CHAPTER 6. CVISN COST ANALYSIS

The purpose of the cost analysis component of the CVISN MDI evaluation is to assess the effects CVISN is likely to have on CVO costs to states and motor carriers. Specifically, this analysis covers deployment and annual operating costs (i.e., nonrecurring and recurring costs, respectively) associated with credentials administration and two aspects of roadside enforcement operations: electronic screening and safety information exchange. In addition to supporting the CVISN Benefit/Cost Analysis (Chapter 8), the cost data presented in this chapter constitute part of the information needed by states and motor carriers to make CVISN implementation decisions. Therefore, the intended audience for this cost analysis chapter consists of

· State administrators responsible for CVO activities, especially those embarking on CVISN deployment

· Motor carrier managers, especially those considering electronic credentialing.

We begin in Section 6.1 with a brief overview of the major findings. The study goals and cost measures are described in Section 6.2 and the approaches to data collection and analysis are summarized in Section 6.3. Section 6.4 contains a summary of the deployment and annual operating costs to states for various components of CVISN Level 1 deployment. The detailed cost breakdowns are provided in Section 6.5. Projected costs and cost savings to states under various CVISN deployment scenarios are presented in Section 6.6. Motor carrier costs related to electronic credentialing are discussed in Section 6.7. Finally, Section 6.8 summarizes and discusses the relevance of cost information that was published in previous studies. Supporting appendices in Volume II provide additional background on state deployment status (Appendix B.1), interview guides for states and motor carriers (Appendix B.2), and cost elements/calculations used in this chapter (Appendix B.3).

Limitations of Findings

To obtain information for this chapter, Battelle staff conducted in-person interviews with officials from commercial vehicle regulatory and enforcement agencies in four states that have actually deployed CVISN technologies. Contacts were also made with a limited number of motor carriers who participated in pilot studies of CVISN credential systems. The methodology for analyzing and presenting the cost information acknowledges that each participating state has unique characteristics and policies. No attempt was made to determine if these costs are applicable to other states. Officials evaluating CVISN technologies may benefit from contacting their counterparts in states that have begun deployment, to determine the extent to which each state’s needs and expectations are comparable to those of their own state.

The results presented in this chapter have important limitations: only a few states have enough experience with CVISN to provide adequate data for this analysis. Thus, the study focused on those states with the most advanced deployment of the system or that were expected to make significant progress in deploying CVISN for credentialing and/or roadside enforcement operations. Because this is the first study of CVISN systems as actually deployed, it is expected that the preliminary findings presented here will be expanded and refined in later DOT publications as deployment proceeds.

Two prototype states (Maryland and Virginia) and three pilot states (Kentucky, Connecticut, and Oregon) were initially targeted for date collection efforts. Kentucky, Maryland, and Connecticut were the three main states whose cost data are presented in this analysis. Unfortunately, no cost data were available from Oregon and only limited data came from Virginia. Some additional cost data came from separate studies of the I-95 Corridor Coalition states (Connecticut, Maryland, Massachusetts, New York, Pennsylvania, and Rhode Island) and of seven states participating in a study of the International Registration Plan (IRP) Clearinghouse (Arizona, Arkansas, California, Kansas, Kentucky, Maryland, and Virginia).

Some states targeted for data collection provided detailed data from their commercial vehicle operations, highway infrastructure, and CVISN systems. These data, as analyzed here, should provide sufficient cost information for future decision-makers in other states to determine the applicability of costs from this evaluation to their situations. Wherever possible, costs are expressed as recognizable units (e.g., one patrol car, one weigh station, statewide computer system) associated with key investments or activities. Costs are also presented at various layers or levels of deployment (e.g., CVISN Level 1). States attempting to adapt or extrapolate the costs and cost elements reported here should first determine if there are significant differences in operating procedures compared with the states participating in this study.

6.1 Overview of Findings

Costs to States

Credentialing. The analysis of actual deployment and operation costs in two states, Kentucky and Maryland, demonstrated that electronic credentialing could offer states substantial cost savings, depending on the level of motor carrier participation. Up-front investments averaging $700,000 were required for one state to deploy an end-to-end IRP credentialing system. However, annual operating costs to the states, which ranged from $63 to $138 for each carrier account before CVISN, can be reduced by almost 35 percent for each participating carrier. Assuming states can achieve a 50 percent participation rate by motor carriers, the annual cost savings to each state after deployment is expected to be between $40,000 and $140,000. Table 6‑3 (below) and Section 6.4 summarize the unit costs to the states, Section 6.5 details the unit cost derivations, and Section 6.6 presents the statewide cost projections.

Both states were in the process of deploying electronic credentialing systems for IFTA. It was estimated that, for the additional investment of $65,000, states could realize additional annual cost savings of approximately $150,000, assuming 50 percent of the accounts file IFTA credentials electronically. The deployment cost for IFTA electronic credentialing is lower than the cost for a comparable IRP system in part because IFTA processing uses many of the same systems developed for IRP.

Additional cost savings are expected when trip-related credentials (HAZMAT, OS/OW, etc.) are filed electronically. However, neither state had begun deployment of these systems.

Electronic Screening. For electronic screening at the roadside, the one-time capital cost to deploy basic screening equipment (AVI and WIM) at a single weigh station was reported by Kentucky to be $150,000. This does not include the cost of land, buildings, or fixed scales. Upgrading this site further to electronic snapshot capability was reported to result in nearly $375,000 in one‑time deployment costs. The cost to equip additional sites with the same electronic screening capability would be lower, because part of the start-up cost at the first site is for software development that would not need to be repeated. Incremental costs for full electronic screening capabilities at one site were reported to be approximately $300,000, a savings of $225,000 per site compared to the cost of the first screening site. Annual capital replacement and operating costs would increase by approximately $75,000 per site to support full CVISN electronic screening.

To illustrate the cost impacts, assume that a state wished to equip and staff five existing roadside weigh stations for CVISN electronic screening. Based on pre-CVISN annual capital and operating costs, plus salary and benefits for three full-time staff per weigh station, a state would already be incurring nearly $700,000 in annual costs for these five sites before CVISN technology was introduced. The deployment costs for full electronic screening capabilities at five sites is approximately $1,725,000. The total annual capital replacement and operating costs at these five sites (not counting one-time start-up costs) would increase by nearly $400,000. Table 6‑3 (below) and Section 6.4 summarize the unit costs to the states, Section 6.5 details the unit cost derivations, and Section 6.6 presents the statewide cost projections.

Safety Information Exchange. For Safety Information Exchange at the roadside, a statewide upgrade to Aspen capability was reported by Connecticut to cost the state $31,000 for infrastructure upgrades, plus $4,800 for equipment and training for each enforcement unit (one patrol car and one officer or inspector). Upgrading to wireless telecommunication and SAFER mailbox capability adds an additional cost of $1,000 per unit. Statewide deployment of CVIEW or equivalent was reported by Kentucky to cost $325,000. Accompanying increases in annual capital and annual operating costs (again assuming no change in the state’s labor costs for enforcement patrol officers/inspectors following CVISN deployment) were reported to be approximately $88,000 per state and approximately $1,400 per mobile unit.

Assuming a state has 50 mobile enforcement units, the one-time start-up costs for full CVISN deployment of safety information exchange statewide (including wireless telecommunication, SAFER Data Mailbox, and CVIEW) would be $650,000. Looking at post‑CVISN annual operating and annual capital costs, a statewide deployment including 50 mobile units would result in increased costs to the state of $160,000, which is only 6 percent of the estimated $2.7 million that such a state spends in labor and annual operating costs for 50 officers or inspectors and their vehicles pre-CVISN. Table 6-3 (below) and Section 6.4 summarize the unit costs to the states, Section 6.5 details the unit cost derivations, and Section 6.6 presents the statewide cost projections.

Summary of Costs to Motor Carriers

Motor carriers participating in pilot tests of electronic credentialing reported saving between 60 and 75 percent of their costs for credentialing, with minimal start-up costs. For the motor carrier, only a desktop personal computer is required; many carriers already use computers with internet access in their business. Straightforward user interfaces are assumed capable of keeping training time and costs to a minimum. The reported time savings to the motor carriers is also substantial, at greater than 60 percent. One of the best benefits of electronic credentialing is the capability for carriers to print their own credentials without waiting for the mail or traveling to the state agency offices. This enables carriers to put new vehicles into operation more quickly. Savings are expected to be greater for new credentials than for renewals, because of the additional data entry that accompanies new applications processed via paper-based systems. Electronic credentialing, which offers database access to carrier information, processing templates, and automated error checking capabilities, promises to yield great savings to motor carriers. Section 6.7 presents the detailed results of the motor carrier cost evaluation.

Determining motor carrier costs and cost savings related to roadside enforcement activities was outside the scope of this evaluation project due to funding limitations – especially when considering the technical challenges in getting accurate operations cost data from motor carriers. However, some additional information on motor carrier costs, based on literature-derived projections, is presented in the benefit/cost analysis in Chapter 8.

