The Obama administration is forming a national freight transportation policy that can be boiled down to one concept: Get more trucks off the roads.
Key officials are increasingly making it clear they want to move a larger percentage of the nation’s intercity freight by rail or water, to take pressure off congested and crumbling highways and to help improve the environment.
“We want to keep goods movement on water as long as possible, and then on rail as long as possible and truck it for the last miles,” Deputy Transportation Secretary John Porcari said at a March 24 Senate Environment and Public Works Committee hearing.
In a single sentence, Porcari described what appears to be the most sweeping change in a generation in the federal government’s approach to shipping and transportation, promising an ambitious and concerted effort to redirect the way freight flows through the country’s long-standing supply networks.
|In its broad outlines, it’s an overhaul that is encouraging to everyone from freight railroads and marine waterway operators to bicyclists. But as details of targeted shifts in policies and spending trickle out, truckers and highway advocates are showing growing frustration as they see Washington’s attention slipping from the roads where they say most freight will remain regardless of federal policy changes.
“We’ve got an infrastructure that for years people have said we’ve underinvested in and we need to do more,” said Randy Mullett, vice president of government relations and public affairs at trucking and logistics giant Con-way. “I’m worried this policy shift will exacerbate the problem.”
The DOT’s intermodal strategy is upending a long-standing if sometimes uneasy balance between transportation interests in Washington and transforming debate over federal transportation dollars. It comes as Congress and the White House grapple with spending priorities and even a schedule for turning a proposed $500 billion surface transportation bill into law.
But the Obama administration is looking beyond the traditional multiyear highway bill for other ways to fund infrastructure projects, whether an infrastructure bank or new rounds of discretionary grants aimed primarily at intermodal freight.
With the number of non-freight and non-highway groups seeking a share of federal transportation dollars growing, trucking interests are calling for stronger safeguards against any diversion of money from the fuel tax-fed Highway Trust Fund.
Porcari’s comments echo remarks Transportation Secretary Ray LaHood made in an interview last month with The Journal of Commerce, when he said six times that “getting more trucks off the road” is a prime objective of the DOT’s freight transportation policy. “We’ve made a huge investment in highways. Highways are always going to be with us,” LaHood said. But he insisted the “genie is out of the bottle,” and more funding will go to intermodal — or, to put it another way, railroads. The DOT already has used stimulus funds to help shift some freight to railroads and marine highways.
The department has five strategic priorities: safety, economic competitiveness, state of good repair, livability and environmental sustainability. “Our policy on freight transportation grows out of our focus on these five key strategic goals,” Roy Kienitz, undersecretary for policy, told a House transportation subcommittee on March 17.
|It’s a strategy, Kienitz said, dependent on breaking down a “stovepipe” modal approach to transportation funding written into decades of surface transportation law.
It’s the strongest intermodal vision for freight ever promoted by the DOT. It’s also remarkably consistent with a blueprint in a 2006 book by Rahm Emanuel and Bruce Reed, “The Plan — Big Ideas for America.” Emanuel is now Obama’s White House chief of staff; Reed is CEO of the Democratic Leadership Council. They wrote then that “railroads are a highly efficient way to move people and goods,” and that shifting 25 percent of freight to rail from trucks “would save 15 billion gallons a year” of fuel and slash average commuting time by reducing congestion.
For some, the policy shift vindicates years of effort to overcome modal barriers that have defined transportation priorities in Washington since the 1950s, when the great age of American road-building culminated in the Interstate Highway System.
“Intermodal is becoming a mode, not just a buzzword,” in the thinking of policymakers, “which is what we’ve tried to convey all along,” said Joni Casey, president of the Intermodal Association of North America. “I think that the signs that we’re seeing from the administration, via DOT, are very positive in terms of the freight industry.
“My caveat, as always in these kinds of situations,” she said, “is the devil is in the details.” For Washington to build on this intermodal focus, “you have to walk the walk in terms of policy initiatives, project funding and industry engagement and dialogue.”
Porcari’s priorities are “spot on,” said Patricia Reilly, vice president of communications at the Association of American Railroads. “His comments reflect a growing recognition of the public benefits generated by moving more goods by rail: cleaner air, less highway congestion, fuel savings.”
Trucking interests, however, say the relegation of trucks to “last mile” delivery is a detour from reality and could leave the nation’s highways and economy worse for wear.
“I’m really disappointed that the importance of our industry is being negated, and the importance of mobility for highway users is being dismissed,” Mullett said.
Con-way isn’t opposed to the expansion of intermodal rail, he stressed — shifting more long-haul freight to intermodal is part of the business’s own truckload strategy. “Trucks are rail’s largest customers. Everyone wants to promote more efficient use of the network. “What’s disappointing is that’s not what (Porcari) said,” Mullett said.
The potential diversion of funds to non-highway programs worries the American Trucking Associations.
“We are concerned with the administration’s proposal to divert $527 million of state apportionments to an ill-defined livability initiative,” ATA Senior Vice President Timothy A. Lynch told a House transportation subcommittee on March 16, referring to plans for an Office of Livability within the DOT. “Given the lack of funding in just about every state, if not all 50 states, for a basic highway maintenance and improvement program, shifting money from ‘must-have’ projects to ‘nice-to-have’ projects is simply irresponsible, and is not a good use of taxpayers’ money.”
