicators have dominantly been applied to road transportation, although other modes such as air and maritime transport are also increasingly monitored. There are two major operational types of traffic influencing the capacity of modern roads, which are continuous and discontinuous traffic. The capacity of a road is the maximal hourly flow of people or vehicles that can be supported by any link. This value is influenced by three major concepts.

  • Road conditions. Physical attributes of the road such as its type (paved, non-paved), number of lanes, width of lanes, design speed and the vertical and horizontal alignment.
  • Traffic conditions. Attributes of the traffic using the road such as its temporal distribution and its direction.
  • Control conditions. Attributes of the control structures and existing traffic laws such as speed limit, one-ways and priority.

Considering the above conditions, the capacity of a road is about 1,000 vehicles per lane per hour for continuous traffic roads and about 500 vehicles per lane per hour for discontinuous traffic roads. The operational goal of traffic planning is thus to make so that road, traffic and control conditions ensure an adequate, if not optimal service. Several guidelines will favor such a goal such as wide enough lanes for a safe maximum speed in both directions and limited grades to limit speed differentials. The capacity of a road is also linked to the level of service, which is a qualitative measure of operational conditions of roads and its perception by users. The spatial distribution of bottlenecks, notably within urban areas, also has a strong impact on capacity as they are the chocking points of the whole road transport system. Traffic can be valued according to three primary measures, which are speed, volume or density:

  • Speed is a rate of distance covered per unit of time. The average speed is the most commonly used measure to characterize traffic on a road.
  • Volume is the number of vehicles observed at a point or a section over a period of time.
  • Density is the number of vehicles that occupies a section at any point in time. For example, a road section having a volume of 1,000 vehicles per hour with an average speed of 50 km/hour will have a density of 20 vehicles/km.

The critical density is the density at which the volume is maximal, and the critical speed is the speed at which the volume is maximal.

3. Economic Performance Indicators

Undoubtedly, transportation plays a considerable role in the economy supporting mobility at all geographic scales. It is an integral constituent of the relationships between production and consumption. Economic impact indicators help understand the relationships between transport systems and the economy as well as to assess the economic weight of this type of activity. Maritime transport is still the most cost-efficient way to transport bulk merchandise over long distances. On the other hand, while air transport is recognized for its unsurpassed time-efficiency versus other modes over long distances, it remains an expensive option. Thus, vertical integration, or the involvement in transportation by firms outside the sector, illustrates the search for these two efficiency attributes by gaining direct control over inputs.

The relationship between transport systems and their economic impacts becomes clear when looking at restructuring patterns which carriers and firms are undergoing. Structural mutations, best illustrated by the popularity of just in time practices, are fueled by two opposing yet effective forces: carriers seek to achieve economies of scale while having to conform to an increasingly customized demand.

Factor substitution is a commonly adopted path in order to reduce costs of production and reach greater efficiency. Containerization by substituting labor for capital and technology is a good illustration of the phenomenon. The most common measures of factor substitution are:

  • Output / Capital ratio is commonly used to measure the capital productivity of transportation.
  • Output / Labor ratio performs the same productivity measurement but for the labor input.
  • Capital / Labor ratio aims at measuring which factor predominates within the relationship between capital and labor productivity.

The above set of indicators therefore provides insights on the relative weight of factors within the production process. More scale-specific indicators can also be used to evaluate the role of transport within the economy. Knowing freight transport both contribute to and is fueled by a larger economic context, freight output can be confronted against macro-economic indicators:

  • Output / GDP ratio measures the relationship between economic activity and traffic intensity.
  • Transport sector income / Local income ratio evaluates the share of the transport industry in the local economy (e.g. municipal or state level).
  • Output / Local income ratio is a measure of the relative production value of the transport industry output.

The goals behind the application of such indicators are as varied as they are numerous. Efficiency indicators constitute valuable tools to evaluate transport projects viability as well as to measure investment returns and cost / subsidy recovery of transport systems. Input-output analyses making use of some of the above indicators are also instrumental to the development of economic impact indexes and productivity assessment concepts such as the Total Factor Productivity (TFP). TFP is the ratio of inputs at the aggregate level over the aggregated outputs. It allows to identify sources of productivity gains. As a element of the aggregate inputs of an economy, transportation is therefore a total productivity factor and increases in its productivity results in additional economic output.


Bibliography

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