Expanding capacity … and paying for it

RSS

The simple fact is: no transportation, no economy. They are inseparable. Congress must invest in all transportation modes – from waterways to roads and rails – to get us where we need to be as a competitive nation. Millions of jobs and our nation's long-term economic health depend on it.” –Larry “Butch” Brown, executive director of the Mississippi Department of Transportation and president of the American Association of State Highway and Transportation Officials (AASHTO)

Two over-arching issues are facing the freight industry these days: the need to expand and replace modal capacity and how to pay for all that entails.

freight1.JPG

According to the second of three big reports on transportation needs being issued the American Association of State Highway and Transportation Officials (AASHTO), the group’s Unlocking Freight analysis finds that America’s highways, railroads, ports, waterways, and airports require investments well beyond current levels to maintain – much less improve – their performance.

According to just some AASHTO’s research, In 10 years, an additional 1.8 million trucks will be on the road, and in 20 years, for every two trucks today, another one will be added. And, despite more long-distance freight being moved by intermodal rail, the report finds that trucks will still carry 74% of the load.

On average, 10,500 trucks a day travel some segments of the Interstate Highway System today. By 2035, this will increase to 22,700 commercial trucks for these portions of the Interstate, with the most heavily used segments seeing upwards of 50,000 trucks a day. Yet between 1980 and 2006, while traffic on the Interstate Highway System increased by 150%, Interstate capacity increased by only 15%.

bld2.jpg

“This report outlines what's at stake if we fail to invest to meet the growing demands on our transportation infrastructure,” noted Pennsylvania Governor Edward Rendell (D) (at left) in a speech last week following the release of AASHTO’s freight study. "In fact, Pennsylvania is one of six states – along with Arkansas, California, Georgia, Tennessee and Texas – that collectively account for 88% of the most heavily used truck routes.”

Tennessee Department of Transportation Commissioner Gerald Nicely added that to accommodate this predicted growth in freight movement, the country needs to think nationally, regionally, and on a multi-modal level.

“Central to this effort should be the creation of a National Multimodal Freight Plan to ensure that transportation investments are coordinated and made where most needed,” he explained. “By linking trucks, rail, waterway transport, and aviation, freight can be moved more efficiently throughout the nation.”

For example, each year, 147 million tons of freight passes through Tennessee by way of trucks, rail cars and barges. In fact, nearly half of Tennessee’s Gross Domestic Product comes from the movement of goods and more than half of the statewide employment is in goods-dependent industries, Nicely emphasized. The segment of I-40 through Tennessee and Arkansas alone accounts for nearly one-third of the nation's busiest truck miles.

freight2.JPG

One current strain on the movement of freight in the Tri-State region is the lack of vehicular and rail crossings along the Mississippi River, according to Nicely.

Tennessee, Mississippi and Arkansas are currently working to develop a third Mississippi River bridge crossing – dubbed the Southern Gateway Project – he added, with environmental studies on the project are now underway that include consideration of a multi-use bridge that would include both vehicle and rail access.

Transportation’s impact on job keeps coming up in all these freight discussions (not a surprise, especially in terms of politics, as jobs equal votes, don't they?)

"The nation's multimodal freight transportation system directly affects economic development, current and future jobs, and the quality of life in our communities," stressed Ohio Department of Transportation Director Jolene Molitoris.

freight3.JPG

“Today the nation's freight transportation system supports more than 10 million jobs, from couriers, truckers, laborers, shippers, railroad conductors and mechanics to postal carriers, warehouse operators and stock clerks,” she said. “Now, think about how many more jobs will be added as the industry grows over time and you begin to see yet another reason why this study is so important.”

But there’s another serious question to be asked in all of this – how do we pay for it? Ah, yes, money – such a sticky wicket as plans for billions upon billions of dollars worth of new and upgraded highways, ports, railroads, terminals, etc., get bandied about.

Well, according to a survey conducted by the Mineta Transportation Institute (MTI) last month, John Q. Public doesn’t WANT to pay for any of this – period.

The firm conducted a national survey from April 27 to May 22 this year to test national public support for sales, gas, and mileage taxes that would raise revenue for transportation purposes, polling 1,545 adults 18 years or older speaking in either English or Spanish.

The survey questionnaire presented eight tax options, including a flat-rate mileage tax, a mileage tax with a rate that varies by the vehicle’s environmental performance, several versions of a gas tax, and a sales tax. Surprise, surprise – NONE of the options received anything close to majority support.

fueling1.JPG

That being said, three options DID get a little traction – though lukewarm support at best. The most popular were a half-cent sales tax (43% support), a ten-cent gas tax increase whose revenue would be used for projects to reduce the transportation system’s impact on global warming (42% support), and a ten-cent gas tax increase spread over five years (39% support).

The survey also compared public support for alternative versions of the mileage and gas taxes. The “base” cases tested against alternatives such as a flat-rate mileage tax of one cent per mile and a ten-cent gas tax increase with no additional information given.

All variants of these base cases increased the level of support, some significantly. The option of varying the flat-rate (base) mileage tax by the vehicle’s pollution levels increased support by a strong 12 percentage points.

For the gas tax, all four variants to the base case increased support as well, MTI’s researchers found. Most notably, spreading the gas tax increase over five years increased support by 16 percentage points, while linking the increase to reducing global warming increased support by 19 percentage points.

As a result, MTI offers two policy recommendations based on its survey. First, linking a transportation tax to environmental benefits can strongly increase support, with the increase in support for a gas tax was even more striking when respondents were told that the revenues would be spent on transportation projects to reduce global warming.

Second, the survey results showed that the very low support levels for a one-time gas tax increase can be raised by modifying how the tax is structured and the way it is described. Linking the revenue to environmental benefits is one good option, and spreading the increase over several years is another, MTI said.

Yet in terms of the big funding picture, remember this – support for transportation taxes is low at best, and while talking up the potential to reduce “global warming” with said taxes might generate more support within a survey, that enthusiasm rarely translates when wallets become involved. It’s a detail to keep firmly in mind as we go about mapping a strategy to handle increased freight volumes predicted for the future.

What's Trucks at Work?

Trucks at Work: Sean Kilcarr comments on trends affecting the many different strata of the trucking industry.

Blog Archive

Sponsored Introduction Continue on to (or wait seconds) ×