Highway bill heads 1998 transportation agenda

It's an election year. Can transportation get Congress' attention? There are plenty of reasons why it should.

By Staff -- Logistics Management, 1/1/1998

The founding fathers purportedly wanted it this way. Lawmaking was supposed to be difficult so that lawmakers would be forced to achieve consensus and avoid giving in to the passions of the moment. Efforts to pass major pieces of transportation legislation in the last session proved that Madison, Hamilton, et al. got their wish--and then some. The two major transportation bills facing Congress in 1997--renewing the nation's highway- funding legislation and winning reform of ocean shipping regulation--now are the two major transportation bills facing Congress in 1998. And there's plenty more on the transportation agenda.

At the top of the wish list will be passage of a multi-year extension of the law that governs spending for the national highway system. The current law, the Intermodal Surface Transportation Efficiency Act (ISTEA), expired at the end of September, but Congress extended that law through March 31 of this year.

Don't expect action by that date, though. House Transportation and Infrastructure Chairman Bud Shuster is not likely to push a new bill until he sees some revenue figures from the Clinton administration. Shuster, a Pennsylvania Republican, believes that highway spending could increase significantly without jeopardizing the balanced-budget agreement between Republican leaders and the White House. He proposed the six-month extension of ISTEA, hoping that an increase in fuel-tax revenues would prove him right.

The prospects for passage of a multi-year bill are far from certain. Intense inter-regional battles over funding formulas are sure to delay action. And although the extension prohibits states from spending federal highway funds after May 1 of this year unless a multi-year bill is adopted, that's not likely to prevent Congress from dithering well past that deadline. It could be June before the bill comes to the fore, and by then, any divisive bill may have trouble finding a spot on the legislative agenda. Another extension into next year, therefore, is a very real possibility.

Many issues remain to be settled in the bill. Among them:

* Rail and intermodal advocates hope to have intermodal connectors designated as part of the federal highway system, which would make them eligible for federal funds. These connectors link the highway system and rail terminals, ports, and airports.

* Freight interests want to require Metropolitan Planning Organizations, which manage much of the discretionary spending for transportation projects, to consider freight projects in their planning. "[W]e've been disappointed with the effort that planners have given [to freight]," says Intermodal Association of North America President Joanne Casey.

* Motor carriers want Congress to eliminate provisions in the pending bill that would allow conversion of some highways to toll roads. "They're sitting on tremendous surpluses," says Lana Batts, president of the Truckload Carriers Conference. "We paid for those roads. Those provisions are an insult to our intelligence and injurious to our pocketbooks."

* The railroads want to maintain the current freeze on expanding the use of longer combination vehicles (LCVs)--trucks hauling triple 28-foot trailers, double 48-footers, or other such combinations. Railroaders fear that longer, more productive trucks would draw business away from them.

* Motor carriers still may lobby for more productivity gains. John McQuaid, president of the National Private Truck Council, says, "Something has got to be done to provide the industry with greater productivity." A coalition called the Alliance for Safe and Efficient Trucking will push to increase truck weight limits to 97,000 pounds from the current 80,000 pounds.

Maritime reform tops shippers' list

Shippers have some reason for optimism over the prospects for passing an ocean shipping reform bill this year. The National Industrial Transportation League (NITL), the nation's largest shippers organization, and some of the largest ocean carriers agree on the basic outline for changing the Shipping Act of 1984. Agreement on a bill appeared to be close before Congress went home last fall. "This thing just has to happen," says NITL President Edward L. Emmett.

Major shippers have long sought a bill that would allow them to sign confidential contracts with carriers and allow carriers that belong to shipping conferences--essentially rate cartels--to individually sign contracts with customers. Currently, conference members may only sign contracts as a group. Says Emmett: "The United States is the only country that does not allow confidential contracts and still has tariff filing."

The bill is not without its critics, including the American Association of Port Authorities (AAPA). Much of their original opposition, however, may already have been overcome. Kurt Nagle, president of the AAPA, says that the latest Senate version of the bill addresses most of U.S. ports' concerns.

Another maritime issue also could become important. If the Supreme Court upholds lower-court decisions declaring the harbor maintenance tax unconstitutional on exports, expect the AAPA to seek an alternative funding source. Ports don't want to lose the tax, which pays for maintenance dredging and other waterways projects.

STB renewal due

Congress will be considering the Surface Transportation Board's future, since it must vote to reauthorize the agency this year. That might appear to be a fairly straightforward matter, but Congress could take advantage of the opportunity to revise the board's authority--a move that is likely to lead to some disputes.

The railroads, for example, worry that some interests may try to insert into the bill a measure that would partially reregulate the railroads, says Tom White, a spokesman for the Association of American Railroads. Indeed, Sen. Jay Rockefeller, a Democrat from West Virginia, introduced legislation in November that is aimed at protecting captive shippers against what he calls unfair pricing practices. That bill would make it easier for shippers to challenge rail rates.

The bill also proposes to overturn the so-called "bottleneck" decisions by requiring railroads to quote rates for separate service segments. Bottlenecks occur when one railroad provides the sole access to the origin or delivery point for freight, but competing railroads serve the other segments of the line haul. Shippers want the ability to price each segment separately; that would allow them to shop around for the best price on the competitive leg of the journey. Railroads, meanwhile, say they should be able to quote only through rates.

Emmett hints that should shippers lose the bottleneck case in court, they may turn to Congress for relief. "If there is not a balancing of power between the railroads and customers, then shippers have to look for something else," he says.

Regulation watch

Another issue that is sure to remain contentious well into the new year is a Federal Highway Administration (FHWA) rule that took effect in November. The new regulation implements a carrier safety-rating system that motor carriers contend is illegal.

The American Trucking Associations and some of its affiliates argue that the rule is unlawful because it bases safety ratings mostly on paperwork compliance, rather than on actual safety performance. Batts says, "They should count on-highway performance as 80 percent of the score. Right now, it's less than a sixth."

The Department of Transportation has pledged to replace the rules with performance-based ratings, but shippers and carriers are not persuaded those will come any time soon. "The rhetoric does not match the regulations," says Batts.

Logistics managers also should keep a watch on rulemakings by the Occupational Safety and Health Administration. OSHA is likely to implement what it is calling a "voluntary compliance program" that asks businesses that have an above-average number of workplace injuries to develop risk-management plans. But Mike Jenkins, president of the International Warehouse Logistics Association, warns that the word "voluntary" disguises strong pressure from OSHA. Companies that the agency identifies as exceeding accident standards and that do not join the program could be subject to frequent, stringent inspections, he says.

OSHA also will issue standards for certification of lift-truck drivers early this year. A major concern for warehouse managers will be the portability of those certifications. Jenkins says that's a worry, particularly for businesses that use temporary labor. "If I bring in a lift-truck driver, will I have to spend three days training him to use him for a day?" he asks. In addition, since the certifications themselves will be issued privately, managers could have problems tracking certifications and monitoring the quality of outside training.

Labor peace essential

Shippers also should watch two important sets of labor negotiations. United Parcel Service, which endured a three-week strike by its Teamsters employees last summer, now must come to terms with its pilots. Those negotiations resume this month. Meanwhile, the Teamsters and the Big Four unionized less-than-truckload carriers are engaged in talks over a new national contract. The current pact expires March 31, but both sides express optimism that they will complete a deal early. (See "LTL carriers optimistic about early labor pact," Page 24.) For all the important public policy issues, a strike by either UPS pilots or LTL employees could quickly become the biggest transportation story of the year.