U.S. freight system “quickly becoming saturated”
U.S. freight system “quickly becoming saturated”
The U.S. freight transportation system “is moving rapidly towards saturation,” officials of the U.S. State Department said in a report on congestion presented at an international meeting of the Organization for Economic Cooperation and Development.
The report, “Transportation Congestion: A Government Perspective,” just published by the OECD, presents a worrying picture of the gap between the growth of freight volume and investments in transport infrastructure, together with the resulting congestion and delays.
Covering congestion at U.S. ports and the problems of rail and highway infrastructures, the report noted that “all countries” are facing the challenge of accommodating the substantial growth of freight moving along their roads, railways, and waterways.
“Beginning in June 2004, an unanticipated surge of import cargoes created backups in ports along the U.S. West Coast and has put the country’s entire intermodal transport network under strain,” the State Department report admitted at the OECD’s November workshop on maritime transport in Paris.
The OECD workshop was chaired by Bruce Carlton, associate administrator at the U.S. Maritime Administration.
U.S. imports broke historical records in June and July, with cargo volumes at the ports of Los Angeles and Long Beach rising 17.5 percent in June and 24 percent in July, the State Department report said. “By September, more than a third of the ships in the ports of Los Angeles and Long Beach were waiting for a berth.”
The report noted the slow gestation of infrastructure projects in general and the difficulties of adding port infrastructures in particular, due in part to local opposition from residents. “Communities surrounding U.S. ports often oppose expansion plans because of the congestion and pollution that residents believe the ports create,” the report noted.
“One of the key challenges is funding infrastructure,” the report said. “Neither the private sector nor the U.S. government alone has the resources to meet the enormous financing requirements for maintaining and expanding the U.S. transportation system.” It cited a Federal Highway Administration estimate that $76 billion a year will need to be invested until 2020 just to keep the highway system in the state it was in 2000, with another $106 billion a year required to fund improvements in highways and bridges.
The State Department paper calls for cooperation between government and the private sector to add needed capacity to the freight transportation system in general. One such successful public-private initiative was the Alameda Corridor in California, the report said.
“Public port authorities and public and private terminal operators share responsibility for seaports,” the report said.
The report cited Transportation Secretary Norman Mineta's proposal to start a “SEA-21” program for the marine transportation system covering the financing of infrastructure improvements, the development of short sea shipping and the integration of shipping into the national transportation system. The cost estimate for this initiative is $1.5 billion for five years.
The State Department report notes that the transportation problem expected for about 2020 will likely materialize earlier than predicted. “It appears that the explosive growth in the trade between the United States and Asia, coupled with an accelerated reliance on imported goods throughout the U.S. economy, have moved that problem dramatically forward,” it noted.
Recent shifts in trade patterns, such as the growth of China as an exporting country, have triggered a growth in U.S. imports.
“The demand curve for imports into the United States appears to have shifted upward more or less permanently,” the State Department report said.
The report remarked that ocean carriers have been able to meet the increased cargo flows with additional services and larger vessels, although transpacific freight rates have “increased substantially.”
“The additional cargo, however, is overwhelming other parts of the transportation network,” the report added, citing shortages in port labor and intermodal rail capacity.
Rail congestion is already “acute” and sporadic reports of delays experienced in past years “are almost certain to become the norm,” the policy paper added.
The State Department believes that changes to port operations can facilitate the movement of freight. It said expanded hours of operations and different container storage procedures “should not be difficult to put into effect.” But new labor practices “often require delicate bargaining negotiations,” it cautioned. The issue of new technology was the main bone of contention that led to the shutdown of all U.S. West Coast ports in 2002.
