Freight Transportation
Strategies Needed to Address Planning and Financing Limitations Gao ID: GAO-04-165 December 19, 2003The strong productivity gains in the U.S. economy have hinged in part on transportation networks working more efficiently. The nation's ports, which handle 95 percent of overseas freight tonnage, are a key link in this network, and efficient intermodal links between ship, rail, and highways are vital to continued productivity gains. GAO was asked to address (1) the challenges to freight mobility, (2) the limitations key stakeholders have encountered in addressing these challenges, and (3) strategies that may aid decision makers in enhancing freight mobility. GAO's work was based on a synthesis of previous studies and a review of conditions at 10 ports and surrounding areas that handle almost two-thirds of all containers moving in and out of the country.
The major challenges to freight mobility share a common theme--congestion. National studies point to such problems as overcrowded highways and freight-specific "chokepoints" that stifle effective intermodal transfer of cargoes. All 10 ports GAO studied faced similar congestionrelated problems. For example, many of the ports are in dense urban areas, limiting the ability to expand rail yards, roadways, and other infrastructure. Increased port security measures may exacerbate congestion if new controls drastically slow the movement of goods. Stakeholders encounter two main limitations in addressing freight mobility challenges. The first relates to the limited visibility that freight projects receive in the process for planning and prioritizing how transportation dollars should be spent. The planning process often lacks a comprehensive evaluation approach, such as a cost-benefit framework that might result in the implementation of freight improvements to better ensure that systemwide, multimodal solutions are considered and adopted where appropriate. The second relates to limitations of federal funding programs, which tend to dedicate funds to a single mode of transportation or a nonfreight purpose. Two strategies may help address these limitations. One is to ensure that transportation planning cuts across modes and individual jurisdictions, includes coordination with freight stakeholders representing an intermodal perspective, and includes sound analytical approaches and meaningful data needed to compare the benefits of freight and passenger projects. The second is to develop a multifaceted funding approach that includes improved access of freight projects to existing funding sources and support for programs that emphasize better use of existing infrastructure. If integrated in these strategies, three principles could better assure that the freight infrastructure system provides the level of capacity and performance that makes the greatest contribution to the nation's economic well-being. These principles include promoting efficiency by embracing a "user pay" approach, establishing performance measures, and aligning incentives for planning agencies to adopt best practices.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-04-165, Freight Transportation: Strategies Needed to Address Planning and Financing Limitations
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Report to the Committee on Environment and Public Works, U.S. Senate:
December 2003:
FREIGHT TRANSPORTATION:
Strategies Needed to Address Planning and Financing Limitations:
GAO-04-165:
GAO Highlights:
Highlights of GAO-04-165, a report to the Committee on Environment and
Public Works, U.S. Senate
Why GAO Did This Study:
The strong productivity gains in the U.S. economy have hinged in part
on transportation networks working more efficiently. The nation‘s
ports, which handle 95 percent of overseas freight tonnage, are a key
link in this network, and efficient intermodal links between ship,
rail, and highways are vital to continued productivity gains. GAO was
asked to address (1) the challenges to freight mobility, (2) the
limitations key stakeholders have encountered in addressing these
challenges, and (3) strategies that may aid decision makers in
enhancing freight mobility. GAO‘s work was based on a synthesis of
previous studies and a review of conditions at 10 ports and
surrounding areas that handle almost two-thirds of all containers
moving in and out of the country.
What GAO Found:
The major challenges to freight mobility share a common theme”
congestion. National studies point to such problems as overcrowded
highways and freight-specific ’chokepoints“ that stifle effective
intermodal transfer of cargoes. All 10 ports GAO studied faced similar
congestion-related problems. For example, many of the ports are in
dense urban areas, limiting the ability to expand rail yards,
roadways, and other infrastructure. Increased port security measures
may exacerbate congestion if new controls drastically slow the
movement of goods.
Stakeholders encounter two main limitations in addressing freight
mobility challenges. The first relates to the limited visibility that
freight projects receive in the process for planning and prioritizing
how transportation dollars should be spent. The planning process often
lacks a comprehensive evaluation approach, such as a cost-benefit
framework that might result in the implementation of freight
improvements to better ensure that system-wide, multimodal solutions
are considered and adopted where appropriate. The second relates to
limitations of federal funding programs, which tend to dedicate funds
to a single mode of transportation or a nonfreight purpose.
Two strategies may help address these limitations. One is to ensure
that transportation planning cuts across modes and individual
jurisdictions, includes coordination with freight stakeholders
representing an intermodal perspective, and includes sound analytical
approaches and meaningful data needed to compare the benefits of
freight and passenger projects. The second is to develop a
multifaceted funding approach that includes improved access of freight
projects to existing funding sources and support for programs that
emphasize better use of existing infrastructure. If integrated in
these strategies, three principles could better assure that the
freight infrastructure system provides the level of capacity and
performance that makes the greatest contribution to the nation‘s
economic well-being. These principles include promoting efficiency by
embracing a ’user pay“ approach, establishing performance measures,
and aligning incentives for planning agencies to adopt best practices.
What GAO Recommends:
GAO recommends that the Secretary of Transportation take steps to
facilitate state and local planners‘ use of better methods and tools
to make freight transportation investment decisions. These methods and
tools include better freight-related data, consistent and sound
evaluation approaches, and greater consideration of alternatives to
capital construction. The Department of Transportation reviewed the
draft of this report and generally agreed with the facts presented,
but did not take a formal position on the recommendations.
www.gao.gov/cgi-bin/getrpt?GAO-04-165.
To view the full product, including the scope and methodology, click
on the link above. For more information, contact JayEtta Hecker at
(202) 512-2834 or heckerj@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Challenges to Freight Mobility Center on Congestion:
Planning and Financing Limitations Pose Difficulties in Addressing
Freight Mobility Challenges:
Two Key Strategies Could Help Address Freight Planning and Financing
Limitations:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendixes:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Summary of the Administration's 2003 Surface
Transportation Reauthorization Proposal Freight-related Provisions and
Observations:
Appendix III: Summary of Freight-related Recommendations Developed by
the Transportation Research Board:
Appendix IV: Summary of the Freight-related Reauthorization Proposals
Developed by Stakeholders:
Appendix V: Assessment of Stakeholder Proposals:
Appendix VI: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Staff Acknowledgments:
Tables:
Table 1: Key Elements of Evaluations Used in a Public Decision-making
Process:
Table 2: Types of Data Collected and the Additional Data Needs for
Freight Mobility Planning:
Table 3: Federal Funding and Financing Sources Providing Eligibility for
Some Freight Projects:
Table 4: Examples of Stakeholder Proposals to Expand Eligibility
Criteria to Include Freight Projects:
Table 5: Description of Nonbuild Alternatives and Relevant Stakeholder
Proposals:
Table 6: Coverage of Strategy Elements in the Most Extensive
Reauthorization Proposals:
Figures:
Figure 1: Congestion-related Challenges Are the Dominant Constraint to
Freight Mobility:
Figure 2: Trucks and Cars on Congested I-710 near the Ports of Los
Angeles and Long Beach:
Figure 3: Examples of Freight-related Congestion at Six Large Gateway
Ports and the Surrounding Areas:
Figure 4: Connector to the Elizabeth New Jersey Port Authority Marine
Terminal: Intersection of North Fleet Street and Corbin Street:
Figure 5: At-Grade Rail Crossing Near Ports of Seattle/Tacoma--before
and after Construction of Overpass:
Figure 6: Examples of Infrastructure with Limited Expansion Potential:
Figure 7: Focus of Planning and Funding Processes Limit Consideration
of Freight Improvements:
Figure 8: Reasons for Limited Private-Sector Participation in the
Planning Process:
Figure 9: Key Strategies and Principles to Address Planning and
Financing Limitations:
Abbreviations:
CMAQ: Congestion Mitigation and Air Quality:
CMS: Congestion Management System:
DOT: Department of Transportation:
FAF: Freight Analysis Framework:
FAIR: Fast and Intertwined Regular Lanes:
FAST: Freight Action Strategy:
FHWA: Federal Highway Administration:
FMSIB: Freight Mobility Strategic Investment Board:
HOT: high-occupancy toll:
HOV: high-occupancy vehicle:
ISTEA: Intermodal Surface Transportation Equity Act:
ITS: Intelligent Transportation System:
MPO: metropolitan planning organization:
NHS: National Highway System:
RRIF: Rail Revitalization and Improvement Funding:
STP: Surface Transportation Program:
TEA-21: Transportation Equity Act for the 21ST Century:
TIFIA: Transportation Infrastructure Finance and Innovation Act:
TRB: Transportation Research Board:
Letter:
December 19, 2003:
The Honorable James M. Inhofe:
Chairman:
The Honorable James M. Jeffords:
Ranking Minority Member:
Committee on Environment and Public Works:
United States Senate:
Globalization has had a dramatic effect on the U.S. economy, resulting
in a greater reliance on international trade and the efficient movement
of goods within the United States. Continued development and efficient
management of the vast transportation system of highways and rail lines
that connect seaports, airports, and intermodal facilities are all
important factors contributing to the nation's economic growth and
productivity. Because more than 95 percent of our nation's overseas
trade tonnage moves by water, container ports are key gateways for our
nation's imports and exports and, therefore, play a particularly
critical role in moving goods into and across the country. Increasing
congestion at these seaports and the surrounding metropolitan areas is
a growing national concern and represents a threat to the efficient
flow of the nation's goods.
Planning and funding of projects to improve the efficiency of freight
movement in the transportation system are becoming increasingly
important. At the federal level, the Intermodal Surface Transportation
Efficiency Act of 1991 and its successor legislation, the
Transportation Equity Act for the 21ST Century, establish much of the
structure of federal assistance for surface transportation projects.
Under this structure, planning and funding of federally assisted
projects is carried out primarily by local metropolitan planning
organizations and by state departments of transportation.
Reauthorization of this legislation--an issue currently before
Congress--presents an opportunity to reexamine ways to enhance planning
and financing activities that improve freight movement at the local
level and to consider whether adjustments should be made in current
policies and programs.
This report responds to your request to provide information on issues
related to moving freight through the nation's largest container ports
and surrounding metropolitan areas and federal efforts to assist and
enhance freight mobility efforts at these locations. As agreed with
your offices, we identified (1) the national challenges to freight
mobility and how these challenges were evident at selected container
ports and surrounding metropolitan areas, (2) the existing limitations
to effectively addressing these challenges, and (3) strategies that may
help public decision makers improve freight mobility, including a
discussion of relevant provisions of selected proposals related to
reauthorization of federal surface transportation programs.
To identify the challenges to freight mobility, the limitations to
advancing freight improvements, and strategies to enhance freight
mobility, we conducted an evaluation synthesis of public-and private-
sector reports, studies, and proposals related to freight movement
issues. To determine whether these challenges and limitations were
evident at the nation's largest container ports and surrounding
metropolitan areas, we conducted site visits and interviews of a wide
range of public and private transportation officials in six
metropolitan areas that collectively contain 10 ports that handle two-
thirds of the containers moving in and out of the country each
year.[Footnote 1] To identify strategies that may aid decision makers
in enhancing freight mobility, we analyzed the results of our review of
the challenges and limitations and built on the perspectives gained
from our past work in transportation and infrastructure systems and
federal investment strategies.[Footnote 2] We assessed various
reauthorization proposals developed by key stakeholders, including the
administration, within the context of these strategies. (See app. I for
more information on the scope and methodology.) We conducted our work
from October 2002 to November 2003 in accordance with generally
accepted government auditing standards.
Results in Brief:
Freight mobility is most affected by congestion-related challenges.
Freight traffic on roadways has increased fourfold over the last two
decades, and both rail and highway congestion are particularly severe
in urban areas where container ports for international trade are
located. Such congestion was evident at all six locations we visited.
