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Publication Number:  FHWA-HRT-07-002    Date:  Jan/Feb 2007
Publication Number: FHWA-HRT-07-002
Issue No: Vol. 70 No. 4
Date: Jan/Feb 2007


Freighted With Urgency

by Tony Furst

USDOT looks to public and private stakeholders to collaborate on a national policy that addresses U.S. freight challenges.

As the U.S. economy continues to grow, truck-borne freight is expected to increase. In this photo, trucks are backed up near the U.S.-Mexico border at Laredo, TX. Photo: Texas Department of Transportation (TxDOT).
(Above) As the U.S. economy continues to grow, truck-borne freight is expected to increase. In this photo, trucks are backed up near the U.S.-Mexico border at Laredo, TX. Photo: Texas Department of Transportation (TxDOT).

The transportation system that moves the Nation's freight is crucial to the continued economic growth of the United States. The system is closely intertwined with free trade agreements and globally with the increasingly sophisticated supply chain. Volume growth and intermodal connectivity pose significant challenges to the system, particularly at key border gateways. Increased flows are contributing to, and are being affected by, capacity constraints and congestion, which in turn impose higher costs on shippers, consumers, and the environment.

The keys to unlocking these constraints are not just in the hands of the U.S. Department of Transportation (USDOT). Effective solutions will require collaboration by all transportation users and providers. Recognizing the need for such coordination, USDOT developed a national freight policy that encompasses this vast array of transportation providers and users. "The framework enables all stakeholders to work collaboratively toward a safe, reliable, and environmentally sound freight transportation system by focusing their efforts on key objectives," says USDOT Under Secretary for Policy Jeff Shane.

The Challenges

Current pressures on the U.S. transportation system are challenging the efficient movement of freight. In some cases, freight movement itself is responsible for those pressures.

Highway Congestion. Since 1980, vehicle miles traveled (VMT) by passenger cars have increased by 50 percent, and VMT by commercial trucks have increased by nearly 100 percent. Coupled with just a 3-percent increase in route miles over the same period, these increases have led to traffic congestion that is becoming steadily worse. Some 60 percent of major roads are congested during peak periods, which now average 7.1 hours, up from 4.5 in 1982. According to The 2005 Urban Mobility Report by the Texas Transportation Institute, congestion delayed drivers by 3.7 billion hours in 2003, with a combined cost in fuel and time of $63.1 billion.

On one-fifth of the interstate system's mileage, trucks account for more than 30 percent of all vehicles. By 2020, more than 40,234 kilometers (25,000 miles) of highway are likely to carry at least 5,000 commercial trucks each day. The portion of urban interstates with heavy truck traffic (10,000 or more trucks per day) will increase from 27 percent in 1998 to 69 percent by 2020.

According to the Federal Highway Administration's (FHWA) Freight Analysis Framework, woven into this tapestry is the anticipated increase in freight on the Nation's transportation network: from 13.9 billion metric tons (15.3 billion tons) to 23.4 billion metric tons (25.8 billion tons), or 70 percent more, between 1998 and 2020. Trucking will carry a large share of this increase due to growing demands for "just-in-time" delivery, major reductions in railroad track mileage, and the decentralization of manufacturing and consumption patterns.

Double-stack trains, like the one shown here, improve rail productivity.
Double-stack trains, like the one shown here, improve rail productivity.

USDOT has initiated a new National Strategy to Reduce Congestion on America's Transportation Network to aggressively pursue solutions to roll back the cost of congestion to the transportation network.

Global Trade. The U.S. economy continues to undergo profound changes due to globalization. From 1980 to 2003, international trade's share of gross domestic product increased from 12 percent to 25 percent. This trade volume concentrates freight movement at the Nation's global gate connections, such as major maritime ports and border crossings made more commercially active by the North American Free Trade Agreement, and severely strains the infrastructure and routes to and from those gateways. These challenges are particularly complex because high-volume freight operations often are located in high-growth, densely populated areas where congestion is already acute and adding new capacity quickly is problematic.

Rail Capacity. Although shifting the movement of goods from truck to rail is a frequently cited solution and intermodal traffic is one of the fastest growing segments of the rail industry,railroads will have difficulty absorbing the anticipated growth in containerized freight with their current assets. Mileage of Class 1 railroads has been reduced significantly in the last two decades, and recent service disruptions demonstrate capacity problems on the existing network. That said, the railroads are slowly adding capacity to improve their operations, though they are being cautious in these investments because adding infrastructure is capital intensive and must be amortized over many years.

