conditions. Document and display selected vessel 

 operating costs in the report. 



(e) Step 5— Determine current cost of commodity 

 movements. Determine transportation costs prevail- 

 ing at the time of the study for all tonnage identified 

 in Step 2. Transportation costs include the full 

 origin-to-destination cost, including necessary han- 

 dling, transfer, storage, and other accessory 

 charges. Construct costs for the with- and without- 

 project condition. The without-project condition is 

 based on costs and conditions prevailing at the 

 time of the study. Transportation costs with a plan 

 reflect any efficiencies that can be reasonably ex- 

 pected, such as use of larger vessels, increased 

 loads, reduction in transit time and delays (tides), 

 etc. Use competitive rates, rather than costs, for 

 competitive movements by land (See 2.7.2(a)(3), 

 2.6.2(e), and 2.6.9(b)). This concept also applies to 

 Steps 6, 7, and 9 and elsewhere where a competi- 

 tive movement by land is an alternative. 



(f) Step 6— Determine current cost of alternative 

 movement Determine transportation costs prevail- 

 ing at the time of the study for all tonnage identified 

 in Step 2 for alternative movements. The cost in- 

 cludes the full origin-to-destination cost. Such alter- 

 natives include competitive harbors, lightering, light- 

 ening and topping-off operations, off-shore port 

 facilities, transshipment terminals, pipelines, traffic 

 management, pilotage regulations, and other 

 modes of transportation. Consider competitive har- 

 bors with existing terminal facilities and sufficient 

 capacities as possible alternatives for traffic origi- 

 nating in or destined to the hinterland beyond the 

 confines of the harbor and for all other new com- 

 merce as well as all diverted traffic. Commerce with 

 final origins and destinations within the confines of 

 the study harbor is normally noncompetitive with 

 other harbors and need not be considered for di- 

 version unless unusual circumstances exist. Diver- 

 sion of established commerce now moving through 

 the existing harbor to or from the hinterland is de- 

 pendent on many different cost and service factors; 

 therefore, to ensure that all of these factors are in- 

 cluded in the analysis, interviews, and consultations 

 with shippers and receivers should be conducted 

 prior to any determination concerning diversion of 

 traffic. Factors to be considered in the analysis in- 

 clude transportation costs for both inland and 

 ocean movement, handling and transfer charges, 

 available service and schedules, carrier connec- 

 tions, institutional arrangements, and other related 

 factors. In addition, for commodities with shifts in 

 origins and destinations, as well as for new move- 

 ments, collect data on the value of the delivered 

 product as well as production and transportation 

 costs for shipments with the project. The specific 

 data and method of collection will vary with the 

 specific situation and the nature of the benefit. 



(g) Step 7— Determine future cost of commodity 

 movements. Estimate relevant shipping costs 

 during the period of analysis and future changes in 

 the fleet composition, port delays, and port capacity 

 under the with- and without-project conditions for 

 each alternative improvement under study. Base 

 future transportation costs on the vessel operating 

 cost prevailing at the time of the study. Additional 

 data may be needed to analyze the relationship be- 

 tween total volume and delay patterns and the port 

 capacity for the with- and without-project conditions 

 for each alternative. Changes in costs due to the 

 project should be identified and separated from 

 changes due to other factors. 



(h) Step 8— Determine use of f^arbor and ctiannel 

 witti and without project At this point, the analyst 

 will have a list of commodities that potentially might 

 use the proposed improvement; potential tonnages 

 of each commodity or commodity group; transporta- 

 tion costs for alternatives and for the proposed im- 

 provement; and present and future fleet composi- 

 tion with and without the proposed plan. To esti- 

 mate the proposed harbor use over time, both with 

 and without the project, compare costs, other than 

 project costs, for movements via the proposed plan 

 and via each alternative. Analyze any changes in 

 the cost functions and demand schedules in the 

 current and future without condition and the current 

 and future with condition. Conceptually, this step in- 

 cludes all factors that might influence a demand 

 schedule. Determine the impact of uncertainty in 

 the use of the harbor, the level of service provided, 

 and existing and future inventories of vessels. Pro- 

 vide adequate lead time for adoption for vessels 

 that are currently a small percentage of the world 

 fleet. 



(i) Step 9— Compute NED benefits. Once the ton- 

 nage moving with and without a plan is known and 

 the cost via the proposed harbor and via each al- 

 ternative are known, compute total NED navigation 

 benefits will be computed using the applicable dis- 

 count rate. 



(1) Cost reduction benefits, (i) Traffic with same 

 commodity, origin-destination, and harbor. For traf- 

 fic now using the harbor or expected to use it, both 

 with and without the proposed project, the transpor- 

 tation benefit is the difference between current and 

 future transportation cost for the movement by the 

 existing project (without-project condition) and' the 

 cost with the proposed improvement (with-project 

 condition). 



(ii) Traffic with same origin-destination; different 

 harbor. For commerce shifted to the proposed im- 

 provement from other harbors or alternatives, in- 

 cluding future growth, the benefit is any reduction in 

 current and future costs when movement via the 



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