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Talking Freight

Commission Work and the National Freight Policy Framework

April 16, 2008 Talking Freight

Good afternoon or good morning to those of you to the West. Welcome to the Talking Freight Seminar Series. My name is Jennifer Symoun and I will moderate today's seminar. Today's topic is Commission Work and the National Freight Policy Framework. Please be advised that today's seminar is being recorded.

Today we'll have two presenters: Darren Timothy of the FHWA Office of Transportation Management and Ed Strocko of the FHWA Office of Freight Management and Operations.

Darren Timothy recently joined the FHWA Office of Operations as an economist in the Office of Transportation Management. He had previously spent 6 ½ years in the FHWA Office of Policy, focusing on highway investment requirements analysis for the biennial Conditions and Performance report to Congress. He also served as staff to the National Surface Transportation Policy and Revenue Study Commission, which he will be discussing today. Darren is originally from Phoenix, Arizona, and holds bachelors and doctoral degrees in economics from Brigham Young University and MIT.

Ed Strocko is a Transportation Specialist in the Federal Highway Administration's Office of Freight Management and Operations. Ed focuses on freight transportation infrastructure projects, freight policy, economics and finance to support FHWA, State DOTs, and MPOs, in implementing programs to improve freight operations within the country's transportation network. In addition Ed provides support for the Federal Aid Highway Program, primarily in the areas of: eligibility, funding mechanisms, planning, project development, and public-private partnerships.

I'd now like to go over a few logistical details prior to starting the seminar. Today's seminar will last 90 minutes, with 60 minutes allocated for the speakers, and the final 30 minutes for audience Question and Answer. If during the presentations you think of a question, you can type it into the smaller text box underneath the chat area on the lower right side of your screen. Please make sure you are typing in the thin text box and not the large white area. Please also make sure you send your question to "Everyone" and indicate which presenter your question is for. Presenters will be unable to answer your questions during their presentations, but I will start off the question and answer session with the questions typed into the chat box. Once we get through all of the questions that have been typed in, the Operator will give you instructions on how to ask a question over the phone. If you think of a question after the seminar, you can send it to the presenters directly, or I encourage you to use the Freight Planning LISTSERV. The LISTSERV is an email list and is a great forum for the distribution of information and a place where you can post questions to find out what other subscribers have learned in the area of Freight Planning. If you have not already joined the LISTSERV, the web address at which you can register is provided on the slide on your screen.

Finally, I would like to remind you that this session is being recorded. A file containing the audio and the visual portion of this seminar will be posted to the Talking Freight Web site within the next week. We encourage you to direct others in your office that may have not been able to attend this seminar to access the recorded seminar.

The PowerPoint presentations used during the seminar are available for download from the file download box in the lower right corner of your screen. The presentations will also be available online within the next week. I will notify all attendees of the availability of the PowerPoints, the recording, and a transcript of this seminar.

We're now going to go ahead and get started. Today's topic, for those of you who just joined us, is Commission Work and the National Freight Policy Framework. Our first presentation will be given by Darren Timothy of the FHWA Office of Transportation Management. As a reminder, if you have questions during the presentation please type them into the chat box and they will be answered in the last 30 minutes of the seminar. With that I will turn it over to Darren.

Darren Timothy:
Thanks, Jennifer. As Jennifer mentioned I will be talking about the National Surface Policy and Revenue Study Commission which recently released its report focusing on freight issues. The Commission was established under section 1909 of SAFETEA-LU. Since the name didn't lend itself to a convenient acronym we actually tend to refer to it as the Section 1909 Commission. Also to distinguish it from another similar commission that was also established under SAFETEA-LU, the National Surface Transportation Commission which released an interim report and work is ongoing and has a slightly different mission than this commission, but it is easy to confuse the two. I am focusing on the 1909 Commission today.

