Call waiting
Isbell renews call to action on freight infrastructure plan, one that goes beyond rail.
If the global recession has not diminished all your optimism, you know better economic times lie ahead.
Accepting this premise, you only need to look backwards to know the surge in container imports from 2004 to 2006 led to significant congestion and unpredictable cargo delays at some of our major marine gateways, notably San Pedro Bay and New York-New Jersey. Unfortunately, since The Waterfront Coalition published its well-read report in May 2005, National Marine Container Transportation System ' A Call to Action, no major non-rail freight infrastructure improvement has been started. These so called 'last mile' projects are not even close to being 'shovel ready.'
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The nation does not have an overarching, reasonable national freight transportation policy or plan, the successor surface transportation reauthorization bill to SAFETEA-LU is going nowhere in Congress, and TIGER funding for freight transportation is being allocated largely to rail projects (CSX's National Gateway and Norfolk Southern's Crescent Corridor), as opposed to dealing with known freight bottlenecks like the Gerald Desmond Bridge in San Pedro Bay, Bayonne Bridge in New Jersey, and other lesser known but important projects linking roads and highways with ports, border crossings and railyards.
The U.S. Department of Transportation's Strategic Plan for 2010-2015 states, 'The nation's economic competitiveness requires a calculus of economic returns that includes valuations and returns for safety, livable communities, environmental sustainability, and stewardship of transportation assets.'
The National Surface Transportation Policy and Revenue Study Commission said in the strategic plan: 'Without adequate investment in the road network or diversion of freight to rail or water transport alternatives, there may be adverse consequences in safety and efficiency should road conditions worsen in the future.'
An overriding theme within the administration's action plan is to divert freight from less environmentally friendly trucks to rail or water transport alternatives. Focusing on rail creates another advantage for the administration, as rail capacity expansion is, for the most part, privately funded.
Expansion of intermodal rail is less expensive and more environmentally friendly than truck in moving containers over longer distances. However, if it is made the focal point for an intermodal transportation policy, scarce resources will likely be diverted from last-mile highway and bridge developments that clearly would benefit shippers by speeding the transport of import and export containers. Bill Graves, American Trucking Association president and chief executive officer, counters that shifting loads to trains would ease congestion, saying that even if intermodal rail tonnage doubled by 2020, it 'would account for just 1.8 percent of the freight movement.'
Off the West Coast, the two Class I railroads efficiently operate in a west-to-east direction over distances of 1,000 miles. Shippers need adequate highway and bridge capacity to handle shorter transits to their near-port distribution facilities and to stores that are within 500 miles of ports. Trucks also enable shippers to expedite freight to final destinations and avoid more costly and less environmentally air freight shipments.
So if shippers agree that we need a combination of private investment in rail and marine terminals to meet the challenges of handling more import and export containers when economic conditions improve, where is the money going to come from to pay for the public portion of the much needed last-mile freight infrastructure?
Despite House Transportation and Infrastructure Committee Chairman James L. Oberstar's good intentions to pass a $500 billion surface transportation reauthorization bill, we've had to settle for extensions to SAFETEA-LU that continue to put our decaying and inadequate highway and bridge infrastructure at risk. Informed sources say Oberstar's bill is not progressing in light of mid-term congressional elections.
A major issue impeding the passing of the next surface transportation reauthorization bill is funding methodologies. The traditional funding mechanism, gas taxes, is inadequate because:
' It has not been increased in more than 15 years and cannot possibly keep pace with rising construction costs.
' More than 25 percent is diverted to non-highway projects (25 percent goes to transit alone).
' Vehicles have become more fuel-efficient and miles traveled are decreasing due to higher fuel prices.
The American Trucking Associations has endorsed increasing the diesel fuel tax as long as the additional revenue is exclusively reserved for highway freight projects. From the ATA's perspective, this tax has the least administrative cost burden, as roughly 92 cents of every dollar collected goes toward funding federal transportation programs. To sufficiently cover the nation's surface transportation infrastructure needs, this additional funding would have to be coupled with an increase in non-diesel gas taxes, but that is the show-stopper for this congressional session.
The National Cooperative Freight Research Program, which funds freight projects under the jurisdiction of the Transportation Research Board, has a project underway to evaluate other funding alternatives. Tioga Group will lead the research (If contacted, please take time to provide your input).
Two interesting funding options are an odometer (vehicle miles traveled) tax and a waybill tax. Each has advantages and disadvantages. Public-private partnerships are another option. The Waterfront Coalition in its 2005 report laid out conditions under which shippers would support this option.
As the coalition pointed out in 2005, 'Maintaining the health of the U.S. Marine Container Transportation System is essential to ensuring America's continued economic dominance.' The nation lacks a national freight policy and the administration's focus on rail and inland waterways is not the multimodal plan our nation needs to support the ever-growing flow of import and export containers. I urge every shipper to become more informed and to work with trade associations and government affairs staff to urge Congress to pass the next surface transportation reauthorization bill as soon as possible, and ensure non-discretionary funding is directed to freight mobility infrastructure projects in key freight corridors.
John Isbell can be contacted at john@starboardalliance.com, or by phone at (503) 329-2599.