6.2 Study Goals and Measures for CVISN Cost Analysis

The cost analysis considered three major cost-related questions:

1. What are/were the baseline costs associated with CVO processes prior to CVISN technology deployment?

2. What are the one-time start-up costs to the states to deploy CVISN systems, and what are the key drivers or major elements contributing to those costs?

3. What annual capital and labor, operating, and maintenance costs do states incur as they use CVISN technologies, and what are the key drivers or major elements contributing to those costs?

In addition, two hypotheses were tested:

· CVISN credentialing systems will result in reduced time, costs, and uncertainties involved with handling (applying for and administering) commercial vehicle credentials for both state agencies and motor carriers

· The deployment of CVISN systems for roadside enforcement operations will result in capital cost increases to state agencies, but is expected to improve (1) inspection efficiency for states and motor carriers and (2) highway safety.

The first hypothesis and the cost impacts associated with the second are discussed in this chapter. The inspection efficiency and safety impacts are discussed in Chapter 5 (CVISN Safety Benefits). Formal benefit/cost analyses under various deployment scenarios involving CVISN credentialing and roadside systems are presented in Chapter 8.

Baseline Costs

Baseline costs include annual capital costs and annual operating costs. With a few exceptions as noted, the term “baseline” refers to operating procedures that do not use CVISN or similar ITS/CVO technologies, even if the state used these technologies prior to the start of the CVISN MDI. Baseline systems use conventional (mostly paper‑based) administrative or roadside technology. Baseline systems are sometimes referred to as “legacy” systems, especially in the case of computer technologies.

Credentialing. The baseline cost elements for credentialing include

· Labor and fringe benefits for staff who process new, supplemental, and renewal credential and permit applications

· Operation and maintenance of pre-CVISN, paper-based credentials administration equipment and facilities

· Communication, mailing, and reporting.

Roadside Enforcement. The operating costs of “baseline” activities are presented in order to provide a perspective on the added costs of CVISN. For example, the costs of baseline activity associated with electronic screening included staffing and operating costs for fixed weigh stations. The cost of baseline activities related to safety information exchange includes salaries of enforcement officers and vehicle costs.

The actual deployment date for a device or system was not the sole factor that determined whether a cost was classified as baseline or post-CVISN. For example, Connecticut was well advanced in using electronic safety data exchange technologies prior to becoming a pilot state in the CVISN MDI. But the systems they deployed were essentially CVISN. Therefore, Connecticut’s costs for electronic devices were treated as post-CVISN costs.

In states where the operation of an existing CVISN-like technology is completely modified to conform to CVISN standards, the pre-existing situation was considered a baseline case. “Post-CVISN” refers to the situation after the modification. For example, Kentucky had an electronic mainline screening capability as part of the Advantage I-75 program prior to becoming a CVISN pilot state. Under CVISN systems deployment in Kentucky, the screening system and its operation have been completely modified to be CVISN compatible. Costs for such modifications are classified as post-CVISN.

Attempts were made to isolate costs devoted to CVISN functions or their corresponding baseline activities before CVISN deployment. However, baseline costs do not include certain capital equipment and facilities costs. For example, the capital costs of computer resources for baseline credentialing activities are excluded because they are often shared with other state agencies and are difficult to isolate. Also excluded are the costs of land and buildings for fixed weigh stations. The requirements for these types of facilities vary significantly from state to state.

CVISN Deployment Costs

Deployment (one-time start-up or nonrecurring) costs associated with CVISN include

· Up-front purchases of equipment, goods, and services, such as hardware acquisition and software development costs

· Systems integration, consultant fees, planning, and design

· Outreach efforts

· Training for staff to use the new technologies.

Some costs to the states are expected to remain the same following CVISN deployment (e.g., roadside staff labor rates or the costs to install and operate a fixed weigh scale). These figures, assumed to be the same for both pre- and post-CVISN in this analysis, should help put the incremental costs for CVISN deployment in the context of overall state CVO costs.

Post-CVISN Costs

Recurring costs to the states following deployment of CVISN technologies included annual capital costs and annual operating costs.

Annual Capital Costs. The start-up (deployment) costs for purchasing capital equipment were used to calculate annual capital costs. To simplify the presentation of costs in this chapter, the annual capital costs were determined by dividing the original purchase price of the equipment by the estimate of the expected replacement life of that equipment (in years). For example, a desktop personal computer having a service life of 5 years and costing $2,000 to purchase new was assumed to carry with it an annual capital cost of $400. This $400 is believed to represent a fair value for periodic replacement of that equipment. The formal benefit/cost analysis presented in Chapter 8 uses appropriate discount factors to determine the true costs at given points in time.

Vehicles were assumed to have a life of 3 years; personal or laptop computers and printers were assumed to have a life of 5 years. All other capital equipment (e.g., scales, computer network database servers, modems, AVI readers) was assumed to have a life of 10 years.

Inferring annual capital costs from one-time start-up costs may seem to be double‑counting. However, this approach was considered reasonable in that, once a state makes an up-front capital investment in equipment, the state will also want to plan for the cost of replacing the original equipment when it reaches the end of its useful life.

Annual Operating Costs. Recurring (annual) operations costs incurred after CVISN technology deployment generally include operations and maintenance (O&M) costs such as

· Labor and fringe benefits for credentialing, roadside, and administrative staff

· Operation and maintenance of the CVISN systems

· Communication

· Equipment and software replacement or upgrades.

In some cases, as noted below, labor is excluded from the O&M cost values. This usually means that CVISN deployment is not expected to affect labor costs significantly.

In general, cost data are presented for activities that correspond with CVISN Level 1 deployment. When firm cost data were unavailable, informed estimates of the costs were used. For example, only about 1 percent of credentialing volume was being handled with CVISN systems at the time of the evaluation, so post-CVISN credentialing labor costs were estimated. Any such estimates, their bases, and their limitations are identified in this report.

Detailed descriptions of the baseline and CVISN systems in place in each state at the time of data collection are presented in Appendix B.1.

6.3 Cost Data Collection and Analysis Approach

The CVISN cost study presented in this chapter consisted of the following activities: data collection, preparation of representative scenarios, and data analysis. Two data collection approaches were used: a literature review and a series of on-site, in-person interviews. Reference materials were obtained from the states, vendors, and publications prior to the site visits. Materials included case study evaluations, system studies, and empirical databases. In-person interviews were the primary source of cost data.

Literature Review Summary

The following sources were consulted in the literature review:

· National Governors’ Association (NGA) Study (Apogee 1997)

· American Trucking Associations (ATA) Foundation Study (1996)

· Maryland Benefit/Cost Study (Bapna et al. 1998)

· Washington State CVISN Pilot Project report (1998).

The NGA study, based on states’ advance estimates of project deployment costs, covered the same three functions as the CVISN cost study: credentialing, electronic screening, and SIE. The study estimated low and high ranges of start-up and annual costs, based on the systems identified for deployment in the individual states and their deployment schedules.

The ATA Foundation study assessed the impacts of ITS technology on regulatory compliance costs for motor carriers. ITS/CVO user services for which costs and benefits were evaluated include (1) administrative processes, (2) electronic clearance, (3) automated roadside safety inspections, and (4) on‑board safety monitoring.

A benefit/cost study conducted in Maryland assessed the benefits of CVISN deployment. The study tested the hypothesis that the net benefits of CVISN deployment are positive and substantial, but vary among system components and between the state and motor carrier industry. Both qualitative and quantitative analyses of benefits and costs were conducted. The costs consist of CVISN investment, maintenance and operating costs to the state, and costs to motor carriers (e.g., transponders, computers, and software).

The Washington State Patrol departments of Licensing and Transportation conducted a feasibility study to determine the effects of continuing implementation of the CVISN pilot project. Effects on state administrative and enforcement functions were assessed, as were effects on motor carriers, commerce, and the traveling public. Incremental and 10‑year costs for the pilot project were estimated. The study also evaluated benefits to the various stakeholders.

Comparisons of CVISN costs reported in this evaluation with the cost impacts predicted in the literature are presented in Section 6.8.

In-Person Interviews

The objective of the interviews with state agencies was to collect information on

· Costs associated with the current credentialing processes and roadside screening and inspection activities

· Costs associated with deploying and operating various CVISN systems

· Resources (staff and equipment) committed to CVISN deployment.

Interviews were also conducted with representatives of selected motor carriers participating in the pilot testing of CVISN systems. The objectives of these interviews were to

· Gather information on the costs incurred (or savings realized) by the motor carrier industry resulting from CVISN systems deployment

· Learn about the impacts of CVISN systems on the efficiency and productivity of the motor carrier industry, as they affect costs.

All interviews were fact-finding, interactive discussions aimed at gaining an understanding and collecting data on the costs of CVISN systems. The interview guides were developed based on the evaluation strategy, evaluation data requirements plan, experiences from similar studies (e.g., NGA), and information gathered from the literature review. The interview guides are included in Appendix B.2.

Battelle staff summarized the data gathered from the interviews and then confirmed the summaries with the officials who provided the information, prior to data analysis.

