Student Corner: The Economic Importance of Appalachian Highways

Community and Economic Development – Blog by UNC School of Government

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Student Corner: The Economic Importance of Appalachian Highways

By CED Program Interns & Students

Published July 2, 2010

Aaron Nousaine is a UNC-Chapel Hill graduate student pursuing a master’s degree in City and Regional Planning. He is currently working with the Land-of-Sky Regional Council in Asheville through the Carolina Economic Revitalization Corps (CERC).

Over the past eight months, the Appalachian Regional Commission (ARC) has released two new studies emphasizing the economic importance of the Appalachian highway system.  The first study quantifies the economic impacts of two major rockslides that occurred in southwestern North Carolina and Tennessee in the fall of last year.  The first slide occurred October 25^th and closed a section of Interstate 40 in Haywood County, North Carolina.  Just over two weeks later, the second blocked a section of U.S. Route 64 in Polk County, Tennessee.  These two events effectively cut off two of the state’s primary trade and transportation routes to Tennessee and the western United States.

According to the ARC study, the majority of the impacts were relatively isolated to the communities immediately adjacent to the slides.  This was largely due to the fact that these towns saw fewer visitors compared to previous years.  Fortunately, many of those interviewed for the study noted that the likely impacts would have been much worse, had the slides not occurred during their typically slower season.  These interviews suggested that through April 1^st, 2010 business activity in the effected areas had been cut by up to 25 or 30 percent.  Among the most heavily effected, were hotels, restaurants, retail businesses, gas stations, and even a local hospital.  Conversely, businesses located in communities along major detour routes reported a temporary increase in business activity related to the spike in visitors to their community.

Beyond local business revenue, the regional impact of the slides was evidenced in increased costs to businesses transporting goods through the western North Carolina region.  Considering vehicle operating costs, diversion travel time, emissions, congestion travel time, and pavement maintenance costs, the total additional transportation cost associated with the two slides was in the order of $197 million.  For individual businesses, the direct costs ranged anywhere from $3,000 to $60,000, depending on the size of the business.

These substantial impacts act to emphasis the value of another study published by the ARC just after the I-40 and U.S. 64 closures.   On November 17^th, 2009 the ARC released their study of Appalachian Development Highway System emphasizing the “importance of intermodal transportation networks for economic development in the 13-state Appalachian Region”.  The study identified the tremendous opportunities that could be leveraged through linkages with the global intermodal trade network.  Ultimately, the results of the study were incorporated into the Network Appalachia Strategic Plan for the Twenty-First Century.  This plan attempts to build on the already established Appalachian Development Highway System with three new initiatives.  These include:

1. Continuing to develop the 3,090-mile Appalachian Development Highway System, 84 percent of which is now open to traffic (as of September 30, 2009). System completion will produce $3.2 billion in new wages, $5 billion in increased economic activity, and 80,500 new jobs by 2035.
2. Establish the Appalachian Development Highway System as a regional highway foundation for a strategic network of Intermodal Corridors of Commerce. This balanced system of interconnected highway, rail, and inland waterway corridors is Appalachia’s direct connection to both domestic and international markets. Models of such intermodal success include the emerging Norfolk Southern Heartland and Crescent Corridors, the new CSX National Gateway Corridor, and the proposed inland waterway Marine Highway System.
3. Develop a growing system of inland ports to serve as key interchanges between the Region’s local economies and its transportation system. Patterned after successful models in Front Royal, Virginia; Huntsville, Alabama; Somerset, Kentucky; Lenoir, North Carolina; and Dubois, Pennsylvania, these transportation and logistics centers enhance the competitiveness of existing local businesses while helping attract new enterprise and employment to host communities.

Ideally, once these elements have been fully implemented the ARC region, and western North Carolina as an Appalachian community, will be able to more readily, and without interruption, access the global economic market place.  As noted in the Highway System study, the ARC recognizes the “linkage between isolation and economic distress…Developmental activity in Appalachia cannot proceed until the regional isolation has been overcome” (ARC, 2009).