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American ShipperIntermodalWarehouse

Failing to keep pace

U.S. transport policy slowly incorporates freight, but infrastructure upgrades lag.

By Eric Kulisch

   The recent collapse of the Interstate 5 bridge into the Skagit River north of Seattle focused attention once again on the fragile state of the nation’s transportation infrastructure.
  
While the collapse does not appear tied to any structural failure or weakness — a truck carrying an oversize load struck a load-bearing beam and brought the bridge down — it brought back memories of the 2007 I-5 bridge collapse in Minnesota and underscored the dependence of the national economy and people’s lives on transportation arteries that provide mobility.
  
As Congress prepares to craft a reauthorization bill for surface transportation programs to replace the short-term MAP-21 legislation that expires Oct. 1, 2014, shippers and transportation providers are once again clamoring for greater federal investment in transportation infrastructure to make up for years of neglect addressing bottlenecks that increase the cost of shipping goods for businesses and their customers, and curtail economic growth.
  
Given current budget constraints, money will still be hard to come by, especially for freight-related projects, but the current debate differs from those of the past decade in that there is growing recognition within the administration and Congress about the importance of dedicating resources and policy attention towards goods movement. Shippers and carriers have pushed for greater prioritization of projects and the government has begun to embrace reforms aimed at making better decisions for allocating federal dollars.
  
American highways, rail lines, airports and some ports are already overburdened by congestion and physical wear. The lack of urgency to modernize aging infrastructure or expand it to meet growing demand for freight transportation in the next five to 30 years is of great concern to the business community. About 48 million tons of goods worth $46 billion move across America each day and by 2050 there will be another 100 million people who will need goods shipped to stores or their homes, according to government estimates. Freight volumes are expected to more than double to 45 billion tons per year by 2040.
  
The World Economic Forum’s latest Global Competitiveness Report ranks the United States 25th in the quality of overall infrastructure, including 19th for ports, 18th in railroads, 20th for roads and 30th in airports. And the American Society of Civil Engineers gives U.S. infrastructure a grade of “D+”.
  
That means the freight system will have to perform at a much higher level than it does today, experts say.
  
“We can no longer afford to spend federal resources on projects that do not meet our most important national needs,” Derek Leathers, president and chief operating officer of Werner Enterprises, a large truckload carrier and logistics provider, said in written testimony for an April 24 hearing held by a special panel on freight issues created by the House Transportation and Infrastructure Committee.
  
“When channels are too shallow to receive large vessels or railroads are located miles away from ports, unnecessary delays and congestion cause the flow of commerce to slow and cost our economy billions. As a result, our ability to compete in the international market and meet President Obama’s goal of doubling exports by 2015 is undermined,” Edward Wytkind, president of the Transportation Trades Department of the AFL-CIO labor federation, added.
  
“Thus, the national discussion about the state of our freight transportation system isn’t just another transportation policy debate; it’s about providing American business the infrastructure they need to distribute their products to the rest of the world and ensuring the U.S. remains a dominant force in the global marketplace,” he said. “While the private sector has a vital and necessary role to play in investing in our freight transport system, the government simply cannot abdicate its responsibility to properly fund this sector of our transportation system across all modes.”
  
MAP-21, or Moving Ahead for Progress in the 21st Century, is a good start for focusing attention on freight, government and industry officials say, even though the legislation only maintained the status quo in the face of Highway Trust Fund shortages by providing $105 billion over two years to run transportation programs and fund construction projects. The legislation was a compromise because of disagreements over how to fund a five- or six-year bill as revenues in the Highway Trust Fund continue to erode due to the use of more fuel-efficient cars and slower economic activity.
  
The Department of Transportation has moved aggressively to implement the law’s freight provisions.
  
Congress directed DOT to take an inventory of the nation’s highways and designate 27,000 to 30,000 miles of roadway as the primary freight network to help states channel resources to the greatest need for efficient freight movement. Selection of routes is expected to rely on truck volume and weight data. Later this year, states will be asked to submit a list of rural state corridors to round out the map of U.S. trucking routes.
  
In addition, DOT is supposed to write by October 2014 a report about the condition and performance of the freight transportation system.
  
A year later, DOT must also complete a national freight strategic plan for the first time, aimed at meeting a number of goals, including improving the nation’s productivity and competitiveness; reducing congestion; enhancing safety, security, resilience and maintenance of the freight network; using innovative technology to improve efficiency; building accountability into operation and performance of the system; and reducing adverse environmental and community impacts of freight transport.
  
The strategic plan is also supposed to identify chokepoints, major trade gateways and corridors; estimate freight volumes 20 years out; assess regulatory and other barriers to efficient freight movement; develop best practices for improving freight system performance and intermodal connectivity; and create a process to address multistate projects and encourage jurisdictions to collaborate.
  
Freight projects normally don’t get funded under the non-discretionary, formula-based system for federal highway aid to states because states typically are more focused on commuters that vote, may not have adequate freight expertise, have trouble fitting facilities such as freight-rail grade crossings within traditional modal funding buckets, and are reluctant to invest in infrastructure with benefits that extend beyond state lines.
  