The Commission itself consisted of twelve commissioners who were appointed by the President and commercial and congressional leaders. The Secretary of Transportation was designated within the statute to serve as the chair of the Commission. With regard to freight, freight interests were also well represented on the Commission. This included Matt Rose, the CEO of Burlington Northern Santa Fe Railway and also Pat Quinn, chairman of U.S. Xpress who at the time was also President of the American Trucking Association. And others on the Commission also had a significant interest in freight. And also have the standard disclaimer that I will be doing my best to represent what was actually in the Commission report, the views of the Commission itself did not represent those of the U.S. DOT or its staff.

The Commission had a number of statutory objectives that were laid out for us. Those included looking at future conditions and needs on transportation system, several different time horizons, 15, 30, and 50 years which particularly looking at the long time horizon presented a number of challenges. The Commission also is charged with developing a conceptual plan to ensure that the transportation system continues to serve those needs as we go throughout the century. The Commission is also supposed to look at the roles of various levels of government and the private sector meeting future surface transportation financing needs, and also to recommend alternatives to replace or supplement the fuel tax as principal revenue source. While the Commission itself talked a lot about the highway trust fund, it included a number of these other provisions and the Commission report itself while it covers that, really covers a much broader set of policy and programmatic issues than simply looking at the short-term issues of the highway trust fund.

The work of the Commission took place over past couple of years. The Commission began its work in May of 2006, and held monthly meetings through December of 2007, there were public meetings, frequently as part of those monthly meetings, and as well as executive sessions. The Commission conducted a large number of field hearings around the country, some of you may have participated or been aware of those. The Commission also had private briefings from industry groups. They did kind of a 101 briefing if you will on freight rail and trucking industry issues, passenger rail, and transit and so on. The Commission also had a large number of issue papers produced which are also available. All of these things were inputted into the Commission's appropriation.

The report itself consists of three different volumes. Volumes 1 and 2 which were published together under a single cover. Volume 1 has the detailed findings and recommendations of the Commission. Volume 2 is more of a technical subject treatment. Volume 3 basically consists of all the analyses, testimony, all the inputs that were given to the Commission, and that's available only on the web.

The central conclusion of the Commission was that what was needed was really a new beginning. The Commission established a mission statement, the goal was to create and sustain the preeminent surface transportation system in the world, and towards that end, end, the Commission made the point that the surface transportation program of the federal government shouldn't be authorized in its current form, but we really need a new start now that we've out grown the transportation system that currently serves us and that we need to do something about it in order to ensure prosperity and competitiveness in the future. And it noted that current institution programs and mechanisms are somewhat outdated and result in a mismatch between the supply and demand for transport services.

The recommendations, a five-part new federal compact which could include a strong federal role, increase spending from all levels of government, improved effectiveness and accountability for investments, investment strategies, performance outcomes and also institutional and federal program delivery reforms. I will be touching on a few of these today. You should also note at this point there is also a minority use statement and touch on some of their conclusions, places where some of the Commissioners differed with the overall report that was released by the Commissioner.

In order to promote the national interest, the Commission talked to ten focus areas that the federal service transportation program has, and you can see one of those which I will be focusing on today is freight. From a programmatic perspective, the idea was that all of the dozens of different federal highway and transit and safety programs should be consolidated within these ten focus areas. From a technical perspective, the Commission looked at different factors and discusses in the report some of the factors influencing the future demand for freight movement. Obviously economic growth is the chief factor affecting the demand for freight transportation in the U.S. The Commission within that really focused on interpret trade as one of the key drivers of that, particularly trade with China and the Far East. The implications of those trade volumes for the surface transportation system. The report also notes that the commodities in the future to the extent that certain commodities are best suited for transportation by one mode or another will affect the demand for transportation in the future. Operational efficiency improvement, or lack thereof, think in terms of freight productivity, regulations, labor service hours, and vehicle sizes and weights have impact, and also changes in business practices over time, a lot of emphasis to recent changes for existing time and manufacturing implications that has for freight movement in the U.S. The report also notes a number of infrastructure challenges we're facing today and increasingly in the future. First of course is the age and deterioration of our transportation infrastructure, the significant and growing levels of congestion in our major cities, obviously the safety of our transportation systems is a major large concern, energy security and environmental protection perhaps represents a growing concern, and the effect that our transportation system has in those areas, and also population growth, the fact that however we're going to actually accommodate adding over 100 million new Americans over the next century.