Cost information in this chapter was drawn mainly from interviews with state transportation officials from four states: Kentucky, Maryland, Connecticut, and Virginia. Table 6‑1 shows which states provided input on baseline costs (pre-CVISN), CVISN deployment or start-up costs, and post-CVISN annual costs. Information collected from some states was insufficient to be included in the cost analysis. Besides these four states, supporting information was drawn from several other states, including those in the I-95 Corridor Coalition and those participating in an evaluation of the IRP credentialing clearinghouse (IRP CH), as shown in Table 6‑1.

Table 6-1. States Participating in Cost Analysis of Various CVISN Technologies

State	Role	Credentialing, Administration		Roadside Operations
State	Role	Baseline	Post-CVISN	Baseline	Post-CVISN
Kentucky	CVISN Pilot, IRP CH	l	l	l	l
Maryland	CVISN Prototype, IRP CH	l	l		¢
Connecticut	CVISN Pilot	l			l
Virginia	CVISN Prototype, IRP CH	¢	¢		l
Massachusetts	I-95 Coalition				¢
New York	I-95 Coalition				¢
Pennsylvania	I-95 Coalition				¢
Rhode Island	I-95 Coalition				¢
Arizona	IRP CH	¢	¢
Arkansas	IRP CH	¢	¢
California	CVISN Pilot, IRP CH	¢	¢
Kansas	IRP CH	¢	¢

Key: l = primary data sources ¢ = secondary data sources

Table 6-2 shows the approximate scope of CVO in each of the primary states participating in the cost analysis. These indicators were used in developing the representative state scenarios presented later in this report.

Table 6-2. General Indicators of CVO Activity in Participating States

CVO Indicators	Number per State
CVO Indicators	KY	MD	CT	VA
IRP Credentialed Motor Carriers	4,400	6,500	2,000	--
IFTA Credentialed Motor Carriers	4,000	5,500	2,800	--
Commercial Vehicle Credentials Issued per Year (IRP)	6,600	15,100	8,125	>6000
Commercial Vehicle Credentials Issued per Year (IFTA)	4,500	50,472	7,500	>14,600
Fixed-Site Weigh Stations	18	16	4	13
Roadside Inspectors	68	--	33	5

Note: Numbers of carriers and credentials are as reported for one year only. Representativeness to other years is unknown.

State Deployments

The following descriptions summarize the baseline and post-CVISN deployments that are the focus of this report. More detailed information by state is presented in Appendix B.1.

Kentucky. Before deploying the CVISN model, Kentucky credentialing was paper‑based. As part of CVISN model deployment, Kentucky deployed electronic credentialing using carrier automated transaction (CAT) software (InterCAT) developed by IDT (Intelligent Decisions Technology). The new system allows electronic application submittal and processing, funds transfer, and issuance of credentials for IRP and the International Fuel Tax Agreement (IFTA).

Pre- and post-CVISN cost data for roadside operations were also collected in Kentucky. Roadside operations include mainline screening and SIE. Prior to CVISN model deployment in Kentucky, mainline automated clearance systems (MACS) were in operation as part of the Advantage I-75 project. Under CVISN, the primary emphasis has been to develop the software to transition Advantage I-75 MACS to full CVISN compliance.

Maryland. For electronic credentialing, Maryland deployed the PC-based CAT software developed by IDT. Maryland wanted the capability of communicating directly with the VISTA system, offered by Lockheed Martin, a third-party service provider. Maryland also developed an in-house system for electronic permitting to process applications for OS/OW permits. This automated system allows carriers to print their permits at their terminal sites or to a designated fax line. It was noted that the Maryland IRP system was not completely “end‑to‑end” at deployment, as Kentucky’s system was. For example, in Maryland, state personnel re‑keyed the carrier credential application information submitted electronically by the carriers, for processing by VISTA. Also, Maryland reported spending less than $90,000 for one‑time contracted software development, whereas Kentucky reported more than $400,000 in software development costs. The reason for this difference in IRP deployment cost elements is unknown.

Connecticut. CVISN model deployment in Connecticut includes only roadside functions, not credentialing. CVISN technology deployment for roadside operations in Connecticut was relatively advanced prior to the CVISN MDI. Safety inspectors were equipped with laptop computers and used wireless CDPD modem technology for accessing carrier safety data. Cost analysis of roadside operations in Connecticut focuses on post-CVISN deployment for SIE.

Virginia. Cost data from Virginia were limited to the NOMAD mobile weight enforcement system and Virginia’s participation in the separate IRP Clearinghouse study. Data on credentialing and other roadside costs from Virginia were unavailable.

Motor Carrier Representatives

At the time of data collection, only a handful of motor carriers were participating in electronic credentialing programs. Three of the motor carriers participating in the CVISN deployment for electronic credentialing were interviewed as part of the cost analysis data collection effort. Results are presented briefly in this report. A separate survey of motor carriers is also in progress as part of the CVISN program; results from that survey are presented in Chapter 7.

Challenges in Data Collection and Analysis

Cost data were generally difficult to collect. Initially, there were misconceptions concerning the use of the data. Some respondents erroneously perceived the cost analysis to be a means of auditing or tracking Federal funds allocated to CVISN model deployment. Others believed the study was intended to assess the efficiency in the state accounting systems with regard to the CVISN funds. These concerns were eventually overcome in the states involved in this effort.

Several other factors hindered the collection of cost data. First, computers, infrastructure, and facilities are maintained by agencies that may be different from those engaged in the CVO functions. Second, operation and maintenance costs are often lumped together with other cost items, making it difficult to isolate those directly related to credentialing and other CVO functions.

In many states, communication and mailing costs are not treated as discrete cost items that are attributed to individual processes. These are usually considered as part of general and administrative (overhead) costs for the entire agency. Mailing cost estimates for credentialing processes were based on the annual average number of credentials mailed and the average cost of mailing a single package. Telephone and other communication costs for both credentialing and roadside operations were likewise difficult to estimate.

“Roadside operations” in the CVISN context is understood to consist of two aspects: electronic screening and SIE. The systems are different, yet they rely on some of the same principles, personnel, and kinds of technology, so in some discussions they are treated together, and in others they are separated. One example is the development of a state’s Commercial Vehicle Information Exchange Window (CVIEW) system, which can be adapted to support both electronic screening and Safety Information Exchange.

Kentucky’s post-CVISN roadside deployment focused on electronic screening, whereas Connecticut’s focused on SIE. As noted in greater detail in the sections below, the overlap of roadside technologies caused some cost elements to be counted in one area when in fact the element benefited both electronic screening and SIE activities.

Despite these limitations, this evaluation presents a first look at CVISN deployment and operating costs in the context of existing CVO costs. Based on data from the handful of states that are furthest along in their implementation of CVISN technologies, this evaluation should give state officials and policymakers important early insights into what they may expect as CVISN progresses in their states.

Development of Scenarios

To present a realistic a picture, valid cost and operations data have been combined and averaged across the states that supplied the data. These costs are summarized in Table 6‑3 below. Supporting explanatory data show details of the CVO costs that are currently being incurred and what new costs states may incur during and following CVISN deployment. In every case, Table 6-3 shows the units, scope, or quantities reflected in the cost values.

Costs are expressed as units whenever possible (e.g., annual labor costs per carrier account, or one-time start-up dollars per fixed weigh scale site upgraded with basic electronic screening equipment). In other cases, scenarios are used to provide a sense of the scope of the operation being reported.

Every state entered the CVISN MDI with a different “baseline,” which sometimes included certain “CVISN” components (e.g., laptop computers in Connecticut, Advantage I‑75 roadside electronic screening systems in Kentucky). Nevertheless, this cost analysis defines “baseline” as CVO processes that are not assisted by CVISN technologies, and then estimates the cost impact of adding CVISN technologies.

6.4 Summary of CVISN Deployment and Annual Operating Costs for States

Table 6-3 presents a summary of baseline, one-time deployment, and post-CVISN annual costs. Most of these costs were determined from actual data provided by the states. However, in some cases, certain assumptions were made or models were used to estimate costs that could not be observed. All costs are expressed in U.S. dollars as reported at the time of the CVISN cost analysis (generally incurred by the states between 1995 and 1999). In this chapter, no attempt was made to apply a discount rate (or escalation factor) to convert these general cost values to constant dollars at some fixed time for this analysis.

The table breaks out costs for specific features within each CVO area. The three main operations areas are (1) credentialing, (2) electronic screening, and (3) Safety Information Exchange.

Table Presentation Format

Each row of Table 6-3 represents one CVO function. For electronic screening and SIE, the rows progress downward from a non-CVISN case to cases with increasing CVISN capabilities. For example, the electronic screening costs start with a fixed weigh scale, add a WIM and automatic vehicle identification (AVI) equipment, and then add electronic snapshot capability.

Columns progress left-to-right from baseline costs to deployment costs to operating costs of the new CVISN technology. Where data are available, the columns give cost values for baseline annual capital costs, baseline annual operating costs, one-time start-up (deployment) costs, post-CVISN annual capital costs, and post-CVISN annual operating costs.

These cost values may be expressed per some defined unit (e.g., per carrier account, per credential issued, per officer); per site (e.g., one weigh station); or statewide (e.g., start-up costs for an end-to-end IRP electronic credentialing system). The sources for each set of cost values are also presented in the far right-hand column.

