NITL Spring Forum: Shippers urged to join infrastructure debate
By John D. Schulz, Contributing Editor -- Logistics Management, 5/1/2008
ALEXANDRIA, Va.—Shippers are being invited to join the national debate on how best to cope with congestion and infrastructure issues, and how best to pay for sorely needed transport improvements. However, they might be advised to wear football helmets as the debate promises to be a free-for-all.
Whatever is likely to come out of the next highway bill, one thing is for certain: It’s going to raise shippers’ freight rates. That was the consensus among experts who spoke at last month’s spring forum for shippers at the National Industrial Transportation League (NITL).
The debate over the current Surface Transportation Reauthorization Bill, which is set to expire Sept. 30, 2009, has already started with three major questions that need to be answered:
- How much money is needed to bring transportation infrastructure up to par?
- What is the best mechanism for paying for those improvements?
- What is the proper role for the federal and state governments in divvying up the money?
The bipartisan National Surface Transportation Policy and Revenue Study Commission recently joined the debate with a lengthy policy review that called for major funding improvements for the U.S. infrastructure. The commission estimated that the U.S. needs to invest between $225 billion and $341 billion per year over the next 50 years. Today, at all levels of government, the country spends $87 billion per year in the U.S. transportation system. Just to bring the current system up to par would take about $110 billion.
With the Highway Trust Fund projected to run out of money next year, the word from Washington is that raising all types of revenue sources is on the table.
That would be an increase in the federal fuel tax, an increase in highway tolls, higher freight and Customs fees, congestion pricing, and more public-private partnerships. Most politicians are loath to try and raise taxes in an election year. That sentiment has helped fuel the drive for higher fees, tolls, and other innovative financing mechanisms that cannot be labeled a tax increase even though they effectively do the same.
“It is very important for you to get engaged,” Jack Schenendorf, a member of the recent blue-ribbon commission on highway funding, told members at the National Industrial Transportation League (NITL) Spring Policy Forum last month. “This is a national problem that needs a national solution...we all have to work together to make this happen.”
Jeff Shane, former under secretary for the Department of Transportation, added that the U.S. runs the risk of becoming “a second-rate economy” unless it makes improvements to its infrastructure.
However, Congress is notorious for delays in funding infrastructure improvements. The last highway bill was passed with more than 6,000 “earmarks”—or pet projects—funded by members of Congress for their own districts that included non-transportation projects.
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