Home | America’s Freight Transportation Network—Struggling to Keep Up

America’s Freight Transportation Network—Struggling to Keep Up

As the world grows more competitive, America’s freight network grows more congested. The investments in America’s transportation network in the 1950s, 1960s, and 1970s led to significant increases in American productivity. Figure 2 illustrates how the costs of logistics steadily declined from the 1960s until today—when measured as a percentage of Gross Domestic Product.

Figure 2. Logistics as Percent of GDP

That trend is changing. Logistics costs are rising, both in absolute terms and in terms of their percentage of the America economy. In 2005, total logistics costs rose to 9.5 percent of GDP, compared to 8.6 percent in 2003. That was the largest rise in 30 years. It is estimated that only one-third of this higher cost is attributed to rising fuel prices. Another third was caused by delay and inefficiencies in the transportation system.

With staggering growth looming on America’s network, America’s shippers realize that the nation’s transportation system cannot handle today’s freight volumes, much less those forecast for the next three decades.

With staggering growth looming on America’s network, America’s shippers realize that the nation’s transportation system cannot handle today’s freight volumes, much less those forecast for the next three decades.

Trucking is clearly the dominant mode of shipping and faces some of the largest problems. However, all the modes play a critically important role in the transportation system—and particularly for important market segments. Rail is essential for intermodal and bulk movements across the continent, particularly for items such as automobiles, coal, and ore. Domestic water shipment is irreplaceable for high-volume, low-cost movement of chemicals, grains, ore, aggregates, and salt, particularly on the Mississippi and Ohio River systems. Air carries a tiny fraction of all freight but is critical for high-value, time-sensitive cargo. Critical electronics parts, perishable gourmet foods, and even high-end clothing travel by air.

The following sections will look at the looming challenges facing each mode—as well as the critical problems facing the integration of the modes into a seamless 21st Century system.

Highways—Backing Up

Although every road is important to someone, some roads are important to everyone. The Interstate Highway System comprises only 1 percent of the public road miles in the United States but it carries 41 percent of the large truck freight traffic in the country. This irreplaceable resource celebrated its 50th anniversary last year. On June 29th, 1956, President Dwight David Eisenhower signed the Federal-aid Highway Act that funded the Interstates. It marked the most significant milestone toward the dream of having a non-stop, transcontinental highway system.

Fifty years later, that system is overworked. Segments of it have become so congested that it no longer is a non-stop coast-to-coast highway. Stop-and-go conditions predominate on hundreds of miles of Interstate highways during peak hours each day in major cities. In some states, rear-end crashes caused by stopped traffic are the fastest growing type of accident on the Interstate highway network.

Loaded trucks traveled 164 billion miles on the nation’s roadways in 2004. Over the next 30 years, that will double.

Figure 3. Currently highway volumes reflect the density and breadth of freight traffic.

America’s competitive position requires a Phase II of the New Interstate Highway System for the 21st Century designed to deal with the volumes, technology and intermodal connectivity demanded by today’s economy. The Phase II of the New Interstate Highway System for the 21st Century will be preserved in a good condition, it will be enhanced with Intelligent Transportation Systems to provide real-time information to motorists and shippers, it will be greatly expanded and it will be complemented by a doubling of transit ridership to reduce traffic demand.

Highway engineers use a simple curve to illustrate congestion. On the Highway Capacity Curve low volumes of traffic can increase significantly without any effect upon travel times, up to a point. If volume increases from 1,000 vehicles per lane per hour to 1,500 vehicles per lane per hour, the motorist will notice the additional cars but traffic will not slow down. Another 300 cars can be added, and still there is no effect. This, in effect, is what happened on America’s Interstates from 1970 until the late 1990s. Traffic grew steadily, but it had little effect upon travel times or reliability.

But then, the Highway Capacity Curve illustrates what happened in the past decade. Once volumes approach 2,000 vehicles per hour per lane, conditions start to deteriorate rapidly. At 2,200 vehicles per lane, traffic speeds become erratic. Something as minor as a police officer issuing a ticket can bring the traffic to a crawl. Then, congestion backs up as the capacity is reduced and the effect ripples for miles up the stream of traffic. Traffic engineers give these conditions a Level of Service rating of A through F.

Figure 4. National Highway System Estimated Peak Period Congestion: 2035

Today, most of America’s urban Interstate highways are mired in Levels of Service E and F. That means that even the most minor incidents caused by accidents, weather, construction, or even law enforcement activities create highly unstable and unpredictable conditions. Rear-end crashes become very common under such conditions. Some states routinely reports sections of Interstate highway that measure 100 and even 200 crashes per mile per year in their cities.

Since 1994, exports of manufactured products are up 43 percent, high technology exports are up 45 percent…and agricultural exports increased 31 percent. Some 3.8 million U.S. jobs now depend on the manufacture of exports…Jobs created by export pay 13 to 17 percent higher wages than non-trade jobs in the economy.

—American Association of Port Authorities

In 2005, America’s highway network carried 77 percent of America’s freight when measured by tons shipped and it carried 92 percent of America’s freight when measured by value.

This highway network is the backbone of America’s freight system. In 2005, America’s highways carried 77 percent of America’s freight when measured by tons shipped and carried 92 percent of America’s freight when measured by value. As noted, the Interstate Highway System carries most of this freight and is the pre-eminent component of the country’s highway system.

