Transportation infrastructure: National Surface Transportation Policy and Revenue Study Commission releases findings to fix U.S. surface transportation systems
Jeff Berman, Senior Editor -- Logistics Management, 1/15/2008
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WASHINGTON—The current state of surface transportation in the United States is at a crossroads, with a looming crisis coming if steps are not taken to address the myriad needs for improved infrastructure improvements and to meet the expected demand in domestic freight growth in the coming years, according to a long-awaited report released by the National Surface Transportation Policy and Revenue Study Commission today.
The 12-member commission was established in 2005 under the Safe, Accountable. Flexible, Efficient Transportation Equity Act—A Legacy for Users (SAFETEA-LU) and charged by Congress to look at highway, transit, and surface transportation needs, to determine what the roles of government should be and how the transportation infrastructure impropvements should be financed in the future. It met for the last 22 months, examining a wide range of ideas regarding ways in which to remedy the nation’s transportation infrastructure needs and issues. The report was approved by a 9-3 vote on December 20, 2007.
Our parents and grandparents had the wisdom and the foresight to give us a world-class transportation system for rail and interstate highways,” said Jack Schenendorf, Commission Vice Chair, and Of counsel at Washington-based Covington & Burling, at a press conference today. “This system has done extraordinarily well over the last 40 or 50 years and has been instrumental in providing the kind of economy we have. It had a lot of excess capacity."
But the surface transportation systems in the U.S. are now aging and needs a tremendous amount of investment just to maintain them, and they have reached the point where they are bursting at the seams, said Schenendorf.
And with 120 million more people forecasted for U.S. population growth over the next 50 years, coupled with the Department of Transportation’s projected 70 percent increase in freight demand by 2020, the current surface transportation system is not equipped to handle future needs, which is bringing the country to the current situation it faces.
With shippers reliant on transportation infrastructure on a daily basis, the report is of acute interest. Several of its findings may ultimately have a direct impact on how freight is moved both globally and domestically:
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As a nation, the U.S. should be spending at least $225 billion per year for the next 50 years on its surface transportation system from all levels of government compared to the less than 40 percent of that figure spent today, noted the report;
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the federal government needs to be a full partner with state, local governments and the private sector in providing the additional investment needed;
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the current federal surface transportation delivery mechanism is not working and should not be re-authorized in its current form. It needs to be re-established and provide a truer sense of purpose and mission by replacing all of the existing highway and transit programs with ten new performance-oriented programs that are outcome-driven, modal neutral and focused on projects that are of national interest. The report added that these programs would be geared to bring existing infrastructure into a state of good repair to do things like reduce congestion to a specific target or limit in major metropolitan areas, and a program designed to provide the freight capacity needed to move freight domestically, among others and;
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fix the current highway trust fund shortfall by recommending financial measures such as raising the gas—or federal motor fuels—tax to from five-to-eight cents per year to 25-to-40 cents per gallon per year over the next five years (or 41 to 66 cents per day), which would eventually be followed by a vehicle miles traveled tax until at least 2025, implementing a federal freight fee, and having a portion of Customs fees be dedicated to the highway trust fund.
Other Commission recommendations cited included an increase in tolling to add interstate capacity, congestion pricing in metropolitan areas of a million or more people to finance interstate and new capacity initiatives, and bringing private capital into surface transportation systems through public-private partnerships (PPP) that can help facilitate international trade with intermodal connections, which relieve congestion that add time and costs to the supply chain.
“We need a mix of public and private approaches—not all parts of the system are going to be served by the private sector,” said Lesley Blakey, executive director, Coalition for America’s Gateways and Trade Corridors, in an interview. “PPPs are well suited to assist in the build out of the goods movement system. It emphasizes the need for a national approach to our freight infrastructure and the connectivity of the country for moving goods and cargo.”
Freight focused report: With so many issues pertaining to U.S. surface freight transportation, the emphasis placed on freight transportation in the report was seen as encouraging by Mort Downey, chairman of PB Consult and former Deputy Secretary of Transportation.
“The issue of changing goods movements and logistics patterns, fixing capacity problems, and issues of economic importance are things that are important for shippers,” Downey said in an interview. “It is timely and also all connected. The question is where do we take all this now?”
Going forward, Downey said this report will help shippers focus on the importance of goods movements and how it fits into their supply chain operations, and allow them to get into the debate on the local level regarding projects and metropolitan transportation infrastructure planning.
"It is hard for shippers and freight carriers to get deeply involved at that level, but now we have national level discussion starting, where everyone is invited to the table,” said Downey.&
For more information on the report, click here.
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