In Oakland, for example, truck traffic on key access highways to the
port increased by 50 to 100 percent from 1996 to 2000. Congestion on
rail lines is also an issue. In the Los Angeles area, two mainline
freight railroads are already experiencing 30-minute delays per train;
freight traffic is projected to more than double along these rail lines
by 2025. Severe congestion also regularly occurs at freight-specific
"chokepoints" or bottlenecks, which exist at entrances to port
facilities, at-grade rail crossings where highways and rail lines
intersect, and roads connecting interstate highways and rail lines to
ports and intermodal facilities.[Footnote 3] The area around the Port
of Seattle located in the heart of the downtown area, for example, has
considerable congestion due to at-grade rail crossings, which slow
freight trains and trucks moving in and out of the port. Old and
inadequate infrastructure in and around gateway seaports--such as
underpasses, tunnels, and bridges with insufficient clearance--is
another source of congestion. The ability to expand or improve this
infrastructure is often limited by geography or by surrounding
development. For example, about 90 percent of the freight moved through
the Port of New York/New Jersey is carried by truck. Dense commercial
and residential development adjacent to key routes in the area limits
highway expansion in most areas and makes upgrades to tunnels and
overpasses very expensive. Moreover, existing rail lines in the area
have high-density usage due to heavy use by freight, commuter, and
intercity passenger trains. Another potential source of congestion--
which has not yet materialized--centers on tighter security measures
being adopted in and around gateway seaports. The impact of future
security measures, such as stricter container inspections and port
access controls, could have a major impact on the efficient flow of
goods at seaports and surrounding metropolitan areas, depending how
such measures are applied and implemented.
The fundamental limitation to overcoming freight mobility challenges is
that the public-sector process at the state and local levels for
planning and financing transportation improvements is not well suited
to address freight projects. On the planning side, consideration of
freight improvement projects as part of the local planning process is
limited because the process is oriented to projects that clearly
produce public benefits, such as passenger-oriented projects. While
freight projects also may produce public benefits by reducing freight
congestion, generally, public planners are wary of providing public
support for projects that directly benefit the private sector. In
addition, the planning process often does not consider the regional
nature of freight mobility and is subject to long lead times to plan
and implement projects, a factor which deters valuable private sector
participation in the process. These limitations were evident at the
locations we visited. For example, planning officials in Southern
California indicated that improvements to a key freight interstate
route from the ports of Los Angeles and Long Beach clearly would have
benefits that extend beyond the jurisdiction of the planning body.
Instead of funding this type of freight improvement, however, planning
bodies tend to allocate funding to nonfreight projects, which clearly
benefit the local constituents. In New York, state officials said that
the long planning horizons associated with the public planning process
and the perception by the freight industry that it was not benefiting
from the process have limited participation by the freight sector. In
addition, freight projects are disadvantaged in the planning process
because many local planning bodies have not applied rigorous evaluation
approaches, such as a cost-benefit framework, or do not have good data
to evaluate freight projects relative to other projects and to better
ensure that multimodal solutions to enhance freight mobility are
considered. Financing limitations pose another difficulty in advancing
freight improvements. Freight projects can often have difficulty
securing public funding because they may generate substantial private-
sector benefits and are intermodal in nature, while funding sources
often restrict access to private firms and focus on a single mode. For
example, gaining access to funding sources--even those federal programs
specifically targeted for freight projects, such as the National
Corridor Planning and Development Program and the Coordinated Border
Infrastructure Program--has been limited because, according to the
Federal Highway Administration (FHWA), these programs are
oversubscribed and much of the funding for these programs has been
allocated to congressionally designated projects. Also, because of
private ownership and other issues, certain freight projects, most
notably rail projects, are especially difficult to fund through federal
programs because of restrictions in using public funds for
infrastructure that is privately owned.
Based on our past work and the work of transportation experts, we have
identified two key strategies that we believe are needed to effectively
address the freight planning and financing limitations. The first
strategy involves promoting a more systemwide perspective in planning
transportation projects. Such a perspective involves several facets in
planning projects. For one, our case studies have demonstrated that
successful intermodal projects--such as the Freight Action Strategy
(FAST Corridor) project in Washington state[Footnote 4]--are those that
are coordinated across various transportation modes and planning
jurisdictions and include close coordination among multiple sets of
stakeholders. Also, active participation by the private sector in
partnership with the public sector often helps to ensure a successful
outcome. The private sector often can bring a more global view of
freight needs to the planning process, can help identify and implement
projects, and can provide new data for making more informed decisions.
An integral part of this strategy is also ensuring that sound
analytical approaches are being applied locally and meaningful data are
available, not only to evaluate and prioritize infrastructure
investments but also to determine whether public support is justified
by considering a wider array of social and economic costs and benefits.
The second strategy involves determining the appropriate federal role
and providing a wider range of financing and related options to enhance
freight mobility. Expanding the eligibility criteria for existing
programs to cover a broader range of freight projects is one way to
accomplish this. For example, one of the administration's current
proposals is to expand the eligibility of one relevant program to
include public or private freight rail facilities and intermodal
freight transfer facilities. Another way could involve expanded support
for alternative financing mechanisms, such as federal loan programs,
and new sources of revenue, such as truck toll lanes, to appropriately
blend public and private funds to match public and private costs and
benefits. Finally, promoting low cost alternatives to expand capacity
through the more efficient use of existing transportation
infrastructure may be a way to address congestion with limited funds.
These alternatives include a diverse mix of measures, including
corrective and preventive maintenance, operations and systems
management, and new technology. The administration and freight
stakeholders have developed a variety of reauthorization proposals to
broaden eligibility criteria, expand alternative funding, and promote
low cost alternatives that, taken together, could represent key
components of the two strategies we identified. While one aspect of the
administration's reauthorization proposal encourages coordination and
cooperation of planning agencies across jurisdictional boundaries and
various transportation modes, more fundamental, bolder steps to change
the way projects are planned and financed may be necessary to overcome
widely recognized limitations with the process. Some transportation
experts contend that more far-reaching solutions, such as establishing
a federally administered program to identify and fund freight projects
having national significance, are needed to overcome local
disincentives currently impeding such cooperation.
We are making specific recommendations to the Secretary of
Transportation to facilitate the use by state and local planners of
better methods to make freight-related and other transportation
investment decisions. These methods include increasing efforts to
collect and maintain more complete and useful freight-related data and
using consistent and sound analytical methods and evaluation
approaches. The Department of Transportation reviewed a draft of this
report, provided technical comments, and generally agreed with the
facts presented in this report. We made changes, as appropriate, to
ensure the accuracy of our report. The department did not take a formal
position on GAO's recommendations.
Background:
The economic significance of gateway ports is related both to consumer
demand for imported products, which has fueled the United States'
increasing dependence on international trade, and to significant shifts
in business and logistics trends. Businesses, to remain globally
competitive, have reduced costs by moving production facilities
overseas and by developing improved practices that highlight
reliability, efficiency, and quality of service. For example, more
companies are practicing multinational production, which involves
manufacturing or assembling goods or components overseas and importing
them into the United States. Also, the time-dependent manufacturing
practice, which minimizes inventories to reduce warehousing costs, has
resulted in the need for smaller, more frequent shipments of goods.
Effective implementation of these new business practices is dependent
on an integrated, intermodal transportation system to provide efficient
and reliable freight movement. Within the ports, quick movement of
imports and exports relies on ready transfer between ships and other
transportation modes, particularly highway and rail. Outside the ports
themselves, freight shares the transportation system with passenger
traffic. However, the transportation system also includes some
infrastructure that is more freight-specific, such as rail yards,
intermodal connectors, and some exclusive rail rights-of-way that allow
trains to move quickly without contributing to congestion.
Freight infrastructure projects are essentially a joint enterprise of
both the private and public sectors and are typically intermodal in
nature. Virtually all freight transportation carriers are private
companies and conduct most of the actual transportation of cargo.
Private sector players include shipping lines, terminal operators,
trucking companies, railroads, airlines, and pipeline companies that
often compete with each other for shipping business. These entities
typically make key routing, operating, and equipment investment
decisions. The public sector provides infrastructure such as highways,
waterside and upland port/intermodal facilities, harbor development,
channels, navigation aids, and locks and dams on inland waterways. For
the most part, the supporting transportation infrastructure for freight
transportation is publicly owned, with the exception of rail
infrastructure.
The Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA)
and its successor legislation, the Transportation Equity Act for the
21ST Century (TEA-21), established federal funding and financing
programs for surface transportation projects. Federal support for
freight transportation infrastructure projects mainly occurs through
the federal surface transportation programs, which include a number of
programs targeted for specific modes and purposes. Other programs have
been established at the federal level to build, maintain, and operate
inland waterways and enhance and maintain harbors.
Revenues collected and disbursed through the surface transportation
program are derived mainly from user tax receipts credited to the
Highway Account of the Highway Trust Fund. The user taxes include
excise taxes on motor fuels (gasoline, gasohol, diesel, and special
fuels) and truck-related taxes on truck tires and sales of trucks and
trailers. FHWA distributes highway program funds to the states through
annual apportionments according to statutory formulas that consider a
variety of factors, including vehicle miles traveled on the interstate
system and motor fuel usage by each state's highway users. The federal
share for project funding is usually 80 percent but can vary among
programs, road types, and states. State and local governments then
match federal funds from other sources, such as state and local
revenues.
States have primary responsibility for selecting projects and for
building and maintaining roads. Innovations in ISTEA and TEA-21 allowed
states more flexibility to use federal funds for freight projects,
established public-private partnerships, and allowed the expenditure of
federal aid on nonhighway freight projects in certain circumstances.
For example, with the passage of ISTEA, it was possible through the
Congestion Mitigation and Air Quality program (CMAQ) for states to fund
intermodal freight projects that included improvements to rail lines
and port facilities. With the passage of TEA-21, public-private
partnerships were made possible through programs like the
Transportation Infrastructure Finance and Innovation Act (TIFIA), a
loan and loan guarantee program. However, because surface
transportation infrastructure is mainly funded through highway user
fees and is based on a user-pays principle, revenues generated from
these fees generally are targeted for highway or transit
projects.[Footnote 5]
Challenges to Freight Mobility Center on Congestion:
Congestion-related challenges are among the dominant constraints for
freight mobility. Congestion on our nation's highways and at intermodal
connectors to rail lines, terminals, and port facilities threaten the
efficiency and reliability of the freight transportation system, both
locally and nationally. Locally, the most acute impacts of congestion
are traffic slowdowns, noise, and air pollution, which threaten freight
and passenger mobility alike. Just as significant is the impact that an
inefficient, congested transportation system has on the national
economy and on international trade. For example, the ports of Los
Angeles, Long Beach, and Oakland together account for over 40 percent
of the container traffic coming into and going out of the United
States; over half of the cargo coming into those three ports is
destined for locations throughout the nation, including New York City
and Atlanta.[Footnote 6]
Several major sources of congestion can impede efficient freight flow.
(See fig. 1.) One is the current high level of traffic on roadways and
rail lines, which is particularly severe in metropolitan centers near
gateway ports for international trade, and which shows no signs of
abating. Moreover, freight-specific chokepoints exist at rail crossings
and roads connecting intermodal terminals, seaports, and airports. In
urban areas, limited expansion potential and infrastructure
deficiencies, such as poorly designed access roads and insufficient
rail and roadway clearances for bridges and tunnels, further contribute
to congestion and impede the efficient flow of goods. Tighter security
measures being adopted in and around large gateway seaports may also
directly impact the efficient flow of goods. While security measures
adopted thus far have not apparently disrupted the efficient flow of
goods to and from seaports, the impact of future security measures on
goods movement, such as stricter container inspections and tighter
access controls to port facilities, is largely unknown and is a growing
concern of freight industry stakeholders.