As noted elsewhere, electronic screening and SIE are considered to be CVISN technologies, so the table generally shows no pre-CVISN or baseline costs to report. Thus, most of these rows are shaded in the baseline columns of Table 6-3.

For all values presented in Table 6-3, explanatory discussions follow. These explanations provide detail on the contributing cost elements, their sources and constituents, the factors and calculation methods, and the assumptions used to infer costs where actual data were unavailable. Further cost details are presented in Appendix B.3.

How to Use Table 6-3

As an example, study the first row under credentialing. Baseline annual capital costs could not be determined, so that cell is shaded. Kentucky reported baseline annual operating costs of $62.54 to administer each of its 4,400 IRP (non-VISTA) carrier accounts. This operating cost included labor costs. To deploy electronic credentialing for IRP credentials, Kentucky invested $935,906 in one-time start-up costs.

The next column shows an estimate of annual capital costs, determined from Kentucky’s start-up cost data. The annual capital cost to the state post-CVISN is estimated to be $1.48 per carrier account. In the post-CVISN annual operating column is the Kentucky estimate of $39.54 per account.

If a state has already deployed some CVISN functions, state officials could use the table to illustrate potential costs that may be incurred for the logical next steps in deployment. For example, under Safety Information Exchange, a state could start with stand-alone Aspen systems in roadside laptop computers (the second row in this section) and advance downward through the table to see estimates for upgrading to wireless modem and SAFER mailbox capability, or full CVIEW capability at the roadside. (A stand-alone Aspen system assumes that data are downloaded periodically via disk or hard-wire connection.)

Expanded Cost Scenarios

Many of the values in Table 6-3 are presented as unit costs. To help state officials, in Section 6.6 these units are extrapolated to provide estimated statewide costs.

6.5 Cost Details

Credentialing (Administrative Processes) Costs

For all credentialing functions, CVISN technologies are intended to enable states and motor carriers to move away from paper-based systems and toward computer-based systems to streamline credentials administration. For example, motor carriers may be able to use modems and dedicated software or internet browsers to apply for, pay for, and receive credentials without mailing a paper application or traveling to a state credentialing office. As noted below, states anticipate continuing to mail permanent credentials to the carriers for the foreseeable future, even after CVISN deployment.

As indicated in Table 6-3, several states provided credentialing cost data. However, the credentialing section is based primarily on data obtained from Kentucky because that was the state that offered the most comprehensive cost data on pre- and post-CVISN systems deployment. The cost and time savings data in this analysis thus tend to reflect the particular features of the Kentucky credentialing systems.

This analysis concentrates on IRP and IFTA credentials. Data on costs for processing other kinds of credentials (e.g., oversize, overweight, or weight-distance permits) were not readily available. At the time of data collection, CVISN systems had not been deployed for these “other credentials”. State officials may be able to infer CVISN cost impacts based on the similarities and differences between the processes for administering these other credentials and IRP or IFTA credentials.

End-to-End IRP (Non-Vista) (4,400 Carrier Accounts)

The costs of this operation area are defined as those the state pays for administering, processing, and issuing motor carrier credentials within the International Registration Plan (IRP). The IRP agreement between jurisdictions in the U.S. and Canada allows commercial vehicles to register in a single home jurisdiction, travel in and through all IRP jurisdictions without additional accreditation, and pay apportioned fees based on the proportion of mileage traveled in each jurisdiction.

While the general steps involved in IRP credentialing are fairly uniform across states, some requirements may be state-specific. In addition, the planned CVISN systems were not fully deployed at the time of evaluation, and only a handful of the carriers were participating in pilot testing of the electronic credentialing systems. Therefore, the observed changes are based on partial deployment and represent short-term effects of CVISN systems.

IRP credentialing costs presented in this chapter do not include revenues collected by the states through license or tax fees paid by the motor carriers. Kentucky has its own in‑house credentialing system, as opposed to other states (e.g., Maryland) that engage the services of a third-party provider to support the credentials administration function. The designation “non‑VISTA” or “VISTA” indicates whether the state uses the third-party Vehicle Information System for Tax Apportionment (VISTA) for its credentialing activities.

Baseline Costs. Prior to CVISN deployment, Kentucky spent about $62.54 per account on average in annual operating funds for processing and issuing IRP credentials. Kentucky has about 4,400 IRP carrier accounts, and administers new, supplemental, and renewal applications. The $62.54 amount includes costs for three basic elements: labor costs (including salary and fringe benefits), mailing or communication costs, and operations and maintenance (O&M) costs. Labor is the main cost element in processing credentials, representing approximately 70 percent of the total baseline operating costs.

CVISN Deployment Costs. One-time start-up costs to implement CVISN technology for IRP electronic credentialing were reported by Kentucky only. Start-up costs required to implement a computer-to-computer (PC-based CAT) IRP credentialing system similar to Kentucky’s system would be around $936,000. Start-up costs include equipment purchases and software development, in-house and contracted labor for software development and legacy (existing computer) system modifications, training for staff and state-sponsored training for motor carriers, and showcases to publicize the electronic credentialing program. The cost also includes administrative support and management costs as well as outreach program costs. The cost does not include new construction or communication infrastructure or the labor cost of new staff hired specifically to operate the new systems.

Software development, legacy system modification, and start-up labor were the major cost elements, accounting for nearly 90 percent of the total start-up costs. Software development was the major driver of electronic credentialing deployment costs, representing about 46 percent of the total start-up cost. Modifying the legacy system cost a significant amount, representing about 25 percent of the total start-up cost. Equipment (hardware) costs were relatively minimal compared to other cost components. Training costs for state agency staff to use the new systems were negligible.

Even though the widespread adoption of electronic credentialing by motor carriers will take time, the start-up costs incurred by Kentucky are expected to be capable of covering 100 percent of that state’s credentialing activity.

Post-CVISN Costs. Based on the equipment required to deploy CVISN for IRP electronic credentialing (i.e., one server at $65,000) and its estimated service life (10 years), the post‑CVISN annual capital cost per carrier account was estimated to be $1.48.

Regarding post-CVISN annual operating costs, the more credentials a state administers using CVISN technologies, the more it saves. The post-CVISN credentialing values shown in Table 6-3 presume full deployment and full motor carrier adoption of CVISN systems. The savings in annual operating cost is mostly attributable to lower labor costs.

A state such as Kentucky deploying a PC-to-PC electronic credentialing system and processing only 10 percent of its IRP credentials with that system (while continuing to process 90 percent of its credentials using baseline methods) would incur only slightly less than the baseline costs per carrier account statewide, when the post-CVISN annual capital costs are considered. If we assume a straight-line relationship between carrier participation and cost savings, then the same state processing all IRP credentials electronically (as shown in Table 6‑3) would find its average annual operating cost to be about $39 per carrier account. This represents approximately $20 in cost savings per carrier account compared to the baseline annual operating cost of $62.54.

To calculate the post-CVISN operating costs, annual labor costs were separated from O&M, communication, and database backup costs. Looking only at labor costs, the total baseline labor cost to the state per credential processed was determined. Then, the relative costs to the state for processing new/supplemental and renewal applications were determined, taking into account (a) the different numbers of each type of credential processed per year in the state and (b) the fact that each new application generally takes several more minutes to process than each renewal application.

The baseline labor cost per credential processed was then adjusted to derive post-CVISN labor costs. With CVISN in place, discrete steps in credentials administration, such as processing applications, generating invoices, and issuing temporary credentials, are expected to take less time compared to the paper-based system. This is expected to free state staff for other assignments. Table 6-4 shows the time-weight factors and the expected time and cost savings. In the time-weight factor column, each step in the process was assigned a weight value (between 1 and 5) to represent the relative amount of time that step customarily requires. These weighting factors were then combined with the estimated time savings from CVISN deployment and used to reduce the labor cost accordingly.

For example, the step “Process the application” was given a weight factor of 5, meaning that it takes relatively more time than the other steps. This step was estimated to take 75 percent less time post-CVISN. By contrast, issuing permanent credentials was given a weight factor of 1, meaning it takes relatively less time, but this step was estimated to see no reduction in time post‑CVISN. The weight factors were combined with the estimated reductions, and these were then used in conjunction with the baseline labor costs to derive a post-CVISN labor cost per carrier account.

Table 6-4 shows one example of part of the post-CVISN labor cost adjustment. The baseline labor portion of the total cost to the state is $35.49 per carrier account. After CVISN electronic credentialing is put in place, the labor cost for new and supplemental IRP (non‑VISTA) credentials is expected to change to $16.28 per carrier account. Similar calculations were used to derive the post-CVISN labor costs for renewal IRP applications in Kentucky and for both new and renewal IRP credentials in Maryland, a VISTA state.