Specifically, the emphasis is on the need to maintain global competitiveness and support interstate commerce in the U.S. Along those lines, the challenge actually is in areas of our infrastructure capacity and performance of that infrastructure, specifically a lot of focus and attention was paid to ports and international gateways which weren't directly spelled out in the charge given to the Commission, and in their deliberations the Commissioners recognized that port crossings, intermodal connection and freight bottlenecks in congested cities are really where the major issues are that we face in terms of the being able to move freight efficiently and reliably The freight investment program proposed by the Commission would have a number of elements to it. It would focus on eligibility perspective and a focus perspective, focus would be on capacity improvements in key freight corridors, an interest in further developing public/private partnerships particularly with traditionally private transportation service providers such as railroads, port facilities and owners of intermodal transfer facilities. Also an interest in stating environmentally friendly freight improvements, infrastructure to reduce idle emissions and the like. Some examples that the Commission cited as the types of projects they would like to see funded include projects I am sure everyone is familiar with like the Alameda corridor in Southern California, and the CREATE project in the Chicago area. The Commissioners had a number of briefings and actually onsite tours of some of those and really saw those types of projects as having significant potential.

The Commission needs analysis was performed, including an analysis on the highway and transit side, using the tools that were based on tools that USDOT had developed in the past for future investment requirements as part of the Conditions and Performance report. For freight rail, the investment needs analysis that the Commission used was developed by the Association of American Railroads and that information was then provided to the Commission. Both the highway and freight rail investment analyses drew on the freight projections from the Freight Analysis Framework. One of the issues of course was the path goes out to 2035. We had to make additional assumptions about traffic growth from there to when going all the way out 50 years. Both of these analyses use those forecasts as a control total. On the technical side, the data itself, we weren't able to link it up directly on a section level with the highway, but we essentially used the state by state growth rates from the highway investment analysis. The funding sources identified by the Commission for future investment would include general increases in general user fees, in the near term that would be focused on field taxes over the long-term, some transition to VMT-based fees, and would be in the works for a number of reasons. They identified potential new freight fees, and that with the idea that these could be deposited along with other user fees in a consolidated surface transportation trust fund, all of the fees would go to a single source to essentially replace the highway trust fund. They also have other sources including those identified potential sources for improvements such as investment tax credits for transportation facility owners and I forgot to also list on here they recommended a portion of customs duties be devoted to freight improvements. This is one of the key areas that the Commissioners disagreed significantly on. The minority views statement talks a lot about the opposition to fuel taxes as a continued finance as a basis of future increase of the future financing for the surface transportation system.

A number of policy and financial issues are discussed within the report, and I think are some of the key issues that one would face generally and coming up in looking at how we should be developing and funding our transportation infrastructure. One issue of course is figuring out how to assess the public and private benefits for projects where both of those exist, and allocating financial responsibility in a fair way, so, for example, if there is going to be some continued public investment in freight railroad, how do you actually figure out whether where benefits start and how that financial responsibility should be allocated among different parties. The concern about the impacts of tolling on freight movement, a lot of issues raised by different Commissioners with regards to impact on interstate commerce, concerns within the trucking industry about what they perceive as double taxation, effectively if they're paying both a toll and fuel taxes. As with all of our discussions of freight transportation and emphasis on from different parties on modal neutral that the policies not be designed so as to excessively favor one mode versus another. There is concern about geographic alignment of revenue sources. The idea here in particular with that a concern that if new fees were to be imposed on new freight fees such as an example a container charge, that there is concern that those fees should be dedicated for use on the corridors where those improved -- where the fees are being collected, that there is concern freight fees might be collected on transportation but then effectively diverted to other areas. And again I think the Alameda Corridor was used as the model for that where those fees are dedicated to that specific corridor. The railroads were concerned about providing track access for passenger rail. There is a lot of interest in the Commission in greatly expanding the use of inner city passenger rail within the U.S., and that has some concerns that if that weren't done carefully, that could negatively impact freight transportation. Towards that end there was an interest in developing exclusive passenger and freight facilities. In the case of rail investments, developing new high speed inner city passenger rail facilities on the highway side a lot of emphasis would be on things like exclusive truck lanes. All of these issues were raised by the Commission, but as you might expect, none of them were fully resolved. They are discussed in the report.

