Freight execs tie tax reform, infrastructure to environmental gains

   Industry leaders concurred during testimony on Capitol Hill Wednesday that the freight transportation industry is doing a lot to make fleets greener, but said Congress could help reduce air pollution by making it easier to adopt clean energy systems and get infrastructure projects completed that reduce congestion. 
   Fred Smith, the founder, chairman and chief executive officer of FedEx Corp., suggested a reduction in corporate tax rates would help companies adopt new technologies.
   The hearing was the first held by a special panel created by the House Transportation and Infrastructure Committee to examine how to improve the U.S. freight transportation system as Congress gears up to vote next year on a multi-year surface transportation bill reauthorizing Department of Transportation programs that mostly focus on highways, transit and safety.
   Rep. Janice Hahn, a Democrat representing a district that includes the Port of Los Angeles and the founder of the PORTS Caucus, said Congress might need to address environmental sustainability when setting new freight policy so that needed infrastructure expansion doesn’t get stalled by interest groups concerned about the health effects of diesel pollution from trucks, ships, cargo handling equipment, and locomotives. She expressed fear that a new intermodal container rail transfer facility planned by the Port of Los Angeles and BNSF Railway to improve the efficiency of moving transcontinental cargo will be held up by objections from the neighboring city of Long Beach until more steps are taken to mitigate the impact of noise and emissions from traffic at the facility. 
   BNSF has already committed to reduce emissions in several ways, including using electric cranes and low-emission yard equipment, modern locomotives and trucks that meet the latest federal emissions standards.
   “The quickest way for Congress to reduce emissions in the transportation sector is to change the corporate tax rate and make it more advantageous to invest in capital assets and modernize,” Smith said. FedEx now flies Boeing 777 freighters that are 18 percent more fuel efficient than previous aircraft and operates lighter delivery vans that consume 40 percent less fuel than older models, he said. The Memphis, Tenn., based logistics provider would like Congress to adjust the 30-year federal standard on trailer size so its less-than-truckload fleet at FedEx Ground and FedEx Freight can use 33-foot twin trailers instead of 28-footers. The larger trailers wouldn’t add to the gross vehicle weight because FedEx tends to carry lighter packages and goods that fill up a trailer before reaching federal weight limits, but they would reduce the amount of trucks required to move cargo and result in less diesel emissions, Smith said.
   A better tax structure would help Werner Enterprises, one of the largest U.S. truckload carriers, invest in alternative energy technology, Derek Leathers, president and chief operating officer, agreed.
   The company, headquartered in Omaha, Neb., is experimenting with liquefied natural gas and compressed natural gas vehicles, which are thousands of dollars more expensive than diesel trucks that themselves have increased in cost with the addition of sophisticated emission control systems mandated since 2007. 
  “So having an appropriate tax environment that allows us to take those risks would be beneficial,” Leathers said.
   Smith has consistently called for lowering the U.S. corporate tax rate from 35 percent to 25 percent, saying business investment will help generate needed economic growth and jobs. But some analysts caution that with all the loopholes and deductions available in the tax code it’s difficult to know much companies actually pay in federal taxes. Allan Sloan of Fortune magazine recommends legislation requiring companies to publicly disclose federal taxes paid for a given year.
   Many good projects with environmental benefits “get snarled up” in federal, state and local bureaucracy during the permit process, Wick Moorman, the chairman, president and chief executive officer of Norfolk Southern, the fourth largest U.S. railroad, said. He endorsed measures that would streamline the environmental review process to speed up completion of projects that would reduce transportation bottlenecks.
   The two-year MAP-21 surface transportation bill enacted last year includes language to streamline the approval process for projects, although many provisions require rulemakings by the DOT that themselves can take more than a year to complete.
   Edward Wytkind, president of the Transportation Trades Department at the AFL-CIO, said increased federal support for transit would help reduce congestion in major metropolitan areas and make room for more freight on roadways. He also called for more funding of the NextGen air traffic control system that would allow for more efficient spacing of aircraft and reduce fuel burn. – Eric Kulisch