Home | Investment to Keep the U.S. Globally Competitive
Investment to Keep the U.S. Globally Competitive
Imagine a freight network which enables America to remain an economic superpower.
As shown in the prior analysis by Michael Gallis, investment in world-class infrastructure has become a competitive imperative. The global economy is pressuring countries to upgrade infrastructure in order to remain competitive, gain advantage, or keep from falling behind. U.S freight trends have changed. International trade increased from 13 percent of the economy in 1990 to 30 percent by 2007. The volume of international containers coming into our ports is forecast to increase from 40 million in 2005 to 110 million by 2020. Truck volumes are expected to double by 2035, and rail freight to increase by over 60 percent. (Figure 21.)
Freight—The Challenge
By 2007, business has entered the 21st Century, but the U.S. freight transportation system has not. America cannot compete in the 21st Century global economy with a freight transportation system built in and for the 19th and 20th Centuries. Compared with its major competitors, the United States still has the most fully developed, efficient, and productive transportation system. However, it is losing ground rapidly and needs to be improved.
Figure 21 
Changing business practices have integrated shipping into the production process increasing the demand for on-time delivery. Conducting business on a global scale strains the freight system because needed resources and economic activity are so dispersed. The delivery of a computer to the buyer’s front door is likely to have included multiple trips in Asia to move and assemble parts for final assembly in the United States before delivery to the final destination. More trips, longer distances, and tighter time tolerances require a system that is
more efficient.
The Freight Capacity Crisis
The nation is entering the early stages of a freight transportation capacity crisis. All systems are aging and stretched to capacity. Highways, railroads, ports, waterways, and airports all require investment well beyond current levels to maintain, much less improve, their performance. Projections of freight volume increases reveal that the nation is unprepared and is not preparing fast enough for the freight increase. A recent report forecasts a four-fold increase of container volumes in Los Angeles, Houston, and Savannah, near tripling of volumes at the ports of New York/New Jersey, Charleston, and Virginia, and greater than doubling at the ports of Miami, Tacoma, and Oakland. These volumes will overwhelm the ports and the surface freight system in each of these metropolitan areas.
Achieving a Multimodal Freight Strategy
There are four key elements to the multimodal freight strategy needed. To move the containers coming through our ports, or to move goods generated here in the United States to national and international markets, a viable long-haul capability is needed. To provide this for trucks a new national network of dedicated truck lanes is needed, and for rail, new system capacity is needed. Fixing bottlenecks, reducing congestion, and improving overall performance within metropolitan areas are needed to make reliable, on-time delivery possible. Connections from ports and distribution centers to the Interstate System and the rail system need to be improved.
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National Highway Freight Network. Capacity needs to be added to the Interstate Highway System to meet the huge increase in freight demand forecast. The following increases are what the NCHRP Interstate study has recommended: 400 lane miles to improve intermodal connections; 14,000 lanes-miles on trade corridors; 1,000 lane-miles for fort-to-port routes to expedite military deployment; and 8,000 centerline miles of high-volume, truck-only lanes. (Figure 22.)
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Critical Commerce Corridors. Congress needs to provide new funding dedicated to this purpose. They should create a program called Critical Commerce Corridors, a 25-year initiative to fund projects of national significance. To be funded from freight-related user fees from outside the Highway Trust Fund, it can enable states to fix highway truck bottlenecks, improve intermodal access to ports and distribution centers, fund international gateways, and add capacity to priority trade corridors. The system is to be designated through a process where the Federal government provides coordination; the states and MPOs have the responsibility for planning; with the consultation of trucking, railroads, ports, and shippers; and the involvement of affected communities.
Figure 22
Drawing courtesy of the Reason Foundation. Illustration of dedicated truck lanes.
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Dedicated Truck Lanes. Handling the dramatic increases in truck traffic forecast, will require more lane capacity, but to make it tolerable to the driving public, it will also require the separation of truck traffic onto truck-only lanes in many corridors. The trucking industry recommends that these facilities should be funded through higher fuel taxes, or through the user fees supporting the Critical Commerce Corridor program rather than through tolls.
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Improving Trucking Productivity. Creating a national network of truck-only highways, will allow for the use of longer and heavier trucks to provide long distance inter-city trips, although the loads (for example triples) will have to be broken down into smaller units to traverse the regular network in metropolitan areas. This change will finally allow the trucking industry to gain from the productivity these changes can make possible. Separating trucks from regular automobile traffic can achieve a major increase in safety; and the heavier trucks will travel only on roads and bridges specially designed to handle the greater loads.
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Fixing Bottlenecks. A priority program should be launched in 2010 to target investment in solving the 100 worst truck freight bottlenecks in the country by 2015.
This diagram shows the location of the highway interchange bottlenecks for trucks. The bottleneck locations are indicated by a solid dot. The size of circle accompanying each dot indicates the annual truck-hours of delay associated with the bottleneck. Each of the top 10 highway interchange bottlenecks cause over a million truck-hours of delay per year. (Figure 23.)
Needed—Governmental and Institutional Change
There is a need for governmental and institutional change without which the new vision for freight cannot be realized. These changes must address the following: the lack of national leadership and a weak Federal role; a fragmented Congressional committee structure; stovepipes within U.S. DOT’s modal structure; a business–government disconnect; the need for multi-state collaboration; the disconnect between cost occurring locally, but benefits accruing nationally; and local fragmentation and parochialism. While the United States is stymied for lack of a coherent national strategy, our major competitors are investing aggressively.
