Conference-approved transportation bill could be promising for shippers

While House and Senate conferees have reached an agreement on a new transportation bill, the two-year bill has yet to be officially signed into law to ensure transportation and related projects are funded through the end of Fiscal Year 2014.

Should the bill, which adopts the name of the Senate’s version, MAP-21 (Moving Ahead for Progress in the 21st Century) become a reality, though, there are various parts of it which stand to have a direct impact on freight transportation, logistics, and supply chain stakeholders. Some of these components—cited in a copy of the conference report obtained by LM— include:
-funding for the federal-aid highway program through fiscal 2014 at current funding levels with a small inflationary adjustment;
-the continuation of the Projects of National and Regional Significance Program, which funds large, multimodal and often-times multi-jurisdictional projects that optimize freight mobility at locations of national significance;
-the development of a National Freight Strategic Plan which encourages state freight plans and advisory committees, and provides incentives for states that fund projects to improve freight movement, focusing on reducing congestion, increasing productivity, improving the safety, security and resilience of freight transportation;
-leveraging the Transportation Infrastructure Finance and Innovation Act (TIFIA) program to help communities leverage transportation resources through federal credit assistance by increasing funding to $1 billion per year and increasing the maximum share of project costs from 33 percent to 49 percent;
-a provision in which Congress should fully expend each year all revenues collected in the Harbor Maintenance Trust Fund for the operation and maintenance of the nation’s federally maintained ports;
-various provisions to address motor carrier companies to mask prior noncompliance and adverse safety history, which authorize the Secretary of Transportation to withhold, suspend, amend, or revoke a motor carrier’s registration if the carrier failed to disclose an adverse safety history or other facts relevant to its past regulatory compliance;
-regulations requiring electronic logging devices for recording hour of service in commercial motor vehicles with basic performance standards for the device;
-an HOS field study to expand on an FMCSA report on driver fatigue and maximum driving time requirements focusing on the 34-hour restart rule;
-provisions directing the Secretary of Transportation to study the effects of truck, size and weight on highway safety and infrastructure;
-provisions addressing the financial responsibility of freight forwarders and brokers which direct rulemakings to establish minimum financial solvency and bonding requirements—and includes exemptions for air carrier and customs brokers already subject to financial responsibility requirements under federal law; and
-direct the Secretary of Transportation, in collaboration with stakeholders, to develop a long-range national rail plan, among others.

The conference agreement on a two-year transportation bill follows weeks of acrimonious negotiations between the House and Senate, which suggested that talks would not advance to this level and that a tenth continuing resolution—to keep funding at current levels—would be introduced prior to the current one expiring at the end of June.

Earlier this year, the Senate EPW Committee passed a two-year, $109 billion bill, while the House’s efforts stalled out. A report in Transportation Weekly said the conference bill would be for two years and $101 billion, which is in line with the annual allocation for the previous bill, SAFETEA-LU, which expired in September 2009.

A noted freight advocate told LM this bill is good news for supply chain stakeholder.

“It does have more in it for freight than we were fearful would be,” said Leslie Blakey, executive director of the Washington, D.C.-based Coalition for America’s Gateways and Trade Corridors. “Overall, we are pleasantly surprised.”

In addressing the freight policy components of the bill, Blakey said that, while not perfect, it does at least acknowledge the importance of freight as part of the country’s transportation system. The national freight plan and strategy language in the bill, she said, goes in the right direction, although she said a state-based approach is not ideal, especially compared to the more efficient nature of doing this at more of a national level.

Douglas W. Stotlar, president and CEO of $5.3 billion Con-way Inc., said the conferees passage of the highway bill is a major positive.

“I am glad we got a bill,” he said, but added he was disappointed there was no language in it to provide greater productivity for trucking companies. Instead, Congress approved a study on some productivity issues that Stotlar said was the equivalent of kicking the can down the road.

“A study in Congress-speak means no,” he said.
  
But he was encouraged that the bill contains language requiring electronic onboard recorders (EOBRs) to help snare hours of service violators.
 
“If they do it right, fleets will benefit much more from EOBRs than the investment,” he said.
 
While Stotlar said he had not read all the fine print of the 27-month highway bill yet, he was happy that at least a small piece of gridlock in Washington has broken.
 
“We’ll see what it ultimately means for the industry,” he said, “but I’m glad we got a bill.”

If a bill is approved by Congress, it would be funded by the federal gasoline tax. But that could prove to be challenging.

The Highway Trust Fund, which is primarily comprised of gasoline tax revenue, collected $36.9 billion in taxes and interest in 2011, while it sent out $44.3 billion in payments, according to Congressional Budget Office figures. Some $36.7 billion went to highways and $7.6 billion to mass transit.
 
The balance of the trust fund was expected to be $5.5 billion by Sept. 30, the end of fiscal year 2012, compared with $14.3 billion in 2011, according to a March CBO estimate.

The main funding mechanism is the federal tax on motor fuels—18.4 cents on gasoline, 23.4 cents on diesel—which has been unchanged since 1993. There is no appetite on either side of the aisle to raise those taxes in an election year.