Figure 1: Congestion-related Challenges Are the Dominant Constraint to
Freight Mobility:
[See PDF for image]
[End of figure]
Current Levels of Congestion Are Already Significant and Will Likely
Grow with Increasing Traffic Volumes:
One major challenge to freight mobility is the existing high demand on
the transportation infrastructure, which is increasing in large urban
areas near international gateway ports. Overall, highway congestion for
passenger and commercial vehicles traveling during peak driving periods
doubled from 1982 through 2000. Freight traffic is adding to this
congestion at a faster rate than passenger traffic. For example, from
1993 through 2001, truck traffic on urban highways increased more than
twice as much as passenger traffic.[Footnote 7] This is particularly
relevant for freight mobility, since trucks carried over 70 percent of
all tonnage and must share the highways with other road users. (See
fig. 2.):
Figure 2: Trucks and Cars on Congested I-710 near the Ports of Los
Angeles and Long Beach:
[See PDF for image]
[End of figure]
As a group, the six regions we studied had varying degrees of highway
congestion. According to a study by the Texas Transportation Institute,
driver delay times[Footnote 8] for the locations we visited ranged from
26 hours per year in Charleston, South Carolina, to nearly 140 hours
per year in Los Angeles--the latter representing more than twice the
average of 62 hours for the locations included in the study.[Footnote
9] Officials in the large gateway ports we visited cited numerous
examples of how congestion affects the movement of freight in and
around the ports and surrounding urban areas. (See fig. 3.):
Figure 3: Examples of Freight-related Congestion at Six Large Gateway
Ports and the Surrounding Areas:
[See PDF for image]
[End of figure]
While congestion affects roads, it was also present on other transport
modes. In Southern California, for example, rail freight operations
move along the main lines of two railroads; parts of these tracks are
shared by both commuter and intercity passenger rail. Currently,
freight trains are experiencing daily delays on the lines averaging
about 30 minutes per train. In 2000, these lines handled up to 59
freight trains per day. Unless more tracks are added and key at-grade
rail crossings are eliminated, the average delay per train will likely
escalate because the number of freight trains is projected to increase
to as many as 130 per day by 2025.
Specific Intermodal Chokepoints Exacerbate Congestion as Traffic
Volumes Increase:
While the freight industry shares many congestion problems with other
users of the transportation system, some sources of congestion have a
more severe impact on freight mobility. In large urban gateway areas,
severe freight congestion regularly occurs at roads connecting main
highway and port landside facilities[Footnote 10] and where rail lines
and highways intersect. These bottlenecks or chokepoints are an
important indicator of those locations where the transportation system
has reached capacity.
Chokepoints on highway intermodal connectors and access roads are a
major source of congestion and concern among freight stakeholders.
Examples of such connectors include exit ramps from major highways, as
well as local access roads that link highways to the port facilities
and intermodal yards. Although these connectors represent less than 1
percent of total National Highway System[Footnote 11] (NHS) mileage,
they provide critical connectivity between highways and primary
roadways, rail yards, airports, and seaports. According to FHWA
officials, investment to improve intermodal connectors is expected to
be a key component in reducing freight chokepoints.[Footnote 12]
Because these connectors were not originally designed to handle large
volumes of freight traffic, they typically have higher rates of
deterioration than other roads and highways. Further, the size of
current equipment (e.g., trucks and trailers) has often surpassed what
the connectors were designed to handle, with the result that roadways
are too narrow, turning radii are tight, and turning lanes are lacking.
(See fig 4.) All of these factors slow freight movement and cause
safety and operational problems along these connectors. Improving the
condition of many of these connectors is not being addressed by local
transportation departments because other passenger-oriented roadways
often have a higher priority.[Footnote 13]
Another major chokepoint for freight mobility often occurs where the
railroads meet highways. At-grade rail crossings, where rail lines
intersect with roadways, can be especially problematic. (See fig. 6.)
At-grade crossings have a double effect on both trucks and trains. At
these locations, automobiles and trucks must often stop to allow a
train to pass, but trains must often slow down as well.
Figure 4: Connector to the Elizabeth New Jersey Port Authority Marine
Terminal: Intersection of North Fleet Street and Corbin Street:
[See PDF for image]
[End of figure]
Officials at some of the locations we visited view at-grade rail
crossings as a serious freight transportation problem and are putting
forth considerable effort and resources to develop solutions. For
example, around the ports of Seattle, Tacoma, and Everett, officials
have targeted the elimination of key at-grade crossings as part of a
large project to address freight mobility needs in the area. (See fig.
5.) Phase 1 of this project is implementing a total of 15
infrastructure improvements, 11 of which are rail/highway separations.
Figure 5: At-Grade Rail Crossing Near Ports of Seattle/Tacoma--before
and after Construction of Overpass:
[See PDF for image]
[End of figure]
Other rail challenges identified at the gateway container ports we
visited include a lack of alternative train routes to prevent train
blockages on major roadways, substandard crossing warning devices, and
the need for rail upgrades to handle heavier cars. For example, in some
locations the rail industry has increased the load capacity of rail
cars from 263,000 to 286,000 pounds on main rail lines. Officials in
Charleston said that this has affected their dockside short rail--
requiring upgrades so they can withstand the heavier cars.
Much Inadequate Infrastructure Has Limited Expansion Potential:
Infrastructure that is old and inadequate--such as underpasses or
tunnels with insufficient clearance--often carries limited expansion
potential; thus, mitigating this source of congestion and enhancing the
efficiency of goods movement by accommodating newer, longer, and
heavier freight configurations becomes more difficult. According to the
Transportation Research Board (TRB) and FHWA, insufficient and aged
infrastructure is a major contributor to freight congestion and
bottlenecks on U.S. freeways and highways and on the connectors to area
ports. Even when expansion is possible, the growing costs of
infrastructure projects, stagnant highway spending, and long delivery
times (5 to 15 years) for completing infrastructure projects have
slowed the development of infrastructure and prevented it from keeping
up with demand.
Officials at the metropolitan area ports we visited pointed to many
examples where there are few alternatives for expansion due to
geographical constraints or surrounding development. (See fig. 6.) Port
and rail terminals are often located in densely populated urban areas,
where space is already at a premium and where commercial developers are
competing for available space. Additional space for piers, container
storage, railroad tracks, and truck roads is being pursued and
developed, but slowly and at a high cost.
Figure 6: Examples of Infrastructure with Limited Expansion Potential:
[See PDF for image]
[End of figure]
Heightened Security Concerns Also Must Be Taken into Account:
Security concerns are one additional matter that needs to be considered
in addressing congestion challenges. Many of the studies included in
our evaluation synthesis were conducted in 2001 or earlier and did not
raise security as a major issue. However, since the terrorist events of
September 11, 2001, security has become an important consideration,
particularly to the transportation infrastructure in and around ports.
The likely impact of disrupting this infrastructure--either to the
economy generally or to military deployments--is substantial. For
example, the Brookings Institution has reported that if a weapon of
mass destruction were shipped into a port by container and successfully
discharged, the immediate damage and the resulting disruption to the
economy could cost as much as $1 trillion.[Footnote 14]
Security and freight mobility are not mutually exclusive goals, but
they can potentially conflict, adding to congestion. Access in and out
of ports represents perhaps the highest potential for conflict between
these two goals. Based on value, the Office of Intermodalism estimates
that about 90 percent of world water commerce moves by intermodal cargo
container. Ensuring that containers do not contain weapons of mass
destruction or other dangerous materials requires comprehensive
security inspections of these cargoes. Thus far, security measures
taken to control port access and to evaluate containers have not
materially slowed freight movement to and from seaports, according to
officials at the locations we visited. However, developing and
effectively implementing future solutions that can accomplish security
goals while still allowing efficient movement of goods, particularly at
ports, is a matter of substantial concern for many freight industry
stakeholders we interviewed.
Protecting our nation's transportation network against attacks is a
formidable challenge because our land and maritime transportation
systems, in particular, are designed to be open and accessible.
Unfortunately, these systems concentrate freight flows in ways that can
make them vulnerable to terrorist attacks. Moreover, the sheer size of
the network presents a daunting security challenge. Given the enormity
and accessibility of this network, protecting it through traditional
means, such as guards, guns, and gates, seems unlikely. Rather,
transportation experts, such as TRB, believe that transportation
security can best be achieved through well-designed security systems
that are integrated with transportation operations.[Footnote 15]
Opportunities for such integration can occur in many forms. For
example, during the design of new facilities--such as bridges and
intermodal facilities--or the remodeling of existing ones, cost-
effective protective features can be incorporated. These features could
include improved lighting, blast-resistant structures, emergency
evacuation routes, and open spaces that provide broad fields of vision.
Where free access is not required, such as at a rail yard, fences,
police patrols, and other perimeter protections can be added. Also, the
application of certain technologies, such as cameras and sensors that
detect chemical and biological agents, can further strengthen overall
security of transportation infrastructure. Taken together, elements
such as these can provide a multitiered security system that not only
deters and protects but also improves safety, thus potentially making
the system more efficient. Such integration will require the concerted
and coordinated efforts of federal, state, and local law enforcement
authorities, the many public and private entities that plan, develop,
own, and operate transportation infrastructure and assets, and various
federal agencies responsible for port and border security and freight
movement.
We and others are involved in separate ongoing studies of numerous
public and private efforts to develop and implement transportation
security enhancements.[Footnote 16] Because of these ongoing studies
and the enormity and complexity of evaluating the security issues
involved in protecting the transportation system, in this report we did
not address barriers that agencies and others face to implement sound
security measures or evaluate options offered by others or efforts
under way to strengthen transportation security. These issues will be
more fully addressed as part of other ongoing and future studies.
Planning and Financing Limitations Pose Difficulties in Addressing
Freight Mobility Challenges:
Studies examining freight mobility point primarily to planning and
funding issues as the main limitations in efforts to help address
challenges to the system, and our work has confirmed their relevance at
the ports and surrounding areas we visited. (See fig. 7.) On the
planning side, the limitations center on two areas. First,
consideration of freight improvement projects as part of the local
planning process is limited because the process is oriented to projects
that clearly produce public benefits, such as passenger-oriented
projects. While freight projects also may produce public benefits by
reducing freight congestion, generally, public planners are wary of
providing public support for projects that directly benefit the private
sector. In addition, the planning process often does not consider the
regional nature of freight mobility and is subject to long lead times
to plan and implement projects, factors that deter valuable private
sector participation in the process. Second, the planning process often
lacks a comprehensive evaluation approach, such as a cost-benefit
framework, that might result in the selection and implementation of
freight improvements and to better ensure that systemwide, multimodal
solutions--as opposed to a focus on a single transportation mode--are
considered and adopted where appropriate. On the funding side, even
when freight projects rise to the level of warranting public-sector
involvement, federal assistance can be hampered by difficulties in
accessing funding sources because federal programs are often structured
such that they dedicate funds on a modal basis. Freight projects have
these difficulties because they are frequently intermodal, while most
federal funding sources are focused on one mode, and because the
projects may have private benefits, raising questions about whether and
how to provide public support.
Figure 7: Focus of Planning and Funding Processes Limit Consideration
of Freight Improvements:
[See PDF for image]
[End of figure]
Freight Priorities Have Difficulty Competing in the Transportation
Planning Process:
According to several studies examining freight mobility, the
transportation decision-making process does not lend itself well to
regional freight mobility planning.[Footnote 17] Under ISTEA and TEA-
21, much of this planning process takes place at the local level
through metropolitan planning organizations (MPOs) and at the state
level through state departments of transportation.[Footnote 18] These
planning agencies focus on the needs and issues within their areas of
jurisdiction. Although the transportation planning process is set up to
address freight transportation improvements and include private-sector
freight interests, in practice, freight projects have difficulty
competing with other projects for a number of reasons. For one, the
public planning process by its nature focuses largely on projects that
clearly produce public benefits. Although reducing freight congestion
may also produce a collateral public benefit, public planners are wary
of providing public support for projects that would also yield direct
private benefits. Within this focus, public-sector attention tends to
be directed to freight-related projects only when there is considerable
public benefit as well. For example, a project that adds lanes to a
crowded freeway is likely to help both passengers and freight haulers,
while a roadway enhancing freight access to a port facility would
likely be perceived as having limited public benefit.