For more information, the full report is available at the Commission website at www.transportationfortomorrow.org.

J. Symoun:
Thank you, Darren. Again, I do want to encourage you to post questions if you have any. I see one came up, and we'll get to that at the end of the seminar. Now I am going to turn it over to the next presentation given by Ed Strocko of the Federal Highway Administration Office of Freight Management and Operations. Ed, I will bring up your presentation.

Ed Strocko:
Thank you, Jennifer. Good day, everybody. It is a pleasure to update this group on the progress that we made on the Draft National Freight Policy Framework. As you may remember, back in 2006 the DOT introduced this framework, and since that introduction, there has been a lot of progress on the public agency side but there is still a lot to be done, and we've had many noteworthy activities undertaken by the private sector or by private shippers and carriers. A lot of people have seen this as a good start in having comprehensive look at a national freight policy. AASHTO endorsed the concept of the framework as they thought it was positive initiative from the Department, and other groups such as AAPA, and freight stakeholders endorsed the framework in a letter to the President. There is continuing to be a call for national freight policy and so I think this will help in that discussion as we go forward.

As you may recall from some of the previous presentations we've done over the past year or two on the framework, it all started with a vision. The vision we laid on it was the United States freight transportation system will ensure the efficient, reliable, safe and secure movement of goods and support the nation's economic growth while improving environmental quality Looking at the screen, you can see how the framework is laid out. We have seven high level objectives, the sacred seven, which we laid out, and under there we have strategies followed by tactics and activities. A big thing is there must be at least one activity for every tactic. Currently in the framework we have 28 strategies, around 130 tactics, and I think 185 activities. The seven objectives that I mentioned before are listed up here, and they cover the water front. We have the operations side of things on the existing freight transportation system, new infrastructure, new fiscal capacity, something on financing and funding and the alignment of the costs and the benefits between users, some of the regulatory and statutory barriers, streamlining. We have new needs out there, trends, what the future holds, dealing with that, safety and security, and then dealing with the environment, both human, natural, and community impacts of freight. Everything fits under those seven.

As we worked on developing the framework, we focused it around five central themes. First one is that the framework is a national freight policy. It is not federal freight policy, and it includes strategies and tactics to be carried out by DOT and many of the other stakeholders, and there might be some that are in conflict and some that the Department supports, some that the Department doesn't support, but it is national. It is comprehensive. The next one is that the strategies and tactics are not only public but public and private, and they're only going to be achieved through a collaboration of public and private. Accountability is a real key, and it is a cornerstone of this. All of the responsibilities and tasks have to have owners responsible for the implementation It is how we can move forward on this. The investment is critical as federal funding is unlikely to be sufficient to meet all the needs as seen in in Darren's presentation before through some of the Commission work, and the future investment will require innovative new financing mechanisms. Finally, the framework is a living document, and it is designed to evolve over time as things get added and taken away. Currently we're seeing a major use of this framework as a tool to engage the various freight players involved in goods movement in a conversation about how to move forward with the freight system. We think that the framework is allowing us to have a common forum for viewing, comparing, and contrasting the current policies with different new proposals and ideas, and I will come back to that again later. With this forum, we think that we can have a dialog and discussion as we head towards reauthorization and see how different people are approaching the freight system.

