Transportation Asset Management: History, Trends, and Risk Reduction

Defining Asset Management in Transportation

In order to fully understand the discussion in this paper, one must first understand what asset management really is. Depending on the source consulted, there are several different definitions of asset management. Asset management has been defined by some as "a systematic process of maintaining, upgrading, and operating physical assets cost-effectively. It combines engineering principles with sound business practices and economic theory, and it provides tools to facilitate a more organized, logical approach to decision-making" (Hamilton, 2001, p. 2).

There are also more specific ways to define asset management. The focus of this paper is on asset management in transportation, and the Federal Highway Administration Office of Asset Management defines asset management as: "A business process and decision-making framework that covers an extended time horizon, draws from economics as well as engineering, and considers a broad range of assets. The asset management approach incorporates the economic assessment of trade-offs between alternative investment options, both at the project level and at the network or system level, and uses this information to help make cost-effective investment decisions" (Hamilton, 2001, p. 2).

As can be seen, the definition of asset management is taken very seriously in the field of transportation. In the following pages, emphasis will first be placed on the historical perspective of asset management in transportation, after which current trends, shifts, and directions will be addressed. Following the discussion of those two issues, the role that asset management plays in reducing threats, vulnerabilities, and risks to infrastructure will be examined before concluding remarks are presented.

Also important to the issue are the following questions, reproduced from Hamilton (2001, p. 3):

Historical Perspective on Transportation Asset Management

Overall, asset management has not been used as extensively in transportation as it has in other areas, and private companies are still much more involved in asset management than are public utilities. "The focus of transportation asset management systems is the maintenance, preservation, and operation of the existing transportation system" (Hamilton, 2001, p. 4). Hamilton (2001) goes on to state that asset management systems — whether for transportation or other goals — share the same basic components, including:

The history of asset management in the transportation sector is important to a study such as this one. It is somewhat difficult to pinpoint exactly when asset management in transportation took hold and became popular (Peaslee, 2005). By 1980, only five states had established any kind of systematic framework for the management of paved roadways (Finn, 1998). Nevertheless, it is important to look at the chronological events that preceded 1980. As early as 1970, workshops were sponsored to discuss issues related to paving roads and ensuring structural soundness and safety (Finn, 1998). Topics at these workshops included how to improve pavement quality and ensure long service life.

Another key issue was whether specific roads should be repaved or simply replaced. Both options carry costs and benefits, and the condition of the roadway as well as the cost of either repairing or replacing it must be considered when deciding which course of action to take. Washington State's Department of Transportation created a basic asset management paving project in 1974, though it did not compare with the more comprehensive asset management frameworks developed in 1980 (Finn, 1998).

In 1977, books were published on the management of paved roadways that addressed asset management to some extent (Finn, 1998). In 1979, a "how-to" guide was developed to help states and municipalities interested in managing their paved road systems (Finn, 1998). As noted, 1980 marked the year when five specific states — Arizona, California, Utah, Washington, and Idaho — first created asset management systems involving transportation and paved roadways (Finn, 1998). At present, all 50 states either have asset management systems for their transportation departments or have begun taking steps to implement them. It is somewhat surprising that so many states took as long as they did to adopt this concept, given that the foundational ideas are generally considered to date to approximately 1968 (Finn, 1998).

Looking at this historical perspective, it is clear that asset management in transportation is a relatively new field, and therefore less is known about it than asset management in some other areas of business. Early databases were created for transportation systems in various states, cataloguing roadway conditions and ranking them so that the worst roadways could be corrected or replaced first (Finn, 1998). Over time, more sophisticated methods were developed to obtain better information about roadways, enabling easier prioritization of problem areas and more effective management of assets such as paved roads and equipment.

A 13-step plan for developing and implementing an asset management system for pavement was also created, reproduced here from Finn (1998):

Source: Finn, 1998.

Although general in nature, this plan gives those interested in creating a transportation asset management program a clearer sense of what needs to be accomplished and where to begin. Managing assets in this way is not always easy, but transportation departments across the country are finding that careful asset management is essential to maintaining adequate funding for roadway upkeep (NCHRP, 2002). There are many roadways throughout the country believed to be in disrepair, and this view is not disputed here. However, it is important to understand that there are literally hundreds of thousands of miles of roadways in this country, and there are only so many employees and so much funding available to address them. Transportation departments do the best jobs they can, but they cannot always reach every road as quickly as nearby residents or frequent drivers might hope.

Several factors contributed to the difficulties involved in creating a pavement management system (PMS) for many states:

Current Trends, Shifts, and Directions in Asset Management

Source: Finn, 1998.

Despite these initial difficulties, pavement management systems — and transportation asset management more broadly — have come a long way from their origins in the late 1960s and early 1970s.

There are several current issues that are important in asset management as it relates to transportation. The following information is reproduced from Hamilton (2001) because of its succinctness and significance, and it provides a clearer understanding of where asset management is heading in the transportation sector.

In recent years, there has been a growing interest in applying the principles of asset management to public infrastructure, and to transportation infrastructure in particular (Hamilton, 2001, p. 1). This growing interest appears to be driven by several factors:

Source: Hamilton, 2001.

It is very important to understand these driving forces because they help explain why asset management has become a priority and where it is likely to continue to develop in transportation. Also important to understand is the process of strategic resource allocation — using available resources correctly in order to manage assets in a way that saves both time and money. This process embodies the core principles discussed in the following section, showing how policy goals, trade-off analyses, resource decisions, program delivery, and system condition assessments all interact with one another.

Conclusion

It is relatively easy to see from the information presented above that asset management in transportation has not been around that long. Because of this, many states and even the federal government are still feeling their way along when it comes to this important issue. However, the examples discussed in earlier sections indicate that many states are taking transportation asset management very seriously. They are thinking carefully about what they want to accomplish with their asset management programs and how to use databases and other technological advances to ensure that their assets and funding are utilized to the greatest possible potential.