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Lots of ground for Congress to cover on the transportation front before mid-term elections

By John D. Schulz, Contributing Editor
August 20, 2014

Now that Congress has issued another highway funding Band-Aid – a $10.9 billion highway bill through next May that former Transportation Secretary Ray LaHood blasted as “totally inadequate” – what can we expect as the infamously do-nothing 113th Congress winds down in the next month before taking yet another recess to prep for the mid-term elections?
 
Short answer: perhaps a lot.
 
With a lame duck session scheduled after the election– often called the “Silly Season” in Washington – anything could happen. And with the Senate likely switching to control by Republicans, that would mean the GOP would have its hand at the levers of both houses of Congress.
 
In trucking, there are issues regarding enactment of electronic onboard recorders (EOBRs), hours of service and fine-tuning CSA 2010 (the so-called Comprehensive Safety Accountability), although some of those issues will be handled by the Department of Transportation, not Congress.
 
Trucking interests already are laying the groundwork for a major push on a long term solution to the highway funding dilemma—perhaps linked to an increase in trucking productivity through more widespread use of longer-combination vehicles.
 
That’s the word from one of trucking’s major leaders, Bill Logue, president of FedEx Freight, the largest single LTL carrier with $5.6 billion in revenue last year. FedEx is leading the charge for Congressional approval of greater use of twin 33-foot trailers, which would increase capacity by 18 percent of the twin 28s now in widespread use.
 
“The crisis is today, and we need to solve it today,” Logue told LM recently. “You have to have an efficiency opportunity. Otherwise, you’re putting more tonnage on same amount of capacity.”
 
With truck tonnage forecast to double by 2035, truck productivity improvements are seen as a way to solve that dilemma. But use of LCVs largely has been frozen since a railroad-backed law limited their use in 1993 to roads that already had allowed their use.
 
There has not been a large-scale improvement in truck productivity since the 1982 Surface Transportation Assistance Act. In that year, truckers won greater use of longer and heavier trucks in exchange for a nickel increase in the federal tax on diesel. Some trucking interests, including Logue, see a similar quid pro quo opportunity in the next Congressional cycle that starts in January.
 
According to an American Trucking Research Institute (ATRI) study, 89 percent of congestion is 12 percent of highway miles. Allowing expanded use of 33-foot double trailers would allow the trucking industry, specifically LTL carriers, much greater flexibility and capacity while dealing with expanding freight demand levels.

“We have a national problem, and we need a national plan to fix for the overall network,” Logue explained. “We know where it is. As we build six-year (highway reauthorization) plan, we need to be specific how we get money to fix that 12 percent. It’s really important to get national plan.”
 
Logue said he is “optimistic” Congress will see it the way the trucking industry does, although he concedes there will be opposition by some railroads and safety groups. But FedEx (and UPS) are the two largest rail shippers in the country, which could mitigate some of the rails’ legendary opposition to allowing greater truck productivity.

“I am optimistic,” Logue said. “The need is pretty clear. Once we get past election season, lot of focus on how to solve it. I am optimistic it will happen.”
 
The highway bill still is the No. 1 issue for the trucking industry in the 114th Congress that will convene in January.
 
“The big thing is infrastructure, and the highway bill is still the key issue for us,” Logue says. “We need a long term bill and find a way to pay for it. Short term, the need is critical. We think the most efficient way to pay for it is through the fuel tax (18.4 cents on gasoline, 24.4 cents on diesel, unchanged since 1993).
 
Logue, no stranger to Washington politics, says he understands the political environment—especially in a lame duck Congress that will meet in November for a few wacky weeks. Because some legislators will be voted out, nearly anything could pass with very little political consequences.
 
“I understand the environment—you can’t change the process,” Logue said realistically. “You have to work within it, as it is. We’d like to see a long term (highway) bill solved today. We’re going to (lobby to) make sure of the importance of getting this thing done.
 
“Tonnage is going to double,” Logue added. “If you think we have issues today, wait until 2035. It will be here sooner than you think.”

The LTL carriers are going to make their appeal for LCVs based on their impact on overall U.S. competitiveness, as well as reduced congestion and environmental gains. And, yes, they will play up the greater safety levels documented by years of LCV usage in states where they are allowed currently.
 
FedEx and UPS estimate their will run 600 million fewer miles with the 33-foot combinations, thereby saving 100 million gallons of fuel. “That’s a safer environment,” Logue said. “Between LTL and parcel, that’s a huge opportunity. You just can’t double the volume out there on highways.” 
 
“We currently have megaships, doublestack railcars and wide body aircraft,” Logue explained. “When you have an industry (trucking) moving 70 percent of commodities, you have to find ways to be more efficient. The (highway bill) extension gives us time so everybody can to continue educate everyone on importance. But we need efficiency improvements as well.

The quid pro quo trade, similar to that done in 1982, “is a very realistic solution” to the dual problems of increasing highway funding while adding to trucking productivity, Logue said.
 
“That’s the ideal way to go,” he concluded.
 
As for the other modes, look for something to be done regarding rail car safety. A recent Department of Transportation analysis shows most freight railroads don’t carry enough insurance to cover damages from a moderate oil train accident, let alone a major disaster.
 
The DOT, in a new report issued Aug. 1, says its own data base of oil train incidents is flawed because some railroads and shippers provide incomplete information that far understates property damage.
 
Thanks to the surge in oil transport by rail, accidents have surged as well. The worst was the he July 2013 derailment in Lac-Mégantic, Quebec, which burned much of the downtown area, killing 47 people. Damages are estimated in the billions, but the small Maine-based railroad responsible for the derailment carried only $25 million of insurance and is now in bankruptcy.
 
DOT’s analysis showed most Class 1 usually have around $25 million in insurance, though that can rise to as much as $50 million for trains hauling hazmat. But smaller railroads often carry much less.
 
Transportation Secretary Anthony Foxx has called for a “New World Order” in oil trains regulations. It already has started with new requirements for tougher tank cars, lower speed limits and improved brakes for the trains carrying an ever-greater amount of crude oil throughout the country.
 
The DOT analysis also cited a systemic weakness in the way the federal government collects data on derailments of crude oil and ethanol trains. The DOT says it’s “impossible to isolate the derailment rate of only crude oil and ethanol trains” due to “limitations in the reported data.” Therefore, it could not make any predictions as to the likelihood of further rail accidents.
 
On the waterways, Congress still has to fine-tune the Water Resources Reform and Development Act of 2014 (“WRRDA”), which pays for navigation, dredging, and flood protection. Currently the Harbor Maintenance Trust Fund has a surplus of $8 billion (ironically at the same time the Highway Trust Fund is near insolvency).

About the Author

image
John D. Schulz
Contributing Editor

John D. Schulz has been a transportation journalist for more than 20 years, specializing in the trucking industry. He is known to own the fattest Rolodex in the business, and is on a first-name basis with scores of top-level trucking executives who are able to give shippers their latest insights on the industry on a regular basis. This wise Washington owl has performed and produced at some of the highest levels of journalism in his 40-year career, mostly as a Washington newsman.


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