Table 6-4. Example IRP (Non-VISTA) Labor Adjustment, New and Supplemental, Per Credential Application Processed in Kentucky

Baseline Labor, $	Labor ($) ) 12	Process Step	Time-Weight Factor	$/Step Baseline	Post‑Time ) Pre‑Time	$/Step (Post‑CVISN)
35.49	2.96	Process Application	5	14.80	0.25	3.70
		Generate Invoice	1	2.96	0.25	0.74
		Receive Payment	3	8.88	1	8.88
		Issue Temp Credential	2	5.92	0	0.00
		Issue Perm Credential	1	2.96	1	2.96
		TOTAL	12			16.28

For comparison with baseline values per carrier account, the post-CVISN labor costs per credential application processed were converted to a statewide per-account basis as follows: the post‑CVISN labor costs for new and supplemental credentials were multiplied by the numbers of each type of credential processed, and then the resulting totals were combined to give a statewide total post-CVISN annual labor cost. This post-CVISN total labor cost was divided by the number of carrier accounts in the state, and then added to the known per‑account O&M, communication, and database costs to yield the post-CVISN annual operating cost of $39.54 shown in Table 6-3.

This analysis assumed that post-CVISN mailing/communications and operations and maintenance (O&M) costs (exclusive of labor) for electronic credentialing would remain the same. This is because the states expect to continue to mail permanent credentials to the carriers for the foreseeable future, even after CVISN deployment. Thus, communication/mailing and O&M costs should remain the same. Labor costs, however, dropped, based on an informed estimate of the amount of time state employees would save when processing credential applications electronically.

In addition to the communication and O&M cost elements, which were assumed to remain the same after CVISN deployment, Kentucky also reported a new annual expense of $10,000 for database backup. This was classified as a post-CVISN annual operating cost element and is included in the total of $39.54 per account.

IRP with VISTA or Other Provider (6,500 Carrier Accounts)

Pre- and Post-CVISN costs for IRP credential processing in states using a third-party service provider were based on costs reported by Maryland. VISTA, offered by Lockheed Martin, is the third-party system being used for electronic credentials administration in Maryland and other states. Maryland is also starting to use a PC-PC electronic credentialing system.

Baseline Costs. Baseline annual operating costs per motor carrier account in Maryland were reported to be $138.20. These costs included elements similar to those reported in Kentucky for non-VISTA IRP credentialing.

CVISN Deployment Costs. One-time start-up costs for IRP (VISTA) deployment in Maryland were provided for the period 1996 through 1999, and amounted to $464,802. Of these costs, in-house development labor amounted to more than 30 percent, while equipment purchases amounted to just under 30 percent. Administrative costs and contract costs were the other major start-up cost elements. As noted earlier, Maryland’s IRP credentialing system was not completely deployed and functional at the time these costs were reported. Also, software development costs were lower than those reported for Kentucky’s IRP deployment, for reasons that are unknown.

Post-CVISN Costs. Post-CVISN annual capital costs were estimated based on the equipment portion of the start-up costs (unspecified equipment costing $131,626) and its estimated service life (10 years). This annual capital cost of $13,163 was apportioned across 6,500 carrier accounts, resulting in a post-CVISN per-account annual capital cost of $2.03.

Labor cost analysis methods for the Maryland IRP VISTA case were similar to those used for Kentucky, but allowed for the slight difference in effort between the VISTA and non‑VISTA credential processes. The cost of processing each IRP carrier account in Maryland is expected to drop to $133.59 when 10 percent of carrier accounts are processed electronically. When all carrier accounts are processed electronically, the cost per carrier account would be about $91.95, representing approximately $46 in cost savings per carrier account, compared to the baseline annual operating cost of $138.20.

End-to-End IFTA (4,750 Carrier Accounts)

The costs for this operation area are those the state pays for administering, processing, and issuing motor carrier credentials within the International Fuel Tax Agreement (IFTA). In IFTA, states and other taxing authorities collaborate to simplify the collection and distribution of CVO-related tax revenues. No firm post-CVISN labor or operating costs were available, but the effect of CVISN technologies in saving money for the state for IFTA credentialing is expected to be similar to the effect on IRP credentials administration costs.

Costs for IFTA credential processing were taken from the average of costs reported from Kentucky and Maryland.

Baseline Costs. The baseline average annual operating cost to these states per carrier account was $166.11. These costs included elements similar to those reported in the IRP credentialing cases.

CVISN Deployment Costs. One-time start-up costs for IFTA electronic credentialing were averaged across the values reported by Kentucky ($98,650) and Maryland ($28,541), resulting in an average cost of $63,596. These capital costs for IFTA electronic credentialing assume that a state already has a CVISN credentialing system in place for IRP credentials. Kentucky, for example, uses elements of its IRP processing system (already in place) for IFTA processing. Software development was the major start-up cost element in Kentucky (81 percent), while equipment and in-house labor were major elements in Maryland (96 percent).

Post-CVISN Costs. Kentucky did not report any start-up hardware or equipment costs for developing the IFTA system. Maryland reported approximately $15,000 in start-up equipment costs. When averaged, the annual capital cost for IFTA credentials post-CVISN was $0.14 per carrier account.

Because no post-CVISN labor hour or cost information was available for IFTA credentials processing, post-CVISN annual operating costs of $100 per carrier account were assumed for IFTA credentials. This represents a decrease of about $66 compared to the reported baseline cost of $166.11 per carrier account, and is in line with the declines in per account costs seen in the IRP credentialing cases.

IRP Clearinghouse

The IRP Clearinghouse provides a mechanism within the IRP for tabulating the net amounts due to or owed by a jurisdiction to all other participating jurisdictions. This Clearinghouse transfers these funds electronically. Costs for the IRP Clearinghouse are based on results from a separate investigation within the CVISN MDI evaluation project (Springer 1999). The results are expressed as an average per state per year to operate the entire IRP credentialing program, before and after joining the clearinghouse. In all, 22 jurisdictions were participating in the IRP Clearinghouse as of early 2001 (AAMVA). The study averaged data collected from seven states: Arizona, Arkansas, California, Kansas, Kentucky, Maryland, and Virginia.

Baseline costs represent the cost of monthly activities, such as distributing registration funds to other jurisdictions and collecting funds from other jurisdictions before joining the Clearinghouse. After joining the IRP Clearinghouse, the between-state transactions are centralized, reducing or eliminating many monthly costs.

According to the American Association of Motor Vehicle Administrators (Arlington, Virginia), states participating in the IRP Clearinghouse pay an annual fee to participate, based on the number of commercial power units in the state. States with fewer than 1,000 power units pay the minimum fee of $1,000 annually, while states with more than 100,000 power units pay a maximum fee of $20,000. The fee scale is graduated.

Electronic Screening Costs

Static Scale and Supporting Staff (One Site; Three Full-Time Staff Members)

A fixed weigh station is defined in this analysis as a facility housing one static scale and staffed by three full-time state enforcement staff. The purpose of most weigh stations is to weigh commercial vehicles away from the mainline of traffic; to help ensure that commercial vehicles are in compliance with the relevant size, weight, and credentialing regulations; and to inspect and remove unsafe or otherwise out-of-compliance vehicles and drivers from the traffic stream.

Baseline Costs. Baseline annual capital costs for one fixed-site weigh station, understood to consist of a single static scale, were determined to be $10,850, based on average purchase costs for such scales reported by Kentucky and Connecticut. The fixed weigh station was assumed to have a service life of 10 years.

Baseline annual labor costs for each full-time roadside enforcement staff member ($41,000) were determined by averaging reported labor costs (including fringe benefits) across two states (Kentucky and Connecticut). The costs are assumed to apply to staff performing both roadside functions associated with CVISN, electronic screening and Safety Information Exchange. For example, the Connecticut Department of Motor Vehicles (DMV) and Department of Public Safety (DPS) staff work at fixed scale sites and also participate in mobile team operations.

Assuming three full-time equivalent (FTE) staff at the average labor rates and adding the annual operating costs reported by Kentucky for one baseline or pre-CVISN fixed weigh station ($5,580), the total annual baseline operating costs were assumed to be $128,580.

Deployment Costs. One-time start-up costs for purchasing one static scale (considered to be a baseline or pre-CVISN facility for this analysis) were estimated to be $108,500, an average of the purchase costs for this equipment reported by Kentucky and Connecticut. This value does not include the cost of real estate, permanent structures, or site improvements beside the scale.

Post-CVISN Costs. The operation of static scale sites and staffing levels for commercial vehicle enforcement functions are expected to continue basically unchanged post-CVISN. Thus, their associated costs are expected to remain basically the same during and after CVISN deployment. For these reasons, identical values for annual capital and annual operating costs are presented in the baseline and post-CVISN columns of Table 6-3. As discussed in greater detail in Chapter 8 (Benefit/Cost Analysis), to isolate the costs and benefits of CVISN deployment at the roadside, we assumed that the numbers of trucks inspected or weighed per day would remain constant. CVISN technologies are eventually expected to result in more efficient inspections, meaning that (a) the inspectors’ time will be devoted more to higher-risk vehicles and (b) more out‑of‑service (OOS) orders will be issued per given number of vehicles inspected. This way, the greatest safety benefits can be realized. If a state is able to increase the number of inspections, this will yield additional safety benefits.

