Confederation Bridge: A Concrete Example of Induced Demand
August 18th and 25th, 2002 - One of the more difficult concepts Maglev proponents have been trying to present is induced demand, the stimulation of a greater demand for transportation services attributed to a major improvement in the transportation infrastructure.
The
ability to choose where to live, work and go to school can only
be provided by transportation; the better the transportation infrastructure,
the increased choices to our citizenry. And as we are finding out,
the greater the deterioration, the greater reduction in the number
of choices we all enjoy. Transportation is essentially a provider
of choice.
We have failed to convince government bodies of the imminent effect of induced demand because we assume in error that a maglev service will not increase the number of urban activity choices.
In 1997, a Canadian bridge demonstrated the induced demand effect quite dramatically.
Source: www.confederationbridge.com
Confederation Bridge, a 13-kilometre link from the Province of New Brunswick to the Province of Prince Edward Island (PEI) opened in 1997 and replaced the marine ferry service across the Northumberland Straights. What was previously a one-hour crossing became a 10-minute car or truck journey. And as any ferry traveller knows, while a crossing can take one hour, the real crossing time can be at least double when accounting for queuing, payment, embarkation, and alighting.
It now takes motorists one-hour to reach PEI from the largest regional city in the Maritimes, Moncton. Prior to the bridge, a similar car trip could easily take two to three hours, depending on the queue and scheduled departure.
A very interesting account of the positive economic impact of the bridge is available at the Canadian Broadcasting Corporation PEI website which is found below. A summary is presented here:
1. According to Standard & Poor's, the number of vehicle crossings more than doubled after the opening of the bridge. Although some traffic declined marginally in 2001, there were 768 thousand crossings last year.
2. The number of tourists visiting the island increased by almost 60% in 1998.
3. The economic impact of the increase in tourism dollars is estimated to be 100%.
4. While some were concerned that the bridge would shorten tourist stays, the average tourist stayed on the island for 4.2 days, virtually identical to the numbers prior to the bridge.
5. The trucking industry became more productive. For one company, productivity increased by 100%. Today, one truck is making four return journeys a day, rather than the previous two return trips. A potato supplier, opened a plant just across the bridge in PEI where it ships French fries to Canadian and American markets.
6. Export manufacturing increased by 20%.
7. In 1990, the island province exported only $170 million, or 16 per cent of provincial output. Last year, P.E.I. exported $667 million representing 30 per cent of GDP.
8. Retailing, especially in the capital city of Charlottetown, received a major boost when merchants such as Winners, Indigo, Future Shop (Best Buy) and others opened new stores. A greater selection of merchandise became available to Islanders.
One would think that a $1.2 billion bridge investment would have received near unanimous approval. But that is far from the case; only 60% of the population voted for it in a plebiscite. The usual NIMBY attitudes were very prevalent. And some were worried more about their own competitive situation than the welfare of other Islanders. In a very revealing radio interview, a local Souris merchant expressed a concern that the bridge would bring more retailers into his local community to compete with his own business establishments. If anything, this concern demonstrates the positive economic benefit of increased accessibility and choice to consumers.
It is not only the reduction in travel time that contributed to such a large and strong economic impact. One other important transportation attribute was substantially improved: reliability. Unlike the ferry service that was unpredictable - cars/trucks having to wait for later departures due to limited capacity - the bridge does not require travellers to schedule their crossing. This is a significant benefit to both truckers and motorists. Likely, it was this attribute along with the reduction in travel time that influenced the location of the McCain's French fry plant in Borden PEI.
Maglev proponents also should remember another important lesson for induced demand to take effect: While travel times were reduced and crossings were made more reliable, the cost of crossing the Northumberland Straits was not increased beyond the fares that the ferry service charged. Actually because of a complicated formula negotiated with Transport Canada, bridge crossings are actually less expensive than the ferry rates that would have been charged today.
In many aspects the Magplane technology can also emulate the improved travel attributes of this bridge. Travel times between metropolitan regions would be substantially reduced. There would be no requirement to place reservations as sufficient capacity would allow travelers to schedule their departures according to the time they need to reach a destination rather than the time a Magplane departs. And the cost of reaching an adjacent metropolitan region would be similar in cost to the current cost of commuting within the metropolis.
Magplane Technology Inc. believes that any successful maglev application that is able to incorporate the speed of intercity transportation modes with the ease, cost, capacity, station accessibility and reliability equivalent attributes found in intra-city mass transit modes, will result in a major shift in travel behaviour. Any Magplane application in existing intercity travel markets will not result in induced demand rates measured in fractions but rates measured in factors. And as we have seen by the example of the Confederation Bridge, the economic impact of induced demand will also be greater than the actual increase in the number of passengers traveling between our cities.
Source:
Canadian Broadcasting Corporation, Prince Edward Island, Canada, Confederation Bridge: 5 Years Later.