10 Steps to an Effective National Freight Policy

With Congress debating federal surface transportation bills, one would hope there might be an opportunity to create an effective national policy for freight. Current policy is disjointed and segregated by mode, leaving freight bottlenecks unaddressed and expansion opportunities largely up to state discretion.

The following are 10 suggestions to Congress and the Obama administration for ways to move toward a true national policy for freight:

1. Clearly define national GOALS WITH RESPECT TO ALL TRANSPORTATION. One reason freight is often neglected is that we haven’t clearly defined the federal government’s role with respect to surface transportation as a whole. The existing role is so broad that it doesn’t allow for prioritization of investments based on national importance. Fortunately, the authorization bill the Senate passed in March defines a set of national goals, including “Freight Movement and Economic Vitality,” and calls on the U.S. Department of Transportation to produce a National Surface Transportation and Freight Strategic Plan. This is an essential first step toward a more focused federal program.

2. Begin work on STRATEGIC PERFORMANCE MEASURES FOR FREIGHT. Laying out a national strategy with specific goals is a great start, but benchmarks must be established to measure progress toward agreed upon goals and evaluate returns on investment. A reliable database is essential to ensure performance measures are effective and reliable. To make sure we get there, the DOT should seek input from the private sector and begin to work with states and metropolitan planning organizations to develop the necessary data, tools and measures.

3. Create a COMPETITIVE FREIGHT DISCRETIONARY GRANT PROGRAM. Competitive grant programs offer a promising means for introducing performance, benefit-cost analysis and innovation to federal investments. Freight investments in particular tend to be lumpy, complex and capital-intensive — and the best ones are often multimodal. Competitive, results-oriented programs, regardless of the mode utilized, can target grant money to meet essential national needs. A program like this was in an earlier version of the Senate authorization bill, but was later stripped out.

4. Strengthen and diversify FREIGHT FUNDING SOURCES. If we are going to fund freight as an intermodal system, we cannot rely on one mode to fund that system. The Highway Trust Fund, which has provided most of the money for the surface transportation program since the start of the Interstate Highway System, is sustained by taxes on cars and trucks. We can’t realistically ask these taxpayers to fund railroad and port systems. An intermodal freight program requires diverse funding sources, and shouldn’t preclude fees that will deliver measureable benefits for those who pay. A new freight funding toolkit could include a multimodal freight fee such as a waybill fee, a port-based cargo facility fee or a value-added tax, as well as greater use of general funds. Funding tools similar to those falling under the Transportation Infrastructure Finance and Innovation Act can help leverage and accelerate public-private investment in seaports, railyards and air cargo systems.

5. Better define the NATIONAL FREIGHT SYSTEM. There is currently no adequate definition of the national freight system, and this is a major roadblock to having an effective federal freight policy. This leaves us without the target required for making priority investments now and for the future. It also keeps us in the dark regarding where system preservation needs might be the greatest — and where rail and the waterway systems can provide needed redundancy and relief. The Federal Highway Administration has made progress with its identification of key national corridors and connectors. We should work to officially add the gateway port and border elements to define a multimodal freight system based on value and importance with respect to national goals. The Marine Transportation System elements, along with rail and air cargo nodes, require connectivity and inclusion.

6. Strengthen the freight COMPONENT OF THE PLANNING PROCESS. The vast majority of federal surface transportation funds are distributed by formula. These funds aren’t likely to be spent on effective freight investments unless freight is better integrated into the transportation planning process. Many states and metropolitan planning organizations don’t consider freight a priority and don’t partner adequately with the private sector to plan for freight. Congress and the DOT should explicitly incorporate freight performance objectives as a planning requirement. It should organize its regional highway, rail and U.S. Maritime Administration Gateway Offices to create a multimodal team in the field to feed national planning from its roots and better integrate national imperatives with local and regional needs.

7. Develop a plan FOR THE REORGANIZATION OF THE DOT. The DOT is currently organized around modes. This doesn’t reflect the systematic intermodal nature of all transportation, but particularly freight. By act of Congress or through use of its inherent administrative authority, the DOT should undertake a restructuring that organizes the department around larger objectives, such as freight, rural and metropolitan transportation. The DOT needs to provide a multimodal brain to focus its modal brawn in the service of systematic domestic and international commerce. An important, immediate next step would be for Secretary Ray LaHood to appoint an assistant secretary to direct the process around the Freight Strategic Plan and encourage systematic investment-oriented measures of performance.

8. The Marine Transportation SYSTEM AND PORTS NEED A STRONGER VOICE TO SPEAK TO THEIR NEEDS IN THE NATIONAL INTEREST. Seaports are the key distribution gateways for many of the good things in our lives and are platforms for increasing U.S. prosperity through exports. Like transit, they are regionally based systems whose services, in sum, have a large national impact. Transit has the Federal Transit Administration to follow the needs of transit users and shape programs in the national interest. The Federal Railway Administration, Federal Aviation Administration and FHWA are champions for improving the efficiency of their freight and passenger modes. Yet there is no agency with the mandate and the muscle to strengthen the waterborne system within the national service scheme. Marine regulatory and support programs are organized in mission silos: security, environmental protection, harbor deepening, customs collections, etc. Only the Maritime Administration has a small MTS role to encourage waterborne use, and this role needs strengthening. Waterborne systems need a maestro who is aware of their relationship to the entire supply chain. Ideally, this would be an assistant secretary charged with orchestrating the harmonious integration of domestic corridors with international gateways.

9. Embrace private SECTOR PARTICIPATION. Many states lack public-private partnership enabling legislation, and virtually none have independent P3 entities. While expanding the TIFIA program will help stimulate investment by providing more loans to P3s, we’ll still lag other countries in P3 investment unless the barriers are reduced at the state level. Congress should provide greater incentives for P3 investment by states when those investments are consistent with national goals.

10. Raise revenue. The bottom line is that our best-laid national freight plans will come to naught without additional revenue. Congress has been unwilling to raise the fuel tax or explore alternative revenue sources that could conceivably fund a national, multimodal freight program. Perhaps once we begin to demonstrate the value of freight, by setting goals and evaluating performance, raising revenue will become easier. It’s fair to ask freight system users to help pay for the facilities they use. To the extent practicable, their fees and tolls should be dedicated to strengthening the facilities they use and expanding modal choice. Policies favoring an effective spend-down of imposts — such as the full distribution of annual Harbor Maintenance Tax receipts — deserve congressional support. We’ll need strong leadership within Congress and the administration to accomplish this challenging goal of establishing stable funding resources. Our economic future and global competitiveness depends on it.

Lillian Borrone is chairman and Joshua Schank is president and CEO of the Eno Center for Transportation in Washington, a nonprofit, operating foundation that seeks continuous improvement in transportation and its public and private leadership. Contact them at lborrone@enotrans.org and jschank@enotrans.org.