Another factor that can limit consideration of freight improvements is
that local planning bodies may not sufficiently address key freight
needs that extend beyond their local areas. Addressing freight
infrastructure needs often involves projects along a freight corridor
that cut across the jurisdictions of several transportation planning
agencies and, in many cases, even states. Although state departments of
transportation work to address freight mobility challenges on a
statewide basis, many corridors cross state boundaries and, unless
states are part of a multistate coalition, states do not usually
address projects that involve multijurisdictional corridors. According
to reports issued by FHWA, getting the cooperation of and coordinating
with multiple agencies and communities--each with its own priorities--
to address freight projects within a relatively large area presents a
challenge that makes the planning and implementation of this type of
freight project difficult.[Footnote 19] Some MPOs and states, for
example, may view a highway connector project for freight movement as
benefiting only a small segment of their constituent population, with
most of the benefits dispersed outside their jurisdiction. The New York
and New Jersey region and the Southern California region serve as
examples of the difficulties associated with addressing freight issues
within a jurisdiction when the benefits extend beyond the jurisdiction.
For example, officials representing the New York and New Jersey region
are exploring the possibility of shifting some of the cargo from the
highly congested roadways to railroads. However, the infrastructure
limitations of rail tunnels in Baltimore, Maryland--outside of the
jurisdiction of the states of New York and New Jersey--are a
significant impediment to doing so. In Southern California, freight
projects that would clearly have benefits beyond the jurisdiction of
the MPO, such as addressing the congestion on the I-710 corridor, have
more difficulty competing for funding against more localized projects
that clearly benefit the constituents within the jurisdiction. At the
locations we visited, we did find some examples in which officials
found ways to deal effectively with projects that crossed
jurisdictional boundaries. As we will discuss in more detail later,
they formed multistate, multijurisdictional, and private-and public-
sector coalitions outside the conventional public planning process to
identify regionally significant freight transportation improvement
projects. However, we found that few such coalitions exist.
Finally, certain aspects inherent in the local planning process can
deter participation by the private sector stakeholders in the process.
According to transportation studies, private sector participation can
help local planners identify and address needed freight transportation
improvements and provide expertise and data to make informed decisions.
According to state and local officials, one reason for limited
participation by the private sector stems from their perception that
freight projects proposed through the transportation planning process
do not offer sufficient benefits to warrant their involvement. This is
not to say that private-sector freight interests were totally
disengaged from the planning process. There were notable examples--
discussed later in this report--in which the private sector became
involved in planning for freight projects because the project held a
clear, direct, and tangible benefit for the freight industry. However,
public officials indicated that, even when freight-related projects
were being considered by transportation planners, if the private sector
did not perceive that the projects would meet their specific needs or
the benefits were not clearly defined, private sector participation in
the conventional transportation planning process was not as evident.
Another factor that can also limit participation by freight interests
involves the differing planning horizons of the public and private
sectors. According to FHWA, the public-sector process for planning and
delivering freight improvements is slow and inflexible compared with
private-sector needs and expectations.[Footnote 20] According to these
same studies, private firms operate in a faster-paced, competitive
environment that is subject to fluctuations in demand for its services
because of economic conditions. Similarly, ongoing business mergers
sometimes make it difficult for private-sector officials to predict
their company's infrastructure needs in 15 to 20 years because they are
unsure whether their company will be active at that time in particular
markets. Several MPO officials told us that their planning horizons
extend over longer-term periods, sometimes as much as 20 years and that
such a planning time frame is necessary to conduct impact studies or
obtain funding. Several MPO and state department of transportation
officials said that even when private-sector interests initially
express a willingness to work with the public sector, they soon lose
interest or become frustrated because of these long horizons.
The experience of ports and surrounding areas we reviewed generally
mirrors the limited private-sector participation noted in studies of
the larger transportation network. (See fig. 8.):
Figure 8: Reasons for Limited Private-Sector Participation in the
Planning Process:
[See PDF for image]
[End of figure]
Better Analytical Methods and Sufficient Data Needed for Transportation
Planning at the Local Level:
Transportation research recognizes the importance of using a sound
evaluation approach, such as a cost-benefit framework, to take a more
systemwide, multimodal approach to transportation planning.[Footnote
21] However, our review at the locations we visited showed that many
state and local transportation planners were not consistently and
systematically applying analytical methods as part of their investment
decision-making process to evaluate freight-specific and other
transportation projects. They also lacked sufficient data to identify
and define current and future freight transportation problem areas and
potential solutions to address them. Lack of data and sound evaluation
techniques reduce the likelihood that the relative merits of freight
transportation proposals can be adequately judged with passenger
projects--a potentially serious consequence for freight projects, which
already tend to receive low visibility. Also, without good cost-benefit
studies, transportation planners may find it more difficult to
determine the extent that public investment is required and to
understand trade-offs and relationships among alternative solutions
involving different transportation modes. More focused federal
direction and support for states and MPOs could better ensure that
sound evaluation approaches are incorporated into the local investment
decision-making process for freight projects and that meaningful data
are collected and used.
State and Local Planners Are Not Consistently Applying Sound Analytical
Methods and Evaluation Approaches:
Our past work on best practices for capital decision-making[Footnote
22] found that establishing a decision-making framework that is
supported by proper financial, technical, and risk analysis is a
critical factor in making sound capital investment decisions.
Transportation experts have echoed the need for such a framework. Key
elements we and others have defined as being important for evaluations
used in the public decision-making process are shown in table 1.
Table 1: Key Elements of Evaluations Used in a Public Decision-making
Process:
Type of evaluation: Prospective evaluation;
Key elements:
* Cost-benefit analyses should be used, especially for projects
involving trade-offs among freight mobility benefits, passenger
benefits, and environmental protection. Transportation benefits should
be evaluated in terms of users' willingness to pay for the change.
Estimating the demand response to changes in transportation cost is
necessary;
* Cross-modal and low cost noncapital alternatives, including traffic
control improvements and congestion pricing, should be actively
considered and analyzed in lieu of capital improvements;
* External benefits and the value of avoiding external costs (like air
pollution and congestion) should be quantified to the extent possible
in the cost-benefit analysis;
* An analysis of risks and sources of uncertainty, including
uncertainty in traffic projections and strategies for reducing risk
should be included.
Type of evaluation: Retrospective evaluation;
Key elements:
* A retrospective evaluation of completed projects should be performed
according to established guidelines. These evaluations allow public
planners to learn from experience, provide incentives to achieve
results, and hold planners accountable for their decisions.
Source: GAO summary of elements presented in TRB's Policy Options for
Intermodal Freight Transportation and Freight Capacity for the 21st
Century.
[End of table]
In recent studies, TRB and FHWA have noted that in making freight-
related investment decisions, local MPOs and state DOTs are not
applying many of these evaluation elements. For example, FHWA[Footnote
23] said that planners lack the tools to evaluate freight projects with
nonfreight projects. TRB studies[Footnote 24] have shown, in general,
that evaluation procedures for setting project priorities for state
highway programs throughout the United States are often defined in
terms of engineering criteria rather than economic criteria. According
to TRB, an important change needed to improve intermodal freight
efficiency involves conducting better evaluations of the direct
benefits of transportation improvements. These evaluations--which are
now largely absent at the local level--would entail applying proper
methods of identifying needs for connectors to ports and other
intermodal terminals. Also, government transportation agencies do not
routinely consider facility management alternatives to physical
expansion as a means to increase capacity, according to TRB.
Our case study work generally confirmed these findings and demonstrated
unevenness in the application of sound methods and evaluation
approaches across the country. Most locations we visited use some form
of cost-benefit analysis, but the sophistication and elements used in
the analysis differ significantly. For example, an MPO official in
Charleston told us that they do not conduct formal cost-benefit
analyses on transportation projects because they do not have access to
those tools or resources. In contrast, the Houston MPO conducts a
variety of cost-benefit analyses using economic criteria, travel
delays, and vehicle miles traveled reductions. The Puget Sound Regional
Council (the Seattle MPO) utilizes a cost-benefit approach for
evaluating freight projects separate from passenger projects but is
working on a more sophisticated approach.[Footnote 25] Other locations
often relied on a variety of methods to evaluate and prioritize freight
and other passenger-related projects, such as weighted systems that
assign additional points if the project benefited freight mobility.
Weighted systems allow freight projects to better compete with
passenger-oriented projects under consideration.
While many of the sites we visited performed cost-benefit studies to
some degree, the specific elements of the analysis varied considerably.
For example, some of the locations include low cost or cross-modal
alternatives and external costs--two key best practice elements in our
capital decision-making framework--during the decision-making process.
However, while many locations considered these elements, MPO
stakeholders typically did not apply these elements in a consistent and
systematic manner. Instead, elements were considered in general through
a process of negotiation among MPO stakeholders. Furthermore, none of
the locations conducted retrospective evaluations. Some of the MPO
officials stated they would like to conduct retrospective evaluations,
and others said they did not have the data nor the resources to do so.
The use of cost-benefit analyses and the application of best practices
evaluation elements at the state level mirrored the MPO experience for
the most part. Most states we visited conduct some form of cost-benefit
analysis, but in varied forms. For example, California conducts a
number of cost-benefit analyses based on economic, safety, and highway
maintenance information, while other states, such as such as New Jersey
and Texas, mainly conduct cost-benefit analyses as a component of their
environmental studies. Some states did not consistently look at cross-
modal or low cost noncapital alternatives. For example, officials in
Texas said they had not advanced to the point of evaluating management
alternatives, although they were beginning to consider alternative
financing mechanisms and user fees. Officials from New Jersey and New
York said they have discussed user fees and tolls, but these
discussions usually have occurred outside the planning process.
Transportation Planners Lack Sufficient Data to Evaluate Freight
Investment Decisions:
Transportation studies by us and by others have found that sufficient
data and information systems are essential to make sound investment
decisions. However, according to recent TRB and FHWA studies, state and
local transportation planners do not have data to sufficiently evaluate
freight infrastructure proposals. Some transportation companies may
consider data on private freight movement to be proprietary. However,
such data can often be used to identify heavily traveled highways and
intersections and possible measures to mitigate intermodal freight
bottlenecks. TRB case studies of transportation projects show that
planning agencies sometimes lack data and proper modeling techniques to
compare the benefits of alternative solutions--such as operations and
management alternatives--with proposals for physical expansion, such as
adding new roadways or highway lanes. According to these studies, data
are also needed that would allow state and local planners to evaluate
forecasts of transportation demand, forecasts of the effect a project
would have on diverting traffic to or from other transportation modes,
or estimates of a project's effect on congestion or pollution.
At the locations we visited, most state and local planners confirmed
that they did not have sufficient data to accurately and effectively
evaluate freight projects as part of the planning and investment
decision-making process. Table 2 summarizes the types of data being
collected by each location and additional data needed.
Table 2: Types of Data Collected and the Additional Data Needs for
Freight Mobility Planning:
Location: Charleston;
Examples of types of data used: Freight Analysis Framework (FAF)[A],
census data, commodity flow data, travel demand model;
Key limitations cited by planners:
* Accessible data are generalized to state and national level;
specific localized data is not available;
* Some of the data from private companies are confidential and
proprietary and, therefore, lack sufficient detail for accurate
freight planning purposes.
Location: Houston;
Examples of types of data used: A variety of national, state, and
local data that includes freight flows, emissions, vehicle miles
traveled, truck counts, purchased data from consultants;
Key limitations cited by planners:
* The validity of some of the national, state, and local data are
questionable, and it is difficult to get the data in detail at the
local level;
* Data purchased from consultants are expensive.