“Livable” communities are a core part of the Obama administration’s long-term strategy, increasingly evident in cooperation between the DOT and the departments of Housing and Urban Development and Commerce over the past year. Bike paths and streetcars, LaHood said at a March 22 International Bridge, Tunnel and Turnpike Association meeting, are “what the people want.” Rail grants “enhance the ability to get goods around the country,” LaHood said at the IBTTA meeting.
Truckers have a different view of how the economy works. Highways are the binding agent that completes the intermodal network, Lynch said, and trucks are a necessary component, moving almost 70 percent of the nation’s freight.
“Trucks are also crucial to freight moved on rail, in the air and on the water. The highway system connects all of these modes to manufacturing and assembly plants, retail outlets, homes and warehouses. An efficient highway system is the key to the supply chain, which in turn is a fundamental element of a growing and prosperous economy.”
Desirable as it may be to get freight off the road and onto water or rail, it’s not going to be easy, said John Horsley, executive director of the American Association of State Highway and Transportation Officials. “Over the next 25 years, if we succeed in shifting a significant part of the long-haul load from trucks to intermodal, we might see trucking’s share of freight ton-miles drop from 62 percent to 59 percent,” Horsley said.
“We’re struggling to keep up with highway capacity, so it makes sense to shift long-haul loads to rail where possible, but it’s not going to be the silver bullet or the panacea, because it’s not going to be massive change,” Horsley said. “The art of the possible is going to be a 3 percent shift — not 20 percent or 50 percent or 100 percent.”
“This new direction (at the DOT) does not reflect reality in freight transportation,” said Clayton W. Boyce, the ATA’s vice president of communications. “They can’t mandate a shift to water and to rail. It’s the shipper that decides.”
Perhaps the White House and the DOT can’t mandate a shift, but they can certainly encourage one, both through incentives and by turning down proposals for projects without multimodal elements. They’ve already shifted spending priorities to favor intermodal projects aimed at reducing carbon as well as congestion.
And even a 3 percent shift in freight ton-miles from trucking to intermodal, as suggested by Horsley, would represent a lot of truckloads moving to rail.
Writing on the DOT’s Fast Lane Blog after the National Bike Summit last month, LaHood took his intermodalism to a whole new level. “This is the end of favoring motorized transportation at the expense of non-motorized,” he said, referring to a “sea change” in policy that would integrate the needs of bicyclists in federally funded road projects. “We are discouraging transportation investments that negatively affect cyclists.”
That drew scorn from his fellow Republicans at a March 17 House subcommittee hearing. “What job is going to be created by having a bike lane?” asked Rep. Steven LaTourette, R-Ohio.
But LaHood’s professed policy change dovetails with the DOT’s new approach to transit funding, which requires planners to incorporate livability issues such as economic development and environmental benefits into projects.
The DOT also is using money from the 2009 stimulus law to “knock down the stovepipes,” as LaHood told The Journal of Commerce, in how the government funds transportation. The bulk of the DOT’s current spending is aimed at highway programs and funded from gasoline and diesel taxes that go into the Highway Trust Fund. The American Recovery and Reinvestment Act also gave the DOT an extra $48 billion to spend on infrastructure, mostly under standing formulas that split the money between states for road and bridge work, plus smaller amounts for airport and transit system needs.
The stimulus also gave the DOT wide discretion to award $8 billion for rail projects to spur passenger train service and create some U.S. high-speed rail, and another $1.5 billion for varied surface transportation projects of special importance.
The DOT called that last batch of funds “TIGER” grants, for Transportation Investment Generating Economic Recovery, and spread them among a broad range of intermodal, seaport, barge terminal, transit and road projects, many of which would not have qualified for federal help under normal state and modal spending formulas.
The Highway Trust Fund, however, threatens to collapse, as fuel taxes increasingly fail to raise enough revenue to keep it solvent. The government is increasingly relying on transfers from the general fund to prop up the highway fund.
“We are concerned that the continued reliance on the general fund, and the associated lack of long-term funding certainty that this creates for state transportation departments, will prevent investments in critical highway projects that demand a stable source of revenue,” Lynch told the subcommittee.
He suggested transferring the trust fund’s transit account to the general fund. “This will provide an immediate injection of approximately $5 billion in highway funding annually, while strengthening the user-pays principle that has historically been the foundation of the Highway Trust Fund.”
The market already has decided the intermodal argument, one shipper told the House subcommittee on March 16. Shippers cannot move freight by highway, rail or barge alone, said Wayne Johnson, director of logistics for American Gypsum.
“In the freight transportation community, there is a fear that we have taken our eye off the ball,” Johnson said, testifying for the National Industrial Transportation League. “The slack in the economy has temporarily pulled a curtain over the problems of congestion and delay that had been making headlines daily when the economy was booming.”
Johnson argued for reinforcing firewalls protecting the Highway Trust Fund, but he also said it’s no longer appropriate to think in terms of single modes of transportation.
“I am the director of logistics,” he said, “not the company’s truck person.”