1. Introduction
1.1 Objectives and Strategy
The overall objective of the Economic Analysis and Business Case for Motor Carrier Industry Support of CVISN is to identify and evaluate the economic justifications for motor carriers and their industry partners (such as service bureaus or licensing and registration brokers) to participate in CVISN deployment. The broader goal of the task is to improve the industry’s understanding of the effect that Intelligent Transportation Systems (ITS), including CVISN technologies, can have on the business operations of motor carrier companies. CVISN stands for Commercial Vehicle Information Systems and Networks. The task entailed the collection and analysis of detailed interview data on costs, benefits, attitudes, and beliefs as reported by representatives of the motor carrier industry.
The intended audience for this report is motor carrier business analysts and related private-sector stakeholders in the commercial vehicle operations industry who may be deciding whether their companies should invest the time, resources, and attention required to participate in CVISN deployment. Both for-hire carriers and private or company-dedicated fleets are included in the scope of the motor carrier industry for purposes of this report. A briefer, summary version of this report is also being prepared, directed more toward industry executives, planners, and decision-makers (FMCSA 2007).
1.2 Task Organization and Hypotheses
The task order was organized into three subtasks: (1) Review Information and Collect Existing Data, (2) Establish Contacts with Motor Carriers, and (3) Develop Economic Modeling of Analysis Outcomes. The third subtask addressed three objectives through the construction of a return on investment (ROI) model, intended to test the hypotheses listed below each objective:
Objective 1 – Document startup and annual recurrent costs associated with CVISN deployment for motor carriers under various scenarios.
Hypothesis: In deploying CVISN technologies, motor carriers incur one-time startup costs that are clearly defined and measurable.
Hypothesis: In operating CVISN technologies over time, motor carriers incur annual labor and operations and maintenance (O&M) costs that are clearly defined and measurable.
Hypothesis: CVISN cost structures vary between segments of the motor carrier industry.
Objective 2 – Document the benefits associated with CVISN deployment.
Hypothesis: Motor carriers are experiencing benefits associated with CVISN deployment that are both defined and measurable.
Hypothesis: CVISN benefit structures vary between segments of the motor carrier industry.
Objective 3 – Document the returns on investment (ROIs) associated with CVISN deployment.
Hypothesis: The ROI, net benefits, and payback periods associated with CVISN deployment are measurable and vary between segments of the motor carrier industry.