Location: Los Angeles/Long Beach;
Examples of types of data used: A variety of national and state data
including commodity flow data; demand model that incorporates heavy
trucks included in regional transportation plan;
Key limitations cited by planners:
* Useful freight data are generally unavailable;
* Available commodity flow data are not detailed enough (i.e., county
or by zip code) for accurate freight planning.
Location: New Jersey;
Examples of types of data used: National data such as the FAF, some
state data, in-house modeling, purchased data from a consultant;
Key limitations cited by planners:
* Modeling data are available, but results are often unreliable
because of questionable assumptions on routes for trucks;
* Reconciling similar data from different sources is also a problem;
combining data and developing new data sets is time consuming and
resource intensive.
Location: New York;
Examples of types of data used: Commodity flows and volumes, origin
and destination data, truck counts;
Key limitations cited by planners:
* Proprietary issues make it difficult to obtain detailed data that
are useful;
* Often there is a time lag in the data received, and the data may not
necessarily reflect the current environment.
Location: Oakland;
Examples of types of data used: State and local data, travel demand
models, roadway monitoring including car and truck counts;
Key limitations cited by planners:
* There is a need for more interstate import and export data and more
freight-specific data.
Location: Seattle/Tacoma;
Examples of types of data used: FAF and Bureau of Transportation
Statistics data, marine cargo forecasting, modeling data, state-level
data, trucking data;
Key limitations cited by planners:
* There is a need for better information on trip reliability or
predictability. Metropolitan traffic models do a poor job of
reflecting "real world" traffic delays.
Sources: Highlights of information collected by GAO from the
metropolitan planning organizations for these locations.
[A] FHWA has created the FAF. This framework was developed from various
government and private-sector databases including the commodity flow
database and the highway capacity dataset.
[End of table]
While many MPOs struggle to obtain sufficient data to make freight
mobility planning decisions, some state and local planners are working
toward collecting and maintaining databases to better evaluate freight
projects. The New Jersey Transportation Planning Authority (an MPO in
New Jersey), for example, in cooperation with the International
Intermodal Transportation Center (IITC) at the New Jersey Institute of
Technology (NJIT) has undertaken a comprehensive data gathering and
research initiative designed to strengthen the evaluation process for
freight planning and decisionmaking.[Footnote 26] As part of this
initiative, IITC developed goods movement indicators and a freight
planning framework and modeling program to forecast the impact of
selected freight mobility strategies for northern New Jersey region.
For example, the model can be used to forecast the decrease in truck
delay resulting from a strategy that considers adding truck-only lanes
to selected highway segments. Also, IITC has summarized data collection
practices used by selected MPOs throughout the United States.
Federal Efforts to Encourage Sound Evaluation Procedures Have Been
Limited:
The variation in local planning evaluation approaches and data
gathering among MPOs is not surprising given the wide latitude that
planning jurisdictions have under the law and the limited guidance
provided at the federal level by DOT and its various transportation
agencies. Under TEA-21 and existing regulations, MPOs and state
departments of transportation have a great deal of latitude in how they
evaluate projects and make investment decisions. DOT officials told us
they viewed their role in this regard as facilitators rather than being
prescriptive in dictating an evaluation process. For example, FHWA
officials said they try to enhance consideration of freight issues
through such efforts as the Freight Professional Development Program,
which includes seminars by industry experts; technical assistance
through peer exchanges and an online list of experts; and the FAF
database program, which can be used to estimate trade flows and
identify areas of potential improvement. DOT officials said their
limited oversight efforts are directed at ensuring that states and MPOs
keep broad goals in mind in designing their process, such as choosing
projects that support economic vitality, increase safety and
accessibility, promote efficiency, protect the environment, and promote
energy conservation.
Although DOT's approach is consistent with giving planning bodies wide
latitude in how to operate, there are strong signs from the planning
bodies themselves that they would prefer more guidance and support in
this area. State and MPO officials with whom we talked said they would
welcome more help in designing an evaluation approach for making
transportation investment decisions for a variety of reasons. One
official, for example, said more specific policies and procedures were
needed to better ensure that they were in compliance with planning
requirements.[Footnote 27] Almost all of the officials said they wanted
more help in obtaining sufficient data for evaluating transportation
proposals. Much of the available freight data, they said, are usually
at a macro level, privately held, cost-prohibitive to acquire, and of
limited use because of proprietary and reliability concerns.
Other groups have also urged DOT to do more. Several transportation
studies have noted the limited amount of guidance and oversight and the
need for better evaluation approaches and have recommended that DOT
take steps to provide better guidance and support in this area. The
TRB, for example, has recommended that DOT actively promote states' use
of economic evaluation methods in transportation programs that receive
federal aid, particularly highway aid programs. TRB also recommended
that, as a means of promoting more useful evaluation at the federal and
state levels, Congress establish a clearinghouse within DOT devoted to
evaluation methods, so that DOT program agencies and local and state
governments could share and compare methods and examples of
evaluations.
Intermodal Nature of Freight Projects and Access Limitations to Federal
Programs Can Hamper Planners in Funding Freight Improvements:
A variety of factors in the way federal transportation programs are
structured and used as funding sources for infrastructure projects
hamper MPOs and states in advancing freight improvement projects. For
one, freight improvement projects are more complicated to fund than
traditional, modally oriented projects, both because of the intermodal
nature of most freight projects and the challenge in balancing public
and private benefits. For example, a traditional, modally oriented
project, such as a project to widen a highway, typically involves only
one mode and yields public benefits. This makes the planning and
development of traditional transportation projects fairly clear-cut--
there is a single sponsor (e.g., an MPO) and a clearly defined funding
source (e.g., one of several highway programs). In contrast, freight
improvement projects tend to be more complicated because they are
frequently intermodal, which means that a clear sponsor for the project
may not exist, discussions among multiple sponsors are usually
required, and it may require consideration of multiple sources of
funding. Also, the project can result in private benefits, which raises
questions about whether and how to provide public support for private
infrastructure. For example, an intermodal connector linking a port to
an intermodal rail yard has no clear sponsor. Such a project may be
viewed as the responsibility of the port, the railroad, or even the
MPO. When such a project becomes the responsibility of the MPO, the
project must also overcome the limitations to advancing freight
improvements in the planning process described earlier. Moreover,
because federal programs are often structured such that they dedicate
funds on a modal basis, MPOs may make decisions based on the mode
eligible for federal funding, which puts freight projects at a
disadvantage.[Footnote 28]
Aside from the greater complexities associated with funding intermodal
freight projects, gaining access to funding sources more specifically
targeted for freight projects is often difficult as well. For example,
two programs--the National Corridor Planning and Development Program
and the Coordinated Border Infrastructure Program (hereafter referred
to as the Borders and Corridors programs)--were created by TEA-21 to
better address freight transportation needs. They are federal grant
programs that share an annual funding allocation of up to $140 million.
Although considered a good source of funding for freight projects, the
most significant limitation with these programs is that they are
oversubscribed, and much of the funding for these programs is allocated
to congressionally designated projects, according to FHWA. Two other
credit programs established in TEA-21--TIFIA and the Rail
Revitalization and Improvement Funding program (RRIF) provide loans,
loan guarantees, and lines of credit for projects. The TIFIA program,
for example, can leverage federal funds by attracting additional
private investments in infrastructure projects. However, according to
stakeholders, the eligibility criteria for the TIFIA program limit some
freight projects, as the program does not allow assistance to privately
owned facilities, such as privately owned rail infrastructure. Further,
to qualify for assistance, TIFIA projects must be valued at over $100
million, which, according to many stakeholders, may exclude many
freight projects that are valued at less than this amount. In addition,
stakeholders have indicated that shortcomings with the RRIF program
include the up-front fee applicants must pay in order to receive the
loan and the length of time applicants must wait before receiving a
decision. These shortcomings have proven to be a disincentive to use
the program, according to DOT.[Footnote 29] Table 3 shows the federal
programs established in ISTEA and TEA-21 that are available as funding
sources for freight projects.
Table 3: Federal Funding and Financing Sources Providing Eligibility
for Some Freight Projects:
Funding source: Congestion Mitigation and Air Quality Program (CMAQ);
Applicability:
* Can be used to fund a wide range of freight improvement projects,
including rail and other nonhighway transportation projects;
* Project must reduce carbon monoxide or other specified air
pollutants in a nonattainment or maintenance area as specified in the
Clean Air Act;
* Freight projects are required to show reduced air emissions.
Funding source: Surface Transportation Program (STP);
Applicability:
* Can be used for highway-related freight projects, such as roadway
improvements to facilitate truck-freight movement or accommodate other
modes, raising bridges, at-grade rail separations, and improvements to
intermodal connectors;
* Project must be related to federal-aid highway system.
Funding source: National Highway System (NHS);
Applicability:
* Can be used to improve intermodal connectors;
* Project must be identified as a NHS priority highway or a connector
linking the NHS to key intermodal facilities.
Funding source: National Corridor Planning and Development Program and
Coordinated Border Infrastructure Program (Corridors and Borders);
Applicability:
* Can be used to fund projects related to planning and construction on
major corridors that have been identified;
* These programs are oversubscribed, and much of the funding is
allocated to congressionally designated projects.
Funding source: Transportation Infrastructure Finance and Innovation
Act (TIFIA);
Applicability:
* Can be used for publicly owned, intermodal, surface freight
transportation facilities (other than seaports and airports) located
adjacent to the NHS;
* To qualify for assistance, projects must be valued at over $100
million.
Funding source: Rail Revitalization and Improvement Funding Program
(RRIF);
Applicability:
* Targeted specifically at providing credit for rail infrastructure
and equipment;
* Applicants must pay an up-front fee in order to receive the loan,
are subject to the lengthy application process, and must first be
turned down by a bank or credit institution.
Source: FHWA.
[End of table]
Because of private ownership and other issues, certain freight
transportation projects are especially difficult to fund or finance
through federal programs, even when they are identified as priorities
within the transportation planning process. For example, rail projects
in particular are difficult to fund even when considered a priority in
the public planning process largely because rail infrastructure is
privately owned. According to a report issued by FHWA, although public
support under existing programs can be used to fund or finance rail,
the projects are usually only eligible for purpose-oriented programs,
such as CMAQ, or through financing programs such as RRIF.[Footnote 30]
However, even with these programs, there are certain restrictions. For
example, in the case of CMAQ, unless a project has a positive impact on
air quality in a nonattainment[Footnote 31] or maintenance area, it
would not be eligible for CMAQ funds. In the case of TIFIA, a project
must be publicly owned, which excludes many rail infrastructure
projects as rail infrastructure is often privately owned and in the
case of RRIF, applicants must pay an up-front fee in order to qualify,
creating a disincentive to use the program.
One example that typified the complexities associated with funding
freight projects under existing programs occurred recently on a major
project undertaken at the Port of Tacoma (Washington). This project,
the D Street overpass, which involved widening a road and relocating
rail tracks to better facilitate road and rail freight flow, was
delayed because the project involved two different modes, and the
funding for one was available but funding for the other was not.
Highway funds were available for the road portion, but private-sector
funding for the rail portion was not readily available. Financing
limitations such as this can delay needed freight improvement projects
or prevent them from occurring all together.
Two Key Strategies Could Help Address Freight Planning and Financing
Limitations:
The upcoming reauthorization of TEA-21 provides an opportunity to
consider ways in which federal policies and programs might be adjusted
to help address the planning and funding limitations described above.
