Economic implications of the Canada-U.S. border bridges: Applying a binational local economic model for international freight movements

Abstract

This study provides an approach to measuring the local economic costs stemming from delays on bridges connecting the U.S. and Canada. We focused on two of the busiest bridges in the U.S. and Canada that connect the Buffalo-Niagara metropolitan region and Ontario province, using an approach that combines spatial networks and local economic impact models to estimate the economic costs of border delays on the local economies of the border regions. We estimated that the local economic impacts of delays on the Canada-U.S. border bridges in the range of $36,000 to $110,000 per day in total, indicating that a 1. percent increase of delay cost can produce 1.33 percent economic costs in total at the bridge connecting Buffalo and Ontario. Furthermore, the binational economic model provides information on which industries are most impacted from shipping delays on the bridges via supply chain, based on various scenarios. Our modeling approach and scenario development process have important implications for border-traffic planning analysis and border-city economies because they allow numerous simulation tests with respect to changes of international freight transportation costs and patterns for key economic sectors.