Capacity on the Water. Sufficient ship capacity is online to move increased freight volumes on the sea, and more is being added. Many ocean carriers are building larger vessels: About 250 post-Panamax vessels, which are too large to fit through the Panama Canal,are scheduled for delivery through 2010, with 150 of these vessels having capacities of at least 8,000 twenty-foot-equivalent units (TEU)each. (One TEU denotes 1 standard 20-foot [6.1-meter] cargo container.) Some firms are seriously considering 10,000- and even 12,000-TEU vessels. An 8,000-TEU vessel is as long as an aircraft carrier, draws up to 14.5 meters (47.6 feet) of water, and carries 17 containers across its beam. Because few ports can accommodate 8,000-TEU vessels when they are fully loaded, these vessels may concentrate freight flows through fewer and fewer gateway ports. The land-side impact of these increasingly large container vessels also will be significant. Once these large vessels are off-loaded to truck or rail, congestion issues could strain highway and rail infrastructures that service these port gateways.

Short Sea Shipping. USDOT continues to explore the economic viability of "short sea shipping"—movement of goods on inland and coastal waterways, reducing reliance on rail and trucks—to help alleviate highway congestion. Many economic challenges need to be overcome, but the current highway capacity constraints and rising prices in the rail and trucking industries may well improve the prospects of short sea options.

Distribution Centers. Many "big box" retailers are establishing large (92,903-square-meter [1-million-square-foot]) distribution centers close to major gateway ports to cross-dock international cargo from 12.2-meter (40-foot) containers to 16.2-meter (53-foot) trailers, deconsolidate cargo, and optimize routing through their distribution channels. The retailers also have set up sites near major markets for their goods. These distribution centers are changing the patterns of freight movement, particularly in local areas, and bringing new pressures to bear on the transportation system.

Environmental Issues. The Natural Resources Defense Council determined in 2004 that 95 percent of the harmful diesel emissions at ports come from ocean vessels, trucks, and cargo handling equipment. A recent FHWA study estimates that freight transportation accounts for approximately half of mobile-source nitrogen oxides (NOx) emissions and 27 percent of all NOx emissions at the national level. Freight transportation accounts for 36 percent of mobile source PM-10 emissions (particulate matter 10 microns in size) and less than 1 percent of all PM-10 emissions. (The vast majority of PM-10 comes from agricultural fields, wildfires, and fugitive dust.)The environmental impact of freight-related vehicles is a growing issue and in some areas is making the economic development argument difficult to advance. The need to address the environmental effects of freight movement is critical.

Air cargo, although a small percentage of total tonnage, is nevertheless a very fast growing mode of freight delivery.
Air cargo, although a small percentage of total tonnage, is nevertheless a very fast growing mode of freight delivery.

The Need for Collaboration

USDOT oversees only a small minority of the components of the U.S. transportation system, making it impossible for Federal agencies, alone, to initiate major changes in the system. The private sector owns and operates the overwhelming majority of the mobile assets and controls the "when, where, and how" of goods movement. The infrastructure on which those assets move is owned, operated, and maintained, for the most part, by State departments of transportation (DOTs) and local and regional agencies and, in the case of railroads, by the private sector. Consequently, any meaningful freight policy absolutely requires collaboration by both public and private parties. That cooperation is the cornerstone of the Framework for a National Freight Policy.

Stakeholders in Freight Transportation Policy Pie Chart
Stakeholders in Freight Transportation Policy Pie Chart

The Framework

The framework begins with a vision and objectives, and then drives through to strategies, tactics, and individual tasks and projects that USDOT and its partners in the public and private sectors can pursue to achieve those objectives. It is built around five central themes.

First, this is a framework fornational freight policy, not Federal freight policy. It includes strategies and tactics to be pursued by USDOT and other stakeholders. This theme reflects the fact that the U.S. freight transportation system is a national and not a Federal system, composed of a vast array of interconnected public and private sector institutions and organizations.

Second, the strategies and tactics will advance more efficiently through public-privatecollaboration. Historically, the public and private sectors have played clearly divided roles in freight transportation: The public sector has built, owned, and operated transportation infrastructure—predominantly highways—and the private sector has used that infrastructure to move freight. This division has limited the opportunities for leveraging private sector efficiencies and expertise when building and operating infrastructure.