Using the work of transportation experts and our own experience in
evaluating transportation mobility projects,[Footnote 32] we
identified two key strategies that hold promise for addressing the
planning and financing limitations that surfaced from our work. The
first strategy addresses planning limitations, and the second strategy
addresses financing limitations. In addition, we identified certain
overarching, economic and management principles for consideration as
the Congress and other transportation decision makers develop and
implement strategies to enhance freight mobility. (See fig. 9.):
Figure 9: Key Strategies and Principles to Address Planning and
Financing Limitations:
[See PDF for image]
[End of figure]
The administration and system stakeholders have developed a variety of
reauthorization proposals to address the planning and financing
limitations.[Footnote 33] (See apps. II-IV for an overview of proposals
made by different freight stakeholders.) For example, to address
planning limitations, most of the proposals seek to improve
coordination, encourage private sector involvement, and/or improve data
and analysis tools to evaluate freight projects. In the area of
financing, most of the proposals seek to either expand the eligibility
of federal programs to include specific freight projects, encourage the
use of alternative financing, or allow for the use of nonbuild tools to
reduce congestion. While all of the proposals address planning and
financing limitations--and involve at least some aspects of our two
strategies--a balanced strategy that addresses the broad range of
limitations we identified will likely be required to significantly
advance freight mobility. (See app. V for a summary of how stakeholder
proposals relate to our two broad strategies.) Optimum results could be
furthered if three overarching principles are applied in the
development and refinement of reauthorization provisions. These include
promoting efficiency by embracing "user pay" principle, maximizing a
performance-based program, and aligning the incentives for planning
agencies and other decision makers to focus on efficiency and results.
First Strategy: Emphasizing a Systemwide Approach to Transportation
Planning:
Our past work has shown that planning should be viewed from a
systemwide perspective.[Footnote 34] Such a perspective includes taking
multiple transportation modes and jurisdictions into account--rather
than considering each one separately--to better ensure the involvement
of freight stakeholders in the private sector. In addition, such a
perspective includes developing meaningful data and sound analytical
methods for making decisions about how best to apply available
resources and to determine the extent of public involvement.
Coordination Across Transportation Modes and Jurisdictions:
As one means to ensure that freight perspectives are included in public
planning and programming decisions, coordination across the various
transportation modes and planning jurisdictions is important.
Intermodal freight movements involve such matters as moving goods from
ships to trucks or railroad cars for distribution throughout the
country. Freight improvement projects must address congestion at these
transfer points as well as congestion on the roads and railroad tracks
that carry freight throughout the country. At the same time, extensive
coordination between multiple sets of stakeholders representing the
various modes is needed because of the intermodal nature of projects.
When such projects affect not only multiple transportation modes, but
also areas that extend beyond the jurisdiction of a single local
planning body, the amount of coordination becomes even more complex.
Our case studies showed that successful intermodal projects involved a
high degree of intermodal and cross-jurisdictional coordination. For
example, the FAST project in Washington state, a series of related but
independent projects intended to improve freight mobility in the
Everett-Seattle-Tacoma region, crossed multiple jurisdictions and
modes and involved multiple stakeholders. The program included port
access improvements and railroad grade crossing improvements to improve
safety and increase mobility. While funding for the project comes from
various public sources and the private railroads, the FAST members
selected and prioritized projects for funding. The coordination of
projects and the cooperation of the multiple stakeholders have resulted
in the elevation and acceleration of freight improvement projects along
the corridor.
Such coordination is not automatically a part of the transportation
planning process; in fact, our reviews of successful projects like the
FAST Corridor program found that they typically occurred outside of the
conventional transportation planning process for several reasons.
First, it is easier to address freight improvements when they do not
have to compete with nonfreight projects in the transportation planning
process. Also, it is easier to build consensus among the multiple
stakeholders when the focus is solely on issues of freight mobility. As
our review revealed, attempts to advance freight improvements within
the conventional process are often hindered by limited cross-modal
communication and limited cross-jurisdictional coordination. Thus,
ensuring that a freight strategy includes sufficient modal coordination
and stakeholder participation, and cooperation continues to be a
challenge for public-sector decision makers.
A number of proposals developed by stakeholders are directed at greater
coordination across modes and jurisdictions. For example, the
administration's 2003 surface transportation reauthorization proposal
(hereafter referred to as the administration's proposal) encourages
MPOs to coordinate their planning process with officials responsible
for other types of planning activities that are affected by
transportation.[Footnote 35] The administration's proposal also
encourages states and other jurisdictions to work together to develop
plans for multimodal and multijurisdictional transportation decision
making through allocations for planning studies.[Footnote 36] This
approach, which encourages more cooperation, but does not specifically
place requirements on the parties in the planning process, is
consistent with the premise of ISTEA and TEA-21 that states and MPOs
are best positioned to make decisions on transportation planning and
project selection to best address local concerns. However, while ISTEA
and TEA-21 have encouraged an emphasis on freight in the planning
process for over a decade, our review highlighted the many
disincentives for such a focus with the result that MPOs typically have
not used their transportation resources on projects that benefit areas
outside of their jurisdictions.
Ensuring That Private-sector Stakeholders Are Effectively Involved:
Since a systemwide approach to transportation planning will require
more focus on issues that cross jurisdictions, securing the
participation of the private sector, which tends to have a more
national and global view of the transportation system than public-
sector planners, will be necessary. Greater participation by the
private sector can also be helpful in supplying necessary data for
making informed decisions and expertise to effectively identify and
implement improvements across modes and jurisdictions. However, our
work has shown that participation by the private sector in the public
planning process is often limited.
Several of the projects we studied offer insights as to how the private
sector might be effectively engaged in the planning process. For
example, the Alameda Corridor project in Los Angeles serves as an
example of a project that involved private sector participants in the
planning and implementation phases of the program. Specifically, the
project consolidated port traffic from four separate branch lines into
a 20-mile railroad express line connecting the ports of Los Angeles and
Long Beach to the transcontinental rail network east of downtown Los
Angeles. The express line eliminated approximately 200 street-level
railroad crossings, relieving congestion and improving freight
mobility. This project succeeded because state and local stakeholders,
the ports, and the railroads all had a financial incentive to relieve
congestion and the commitment and ability to bring the necessary
financial resources to bear.
Our review also showed that when the particular needs or interests of
the private sector were not addressed, private-sector participation
could be limited or absent altogether. As noted earlier, the FAST
Corridor and the Alameda Corridor projects are examples of bringing
diverse stakeholders together to forge a partnership to advance needed
freight projects. Both projects yielded benefits for the stakeholders.
The Alameda Corridor East project, however, serves as an example of
what could happen when a project yields limited private benefits. This
proposed project, extending east from Los Angeles through the San
Gabriel Valley, focuses on safety improvements and congestion relief
for the surrounding communities by providing grade separations at rail
and highway crossings along the route. Unlike the original Alameda
Corridor project, this project provides no new track capacity for the
rail carriers and would not materially speed freight movement along the
route. Therefore, according to MPO officials, the rail carriers see
little benefit for them and currently are not actively involved in or
committed to the project.
Several of the proposals made by freight stakeholders would address
private-sector involvement. For example, the Freight Stakeholders
Coalition has recommended the formation of a group composed of freight
transportation providers from all modes, as well as shippers and state
and local planning organizations, to provide industry input to
DOT.[Footnote 37] Providing a national perspective through such a group
could provide information that would help to identify critical freight
bottlenecks within the nation's transportation system and options to
balance the state and local perspective. Further, the Freight
Stakeholders Coalition has suggested that states and MPOs receive
additional funds for expert staff positions dedicated to freight
issues. Hiring and training professional freight planners could
ultimately result in improved coordination of resources and better
transportation investment decisions leading to improved freight
mobility. The administration's proposal also addresses private-sector
involvement through a program that would address freight transportation
gateways and intermodal connections.[Footnote 38] This program would
require states to designate a freight transportation coordinator
responsible for fostering public and private sector collaboration
needed to implement solutions to freight-related problems. However,
unless states are able to overcome the limitations to private-sector
participation, this type of provision may do little in garnering
private-sector participation.
Applying Sound Analytical Approaches and Collecting Sufficient Data:
As part of a systemwide approach to planning, standard evaluation
methods and sufficient data will also be needed to support public
transportation investment decisions. Methodologically sound
evaluations and basic freight-related data are both necessary to
support public transportation investment decisions; to evaluate viable
alternative solutions, including facility management alternatives; and
to ensure that intermodal solutions to enhance freight mobility are
considered and adopted where appropriate. Transportation experts with
whom we collaborated on past mobility work cited the importance of
considering all modes and travel types in addressing mobility
challenges--as opposed to focusing on a single mode--to achieve desired
results. Sound evaluation approaches, such as a comprehensive cost-
benefit framework, are a necessary prerequisite for doing this.
Various proposals have been made for strengthening this part of the
process. For example, the administration's proposal includes a
modification to the planning provisions that would require states to
address data issues by targeting part of the state apportionments for
state planning and research.[Footnote 39] This set-aside is intended to
be used for the collection and reporting of strategic surface
transportation data to provide information about the extent, condition,
use, performance, and financing of the nation's highways for passenger
and freight movement. This set-aside represents somewhat of a departure
from current core transportation legislation, which leaves such
decisions on the use of federal transportation funds to states and
MPOs; however, it might increase freight data collection efforts and
elevate freight issues in the planning process. The TRB proposed a
different approach involving recommendations at both the national and
MPO levels. At the national level, TRB recommended the creation of a
clearinghouse devoted to evaluation methods, which DOT program agencies
and local and state governments could use for sharing and comparing
methods and examples of evaluations. At a more localized level, TRB
recommended that programs in successor legislation should contain
requirements for evaluating the performance of programs and that state
and local governments should conduct evaluations to test the economic
rationale for both existing projects and proposed projects requiring
new government involvement in transportation investments.
Second Strategy: Providing a Wider Range of Funding and Related
Options:
The second strategy addresses the other main limitation identified by
our own reviews and other researchers as a common obstacle to progress
in resolving freight and overall congestion issues--financing and
funding. In the current budgetary environment, along with long-range
fiscal challenges confronting the country,[Footnote 40] substantial
increases in current funding sources for all transportation projects
will require a high level of justification. Yet, as our work has shown,
intermodal freight projects that involve both public and private
interests and may help foster both economic efficiency and growth have
difficulty competing for limited transportation resources. Therefore,
determining how federal policies and programs might be adjusted to
address the limitations to funding freight projects raises the
fundamental policy question of defining the appropriate scope of
government involvement in freight improvements. When public
subsidization of freight projects is determined to be appropriate
through proper analysis, approaches such as expanding eligibility
guidelines for existing federal programs, developing or expanding the
range of funding and financing mechanisms that appropriately blend
public and private funds to match public and private costs and
benefits, and making maximum use of low-cost "nonbuild" approaches
could be considered to address limitations in advancing freight
improvements.
Determining the Appropriate Federal Role and Apportioning the Cost
Burden among Beneficiaries:
Transportation experts generally agree that determining the appropriate
scope of government involvement and level of subsidization in freight-
related and other projects is an important step in making
transportation investment decisions. The underlying principle guiding
the scope of government involvement is that such involvement should
occur only to the degree that the private sector will not undertake a
project needed to improve transportation mobility, and yet the project
is deemed to be economically viable. There are a number of reasons why
the private sector may not participate in such projects--for example,
they may generate significant external or social benefits associated
with reducing congestion and air pollution from which those in the
private sector who would make the investment would receive no economic
benefits.
Determining the scope of government involvement entails three basic
steps: (1) determining that the project is worthwhile by applying a
rigorous cost-benefit study; (2) justifying that government involvement
is necessary based on known criteria; and (3) deciding on the level of
subsidization required by the public sector reflecting the interests
and benefits on a local, state, regional, or national level. As we have
discussed previously, cost-benefit frameworks that transportation
agencies currently use to evaluate various transportation projects
could be more comprehensive in considering and quantifying a wider
array of social and economic costs and benefits to determine whether
public support is justified. Developing sound justifications and
determining appropriate subsidy levels can be undermined by an absence
of rigorous evaluation approaches, and there is broad consensus among
transportation stakeholders that state and local planners need to
improve their evaluation capabilities.