To incentivize states to plan and implement projects that improve freight flows, MAP-21 allows federal funds to cover 95 percent of the cost of interstate highway improvements and 90 percent for any other project if states demonstrate the project will make a difference in moving cargo more efficiently. Eligible projects include intelligent transportation systems and other technology, rail-highway grade separations, truck-only lanes, climbing and runaway truck lanes, truck parking facilities, and intermodal connectors. The normal federal cost-share is 80 percent.
  
States are also encouraged to develop, or update, their own comprehensive freight plans, which will be used by DOT to help inform the national freight strategic plan.
  
Several states recognize the interdependence of interstate highway and rail corridors, but it is the responsibility of DOT to make sure “that there is a national coherence to this, that we don’t have Balkanized, individual plans that don’t serve the nation,” Deputy Transportation Secretary John Porcari told the freight panel during an informal roundtable session in mid-May.
  
“In goods movement, you’re serving typically both a local function and a national and international one and we need to make sure both parts of that equation are accommodated,” he said.
  
Some states, he added, have become much more sophisticated in their planning and are trying to synchronize development of highway, rail and port improvements as part of larger economic development strategies.
  
The National Gateway Initiative, an $850 million public-private partnership to raise clearances for double-stack intermodal container trains and build intermodal terminals on CSX Transportation’s network between the Mid-Atlantic and Midwest regions, is an example of states investing in improvements that have positive impacts beyond their border, Porcari said.
  
“Many states, at state expense, are making improvements that may not directly benefit their state, but benefit the system that’s being expanded,” he said.
  
DOT is planning to conduct several truck-related studies, including a survey and assessment of the adequacy of truck parking facilities, public and private. Truck parking is an important safety issue and needs to be incorporated into the freight strategy, industry and government officials say, noting rest areas are in short supply in many corridors and during certain times of day.
  
The business sector has long complained infrastructure projects that could make transportation more efficient take an inordinate amount of time — 10 to 20 years in many cases — from concept to construction. The transportation law includes many provisions aimed at accelerating project delivery. Key provisions force agencies to coordinate planning and environmental review processes, with work being done concurrently rather than sequentially, and establish decision-making deadlines. MAP-21 also gave DOT expanded authority for use of categorical exclusions to speed up the approval process.
  
Categorical exclusions are categories of relatively minor and straightforward environmental approvals that do not need to go through a full blown environmental assessment or issuance of an Environmental Impact Statement. The law expands the use of these exclusions to a variety of projects, including multi-modal projects, projects to repair roads damaged in a disaster, and projects within existing operational right-of-way.
  
Last summer, the Obama administration put 50 projects of regional or national significance, including seven at ports, on the fast track for permitting and created an online dashboard to track their progress.
  
In September, DOT established a Freight Policy Council designed to break down the modal silos within the organization by bringing together division heads and policy experts to implement the freight provisions of MAP-21.
  
The White House last year also formed a Task Force on Ports to develop strategies to support port and related infrastructure investment in the context of a multimodal freight strategy. Senior homeland security, transportation, economic, trade and environmental officials are members of the task force.
  
On May 30, DOT selected 47 people from industry, academia, labor, safety organizations and local governments to sit on a new National Freight Advisory Committee that will offer recommendations for improving the national freight system, with its initial task being to help shape the national freight strategic plan.
  
Meanwhile, there is great focus at DOT on developing realistic performance measures, data sets and tools to evaluate freight transportation investments.
  
DOT intends to set performance measures for each strategic goal, as well as for each mode, to evaluate its progress, Beth Osborn, a deputy assistant secretary of transportation, said at a March briefing. Once DOT establishes the measures states and metropolitan planning organizations will set targets and report back on how well they are meeting those targets.
  
Creating metrics isn’t easy because “the very measures you pick can have a direct impact on the outcomes you’re seeking,” Osborn acknowledged.
  
Freight projects have also been the recipients of $1 billion through four rounds of the TIGER (Transportation Investment Generating Economic Recovery) grant program, almost one-third of the total distribution so far. What started out as part of the stimulus program in 2009 has helped fill the gap in funding for many multi-jurisdictional freight projects that have also received financial support from some combination of local and state governments, and private companies. Rail projects have been large beneficiaries of the program, including the Norfolk Southern’s Crescent and Heartland corridors expanding intermodal capacity between the Southeast, Mid-Atlantic, and Midwest; CSX’s similar National Gateway Initiative; the Colton Crossing grade separation of the BNSF Railway and Union Pacific lines in California’s San Bernardino County; and Tower 54 in Fort Worth, Texas.
  
Applications for a fifth round of TIGER grants totaling $474 million were due June 3.
  
“It’s the one useful multimodal tool we have,” Porcari said.
  
Before TIGER existed, one of the few opportunities for freight funding came from a program called Projects of Regional and National Significance, which was designed to address intermodal bottlenecks. MAP-21 reauthorized $500 million for PRNS, but Congress subsequently failed to appropriate any money.
  
