Infrastructure Week: Freight in Focus

May 18, 2018

During Infrastructure Week, two panels featuring freight experts and stakeholders emphasized the multimodal freight infrastructure needs across major U.S. industries.

Private Sector Perspective

The Association of Equipment Manufacturers hosted a Tuesday morning briefing titled “By Land, Rail, and Sea: How U.S. Equipment Manufacturers and Their Partners Depend on Infrastructure to Stay Competitive and Keep Their Products Moving”featuring:

  • Rich Goldsbury, President, Doosan Bobcat North America and Oceania
  • Jason Andringa, President and CEO, Vermeer Corporation
  • Ben McLean, CEO, Ruan Transportation Management Systems
  • Kurt Nagle, President and CEO, American Association of Port Authorities

Eno President and CEO Robert Puentes moderated the session on intermodal transportation infrastructure challenges and policy concerns. Sen. John Hoeven (R-ND) opened the session with remarks about holistic importance of infrastructure. As a sitting member of the agriculture committee, he highlighted the importance of the Farm Bill for agricultural equipment manufacturers and its goal to help farmers export and trade productively. Sen. Hoeven also mentioned his bill the Move America Act of 2017 (S.1229) co-sponsored by Sen. Ron Wyden (D-OR). The legislation proposes to fund infrastructure projects with Move America tax-exempt private facility bonds and other tax credits.The bill was introduced and referred to the Finance Committee nearly one year ago.

Panelists Adringa and Goldsbury described their daily multimodal product distribution. Their respective companies chose which ports to utilize based on greater efficiency and cheaper prices. Goldsbury explained his choice to ship through Montreal instead of Chicago, as Chicago rail congestion adds over one week of delays to shipping times. (Asst. Ed. Note: This tracks closely with recent testimonyfrom Michael Khouri, acting chairman of the Federal Maritime Commission, who told a Senate subcommittee that “where we’re having trouble [with congestion] now is not at the sea ports, but in the inland legs of container shipping… at the rail head end of shipments.”]

The American Association of Port Authorities described its members’ most crucial challenges as first-mile, last-mile congestion—with serious bottlenecks occurring particularly at intermodal transfer points—and need for increased federal investment to the tune of $66 billion over the next five years. Manufacturers also identified workforce shortages and interstate regulation patchworks as critical issues. An estimated shortfall of 50,000 truckers in 2017 gets further crunched during produce and holiday seasons. As for patchwork regulation, when trucks cross over the North Dakota-Minnesota state line, drivers must stop to reconfigure their load’s size to comply with inconsistent weight laws between neighboring states. This is a costly action in terms of time and money. As another example of a costly lack of interstate harmonization, compliance with different driver hours of service across states adds further confusion.

When asked to make one recommendation each to the federal government, freight stakeholders encouraged long-range visioning and holistic infrastructure investment beyond highways and roads, reviewing the future of the Highway Trust Fund as vehicle fuel efficiency improves, and raising the gas tax (26 individual states have done so since 2013). Specifically, ports cannot plan ahead effectively as they wait with uncertainty for the U.S. Army Corps of Engineers annual funding cycle. Pleased with significant dedicated federal dollars for freight overall in the 2015 FAST Act, the Association requested more of that be set aside for multimodal projects.

Federal and State Government Reactions and Observations

The Congressional PORTS Caucus (Ports Opportunity, Renewal, Trade, and Security) co-hosted a Hill briefing with the American Association of Port Authorities (AAPA) on State Freight Plans as related to multimodal port infrastructure Thursday afternoon. Adding to the excitement of Infrastructure Week, AAPA also released “The State of Freight III” report and shared the urgency of its findings: $20 billion in projected needs over the next 10 years.

Will Friedman, president and CEO of Port of Cleveland, who is also the AAPA chairman-elect, moderated a discussion mostly focused on landside multimodal issues featuring speakers:

  • Caitlin Hughes, Director of Freight Management and Operations, Federal Highway Administration, U.S. Department of Transportation
  • Caroline Mays, Freight Planning Coordinator, Texas Department of Transportation
  • Mike Peters, Senior Vice President of Real Estate and Economic Development, Genesee & Wyoming

When asked about federal dollars for multimodal projects that are not strictly highway projects, Hughes mentioned BUILD grants (formerly known as TIGER), INFRA discretionary funds (formerly known as FASTLANE), and smaller funding programs housed under the Federal Railroad Administration and Maritime Administration. She admitted existing federal funds would not be enough to fund current and anticipated need. In order to meet that $20 billion in the next decade, as projected by AAPA, fund matching and state programs need to be innovative.

As required by the FAST Act, states receiving federal funds were required to submit State Freight Plans to the Federal Highway Administration. The initial purpose of the plans was to understand how states spend their federal formula dollars, to collect bottleneck analyses, and to examine larger trends and themes. Hughes commented that this was a success. In addition, states must update their Freight Investment Plans every five years under FAST Act statute. FHWA plans to analyze all state plans to inform a National Freight Strategic Plan and determine room for technical assistance.

She hopes states will use these documents to drive conversations with neighboring states across borders, along waterways, and among macro-regions—perhaps to identify opportunities for multijurisdictional corridors. In fact, Mays said the I-10 Corridor Coalition, comprised of Arizona, California, New Mexico and Texas, works to share information with industry users and may apply for a federal grant soon.

According to Hughes, guidance also encouraged states to convene Freight Advisory Committees with private and public sector stakeholders on a voluntary basis. Over 30 states did form them, but activity has dropped off since plan submission because it was purely optional. Mays described Texas’ advisory committee as productive partnership body of 24 members, including two representatives from the Ports of Houston and Corpus Christie. Texas DOT, in the process of creating their freight plan, identified more needs than funding and must now prioritize where to invest. Two major issues are a rise in unsafe illegal truck parking due to lack of spots and outdated roadway design not built to support heavy vehicles.

In direct response, Hughes shared that the Jason’s Law survey on truck parking, a requirement under MAP-21, will add a new question specific to ports this summer, and FHWA will release those findings next year.

Providing a private sector rail perspective, Peters pointed to the Port of Savannah and Georgia Central Railroad’s new investment in their port-rail infrastructure, which is expected to improve throughput, free up road and truck capacity, and make short-haul moves more cost-effective. Canada is also investing in the Ports of Quebec and Montreal, nearby competition for U.S. ports dealing in agricultural exports.

Private businesses and government officials recognize the urgency of modernizing and repairing multimodal freight infrastructure to support the national economy in trade and supply chains. Officials are working to be more proactive in their planning and forecasting across local, state, and federal levels.

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