Federal Leadership
The Federal government needs to play a strong funding and policy role with regard to the national freight system. In consultation with states and the freight industry, U.S. DOT needs to develop a national policy that includes at least seven elements:
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Improve the operations of the existing freight transportation system.
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Add physical capacity in places where investment makes economic sense.
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Use pricing to better align all costs and benefits between users and owners.
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Reduce or remove regulatory and institutional barriers to improved performance.
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Proactively identify and address emerging transportation needs.
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Maximize the safety and security of the freight transportation system.
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Mitigate the environmental, health, and energy impacts of freight transportation.
A top-down, regulatory approach is not what is needed. Rather, what is needed is a multi-tiered approach which recognizes the important roles many must play. At the national level, the Federal government needs to work in partnership with the private sector, and with other Federal agencies, organized through a National Freight Coordinating Council, to help achieve what is needed. At the multi-state/regional level, states need to collaborate with shippers, carriers, and others. At the local level, state, and local governments, MPOs and the private sector need to work together to make the freight system improvements needed.
Expanding Railroad Capacity
With highways more congested and costly to build, railroads can help manage the increases in freight and passenger traffic expected in the years ahead. Capacity will be key. Freight and passenger railroads will need a significant amount of new infrastructure capacity just to maintain their share of the domestic transportation market. Increasing the rail share will require even more capacity. Here are some of the positive changes which need to take place.
Increase Freight Rail’s Market Share from 14 to 15 Percent by 2035, Rather Than the 13 Percent Share Forecasted
In 2007, many analysts forecast that because of structural changes in the economy, freight rail’s share of the market would drop from 14 percent to 13 percent over the next 30 years. They point out that the economy is producing and shipping more higher-value, lighter weight products, and less heavy manufactured goods. Railroads are also struggling to add the capacity needed to enable rail intermodal to expand. What could make it possible for freight rail to increase its market share in this period despite these forecasts, is for rail intermodal shipments to grow by over 200 percent between 2007 and 2035. Carrying more long-haul loads by rail will prove helpful to truck-load carriers who continue to face a driver shortage. Shifting those trips to rail also can relieve pressure on highways which are already congested. According to the Association of American Railroads, moving more freight by rail rather than by truck, as just mentioned, would also have the benefit of reducing the net fuel consumed, and reducing greenhouse gas emissions. Funding to add the rail capacity needed is the ingredient essential to make these outcomes possible.
Investment Tax Credits
Congressional adoption of the investment tax credits proposed by the rail industry for improvements which add rail capacity could be very helpful. The investment made possible through this tax incentive will enable railroads to address capacity constraints across their systems.
Public–Private Investment in Rail Improvements
States, cities, and counties may enter into joint ventures to invest in rail improvements in partnership with the railroads. Such joint public–private ventures would make possible projects which otherwise would not have been undertaken by either the public or private interests alone. The ReTRAC project through Reno, Nevada, is a classic example. The Union Pacific track was depressed in a 2.25-mile trench which eliminated at-grade crossings in the busy downtown gaming district. Trains were allowed to move through town faster, and vehicle delays and vehicle and pedestrian accidents at the street level were eliminated.
The Port of Tacoma Road Overpass project, a 2001 FAST Corridor project, today expedites truck movements into and out of the Port of Tacoma in Washington State. It grade separates the Port’s main highway access from an on-dock rail facility, and enhances rail yard capacity and switching operations.
Figure 24
Intermodal Connections Need to Be Improved
Intermodal connections to ports and distribution centers need to be made in many parts of the country providing seamless, more efficient connections involving rail, highways, and water transportation. The FAST Corridor in the Seattle–Tacoma region is a prime example. The Puget Sound maritime freight gateway has leveraged hundreds of million of dollars of public and private funding so far, with hundreds of million more expected. Train volumes between Seattle and Tacoma are expected to double over the next 20 years.
Railroad System for the 21st Century
In 2007, AASHTO published a report titled America’s Freight Challenge. It stated that America needs a new railroad system, which “will expand capacity and eliminate the critical bottlenecks which plague the old system today…It will stretch to the limits of America’s new frontiers, reach directly to port docks, and span chokepoints in Chicago, Los Angeles, and Texas, and throughout the East Coast. As with the 19th Century system, public-sector assistance will be needed, new funds, and new regulatory flexibility.”
A project under way in 2007 is such an effort. It is the Heartland Corridor, a partnership between the Virginia Port Authority, the Norfolk Southern Railroad and the states of Virginia, West Virginia, and Ohio. It will create a double-stack container route from the port of Norfolk to the Midwest, cutting the distance by 250 miles and shaving 36 hours off the trip. It will build new rail line where needed, raise tunnel and bridge heights to accommodate containers stacked two high. The project cost is funded by a combination of interests, including Federal funds. (Figure 24.)
Norfolk Southern Corp. recently also announced plans to build a 1,400 mile rail line paralleling Interstate 81 from New Jersey to New Orleans. The proposed $2 billion Crescent Corridor will reduce highway congestion, and speed cargo shipments between the Northeast and the Southeast, while increasing intermodal capabilities. It is estimated that the corridor could divert more than 1 million truckloads off the highways. Public partnerships will also be sought to help fund the rail project.
Photo courtesy of Tennessee Department of Transportation.Freight capacity investment will be vital to meeting the nation’s growing intermodal transportation needs.