Justifying government involvement for freight transportation
infrastructure projects involves having clear guidelines specifying the
conditions under which public involvement is warranted. TRB has
provided such guidelines in two recent reports.[Footnote 41] According
to TRB, public support for freight infrastructure projects must be
established on a project basis to determine if the project possesses
certain characteristics, such as reducing the external costs of
transportation, yields efficiencies in the transportation system beyond
those recognized by the private sector, and/or meets some public safety
need.[Footnote 42] TRB contends that if government involvement cannot
be justified on one of these grounds, the private sector should
undertake the project.
Once the justification is established for public involvement in freight
and other projects, the next critical decision involves deciding on the
level of public subsidy. While in most cases, government involvement is
often assumed to mean subsidization of a project, such involvement need
not necessarily imply the need for, or appropriateness of federal
subsidization. For example, a government agency might plan a project to
be entirely self-supporting from user fees and private sector
participant contributions; in this case, no government subsidy is
involved. However, when public subsidization is being considered,
particularly for freight infrastructure projects, the appropriate scope
of government involvement must carefully be considered because of the
public-private nature of these projects.
When public subsidization has been deemed appropriate, apportioning the
cost burden among participants, or the beneficiaries of the project is
the next critical step. This means identifying the beneficiaries and
determining the level of benefits they are likely to derive from the
project. According to TRB, "the candidates for paying for an intermodal
freight transportation project are users (through tolls or other fees),
other direct beneficiaries (e.g., owners of property adjacent to the
development), the local public (through subsidies from local general
tax revenues or tax concessions), the national public (through use of
federal grants or tax-exempt bond finance), or indirect beneficiaries
(e.g., application of road user fee revenues to rail transport on the
grounds that rail use relieves road congestion)."[Footnote 43] TRB
further noted that, for some projects, these beneficiaries should pay
the costs commensurate with the cost of providing the service to the
user. For example, when users are the direct beneficiaries of the
project, user fees, which involve each user paying a fee for the cost
of the service provided, are the preferred method that should be
considered for projects that directly benefit the users. On the other
hand, when external benefits, such as the reduction of pollution or
congestion, result from a project, a case can be made that public
support be provided for the project, and the direct users should pay
the net cost of the use of the service after deducting the public
benefit. Further, if public beneficiaries are largely local (e.g.,
reducing suburban congestion), efficiency principles would call for the
public subsidy to be at a local rather than federal level. Again, as in
other aspects of the decision-making process, sound evaluations and the
ability of local planners to quantify the benefits and their
distribution are critically important to making good decisions.
Expanding Eligibility Guidelines for Existing Federal Programs:
A concern voiced by national stakeholder groups and raised through our
evaluation synthesis was that federal program eligibility requirements
do not always lend themselves to certain types of freight improvement
projects. For example, rail projects are eligible for federal aid
funding or grants only if the project has a positive impact on air
quality in a nonattainment area, involves modifying a rail line to
accommodate a federal aid highway project, or results in specified
improvements in safety. While carefully tailored eligibility assures
only projects generating public benefits receive subsidies, these
programs do not appear to be sufficiently fluid to allow support for
the full range of freight projects, which might generate substantial
public benefits. One way to address this concern might be to expand
eligibility criteria to cover a broader range of freight projects--by
adding specific types of freight projects to the guidelines of existing
programs--to make it easier for states and MPOs to fund freight
projects identified as priorities through the transportation planning
process. However, unless a determination is made that the project meets
the criteria or characteristics that justify government involvement,
public support for freight projects may result in more significant
needs going unmet.
A number of proposals have been made to expand eligibility criteria to
include freight projects, including the following examples. (See table
4.):
Table 4: Examples of Stakeholder Proposals to Expand Eligibility
Criteria to Include Freight Projects:
Stakeholder: Administration;
Proposal:
* Allows the use of Surface Transportation Program funds for publicly
owned intermodal freight transfer facilities and National Highway
System funds for routes connecting to intermodal freight terminals;
* Expands the types of private activities that can be financed with
tax-exempt private activity bonds to include surface freight transfer
facilities;
* Expands the eligibility of the Transportation Infrastructure Finance
and Innovation Act to include public or private freight rail
facilities and intermodal freight transfer facilities.
Stakeholder: Freight Stakeholders Coalition;
Proposal:
* Expands eligibility guidelines by dedicating funds for National
Highway System connectors and expanding the Corridors and Borders
Program to include gateways.
Sources: The administration's surface transportation reauthorization
proposal and the Freight Stakeholders Coalition proposal.
[End of table]
The provisions within the administration's proposal to expand
eligibility generally leave decisions about whether to advance projects
to the states and MPOs. The extent to which eligible freight projects
actually received support would depend on the priority they received in
these local funding decisions. While there are specific implications of
each suggested modification, these options retain the basic funding
flexibility framework of ISTEA and TEA-21, which enables states and
MPOs to determine their needs and identify the projects that are
needed. This approach, however, may not go far enough in overcoming the
difficulties in advancing freight improvements when their scope extends
beyond the purview of individual states or MPOs. In such cases, many
researchers and stakeholders have observed that public planners are
wary about giving priority to freight projects when the costs are borne
locally, but the benefits accrue nationally. Moreover, this approach
does not recognize the intermodal nature of freight projects, since
existing funding mechanisms tend to be modally focused. In addition,
the administration's proposal contains one provision that would
establish a mandatory set-aside of NHS funds to address intermodal
connectors. Since this would provide a dedicated pool of funding for
intermodal connectors, these projects would no longer have to compete
with other nonfreight priorities. However, a set-aside runs counter to
the flexibility that ISTEA and TEA-21 allow to MPOs and states and
could result in other needs going unmet.
While expanding the eligibility of existing programs to cover a broader
range of freight projects has benefits, it would not, in itself,
provide a systemwide approach to addressing freight mobility
improvements. Another option, however, would largely mitigate this
planning limitation--establishing a federally administered program to
address freight projects of national significance. A federal program to
address freight projects of national significance offers another way to
address freight corridors that are regional in nature and achieve a
systemwide approach for planning freight improvements, taking multiple
transportation modes and jurisdictions into account. This program could
be structured either through a "top-down" approach, under which a
federal agency actively identifies, develops, and evaluates freight
projects, or a "bottom-up" approach, under which local governments and
private parties develop proposals and compete for federal support. This
approach would provide a dedicated pool of funding for freight projects
and, thus, would reduce, although not totally eliminate, the
competition at the local level for available funding with nonfreight
projects.
In structuring such a program, suggestions have been made by various
stakeholders. The Freight Stakeholders Coalition, for example, proposed
a tenfold increase in funding for the Borders and Corridors programs.
They also proposed expanding the eligibility guidelines of the Borders
and Corridors programs to include gateways. Therefore, prioritizing
projects based on a qualification threshold, such as volume and
congestion, would be needed to focus funding on critical corridors,
gateways, and intermodal infrastructure. As noted above, to date, much
of the funding for the Borders and Corridors programs has been
allocated to congressionally designated projects, and the need has far
surpassed the available funding for the programs, according to FHWA.
FHWA describes a federally administered program as one that could
complement the decisions made at the state and local levels, not
replace them. In other words, the program would not remove MPOs from
considering and approving freight projects within their respective
areas of jurisdiction; rather, it would augment the current process by
addressing those freight projects of national significance that crossed
the boundaries of local jurisdictions. In terms of the revenue sources
for such a program, some have suggested a more indirect federal role in
subsidizing the program's projects. For example, TRB has said that the
government's most effective role in subsidizing freight projects of
national significance would be as a provider of backup credit and as an
absorber of risk rather than as a source of grants. This, according to
TRB, would make the project accountable for its performance and would
tend to improve project selection. Also, FHWA suggests that such a
program would need to be a discretionary, as opposed to a formula-
driven program, to allow greater flexibility for the federal government
to identify and fund projects as the need arises.
Using Financing Mechanisms or Developing New Revenue Sources to Ensure
a Blending of Public and Private Funds to Match Public and Private
Costs and Benefits:
Many stakeholders have argued that the level of transportation funding
is insufficient to adequately address the challenges to freight
mobility described earlier in this report. While more funding might
appear to be an obvious solution, in the current budgetary environment,
many stakeholders believe that other methods must be explored. One
alternative would be to expand support for alternative financing
mechanisms to access new sources of capital and stimulate additional
investment in freight improvements. A closely related strategy involves
raising new revenue through tolling and pricing strategies.
Alternative financing mechanisms include techniques such as loans and
loan guarantees, providing credit assistance to state and local
governments for capital projects, and using tax policy to provide
incentives to the private sector for investing in freight improvements
through, for example, bonds. When public transportation investment
decisions are made based on sound evaluations, these mechanisms can
lead to an appropriate blend of public and private funds to match
public and private costs and benefits. Such mechanisms, however,
currently provide only a small portion of the total funding that is
needed for capital investment and are not, by themselves, a major
financing strategy for addressing freight mobility challenges.
The administration's proposal, for example, seeks to expand the
eligibility of the TIFIA program, which provides loans, loan
guarantees, and lines of credit. The proposal expands the eligibility
of the program to include private freight rail facilities, access to
intermodal freight transfer facilities, and allows for the grouping of
projects. In addition, the loan threshold would be lowered from $100
million to $50 million. In addition, the administration's proposal
would amend the Internal Revenue Code by expanding the eligibility of
private activities that can be financed with tax-exempt private
activity bonds to include freight-related projects.[Footnote 44]
Eligibility would be expanded to include all federal-aid eligible
surface transportation projects and surface freight transfer
facilities, such as intermodal rail yards.
Alternative financing mechanisms involve a careful evaluation of trade-
offs involving their use. On one hand, expanding eligibility could
encourage development of new funding sources for transportation
projects by attracting private-sector participation in projects that
serve both public and private ends. Also, they may be necessary tools
for freight infrastructure; many freight operators are private
entities, which currently makes it impossible or inappropriate to
provide funding for them through direct federal grants. On the other
hand, despite potential benefits, these mechanisms could result in
higher costs to the U.S. taxpayer. For example, when we compared direct
appropriations for transportation infrastructure projects with methods
such as TIFIA loans or state and local tax-exempt or tax credit bonds,
we concluded that a direct appropriation had the lowest combined cost
to state, local, and federal governments for a given amount of
transportation investment.[Footnote 45] The U.S. Treasury has drawn
similar conclusions. Further, because these approaches would allow
public support for private infrastructure, it will be important that
evaluations are conducted to prospectively test the economic rationale
for government involvement in such projects and retrospectively
evaluate whether intended benefits have been achieved.
A related feature of alternative financing approaches is the strategy
for generating revenue from various tolling approaches, which can
provide new sources of funding to address the increasing freight-
related and other infrastructure needs. Tolling is often associated
with alternative financing tools since nearly all require a dedicated
revenue stream to repay borrowed funds. According to TRB, a greater
reliance on tolls allows capacity to be more self-adjusting by
rationing use, providing funds for expansion, and providing an
indication of where expansion should occur in the long run. In concept,
tolling on highways and major access roads is consistent with the
premise that the users of the transportation facilities should pay the
cost of those facilities. Also, to the extent that the private sector
participates in building and maintaining toll roads or intermodal
facilities, tolling can bring new funding sources into the financing
mix, thus potentially reducing funding contributions of the public
sector.
Tolling can take many forms, but two approaches are particularly
relevant--tolling mainly to raise revenues and tolling instituted at
peak driving times to reduce congestion.
* Tolling as a revenue-generating source. Tolling on some roads is done
as a way of generating new revenues to pay for needed infrastructure
rather than to reduce congestion. The Reason Foundation has suggested
freight-specific tolling through self-financing toll
truckways.[Footnote 46] Toll truckways, solely for use by large trucks,
could be custom-built and designed for use by longer and heavier
trucks. Separating large trucks from other vehicles would improve
safety along with transportation efficiency. In its study, the Reason
Foundation concludes that trucking firms would be willing to pay a toll
up to one-half of the cost saving that would be generated from the use
of the truckways.
