While a lot of time and energy can be spent dreaming up a great federal program, the hardest part is often determining who should pay. For years freight transportation shippers, carriers, and other interests have called for a federal discretionary grant program that can competitively allocate funding to major freight infrastructure projects that have national benefits. And now, Eno’s Freight Working Group has released a report with a specific recommendation on how to fund such a program.

The report and recommendations were publically released at an event on May 19 in Washington, DC. The release event included remarks from Working Group co-chair Senator Norm Coleman (R-MN), Congressman Alan Lowenthal (D-CA) (the author of a related freight funding proposal), and a panel of industry stakeholders. Panelists included Chuck Baker (CC&H), Alejandro Solis (HDR, Inc.), Leslie Blakey (Coalition of America’s Gateways and Trade Corridors), and David Gehr (WSP | Parsons Brinkerhoff), with Rob Puentes of Eno moderating. Paul Lewis of Eno presented the report and recommendation.

The first part of the recommendation is for Congress to appropriate general fund revenues for the freight discretionary grant program as a “bridge” to support an expanded program while a dedicated funding stream is being established. This provides the ability to expand on the existing federal freight program that was created in 2015 immediately, make that program fully multi-modal in nature, and sustain it while a long-term funding source can be developed.

In the long-term, the recommendation is for Congress to authorize the implementation of a cost of freight shipment (COFS) fee that will be dedicated to the freight discretionary grant program. The COFS fee would assess a small percentage fee levied on cargo owners based on the cost of freight shipment. The fee would be assessed regardless of mode and placed on domestic surface shipments. (A similar waybill fee on air cargo transportation already helps support the federal Airport and Airway Trust Fund.) And importantly, Congress will need to spend the next few years working closely with industry stakeholders to ensure that the administrative and collection system for the COFS fee will be simple and straightforward.

These recommendations did not come easy. Eno and the Working Group worked for over a year, meeting several times to debate nearly all funding mechanisms imaginable. At the release event, the panelists remarked that not a single source surfaced as the silver bullet during the process– each had several benefits and drawbacks. As the list of possible funding sources was narrowed, Eno staff conducted extensive research in to the details, effects, and likely outcomes of each source.

During the Working Group’s deliberations, Congress passed the FAST Act, which not only provided funding for federal transportation programs but it also included a discretionary grant program for freight projects. The Working Group decided to build off the FAST program, creating recommendations that improved and expand the program now and prepare for creating a stable program after FAST. The panelists remarked that the prospects are not good for long term transportation funding after 2020, when FAST expires. This makes it all the more important to begin work right away to establish a sustainable funding stream.

After much discussion, the two-part recommendation became the best option to bolster the federal program now while working to create a sustainable funding stream from the COFS fee. Although Congress is still four years away from the expiration of FAST funding, there are still significant issues that need to be worked out with the COFS fee. The recommendation facilitates a process so that work can begin now to engage stakeholders to find a workable solution to outstanding issues.

Details of the recommendation and the process used can be found in the report: Delivering the Goods: Finding a Funding Source for a Federal Freight Program.