Over the last year or so we've had a team at USDOT representing all the modes, updating the website that contains the Department's freight information, and specifically the freight policy framework. By the end of this month you'll be able to access the site and we'll have the framework, the visions and themes, objectives of framework, and the existing pieces of it, the proposed strategies, and we're also going to have a number of key statistics, maps and data, links to the different modal USDOT websites, and then an email address for feedback and information. On the bottom of the screen you can see the website is not live yet but it will be in the next week or two. If you want to write that down, I'll also have it for you later in the presentation.

I will spend time walking you through the revised framework as you would see it on the web and some of the changes and innovations we've made. There remains basically two major sections on the framework home page of the framework section of the website. First is background that provides information about the hows and whys of the framework and also information on how to contribute to the actual framework. As I mentioned earlier, it is a dynamic document that only will succeed when people continue to contribute to it. The framework is built on project and programs that are being actively pursued by the contributing organizations, we need people to continue to populate it and to push forward on the things that they put in there. One of the big criteria is that there are actual items that you'll undertake as we put things in there. We don't want ideas out there that no one is going to implement or no one is going to make an active effort to pursue. That's our big criteria when we add something.

On the screen here you'll see the framework portion of the page. We divided it up into a couple different ways to look at it. The existing policies that are currently in place, proposed policies are actions that people are pursuing, and then the ability to look at everything. As you may remember if you looked on our website, the current page has a list of all the actions and strategies and tactics as one big thing and is kind of messy and we hope to streamline this - and in the next couple slides I will go through it quickly and demonstrate that.

If you click on the introduction, you'll get background information of the vision, some of the themes we talked about earlier and what the framework is all about. If you go back and you click on the framework elements themselves, you'll get the seven major objectives, and from here everything is expandable. You click on the little plus sign next to it. You click on the plus sign next to objectives, the strategies pop out. If you click on the plus sign next to strategy, all the tactics that fall under the strategy will appear. If you click on it again, you get information about each specific tactic. You click on a tactic, you get information on each of the activities which is the bottom level and as mentioned before we have to have an activity for every tactic or strategy. Another addition we've done for the framework is adding a search feature. You can now type in a keyword, and it will search the entire framework database to pull out all key words you've had pulled up. Here we pulled up the word rail and shown a couple of examples where it appears. If you're interested in a specific part of the framework, you can easily search on this. As we go forward over the next year, there are two big emphasis areas for us. We want to continue working with folks to populate the framework with the actionable items, both from the federal side within DOT and some of the other federal agencies and of course our public sector partners, and also the private industry. We're going to start engaging in strategic outreach to get more contributions to this, some of the associations out there, and we're also going to use this as a forum for discussing the current and proposed policies. I think we can use this to help understand where there are synergies and where there are gaps, where there are conflicts and complementary policies, and as we head towards reauthorization, we can see how people are lining up with different proposals. With that I will put up our contact information and in the bottom you can see the e-mail address to contribute to the policy framework as well as the website where the framework will be up in a couple of weeks. With that, I will turn it over to Jennifer.

Jennifer Symoun:
Okay. Thank you, Ed. I hope everybody enjoyed the two presentations. We're done with the presentation part a little bit early today, so we'll go ahead and move onto the question and answer session. I will start. There has been a few questions posted online, so I will start with those. Feel free to continue typing in questions if you have them, either Ed or Darren, and if you actually do me a favor and note in your question which presenter the question is for, and we can also open up the phone lines once I have been through what's typed in to see if anybody has any questions over the phone.

Our first question I believe is for Darren, and the question is was there any talk about separating freight fees from other revenues in the surface transportation trust fund?

