Congestion Ahead: Merging Disparate Transportation Bills Into a Well-funded Solution
Washington has a problem. It needs to produce a fully funded, multi-year surface transportation bill, and find a way to pay for it in an election year, before the end of September. The Chicago Cubs winning the World Series might be a better bet.
Even senators involved in the sausage-making exercise known as lawmaking are skeptical of being able to produce such legislation on a tight deadline.
“In the Senate today,” said Sen. Roy Blunt, R-Mo., a member of the Senate Commerce Committee’s Surface Transportation and Merchant Marine Infrastructure, Safety and Security subcommittee, “I am hesitant to use the words ‘produce legislation.’” ]Blunt spoke at an “Infrastructure Week” event coordinated by the American Trucking Associations at its Capitol Hill office. It was all smiles, seashells and balloons at the press event. Even Ed Hamberger, the longtime president of the Association of American Railroads, was sporting an “I Love Trucks” pin.
Other senators were slightly more optimistic. Sen. Tom Carper, D-Del., chairman of the Senate Environment and Public Works Committee’s Transportation and Infrastructure subcommittee, said there were “all kinds of ideas” floating around Capitol Hill on infrastructure. “There is no silver bullet—but maybe there are some silver BB’s,” Carper said. “Maybe we could put together a tapestry of ideas.” So far that tapestry includes, or will include, these ideas to replace the current two-year, $109 billion “MAP-21” that expires Sept. 30: -President Obama’s four-year, $302 billion proposal that the possibility of interstate tolling, or some other mileage-based revenue system, to replace or supplement the federal fuel tax. -the Senate Environment and Public Works (EPW) Committee’s six-year proposal that keeps funding at the current levels, but with no specific way to pay for it; and -the House Transportation & Infrastructure Committee and perhaps the House Ways & Means Committee also may chime in with their proposals, although neither will likely have a hard formula for paying for it.
Which is rather necessary. The Highway Trust Fund is on track to be exhausted by August, when Congress will be on its six-week summer vacation. It wouldn’t be the first time. Since 2008, the General Fund of the U.S. Treasury has bailed out the HTF to the tune of about $54 billion. It likely will do the same late this summer. Some 87 percent of the HTF comes from the federal tax on fuel—18.4 cents on gasoline, 24.4 cents on diesel—which is unchanged since 1993. Truckers have been openly pleading with Congress to raise the fuel tax, partially because it’s commonly called an “Ex-Lax” tax by truckers—because it is easily passed through to shippers. Sen. Carper is proposing just restoring the buying power of the federal fuel tax to where it was 21 years ago, then indexing it to inflation. He is calling for a 3-4 cent increase annually for four years to restore the tax’s effective buying power. That is considered a long shot in an election year, but he is unbowed.
“We have to figure out the right thing to do—not the most expedient thing,” Carper said, adding even some Republicans like his idea. “If I had said that six months ago, they would have thrown me out of the room. I mentioned it a few weeks ago, and they didn’t.” Then, there’s tolls. Putting tolls on the existing free lanes of 50,000 miles of the Interstate System could provide more than $50 billion annually. But that proposal faces stiff headwinds. Trucking interests much prefer the tax hike to increased tolling. Phil Byrd, president and CEO of Bulldog Hiway Express, Charleston, S.C. and ATA chairman, said truckers are against tolls on existing interstates for three reasons:
Those highways already have been built and paid for.
It’s effectively double taxation.
Tolls are inefficient, with overhead consuming as much as 25 percent of overall revenue, compared to less than 1 percent overhead of collection of fuel tax receipts. In one of the few instances where big trucking companies and independent owner-operators agree, the Owner Operator Independent Drivers Association (OOIDA) blasted the Obama administration’s tolling proposal. OOIDA called it a “negative provision” that would create a “patchwork” of state-controlled toll roads in place of a unified Interstate system. “Any proposal that moves away from a user fee funded transportation system is not going to be acceptable to the American trucking industry, period,” ATA President and CEO Bill Graves said. FedEx, along with the ATA and the U.S. Chamber of Commerce, has been among those lobbying for a fuel tax increase to help ease congestion and freight bottlenecks.
Bill Logue, president of FedEx Freight, the nation’s largest single LTL carrier, said congestion is costing the trucking industry $9 billion annually, with some 141 million hours productivity lost. “It’s not about filling potholes or repairing roads,” Logue said. “It’s about jobs, our quality of life, and our competitiveness. We have to change the debate (on Capitol Hill).”
Byrd of Hiway Express said simply that Congress has to buckle down and “make some hard decisions to improve America. The Highway Trust Fund (funding formula) hasn’t been changed since 1993. We have to address that.” Since U.S. population is expected to reach 400 million by 2040 and freight volumes are expected to double from today’s level by 2035, UPS Vice President Pat Thomas said it’s time to not only talk about repairs but to perform considerable, expensive expansion of the current network of highways and bridges.
“That’s going to take a sizeable investment,” Thomas said, adding that if every UPS driver in the country gets stuck in traffic for five minutes, it costs the world’s largest transportation company $105 million in lost productivity. Even the AAR’s Hamberber, who often clashes with trucking interests on Capitol Hill, seemed sympathetic to the truckers’ plight. “Our members cooperate every day in business,” he said.
“Sometimes inside the Beltway, we lose sight of issues we have had in the real world.” Unfortunately, inside the Beltway is where laws are made. The varying proposals would have major implications on how freight, and people, move in this country. Given Congress’s notorious lack of will on issues large and small, and the way the country is divided, a likely six-to-12 month continuing resolution funding U.S. infrastructure at current levels, looks like a near certainty.
About the AuthorPatrick Burnson, Executive Editor Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]
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