Basic Screening Equipment (AVI and WIM; One Site)

To establish electronic screening, states can install automated vehicle identification (AVI) devices and weigh-in-motion (WIM) scales at some location upstream from a fixed-site weigh station. The AVI and WIM enable enforcement personnel to identify vehicles or carriers at highway or ramp speeds, with the goal being to allow certain approved vehicles to bypass the weigh station, or avoid stopping. Carriers and state officials can thus enhance safety by focusing inspection resources on high-risk carriers and vehicles. WIM capability is not a requirement of CVISN Level 1 deployment.

Baseline Costs. This operations area and the other areas under electronic screening are considered to be exclusively post-CVISN functions, so no baseline annual capital or baseline annual operating costs are reported in Table 6-3.

CVISN Deployment Costs. One-time start-up costs for equipment to upgrade an existing fixed‑site facility for AVI and mainline WIM capability were based on costs from Kentucky, incurred as part of the Advantage I-75 program that preceded the CVISN MDI. The mainline WIM scale was the major cost ($125,000) of this upgrade total ($150,000).

Post-CVISN Costs. Annual capital costs were estimated based on the initial capital cost (i.e., one WIM plus AVI readers, electronic signs, and loop detectors at $150,000) and a service life of 10 years. Annual operating costs (excluding labor) were determined based on a $6,500 annual maintenance cost per WIM as reported by Kentucky.

Site Upgrade to Electronic Snapshot Capability; Equipment and Training for Three Persons (One site)

“Electronic snapshots” are “packets of safety data which can be made available at roadside inspection stations via SAFER and/or CVIEW. Snapshots contain safety information on carriers and vehicles” (ITS/CVO Glossary, 2000). Once a state’s electronic screening system has a method of automatically identifying a vehicle in traffic, the state can then check the vehicle identification with a centralized database of information on carriers and vehicles credentialed to operate in the state. A snapshot report on the vehicle is available at the roadside very quickly. This allows vehicle screening systems or personnel to make weight and inspection decisions and then communicate those decisions to the vehicle operators in real time.

CVISN Deployment Costs. Kentucky reported one-time start-up costs of $372,252 for upgrading one existing (Advantage I-75) site to full CVISN status. Communication equipment and consulting costs amounted to more than 75 percent of Kentucky’s start-up costs. Kentucky’s deployment involved aspects of both electronic screening and Safety Information Exchange, so the separation of cost elements for purposes of this analysis is somewhat artificial, as discussed below. Kentucky purchased roadside operations computers (ROCs) for the fixed-site weigh station and paid for training for staff members. Equipment and training (but not labor) costs for an arbitrary staffing level of three full-time equivalents (FTEs) were chosen for this analysis; other states can scale up or down according to their staffing requirements.

The costs for electronic screening deployment assume that the CVIEW software, which applies to all CVISN roadside operations (electronic screening and Safety Information Exchange), has already been developed. (Costs for the CVIEW software development are presented and discussed separately, under Safety Information Exchange.)

The study further assumes that some of the one-time start-up costs included in this analysis for electronic screening would also be of benefit to a state’s deployment of Safety Information Exchange. For example, consulting costs reported by Kentucky covered software development for both roadside functions and included the costs to establish interfaces with the CVIEW system.

Post-CVISN Costs. Annual post-CVISN capital costs of $14,300 per site for the electronic screening upgrade to snapshot capability were calculated from the costs for hardware or equipment (i.e., communication equipment and personal computers at $133,000) with expected service lives of 10 and 5 years respectively.

Post-CVISN annual operating costs for electronic screening at one fixed site in Kentucky (excluding labor) were reported to be $42,416 with hardware/software upgrade costs, database costs, and mainline screening equipment maintenance being the major contributors.

Mobile Unit (One unit; Two full-time persons)

Virginia has deployed a CVISN-compatible system for mobile weight enforcement, consisting of an operations van and an electronics trailer. This system, deployed by the state Department of Transportation and known as NOMAD, can be used for weight enforcement and statistical data collection. The NOMAD van includes a WIM sorter system, a roadside operations computer (ROC), static scale interface, and other support equipment normally used in a fixed-site weigh station. The electronics trailer houses a WIM scale, AVI, variable message sign, and telemetry equipment to measure and communicate information about commercial vehicles.

As deployed in Virginia, the system serves as a means for identifying suspect vehicles for further inspection by enforcement units. The NOMAD system requires two full-time employees and can be used at any location. However, Virginia has found that the most productive use of the system is at “pre-engineered” sites where transducers and other infrastructure are already in place and the mobile system can be set up quickly.

The NOMAD system is designed to screen for weight, credentials, and safety, but is currently being used only for weight. Screening for credentials and safety will depend on timely data availability. NOMAD can connect to CVIEW via a telephone line or can access CVIEW data downloaded to the ROC daily.

CVISN Deployment Costs. The van described above was purchased for approximately $70,000; a trailer similar to the one used in Virginia would cost between $200,000 and $335,000, depending on equipment and optional features. The cost shown in Table 6‑3 assumes the greater figure.

Post-CVISN Costs. Post-CVISN annual capital costs were estimated based on the equipment (i.e., computer-equipped support van and electronics trailer) start-up costs. The equipment’s estimated service life is 10 years. The life of 10 years was used for the van, even though it is technically a vehicle, because its reported cost of $70,000 suggests that the base vehicle portion of the cost may be less significant than the screening and communication equipment it houses.

Although Virginia did not report staffing costs, annual operating costs in this analysis include estimated labor for two full-time roadside employees. Virginia did report actual O&M costs for consumables such as piezo cables and portable temporary inductive loops, which are included in post-CVISN annual operating costs.

Safety Information Exchange Costs

Safety Information Exchange (SIE) is the electronic exchange of safety data and supporting credential information regarding carriers, vehicles, and drivers involved in CVO. The exchange of such information would ideally enable roadside decisions to be supported by historical safety performance information available to enforcement personnel in real time.

Enforcement Officer and Vehicle (One Unit)

Because SIE tends to rely on officers working from vehicles rather than at fixed‑site weigh stations, baseline costs for this functional area are defined as one roadside enforcement officer and one conventional patrol vehicle equipped with a portable weigh scale. The baseline case does not include any computer equipment.

Baseline Costs. Table 6-3 shows the annual capital costs ($10,325) and annual operating costs ($45,320) for one enforcement officer and his/her vehicle, including a portable scale, but excluding accessories added to the vehicle as part of CVISN deployment. The annual operating cost includes labor. Annual capital costs were estimated based on the purchase price of the capital equipment (i.e., one car and one portable scale) and on a service life of 3 and 10 years, respectively.

The total annual operating costs were determined by averaging the annual labor costs (including salary and fringe benefits) for roadside officers as reported by Kentucky and Connecticut, then adding the maintenance cost for one vehicle as reported by Connecticut. The same labor cost values were used in calculating operating costs for the roadside electronic screening functions.

Deployment Costs. A typical vehicle plus portable scale were assumed to cost $33,250 (not including a computer).

Post-CVISN Costs. The operation of one enforcement vehicle/portable scale unit and the cost to support one officer for commercial vehicle enforcement functions are expected to continue basically unchanged post-CVISN. For these reasons, identical values for annual capital and annual operating costs are presented in the baseline and post-CVISN columns of Table 6‑3. As noted above in the discussion of post-CVISN costs for electronic screening, the number of trucks inspected would remain constant following CVISN deployment. Inspection efficiency should increase as resources are focused on higher-risk carriers, vehicles, and drivers.

Upgrade to Aspen Capability (Statewide); Equipment and Training (One Person)

Aspen is a pen-based roadside inspection system that allows commercial vehicle inspection data to be electronically transferred periodically between the roadside and Safetynet, using hard-wire connections or exchange of physical computer storage media between computers. These transfers take place via either Avalanche or the CVIEW/SAFER Data Mailbox System. A related system, the Inspection Selection System (ISS), is used to aid inspectors in deciding how to inspect a vehicle that has been stopped. It is envisioned that eventually ISS will be used to help inspectors make inspect/bypass decisions in real time at the roadside. The costs for this upgrade are based on statewide and unit cost information from Connecticut.

Baseline Costs. This operation area and the other areas under Safety Information Exchange are considered to be exclusively post-CVISN functions, so no baseline annual capital or baseline annual operating costs are reported in Table 6-3.

CVISN Deployment Costs. This analysis assumes that equipment for one roadside staff member is to be upgraded to Aspen capability, with appropriate training for the officer. Costs are for a state to upgrade the officer’s equipment with a stand-alone laptop computer and a printer, plus Aspen/ISS. Costs also include one-time costs for training the staff member.

Connecticut reported $31,000 in statewide start-up costs for the central system to support this upgrade. A one-time per-person cost of $4,822 for upgrading the personal equipment and training of one staff member was determined by dividing Connecticut’s total personal equipment/training costs by 63 (i.e., the number of laptop PCs and mobile printers purchased for roadside use statewide, consisting of 48 sets for DMV staff and 15 sets for State Police staff). A “stand-alone computer” indicates that data are transferred to and from the laptop and a central station computer or database via hard wire connection (e.g., computer port or modem) or via a periodic download (refresh) from a compact disk or other physically connected storage medium. Wireless telecommunication costs are presented below and discussed separately.

Post-CVISN Costs. Annual capital costs for the statewide and single-officer upgrade to Aspen ($2,200 per state, and $810 per unit) were calculated based on the reported purchase costs of equipment and their expected service life.

