Economic Impact of Traffic Incidents on Businesses

Incidents and the resulting congestion on Interstate highways add uncertainty to travel times, imposing significant costs on business operations and regional economic development. This paper describes the results of an effort to quantify the economic impact of traffic incidents on North Carolina's Interstate facilities. The businesses to be interviewed were carefully chosen on the basis of their substantial shipping needs. Analyses of 29 selected businesses, including carriers, were conducted and showed an average hourly cost of unexpected delay of $145 to the businesses surveyed (2005 dollars). A more focused analysis by sector and region showed that various types of businesses and regions differ in their sensitivities to unexpected congestion. Of the industrial sectors sampled, transportation and warehousing had the highest hourly costs, followed by the retail trade and manufacturing sectors. Case studies further showed that although a majority used information technology to track shipments, few businesses sought preshipment traffic information or were aware of the traffic information services available. The businesses surveyed generally expressed a desire for better communication and information services from the state department of transportation. It is clear from this study that businesses incur costs because of unexpected delays on the Interstate system, adding to the cost of production. The implications of the results are discussed.