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National Policy, Multimodal Network Needed to Improve Freight Transportation, Report Says

Friday, November 01, 2013
Sandler, Travis & Rosenberg Trade Report

A congressional report issued this month identifies a number of challenges and impediments to the efficient and safe movement of goods into, out of and through the United States. The report makes several recommendations for addressing this situation, many of which reiterate prescriptions offered by similar public and private sector reports issued in recent years.

The report, issued by the House Transportation and Infrastructure Committee’s Special Panel on 21st Century Freight Transportation, finds that the current state of highway infrastructure does not adequately serve the needs of those moving goods across the U.S. The Highway Trust Fund, from which federal investment in highway infrastructure is disbursed, will soon be insolvent, which is especially problematic considering that maintenance of existing highway facilities alone would cost hundreds of billions of dollars and that one of every four bridges in the U.S. is structurally deficient or functionally obsolete. Furthermore, a recent study found that road congestion cost the U.S. economy $121 billion in 2011.

Harbor and inland waterway infrastructure is lagging as well, the report states, which is a concern because more than 75% of all U.S. international freight moves by water. Unlike the Highway Trust Fund, the federal fund dedicated for harbor maintenance has a positive balance, but a lack of appropriated funding has resulted in deferred maintenance of channels that serve coastal ports. As a result, the constructed depths and widths of entrance channels at 59 major ports are currently available only 35% percent of the time, making it difficult for these ports to handle not only existing cargo ships but the larger vessels that will service U.S. ports in the near future. Internally, U.S. waterways carried an equivalent of over 100 million truckloads of goods in 2012, but much of the critical infrastructure for this transportation is in dire need of repair.

The report suggests that U.S. freight rail infrastructure is in better shape because it is privately owned. There are approximately 565 freight railroads in the U.S. that operate more than 200,000 miles of track. These railroads own the infrastructure over which they operate and thus invest heavily in it; e.g., over $23 billion in capital expenditures was invested in 2011 to improve and expand rail networks.

The report also examines air cargo, which carries less than 3% of total freight by weight by nearly 35% by value; the warehousing, distribution center and logistics industry, which helps optimize the movement of freight across all modes of transportation; and pipelines, which carry 10% of U.S. freight movements by tonnage and nearly two-thirds of the U.S. energy supply.

To ensure that these modes are capable of safely and efficiently carrying cargo in the coming years, the report recommends that Congress take the following steps.

- direct the Transportation Department, in coordination with the Army Corps of Engineers and the Coast Guard, to establish a comprehensive national freight transportation policy and designate a national, multimodal freight network

- ensure robust public investment in all modes of transportation on which freight movement relies and incentivize additional private investment in freight transportation facilities

- promote and expedite the development and delivery of projects and activities that improve and facilitate the efficient movement of goods

- authorize dedicated, sustainable funding for multimodal freight projects of national and regional significance through a grant process and establish clear benchmarks for project selection

- direct the Transportation Department, in coordination with the Treasury Department and the Army Corps of Engineers, to identify and recommend sustainable sources of revenue across all modes of transportation that would provide the necessary investment in the U.S. multimodal freight network and align contributions with use of, and expected benefit of increased investment in, such network

- develop specific funding and revenue options for freight transportation projects prior to Congress’ consideration of the surface transportation reauthorization bill in 2014

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