Annual operating costs for CVISN systems were reported by Connecticut to include statewide server maintenance costs of $6,000, plus a cost of $74 for version control or upgrading each of the laptop computers. These costs exclude roadside labor costs.

Wireless and SAFER Mailbox (One Unit)

This upgrade is assumed to include wireless telecommunication equipment, plus full SAFER Data Mailbox capabilities. The upgrade permits a roadside officer in a vehicle to use a laptop computer to send and receive inspection reports and other carrier information from a roadside location. SAFER (Safety and Fitness Electronic Record) is an on-line nationwide data network that, when fully deployed, is intended to return a standard carrier safety fitness record to the requestor in a few seconds.

CVISN Deployment Costs. Each cellular digital packet data (CDPD) wireless modem purchased by Connecticut cost $1,000.

Post-CVISN Costs. The annual capital cost for each modem (with an expected life of 10 years) was calculated to be $100. Connecticut reported post-CVISN annual operating costs for wireless capability (excluding labor) of $469 per modem. This cost was based on a monthly communication cost of $39.05 per CDPD unit.

Kentucky anticipated incurring $50,000 in consultant costs for upgrading to wireless technology. Because the cost had not yet been incurred, it was not included in this analysis. Connecticut reported no comparable consultant expenses.

CVIEW or Equivalent (Statewide)

CVIEW (Commercial Vehicle Information Exchange Window) is a state-based software system that provides carrier, vehicle, and driver safety and credential information to fixed and mobile roadside inspection stations. The CVIEW system functions as an interface or software umbrella through which users can readily gain access to a variety of data sources.

The CVIEW upgrade is understood to encompass general roadside functions common to electronic screening and Safety Information Exchange. The system provides enforcement officers at the roadside with integrated safety and credentials data. Cost for developing electronic screening and SIE applications for CVIEW are expected to complement each other. Because CVIEW is technically more closely allied with SIE than with electronic screening, statewide CVIEW start-up costs are presented in the SIE portion of Table 6‑3.

CVISN Deployment Costs. Kentucky reported development costs of $325,000 for statewide development of a CVIEW capability. These start-up (deployment) costs for CVIEW should permit the CVIEW software, once developed, to be installed at multiple sites across a state.

Post-CVISN Costs. No annual capital costs were reported for CVIEW, presumably because the system is not heavily dependent on new capital hardware or equipment. States can use CVIEW on existing computer platforms. Annual post-CVISN operating costs for CVIEW were estimated at $80,000, to consist of costs for two full-time staff members to maintain, troubleshoot, and consult on software development throughout the system’s life.

6.6 Projected Costs and Cost Savings Under Various Deployment Scenarios

The total costs of deploying CVISN and maintaining CVISN-enhanced credentialing and roadside CVO operations, as well as the potential cost savings from electronic credentialing, can be estimated for one hypothetical state using the unit costs in Table 6-3. This process is illustrated below using scenarios derived from the operating parameters reported by the states participating in the CVISN cost analysis.

Credentialing

Costs for credentialing were extended from a per-carrier-account basis to a statewide annual cost basis, making assumptions about stages of CVISN deployment and the level of participation in electronic credentialing by motor carriers.

End-to-End IRP (non-VISTA)

Based on the data shown in Table 6-3, a non-VISTA state having 4,400 IRP carrier accounts would incur $275,176 per year in operating costs before CVISN deployment of electronic credentialing ($62.54 per account H 4,400 accounts). Such a state might make a one‑time investment of $935,906 to deploy a statewide CVISN system for electronic credentialing. Following CVISN deployment, depending on the level of adoption by motor carriers, the state should expect to incur lower per-account costs.

Table 6-5 shows that total annual costs to the state are expected to increase slightly at 10 percent CVISN adoption, because the additional annual capital expense ($1.48 per account) is not offset by sufficient labor savings when only 10 percent of credentials are processed electronically. But at 100 percent CVISN adoption, total annual costs should decline sufficiently to provide states with a cost savings of nearly $95,000 per year.

This level of savings was determined by taking the difference between pre‑CVISN operating costs ($62.54 per account) and the post-CVISN annual costs ($1.48 + $39.54 per account); then multiplying by the number of IRP accounts (4,400) and the percent deployment (percent of accounts processed electronically). For example, the annual savings at 100 percent deployment would be ($62.54 - $41.02)*4,400*100% = $94,688.

Table 6-5. Total Annual Costs to State at Various Post-CVISN Adoption Levels (IRP, non-VISTA)

CVISN Deployment (%)	Statewide Annual Cost, $	Statewide Annual Savings (Cost) versus Baseline, $
0 (Baseline)	275,176	0
10	280,544	(5,368)
50	236,104	39,072
100	180,488	94,688

If a state incurred CVISN deployment costs similar to Kentucky’s for electronic administration of its IRP credentials ($935,906), and similar annual operating cost savings, and if 100 percent of its motor carriers quickly adopted the system, allowing the state to realize the full labor cost savings, then such a state might recover its start-up costs in approximately 10 years.

End-to-End IRP (VISTA)

A VISTA state having 6,500 IRP carrier accounts would incur $898,300 in annual operating costs before CVISN deployment (per-account cost of $138.20). One‑time start‑up costs would be $464,802. Following CVISN deployment, the state would incur new annual capital costs of $2.03 per account, but lower annual operating costs. The total annual cost savings to the state would range from about $16,000 per year at 10 percent CVISN deployment to more than $280,000 per year at 100 percent CVISN deployment. If 100 percent of motor carriers adopted CVISN, then the state could recover its start-up costs for electronic IRP credentialing within 2 years. Table 6-6 shows the projected annual costs at various levels of CVISN adoption for IRP (VISTA) credentialing.

Table 6-6. Total Annual Costs to States at Various Post-CVISN Adoption Levels (IRP, VISTA)

CVISN Deployment, %	Statewide Annual Cost, $	Statewide Annual Savings versus Baseline, $
0 (Baseline)	898,300	0
10	881,530	16,770
50	761,280	137,020
100	610,870	287,430

End-to-End IFTA

A state processing credentials from 4,750 in-state IFTA carrier accounts would incur $789,023 in pre-CVISN annual operating costs ($166.11 per account). The same state would spend $63,596 in start-up costs to establish electronic credentialing for IFTA. Based on data from Kentucky and Maryland, the post-CVISN annual capital costs per account would be only $0.14. Based on the assumed similarity of IRP and IFTA processing labor changes that will be brought about by CVISN deployment, the study assumes that post-CVISN annual operating costs per account will fall to $100 at 100 percent deployment.

Using these assumptions, the state would incur $475,665 in total annual IFTA credentialing costs post-CVISN, a savings of more than $300,000 per year in total annual costs, once 100 percent of motor carriers had adopted CVISN credentialing. Assuming that an IRP electronic credentialing system is already in place to support the IFTA processing capability, such a state would recoup its one-time start-up costs to deploy the IFTA function of CVISN in less than 3 months.

Electronic Screening

The cost values for electronic screening operations pre- and post-CVISN were presented on a per site basis in Table 6-3. Staffing level per site and annual capital cost for one static scale were assumed to remain the same from the baseline to the post-CVISN deployment phase. The projected costs below assume that a state might want to deploy CVISN electronic screening capabilities at four additional weigh station sites, for a total of five sites.

Expanded CVISN Deployment (Start-Up) Costs

A state with more than one conventional static weigh scale station might be interested in upgrading several of its stations to CVISN electronic screening capabilities (i.e., AVI, WIM, plus snapshot capability). Some of the one-time deployment costs are for software development; so such costs might not be incurred again as the program is expanded to additional stations. Table 6‑7 shows details of the total start-up cost for electronic screening at the first site and at each additional site.

Table 6-7. Elements of Total Deployment Costs for Electronic Screening

Cost Element	Cost ($) for the First Site	Cost ($) for Each Additional Site
AVI Reader	15,000	15,000
Scale, WIM, Mainline	125,000	125,000
Electronic Signs/Loop Detectors	10,000	10,000
Administrative/other	27,000
Communication equipment	123,000	123,000
Consultant (software development)	166,712
Interfaces	25,000
Personal Computer (3 desktop)	10,000	10,000
Retrofit fixed weigh scale	20,000	20,000
Training, PC (3 persons)	240	240
Training, Info Technology (3 persons)	300	300
TOTAL	522,252	303,540

If a state wanted to convert five existing weigh stations to electronic screening capability, the cost would total $1.7 million (approximately $500,000 for first station + $1,200,000 for four additional stations).

Expanded Post-CVISN Annual Costs

If a state wanted to deploy a CVISN electronic screening capability at an additional weigh scale station, it would presumably need to incur the baseline annual capital and annual operating costs shown in Table 6-3, i.e., $10,850 per site in annual capital and $128,580 per site in annual operating costs (including labor for three roadside staff members). In addition, the state would incur $29,300 in post-CVISN annual capital costs and $48,916 in post-CVISN annual operating costs (resulting in a total annual cost of $78,216) for AVI, WIM, and electronic snapshot capability at each site.