TIGER grants and TIFIA (Transportation Infrastructure Finance and Innovation Act) loans have been helpful, proponents say, but are not a substitute for more sustained federal investment across the nation. The Coalition for America’s Gateways and Trade Corridors said at least $2 billion a year should be included for freight funding in the next transportation bill. Freight stakeholders are clamoring for a new trust fund dedicated to freight infrastructure, but that would require identifying a new source of revenue at a time when lawmakers are reluctant to raise taxes or expand the size of government. Mobility 21, a coalition of business and community groups that advocates for multi-modal transportation policy, recommended the Freight Trust Fund have a sunset date for a prescribed number of projects prioritized by regions for ports, border crossings, other assets and environmental mitigation.
  
Industry officials say planners need to think about freight transportation in a holistic way that recognizes how all the modes connect and coexist with community and economic development.
  
DOT officials for years have talked about the importance of intermodalism, but until the Obama administration there was little attempt to break down the modal silos and organize the department in a way that allowed for a holistic approach to transportation policy. Funding and policy were controlled by the administrations in charge of highways, railroads, maritime transport, aviation, pipelines, and motor carrier and bus safety.
  
A prime example of the new thinking is last year’s memorandum of understanding between DOT and the Army Corps of Engineers to work more closely on planning investments for projects that impact more than one mode of transport.
  
The Corps is now helping DOT evaluate TIGER grants to make sure they are aligned with dredging and other activities. Technical experts review marine-related aspects of applications, such as for a rail connection to a port, so DOT can decide whether it makes sense to expand landside capacity if the Corps doesn’t intend to expand the harbor’s capacity to receive larger vessels.
  
If the past is a prologue, DOT will have many more good applications than it can fund through TIGER. “That’s why it’s so important to have interagency cooperation to get the maximum return on federal investment,” the DOT deputy said.
  

  
Defining The Freight Network. Porcari said the collaboration with the Corps is also helping DOT’s ongoing effort to develop a marine highway network for moving container cargo on coastal and inland waterways to relieve road congestion and air pollution on crowded freight corridors. Several years ago, the Maritime Administration designated 11 multistate all-water routes and three shorter routes as marine highways. Porcari said waterways represent “untapped potential” for goods movement. DOT and local port authorities have found it difficult to attract enough shippers to make regularly scheduled container-on-barge services economically viable, although a handful of subsidized demonstration programs exist in places such as Virginia.
  
Congress defined the national freight network in MAP-21 as limited to highways, but a bill introduced by Rep. Albio Sires, D-N.J., would expand the designation to include rail, navigable waterways, inland ports, freight intermodal connectors, and airports. DOT officials in March said they intend to use existing authority to look more broadly at the freight system as they put together the strategic plan and a report about the network’s condition and performance.
  
“What we very much believe is essential is a systems approach toward moving freight. We can’t afford not to utilize every ounce of capacity in every mode given what’s coming at us in terms of demand,” Greg Nadeau, deputy administrator of the Federal Highway Administration, said.
  
The agency has experience conducting “condition and performance” reports for highways, although not with a specific focus on freight. It will have to develop measurement criteria and the types of data to collect for the other modes with the help of shippers, carriers, infrastructure owners, states and local governments, Osborn said.
  
DOT will look for ways to aggregate private sector data to protect proprietary and confidential information, Chief Economist Jack Wells said.
  
California state officials have expressed concern to the special House panel that the list of highways identified for the primary freight corridors may exclude many arteries in Southern California
  
that are important for moving cargo because they are state highways, not interstates.
  
The Federal Highway Administration does not collect data on state highways and counts short hauls from the ports of Los Angeles and Long Beach to warehouses for transloading into larger domestic containers for shipment eastward as local moves, Kome Ajise, deputy director for planning and modal programs at the California Department of Transportation, testified during a field hearing in Los Angeles.
  
“Southern California needs these shorter truck trips to be counted as a longer freight trip so that the impacted highways can be recognized as serving national needs, not just local needs,” he said.

  
Rep. George Miller, D-Calif., said DOT should take freight corridors into account because Southern California has multiple highways operating in parallel.
  
Mobility 21 also opposes the interstate-only approach.
  
“By forcing DOT to be bound only by interstate highway lane miles, rather than also including state routes that carry freight, and limiting the number of lane miles that can be included to far fewer than experts agree are part of our freight system, we fear that critical multi-modal freight facilities… will be left out of the assessment and therefore left out in the cold when it comes to providing funding for their maintenance and necessary upgrade,” Executive Director Marnie O’Brien Primmer said.
  
Porcari acknowledged the number of lane miles stipulated in MAP-21 for freight corridors may not be sufficient.
  
“I think it’s very likely we’ll need to expand those designations given the number of primary freight corridors both on the interstate and national highway system,” he said.
  
Sires’ bill would also create a National Freight Infrastructure Investment Grants program for port development, freight rail, intelligent transportation systems and other projects. The competitive grants would be awarded to projects that demonstrate high benefit-to-cost ratios in improving goods movement.
  
The grants provision essentially would give more permanence to the TIGER grant program that the Obama administration created in 2009 and through four rounds has provided grants to ports and freight rail projects that typically don’t qualify for federal highway aid to states.

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