Transportation legislation: “Give freight a fund” is new cry in Washington
John D. Schulz, Contributing Editor -- Logistics Management, 5/21/2009
WASHINGTON—A potentially powerful coalition of transportation and freight interests is calling for a separate, dedicated freight mobility program to optimize freight movements across all modes and political jurisdictions.
The Coalition for America’s Gateways and Trade Corridors (CAGTC) is calling on Congress to create a dedicated federal Freight Trust Fund (FTF), modeled after the Highway Trust Fund to pay for freight-only projects. The goal is to include such a dedicated fund in the upcoming reauthorization of the highway reauthorization fund, which expires on Sept. 30. Transportation lobbyists are expected to work overtime between now and then on that must-pass legislation.
Whether a dedicated Freight Trust Fund is included in the bill is anyone’s guess. But the idea is gaining support by some members of Congress.
“I am pushing for a national freight policy,” says Rep. Laura Richardson, D-Calif., a member of the House Transportation and Infrastructure Committee chaired by Rep. Jim Oberstar, D-Minn. “I’ve had a meeting with Chairman Oberstar on this issue, and I’m going to have many more.”
Approximately half this nation’s imports move through Rep. Richardson’s district that includes the Port of Long Beach in Southern California. She says modernization of the nation’s freight system is essential to economic recovery and more good-paying jobs. She cited a recent report on surface transportation that recommended this nation spending $384 billion annually for the next 20 years to upgrade the transportation infrastructure.
“The real key to creating jobs is through transportation and infrastructure,” Rep. Richardson said. “Right now we do not have a focus in this country on transportation and infrastructure. We are focusing on energy, health care, Afghanistan, and other matters. We need to get back to basics, and that is transportation and infrastructure. It’s critical we put infrastructure back as issue No. 1.”
Added Rep. Thomas Petri, R-Wis., another member of the House T&I Committee: “This is obviously a very important cause. We need to do a lot of investment.”
Another Republican, Rep. Ken Calvert of Calif., said: “We obviously have a problem—not just in California but through the U.S. Money is a problem. We need to find an income stream so we can make freight improvements. Hopefully there will be a section in the (highway) bill on freight movement. We need to make sure none of that money bleeds away to other things.”
Reps. Calvert, Petri, and Richardson spoke at a rally sponsored by the Coalition for America’s Gateways and Trade Corridors at the U.S. Capitol. Among its 60 or so members are some of the largest freight interests in the nation, including the ports of Long Beach and Los Angeles, the City of Chicago, the Florida Ports Council, Florida East Coast Railway, the construction company Parsons and several state departments of transportation.
Sporting buttons reading “Freight Needs a Fund,” CAGTC members are actively lobbying Congress to include language calling for a dedicated freight fund in the highway bill.
“It will take a lot of work but it’s interesting to see how far we have come from five years ago,” says Leslie Blakey, CAGTC executive director. “Now everybody recognizes the importance of freight. Members are aware of the various choke points in our system and infrastructure needs.”
Several bills have been introduced calling for the dedicated freight fund. Freight interests favor such an approach because when freight projects compete with projects for passenger movements, freight often loses. That’s because of the old saying in Washington that “Freight doesn’t vote.”
The most controversial aspect of the program is the new dedicated freight fee. An idea being floated in Washington is a 1 percent “excise tax” on all freight bills of lading. Major shipper groups such as the National Industrial Transportation League have opposed such a tax in the past, although NITL formally has not taken a position on this particular bill.
Such a tax has been supported by the recent National Surface Transportation Policy and Revenue Study Commission’s report, “Transportation for Tomorrow.” While the Freight Trust Fund would provide a dedicated source of revenue for freight project funding, participation in the program would not preclude projects from seeking funds from existing federal, state and local sources.
The American Trucking Associations has not taken a formal position on the matter. But some trucking executives warn privately the 1 percent tax might be a hard sell at a time when nearly all trucking companies have seen sharp drops in profit during the recession. YRC Worldwide, the nation’s largest LTL carrier, has lost nearly $1.9 billion in the last nine quarters.
“Truckers are concerned about the potential effects such a freight fee would have on negotiations with their customers,” Blakey admitted. “They’re not uniformly behind this. But this is about the movement of goods across our entire transportation system, all the modes, from the ports to the railroads to the airports.”
Despite resistance, the nation’s projected growth in freight (it’s expected to double by 2030) and an increase in population (by 100 million by 2050) is expected to “tax” the current freight infrastructure in another real way.
“All those additional people are going to want jobs, and they’re going to want stuff,” Blakey said. “This goes hand and hand with that.”
Jean C. Godwin, executive vice president and general counsel of the American Association of Port Authorities, says she is “very optimistic” that freight interests will be heard in the highway reauthorization battle.
“There are too many voices out there calling for this,” Godwin says. “The big focus is developing a national freight program with a strong federal role.”
Janet F. Kavinoky, director of transportation infrastructure in the Congressional and Public Affairs Division at the U.S. Chamber of Commerce, is pushing for more freight funding through the Chamber’s transportation coalition called “Let’s Rebuild America.” She says a dedicated freight funding mechanism would help the Chamber’s members.
“One of the things we fundamentally know is our members need a modern transportation system,” Kavinoky says. “Our economic growth depends on a safe, secure, reliable transportation network. Without it, our economic recovery will not occur as quickly as we would like.”
CAGTC is also calling for a new “Office of Intermodalism” to be reestablished within the Department of Transportation. That office would be charged with administering the new freight mobility program focusing on projects of national significance. DOT formerly had such an intermodal office, but it was abolished a decade ago.
The Freight Stakeholders Coalition, a longstanding group of 17 trade associations including the American Trucking Associations, NIT League, Association of American Railroads, American Association of Port Authorities, Intermodal Association of North America and the U.S. Chamber of Commerce, has signed onto the national freight program calling for a national multimodal freight strategic plan.
"America's freight transportation system is in dire need of increased and sustained investment," says Joni Casey, IANA president and CEO. "Without a strong commitment from Congress in the upcoming reauthorization cycle, productivity of all mods could deteriorate, which in turn will impact our country's economy recovery and national competitiveness."
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