DOT’s Peters: “Time to treat transportation as a business”

By John D. Schulz -- Logistics Management, 3/1/2007

WASHINGTON—If the United States is to combat increasingly crippling congestion in its aging transportation-infrastructure system, it must do so through innovative public-private partnerships, Transportation Secretary Mary E. Peters told American business leaders last month. Peters spoke before more than 150 business and transportation executives at a U.S. Chamber of Commerce symposium on transportation and the global economy.

Traditionally, infrastructure improvements have been funded by a combination of federal and state governments. But government funds no longer are sufficient to meet the demands of the future. Forecasts of up to 70 percent growth in freight demand over the next 10 years are causing federal and state officials to rethink the way transportation projects are funded, Peters said.

“For many years, transportation was government-planned and government-made,” she said. “Transportation is a business. If we treat it as a business, maybe it can become a source of growth in America, rather than a source of irritation.”

Some sort of change is needed soon: The explosion of international trade has exacerbated this country’s infrastructure weaknesses, state budgets are being strained by transportation projects, and fuel taxes are no longer enough to fund them, said Peters, who called increasing participation by private enterprise in such projects “one of the most exciting things in transportation today.”

“The free market can deliver to transportation the innovation and quality that it has long delivered in U.S. business,” Peters said. “It’s an idea whose time has come.”

It’s not a totally new idea, however; the railroads, for example, have long supported public-private partnerships to help finance capacity expansions that otherwise would be impossible if the carriers had to pay for those improvements on their own.

The federal DOT has estimated that congestion and delays in the U.S. transport system cost the economy $200 billion annually, or about 2 percent of Gross Domestic Product. Peters, who has more than 20 years of experience in transportation oversight, understands the importance of solving that problem. “I remain committed to keeping the U.S. transportation system the best in the world,” said the former U.S. Federal Highway Administrator and director of Arizona’s state department of transportation. “Transportation is at the core of the freedoms we enjoy in this country.”

Peters contention that traffic congestion, delays in the skies and on the ground, lack of capacity, and aging infrastructure are all threatening U.S. competitiveness was echoed by other speakers at the symposium. “America’s transportation system, once the envy of the world, is being stretched beyond its capacity,” asserted Carol Hallett, counselor to the U.S. Chamber of Commerce, which has been actively lobbying for more spending on transportation infrastructure projects.

Railroads, ports, interstate highways, airports, and links to intermodal facilities all need attention, said Hallett, a former U.S. Customs commissioner. “The tremendous growth in trade and increased number of users are wearing out the U.S. transportation system,” she said.