D. Timothy:
There is certainly talk about that. The Commission report with regard to the surface transportation trust fund, the [ indiscernible ] is was that it would be a multi-modal trust fund to reflect the multi-modal nature of the transportation issue that is our country faces, but they did talk about within the report about consolidating the highway and transit accounts of the current highway trust fund, but that left an open question for Congress to decide whether their freight and passenger rail would be developed as separate accounts or as part of a comprehensive fund, but the report also in talking about the different potential freight fees, you know, essentially talks both ways. It talks about the importance of having those fees a aligned with the -- be used to directly benefit those that pay those fees, both geographically in terms of the [ indiscernible ] paying them, but then it also talks about the importance of flexibility and multi-modal solutions, so I think it is an area that would be overall essentially left open for further discussion how [ indiscernible ] use of those fees would besting structured.

J. Symoun:
We have another question for you. Were dedicated truck lanes considered?

D. Timothy:
Yes, although perhaps not to the extent I think we would have liked. In developing the needs analysis, we looked at a number of different scenarios I guess we call them, and one of those was looking at exclusive passenger and freight facilities. We did a -- on the highway side we tried to look at the impact of a dedicated truck lane that worked, but it was really a fairly high level analysis. We're essentially looking using some [ indiscernible ] developed for the comprehensive truck, size and weight study, essentially looked at the impact of reducing combination vehicles on interstates and what the implications would be for a future investment and requirements on interstates. We didn't really have the opportunity, however, to do the type of detailed technical analysis of merits of dedicated truck lanes that I think the subject warrants, so it was something that was acknowledged and touched on, but not analyzed in any great depth.

J. Symoun:
I don't see any other questions typed in at this point. What we'll do is go ahead and open the phone lines and see if you have any questions over the phone, but in the meantime if you want to type in questions, feel free to go ahead and do so. Heather, if you can give instructions on how to ask a question over the phone.

Operator:
If you would like to ask a question press star 1. You will be prompted to record your name. To withdraw your question, press star 2. One moment. At this time I am showing no questions.

J. Symoun:
Well, if we don't have any additional questions, we'll close out early today. Actually what I will do is give you a few more minutes for questions and in the meantime I will mention the Freight Peer to Peer program which normally I would have a slide showing up about. I wasn't able to get the slide up, but the Freight Peer to Peer program is a program for public sector freight stakeholders such as state DOTs and MPOs. If you have a freight issue, you can work with the program. We have a database of peer experts, we'll find an expert or two to help you work on your issue, and we'll arrange the meeting. We have money to pay for travel costs for the experts. The Freight Professional Development website has more information about the Freight Peer to Peer program. I will type that website in. If you go to the site, on the left side there is a link to the Peer to Peer program, and I encourage you to go look at it and see if the program could possibly help you in any way.

It seems like there are no more questions in there, so we'll go ahead and close out. If you do think of anything, feel free to send it to one of the presenters or the freight LISTSERV.

There is a question in there. I believe it is for Darren. Would bicycle and pedestrian couriers be considered in the final analysis?

D. Timothy:
I don't recall that bicycle and pedestrian couriers coming up. There may have been testimony from some of the field hearings. I know they did talk about freight, and bicycle and pedestrian transportation in general.

J. Symoun:
The presentations, a transcript, and a recording from today's seminar will all be posted to the talking freight website within the next week or so, and I will send out e-mail to everyone in attendance when that becomes available. The next seminar will be held on May 21 and will be about Supply Chains. If you haven't done so already, I encourage you to visit the Talking Freight Web Site and sign up for this seminar. The address is up on the slide on your screen. I also encourage you to join the Freight Planning LISTSERV if you have not already done so.

With that, we'll close out early today. Thank you to both presenters. If anybody does think of a question after we close out, either e-mail presenter or send it to me and I can get it to the presenters or send it to the LISTSERV. Thank you, everybody, and have a good rest of the day.

Updated: 03/29/2011
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