Table 6-8 shows the effect of a five-site expansion of CVISN electronic screening capability, in the context of the existing annual capital, labor, and operating costs of those five sites. This table shows that the state would already be incurring nearly $700,000 in annual capital and annual operating costs (including labor) for the five sites, and that the CVISN upgrades included in Table 6-3, i.e., AVI, WIM, and electronic snapshot capability, would result in an additional $391,080 in annual costs to the state. Again, this assumes that the three FTE staff members per weigh station will be able to use the CVISN technology without additional labor being required.

Table 6-8. Cost-CVISN Annual Costs for Five Electronic Screening Sites

Cost Element	Expanded Cost, $
Static Scale & 15 FTEs (3/site)	697,150
CVISN Upgrades (AVI, WIM, snapshot)	391,080
Total for Five Sites	1,088,230

Safety Information Exchange

Deployment of Safety Information Exchange is based on the number of enforcement “units” used by the state. An enforcement unit consists of an officer or inspector and a vehicle. Statewide costs include costs for software and other central infrastructure elements to support a set of enforcement officers operating in the field. To operate SIE technology using land‑line communication technology for the Aspen system, these start-up costs are $31,000 statewide, plus $4,822 per unit. Wireless communication capabilities cost $1,000 per unit and CVIEW capabilities cost $325,000 for the entire state.

Table 6-9 shows that for a state with 50 inspectors, the one-time start-up (deployment) cost for SIE, including upgrade to Aspen capability, wireless communication, and CVIEW, would be nearly $650,000. Table 6-9 assumes that the state does the following:

· Upgrades its statewide system to Aspen capability

· Equips its 50 officers with laptop computers, wireless modems, and mobile printers

· Trains those same 50 officers

· Develops a state-specific version of the CVIEW software to support all roadside operations.

Table 6-9. SIE Start-Up Costs (Extended to 50 Units)

Cost Element	Cost per Unit, $	Number of Units	Extended Cost, $
Start-Up Cost (Aspen), Statewide	31,000	1	31,000
Start-Up Cost (Aspen), per unit	4,822	50	241,100
Start-Up Cost (wireless), per unit	1,000	50	50,000
Start-Up Cost (CVIEW), Statewide	325,000	1	325,000
TOTAL			647,100

Table 6-10 shows that, once CVISN is deployed, the state could expect to incur $160,850 in combined annual capital and annual operating costs, excluding roadside labor.

Table 6-10. SIE Total Annual Costs for Upgrade to Aspen & CVIEW (Extended to 50 Units)

Cost Element	Annual Cost, $	Number of Units	Extended Annual Cost, $
Annual Capital (Aspen), Statewide	2,200	1	2,200
Annual Capital, per Unit	810 + 100	50	45,500
Annual Operating (Aspen), Statewide	6,000	1	6,000
Annual Operating, per Unit	74 + 469	50	27,150
Annual Operating (CVIEW), Statewide	80,000	1	80,000
TOTAL			160,850

Table 6-11 illustrates how the one-time start-up cost and the annual operating costs for moving to CVISN technology, including Aspen, wireless communication, and CVIEW compare to the baseline costs to operate 50 enforcement officers (with vehicles) in roadside inspection service

Table 6-11. SIE Deployment Statewide, Plus 50 Enforcement Officers

Cost Element	Cost, $	% of Baseline Annual Operating Costs
Total Annual Cost, Baseline	2,782,250/yr	100%
Start-Up Cost for Aspen, wireless, and CVIEW	647,100 one time	23%
Total Post-CVISN Annual	160,850/yr	5.8%

Cost Projections to Other Scenarios

The above analysis was presented to illustrate how the unit costs, which were derived from actual costs in selected states, might be applied to calculate start-up and annual costs in states with different operating parameters (numbers of credentialing accounts, weigh stations, and enforcement units). However, at the time this study was concluded, only a few states had experience at deploying these systems. Therefore, it was not possible to determine how these cost elements and the associated cost values might vary from state to state. CVISN involves the integration of existing (i.e., legacy) software systems, which might not look the same in different states. As additional states gain experience at deploying and operating these systems, new cost data will become available for this type of sensitivity analysis. In the meantime, states attempting to use these data to project future costs and cost savings should consider the degree to which their legacy systems and operating procedures are comparable to those of the states participating in this study.

6.7 CVISN Costs to Motor Carriers

Three motor carriers participating in the CVISN deployment for electronic credentialing were interviewed as part of the cost analysis data collection effort. Two carriers participating in the Kentucky deployment and one carrier in the Maryland deployment were interviewed. The interview objectives included

· Gathering information on the costs incurred by the motor carrier industry in obtaining IRP credentials before and after CVISN systems deployment

· Understanding the impact of CVISN systems on the efficiency and productivity of motor carrier operations.

The carriers were also asked to identify significant changes or benefits resulting from deploying CVISN systems. Table 6-12 summarizes the characteristics of the three carriers interviewed and the expected savings to be realized from CVISN deployment.

Data concerning motor carrier cost to deploy electronic credentialing systems include:

· Start-up costs for motor carriers for either the PC-based or web-based CAT option are minimal because the only equipment required is a computer with the necessary communication peripherals. As part of the pilot testing, the CAT software was provided by the states at no cost to the motor carriers. The amount of training required to use the CAT software is considered minimal for computer-literate motor carrier staff.

· Labor and other costs associated with obtaining IRP credentials in terms of the number and level of staff responsible for obtaining credentials is not affected by the credentialing option(s) used by the state, mainly because the one person assigned the credentialing duties does other things as an employee, but is still needed to devote some hours to credentialing activities.

· The only relevant communication charges for the motor carriers are the internet or e‑mail charges associated with interfacing with state credentialing systems. This additional cost is only for carriers who did not have internet or e-mail service prior to using electronic credentialing.

· No separate or additional O&M charges are expected because operating and maintenance costs of equipment and software are covered by service warranties that come with the equipment purchase.

Table 6-12. Motor Carrier Credentialing Costs and Savings

Carrier 1

Carrier 2

Carrier 3

State

Type of Operation

# of Trucks

Time Sensitivity of Freight

Staff for Credentialing

Other Staff

Salary of Credentialing Staff

Salary of Other Staff

New Credentials per Year

Private

very

$25/hr

$15/hr

For-hire

115

very

$17/hr

$9/hr

Leasing

1000

very

N/A

$8.5/hr

N/A

120

Cost

($)

Time (hrs)

Cost

($)

Time

(hrs)

Cost

($)

Time

(hrs)

Pre-CVISN

New Credential

Credential Renewals

Total

$2334

$346

312

360

6.5

$5525

$344

49.3

88.5

Post-CVISN

New Credential

Credential Renewals

Total

$480

$167

2.2

7.2

130

201

1.4

11.2

$765

N/A

24.5

N/A

Percent Savings^a

New Credential

Credential Renewals

Average Savings

79%

52%

75%

67%

80%

59%

82%

44%

60%

78%

53%

58%

Commercial Vehicle Operations Area - Operating Features	Baseline		CVISN Deployment (Nonrecurring, One-Time Start‑Up) Costs	Post-CVISN Recurring (assuming 100% deployment)		Data Sources (States)
	Annual Capital Costs	Annual Operating Costs^a		Annual Capital Costs	Annual Operating Costs^a	Data Sources (States)
Credentialing (Administrative Processes)
- End-to-end IRP (4,400 carrier accounts)	Note b	62.54 per account	935,906 statewide	1.48 per account	39.54 per account	KY
- IRP with VISTA (6,500 carrier accounts)		138.20 per account	464,802 statewide	2.03 per account	91.95 per account	MD
- End-to-end IFTA (4,750 carrier accounts)		166.11 per account	63,596 statewide	0.14 per account	100.00 per account (assumed)^c	KY, MD
- IRP clearinghouse	Note d	79,656 per year statewide	0	0	14,220 per year statewide plus membership fee	Note e
Electronic Screening
- One static scale at fixed site, plus labor for 3 persons	10,850 per site	128,580 per site	108,500 per site^f	10,850 per site	128,580 per site	KY, CT
- Basic screening equipment (AVI & WIM, 1 site)	Note g		150,000 per site	15,000 per site	6,500 per site (excluding labor)	KY
- Site upgrade to elec. snapshot capability; equipment & training for 3 persons			372,252 per site	14,300 per site	42,416 per site (excluding labor)	KY
- Mobile unit (1 unit & 2 persons)			405,000 per unit	40,500 per unit	97,500 per unit	VA
Safety Information Exchange
- Enforcement officer and vehicle (1 unit)	10,325 per unit	45,320 per unit	33,250 per unit^f	10,325 per unit	45,320 per unit	KY, CT
- Upgrade to Aspen capability (statewide); equipment and training (1 unit)	Note g		31,000 per state 4,822 per unit	2,200 per state 810 per unit	6,000 per state 74 per unit (excluding labor)	CT
- Wireless and SAFER mailbox (1 unit)			1,000 per unit	100 per unit	469 per unit (excluding labor)	CT
- CVIEW or equivalent (statewide)			325,000 per state	0	80,000 per state (assumed)^h	KY