Third, accountability is essential, and all responsibilities and tasks will have "owners" responsible (held accountable) for implementation.

Fourth, investment is critical. The Nation's freight transportation system is a tremendous asset, and as with any asset it requires investment to maintain its high quality. Public sector investment, including Federal funding, will be insufficient to meet all needs, requiring innovative new financing mechanisms. Going forward, this framework takes a broader perspective, seeking a wide range of public and private investment tools to finance construction and operation of freight infrastructure.

Last, the framework is a living document, designed to evolve over time. It must be as dynamic as the freight sector and the economy it serves. The framework will evolve as conditions change and as strategies and tactics are tried and evaluated.

Many ocean companies are building increasingly large container vessels. Shown here is the Port of Long Beach, CA.
Many ocean companies are building increasingly large container vessels. Shown here is the Port of Long Beach, CA.

The vision for the framework is akin to what it has been for the U.S. freight transportation system generally: It will continue to "ensure the efficient, reliable, safe, and secure movement of goods and support the Nation's economic growth while improving environmental quality."

The framework's objectives are to accomplish the following:

The seven objectives are intended to support each other, with tactics under one objective generating benefits under others. As a real-world example, Pier PASS, a pricing initiative implemented at the port of Long Beach in California, originally was intended to improve freight operations. In the end, it also reduced highway congestion and emissions while decreasing energy consumption.

As a work in progress, the framework does not yet include a full suite of details below the level of individual tactics, nor does it contain all the strategies and tactics that need to be pursued. Currently, in consultation with its public and private sector partners, USDOT is developing a broader range of strategies and tactics, plus specific tasks and responsibilities, to ensure accountability for each tactic. Most tactics will involve efforts by two or more parties, and USDOT's role will vary depending on the particular initiative. The framework, then, unifies all these diverse tactics and initiatives within an overarching national freight policy.

To help the framework's evolution, stakeholders are invited to review the detailed description at www.dot.gov/freight/ and submit their online input to freight@dot.gov.

Framework Objectives Cyle Chart
Framework Objectives Cyle Chart

Relationship to Congestion Initiative

In May 2006, then-Transportation Secretary Norman Y. Mineta described USDOT's new National Strategy to Reduce Congestion on America's Transportation Network. Some actions being pursued under the congestion strategy are reflected in the Framework for a National Freight Policy, and vice versa. For example, the freight policy includes a number of strategies on public-private partnerships (PPPs) that promote pricing mechanisms to improve performance of the freight network. The strategies include using and promoting new and expanded financing tools to attract private sector investment in transportation projects, exploring opportunities for PPPs and/or privatization, and using public and private sector pricing tools. On a parallel track, the congestion initiative encourages legislation fostering PPP formation in additional States to further enable these partnerships to expand transportation capacity.

Relationship to SAFETEA-LU

The freight policy draws on some of the freight provisions in the 2005 national transportation law, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU). For example, a tactic under both the congestion initiative and the freight policy is to provide USDOT support for freight projects in SAFETEA-LU's Projects of National and Regional Significance program and the National Corridor Infrastructure Improvement Program. Also, the freight policy supports public sector professional capacity building, as does SAFETEA-LU through its provision on the Freight Capacity Building Program.

Next Steps

An effective freight policy—or, for that matter, any wise and well-managed change—must start with communication. For this performance-based policy to be achievable, it requires input and participation beyond USDOT from the broader community of freight stakeholders, including both public and private sector interests. Within USDOT, individual offices"own" particular tasks and are accountable for seeing their responsibilities through to completion, but they still need the input of this wider group of stakeholders. USDOT has begun the process of soliciting comments on the framework and looks forward to working with its partners to refine it further. The latest version of the framework is available online at www.dot.gov/freight. USDOT would appreciate the questions and feedback of all stakeholders, and ask them to address all correspondence regarding the framework to freight@dot.gov.

Tony Furstis the director of FHWA's Office of Freight Management and Operations. Among other things, the office provides data analysis and decision-support tools for transportation professionals evaluating freight projects, develops and promulgates capacity-building programs and training for freight professionals, and promotes freight technology for national and international deployment. Before joining FHWA, Furst held a variety of positions at USDOT: with the Maritime Administration as a program coordinator, in the Office of Intermodalism as a project coordinator, and with the Transportation Security Administration.

For more information, contact Tony Furst at 202-366-9210 or tony.furst@dot.gov.



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