Business groups make case for national intermodal plan, funding
The U.S. Chamber of Commerce and the American Association of Port Authorities on Monday urged the federal government to play a larger role in setting national priorities for intermodal surface transportation, and to improve road connections between ports and other freight hubs as part of a broad effort to rehabilitate a capacity-constrained freight transportation network.
“Every level of government must step up to the plate and make commitments to expand capacity, either through better utilization or additional infrastructure,” said Rolf Lundberg, senior vice president of congressional and public affairs for the U.S. Chamber.
The two groups were among two-dozen panelists representing carriers, users, labor, builders, and state and local governments that testified in Washington before the National Surface Transportation Policy and Revenue Commission, which has been holding a series of hearings around the nation to prepare recommendations for Congress on setting transportation infrastructure priorities and how to fund them.
The AAPA stressed the need for dedicated funding for intermodal connectors and projects of national significance, freight coordinators at the state level, a tax credit for railroads to spur investment in new capacity, and support for short-sea shipping initiatives.
The multi-year surface transportation spending blueprint passed by Congress in 2005 provided some new funding for freight infrastructure projects, but the U.S. Department of Transportation does not have any discretion on which projects to support because all the money was earmarked by lawmakers for pet projects. The authorization bill also does not provide any dedicated funding for intermodal connectors.
“In order to ensure that intermodal connectors are built and maintained in a timely manner, it is important to create a federal program that dedicates funding in each state to the purpose of intermodal connectors,” said Jean Godwin, AAPA’s executive vice president and general counsel, in prepared remarks. “No matter how much money ports invest or how productive ports make their marine terminal facilities, our transportation system cannot operate to maximum efficiency unless cargo can move quickly, and cost effectively, in and out of ports.”
The federal government needs to have more control of funding projects of national and regional significance that cross jurisdictions, she added.
States should be required by law to appoint special managers to coordinate freight projects that meet the needs of carriers and shippers in order to receive federal funds, Godwin said, taking a page from a proposal that was dropped in the final version of the 2005 Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users, or SAFETEA-LU. Many state transportation departments have voluntarily appointed freight coordinators, but she said the practice should be mandated so that all states give priority to freight transportation.
Godwin reiterated AAPA’s support for a 25 percent railroad tax credit to coax investment in new track, intermodal facilities and other expansion efforts. Legislative support for a new tax credit bill is uncertain at this time.
The AAPA also urged the commission to recommend the use of transportation revenue bonds to help raise money for infrastructure upgrades, and said it would support shipment user fees only if the money is used for well-defined transportation purposes.
The commission should also lay the policy foundation for intermodal container connections between highway and waterway transport, Godwin said.
“It’s not just about the modal connections, it’s also about whether federal policy encourages the development of the marine system element,” she added. “The commission should consider ways to encourage private sector investments in the marine highway, including the waiver of the Harbor Maintenance Tax as it is applied to intermodal cargo in domestic moves, and incentives for investment in port terminals and vessels that would be used specifically for coastwise or domestic marine highway service.”
The Harbor Maintenance Tax acts as a drag on short-sea shipping growth because international shipments that are transferred for domestic water moves are taxed twice, marine industry advocates argue.
The fuel tax is the best way to pay for the vast majority of infrastructure needs, and privatizing highways and other facilities is “not a substitute for systemic user-fee based-funding,” Lundberg said in written testimony. He dodged the question of whether the gas tax should be increased to supplement the Highway Trust Fund, which is projected to go in the red as early as mid-2008 or 2009, saying the Chamber will take a position once such a proposal is made.
Manufacturers and retailers who depend on a reliable surface transportation network to efficiently deliver their goods to market will remain on the sidelines unless the government demonstrates it intends to efficiently target tax increases and other fees to address congestion in the most critical chokepoints, Lundberg said.
“If the politics of equity and earmarks appear to be driving investment decisions, it will be difficult to motivate Chamber members to spend time and other resources on engaging in the public debate — regardless of the fact that the very issues the commission is grappling with are essential to their productivity and the economic health of the country,” he said.