Truck volumes are approaching staggering levels on the Interstate system (Figure 4.):

  • Today only 30 miles of Interstate Highways carry more than 50,000 trucks a day. By 2035, that will grow to 2,500 miles carrying more than 50,000 trucks daily;

  • Today, the average Interstate highway mile carries 10,500 trucks and that will rise to 22,700 by 2035;

  • By 2035, more than a third of America’s Interstate highways will carry more than 25,000 trucks per day. That means for a motorist changing a tire on the side of the Interstate, a truck will pass him or her every 3.5 seconds.

The Texas Transportation Institute’s annual congestion analysis documents steady degradation in American travel times, particularly in large cities. Annual hours of delay per traveler have grown from 16 hours lost to congestion in 1982 to 47 lost hours in 2003, for Americans in the 85 largest urban areas. Highway congestion caused 3.7 billion hours of travel delay and 2.3 billion gallons of wasted fuel in 2005 for a total cost of $63 billion. Incidents such as weather, accidents and construction are blamed for about 40 percent of the delays while a lack of capacity creates the remaining 60 percent.

Much of the nation’s congestion occurs at bottlenecks on the Interstate system, mainly at outdated and over-capacity interchanges. A recent study indicated that 243 million hours of delay occur annually to freight trucks, causing $7.8 billion in lost time. Interchanges accounted for 51 percent of the 243 million hours of annual truck delay at the top 277 bottlenecks. The top 10 bottlenecks average 1.5 million hours of truck delay each year. More than half of those total interchanges each generate more than 250,000 hours of truck delay per year.

Much of the nation’s congestion occurs at bottlenecks on the Interstate system, mainly at outdated and over-capacity interchanges.

Congestion threatens the very network which enabled a just-in-time economy. The stated performance standard for truck shipping typically is 95–98 percent on time—often calculated to within minutes of the customer’s loading dock. The trucking industry’s ability to meet this goal and the advent of computerized logistics networks led to the creation of just-in-time practices. Outfitted with mobile communications and product-identification technology, the truck became part of corporate America’s computer systems as well as its delivery system. This allowed companies to move more product faster, farther and more reliably than ever.

A study of Ohio’s Interstate highways indicates that up to 2,500 hours of truck delay occurred daily at its worst bottlenecks. Those locations affected travel times for more than $226 billion worth of freight in 1998 dollars, rising to $309 billion by 2010. Reconstructing the Columbus and Cincinnati bottlenecks would provide travel time savings of between $1.7 billion and $3.4 billion by 2030. The projects had benefit/cost ratios of between 10-to-1 and 16-to-1.

Such improvements are sorely needed but exceed the budgets of nearly all state departments of transportation. Meanwhile, delay at such locations costs shippers between $25 and $200 per hour, depending upon the product carried, according to FHWA. The largest delay for long-haul trucks was estimated at the following five locations:

  1. I-24/I-440N in Chattanooga with 393,100 hours of delay affecting $3.7 billion worth of freight;

  2. U.S. 95/I-15 in Las Vegas with 299,800 hours affecting $2.3 billion worth of freight

  3. I-90/I-94 at I-290 in Chicago with 286,000 hours of delay affecting $4.2 billion worth of freight;

  4. I-94/I-90 in Chicago with 281,700 hour of delay affecting $5 billion worth of freight;

  5. I-75/I-74 interchange in Cincinnati with 255,000 hours of delay affecting $3 billion worth of freight.

The issue of congestion is only one of two major challenges facing the highway network. The other is the massive cost to rebuild the Interstate system.

As America’s urban areas crawl farther down the Highway Capacity Curve, the nation’s freight network will become increasingly unreliable. Already the increase in congestion is growing greater each year. According to the Texas Transportation Institute’s 2005 Urban Mobility Report, between 1982 and 2003:

  • Annual hours of delay per peak traveler rose from 16 to 47;

  • The number of urban areas with more than 20 hours of delay per traveler rose from 5 to 51;

  • The total hours of delay rose from 700 million to 3.7 billion;

  • The cost of congestion rose from $12.5 billion annually to $63.1 billion.

The costs to improve these trends are significant and far outstrip the revenues currently provided to departments of transportation. The issue of congestion is only one of two major challenges facing the highway network. The other is the massive cost to rebuild the 50-year-old pavements and bridges which are remnants from the original construction of the Interstate system.

Unless America takes direct action soon to develop the New Interstate Highway System, the nation’s freight highway network will experience greater unreliability, delay and congestion.

Compounding the need has been the devastating effects of construction prices driven by a tripling in oil prices. Heavy highway construction is extremely energy intensive. Asphalt is an oil derivative and cement requires huge kilns heated to 1,700 degrees to create the chemical process for its manufacturing. Aggregate is mined, crushed, and hauled by diesel equipment. Diesel prices have tripled in about 30 months. Such inflation has eroded states’ construction purchasing power by as much as 40 percent in the past three years. The last federal fuel tax increase was in 1993 and between then and 2015 construction prices will have risen 70 percent. To cover just the effect of inflation, federal highway spending would have to grow from $43 billion in 2009 to $73 billion by 2015. The 2007 cost to improve highways to add adequate capacity would cost $155 billion.

Problems on America’s highways affect not only trucking but all modes as well. Trucking is the typical link between the other modes. Exports often reach the port by truck. The truck brings imports back from the dock. Rail loads are broken down and delivered to final destinations by truck. Trucking serves as a direct and an indirect link between all the freight modes.

Unless America takes direct action soon to develop the New Interstate Highway System, the nation’s freight highway network will experience greater unreliability, delay, and congestion. Incremental changes will fall far short of the necessary investment needed to reverse these trends.

 

America’s Freight Transportation Network—Struggling to Keep Up (Continued) >>