* Tolling for congestion pricing. Not only can pricing strategies
generate revenue to help fund transportation investment, our past work
has shown that this approach can potentially reduce congestion by
providing incentives for drivers to shift trips to off-peak periods,
use less congested routes, or use alternative modes, thereby spreading
out demand for available transportation infrastructure.[Footnote 47] A
number of congestion pricing projects are in place in surface
transportation, both here and abroad. For the most part, they
demonstrate that congestion pricing can be successful. Congestion
pricing also has the potential to generate sufficient revenue to help
fund operations--and sometimes fund other transportation investment as
well. For example, in San Diego, where users pay a toll to use a less
crowded freeway lane, some of the revenues are used to operate a new
express bus service, providing commuters with more travel options.
In one possible form of congestion pricing for public roads, tolls
would be set on an entire roadway or road segment during periods of
peak use. In another form, sometimes known as value pricing, peak-
period tolls would be set on only some lanes of a roadway, allowing
drivers to choose between faster tolled lanes and slower nontolled
lanes. High-occupancy toll (HOT) lanes, under which drivers of single-
occupancy vehicles are given the option of paying a toll to use lanes
that are otherwise restricted to high-occupancy vehicles, are an
example of value pricing. A more freight specific alternative, such as
truck toll lanes, may also be a way to reduce congestion, expand
capacity, and generate revenues.
Possible challenges to implementing congestion pricing include current
statutory restrictions limiting the use of congestion pricing and
concerns about equity and fairness across income groups. For example,
tolls are prohibited on the Interstate Highway System, except for roads
that already had tolls in place when they became part of the system or
where exceptions have been made for pilot programs. Also, equity and
fairness issues for low income and other groups have been raised, but
there is evidence that these issues can be mitigated. Some projects
have shown substantial usage by low-income groups, and other projects
have used revenues generated to subsidize a low-income transportation
option. In addition, some recent proposals for refining congestion
pricing techniques have incorporated further strategies for overcoming
equity concerns. For example, the Fast and Intertwined Regular (FAIR)
lanes proposal in New York suggests crediting users of the nontolled
lanes to partially pay for them to use public transportation, or to use
the express lanes on other days.
The administration's proposal allows for the use of such alternatives
in the form of variable toll pricing. The administration's proposal
encourages the use of a variable toll pricing provision that would
permit a state or public authority to toll any highway, bridge, or
tunnel to manage existing high levels of congestion or reduce
emissions. The administration's proposal would also allow low-occupancy
vehicles or solo drivers to pay a fee to use high-occupancy vehicle
(HOV) lanes during peak travel periods.
Using Nonbuild Alternatives:
Finally, a number of low cost alternatives can be used to expand the
capacity and efficient use of existing infrastructure. These
alternatives are a diverse mix, including corrective and preventative
maintenance and rehabilitation, operations and system management, and
new technology.[Footnote 48] Keeping up with growth within the
constraints that will be imposed on the transportation system in the
future will not be possible through capital improvements alone;
operators must also extract more service and capacity from existing
facilities. Although many of these techniques are currently in use,
public planners can more consistently consider a full range of
techniques. Table 5 briefly describes the types of alternatives
available with examples of stakeholder proposals that apply to each.
While the administration's proposal allows for the use of all of the
nonbuild alternatives, many of the provisions do not require the
consideration and analysis of these noncapital alternatives in
evaluating capital projects.
Table 5: Description of Nonbuild Alternatives and Relevant Stakeholder
Proposals:
Type of alternative: Increased maintenance and rehabilitation;
Description: This entails having a regular and a systematic corrective
and preventive maintenance program at the state and local level to
maintain the integrity of existing infrastructure and prevent or
forestall major rehabilitation or replacement. Such a program can
improve the speed and reliability of freight travel; Examples of
proposals: In the administration's proposal, maintenance and
rehabilitation is addressed through the establishment of a new program-
-the Infrastructure Performance and Maintenance Program--which focuses
on projects that preserve existing highway facilities or alleviate
traffic chokepoints.
Type of alternative: Improving management and operations; Description:
This involves using existing infrastructure more efficiently, which
adds capacity. Examples include installing modern traffic control
systems and developing strategies to handle traffic accidents and
breakdowns; Examples of proposals: The administration's proposal
requires transportation plans to contain operational and management
strategies. It also encourages transportation agencies to collaborate
and coordinate on a regional level for improved systems management and
operations.
Type of alternative: Developing and using new technology; Description:
This includes Intelligent Transportation Systems (ITS) that are
designed to enhance the safety, efficiency, and effectiveness of the
transportation network. ITS can serve as a way of increasing capacity
and mobility without making major capital investments; Examples of
proposals: The administration's proposal addresses ITS through an
Intelligent Transportation Systems Performance Incentive Program. The
goal of the incentive program is to accelerate the integration and
interoperability of ITS to improve the performance of the surface
transportation system in metropolitan and rural areas. Funding would be
directly tied to criteria that reflect each state's performance
outcomes with respect to established criteria for enhanced safety,
operations, and mobility.
Source: GAO and the administration's reauthorization proposal.
[End of table]
Building in Basic Economic and Management Principles into
Reauthorization Strategies and Provisions Could Enhance Capacity and
Performance of Freight Mobility:
Congress will formulate a new national transportation policy when it
reauthorizes TEA-21. Our past work and our review of numerous studies
by a diverse group of transportation experts show that the planning and
financing processes established by core transportation legislation make
it difficult for freight mobility projects to compete with nonfreight
projects. Our work has also led us to identify sound principles that,
if integrated into the transportation planning and financing strategies
and provisions of the new legislation, would better assure that the
freight infrastructure system provides the level of capacity and
performance that makes the greatest contribution to the nation's
economic well-being.
While not an all-inclusive list, we have synthesized three main guiding
principles, often mentioned by transportation experts, for use in
structuring federal support.
* Promote efficiency by embracing "user pay" principle. Public
financial support to individual private entities or transportation
modes is best structured so as to minimize distortion of any
competition. Competition will be enhanced and efficiency will be
promoted when capital and operating costs for infrastructure are paid
from the revenues or fees charged to the direct users or beneficiaries
of the facilities. Reliance on revenue from users will increase the
likelihood that the most worthwhile improvements will be implemented
and that facilities will be operated and maintained efficiently,
according to transportation experts. Fees assessed on each mode (user)
need to be accurately aligned with the costs each mode or vehicle
imposes on the transportation system. Where user fees and costs are not
aligned, a mode may enjoy an advantage over another in competing to
transport goods. For example, according to TRB, the heaviest
combination trucks pay a smaller share of the expenditures highway
agencies incur to serve them.[Footnote 49] From an economic standpoint,
this level of taxation distorts the competitive environment with
railroads and other modes that could also move the goods by making it
appear that these heavier trucks are a less expensive means for
shippers to transport their goods than they really are. Better matching
of fees to costs could provide incentives for shippers to make modal
choices and transportation options based on true costs. Transportation
experts recommend that, to ensure market outcomes of competition
between trucking and other modes are in the public interest, adjusting
user fees is preferable to providing off-setting subsidies to competing
modes, such as railroads.
* Establish performance measures and expectations and build in
accountability. Leading organizations have stressed the importance of
developing performance measures and linking investment decisions and
their expected outcomes to overall strategic goals and objectives.
Doing so is valuable in evaluating the effectiveness of investment
decisions, and it provides decision makers with valuable information
for determining whether intended benefits were achieved and whether
goals, responsibilities, and approaches should be modified.
Establishing a framework for performance and accountability involves
three key components--setting expectations for performance outcome,
developing and maintaining an information system to capture critical
performance-related data, and establishing a mechanism for evaluating
and reporting results. Transportation experts have suggested that such
a framework be built into legislation as a means of better ensuring
effective use of transportation dollars. The Brookings Institution, for
example, recently recommended that Congress should subject MPOs to
enhanced accountability measures and require states and MPOs to
maintain information systems on indicators of national significance,
such as daily vehicle miles traveled, improving air quality, lowering
transportation costs, and expanding transportation options. Brookings
also recommended establishing annual performance objectives and holding
decision makers accountable by establishing consequences for excellent
and poor performance. TRB has suggested similar measures including the
need for systematic and uniform retrospective evaluations after
projects are completed to assess the financial and economic performance
of completed projects and facilities in operation. As discussed above,
none of the states or MPOs in the locations we visited currently
perform retrospective evaluations. TRB also recommended developing
benchmarks to evaluate existing or proposed transportation facilities.
The benchmarks would be a systematic comparison of performance
measures, such as physical efficiency, cost, and rate of return; such
benchmarks would be used to evaluate a specific facility under
construction with other similar facilities, including state-of-the-art
facilities abroad.
* Align incentives for planning agencies to adopt best practices and to
achieve expectations. Aligning incentives for existing and new programs
or approaches to facilitate the use of better freight transportation
project planning and financing options could improve the efficiency of
federal transportation programs in enhancing freight mobility. Better
aligning both intended and de facto incentives of federal programs
could elevate freight consideration in transportation planning and
investment decisions more effectively than rigid direction or mandatory
programs and is consistent with the ISTEA and TEA-21 premise of
providing state and local planners with broad flexibility to address
the nation's transportation needs. To be effective, incentives should
be tangible and significant enough to address the need and spur action.
Incentive approaches can take many different forms, as evidenced by
varied suggestions from transportation experts and stakeholders. FHWA
has suggested, for example, that to promote a more system-wide approach
to planning freight improvement projects, incentives could be offered
to multistate or regional coalitions or organizations. One such
incentive would provide funding to support freight planning or
financing for projects that meet certain criteria, such as involving
multiple states or modes. TRB has noted, for example, that as an
incentive for states to experiment with alternative financing and
management methods, Congress could set aside a fund dedicated to
projects on roads where the highway agency has implemented efficient
maintenance, traffic control, and other management measures, according
to specified definitions. TRB has also suggested that as part of the
highway program reauthorization, Congress should consider measures to
reduce obstacles and provide incentives to private participation in
highway development. Others have suggested that to promote the use of
low cost, noncapital alternatives to more efficiently use existing
infrastructure, a system could be established in which federal support
would reward those states and localities that apply federal money to
gain efficiencies in their existing transportation system. Different
matching criteria would be one way to provide these rewards. For
example, to spur consideration of preservation of existing
infrastructure, matching requirements could be changed to a 50 percent
federal share for building new capacity and an 80 percent share for
preservation. The Brookings Institution, for example, has recommended
consideration of other types of incentives--for example, that Congress
should allow DOT to maintain a small incentive pool to reward states
and MPOs that consistently perform at the exceptional level.[Footnote
50] Ideally, an intentional alignment of the full range of existing
programs and policies would emerge from a rigorous retrospective
evaluation of both intended and de facto incentives provided by current
programs and policies.
Conclusions:
The current system for planning and financing transportation
infrastructure projects is not well suited to advancing freight
transportation improvement projects, and fundamental changes are needed
that take a broader, systemwide approach to planning and financing
freight projects and that foster active participation by the private
sector in this process. Without such changes, growing congestion,
coupled with a doubling of freight volume in the next two decades,
could overwhelm the capacity of our nation's transportation
infrastructure and thereby severely impede goods movement. This, in
turn, would likely negatively impact the nation's economic well-being
and productivity.
Reauthorization of TEA-21 represents an opportunity to examine current
federal policies and programs and determine how best to address freight
mobility issues. The range of freight-related options proposed by
various freight stakeholders is broad and sometimes controversial, and
selecting among these options and splicing them together into a
cohesive package represents a significant challenge. A blend of
measures offers promise in two broad strategies: first, to promote a
systemwide approach to planning and transportation investment decision
making, and, second, to provide an array of flexible financing
approaches and funding sources for freight-related infrastructure
improvements. Taken together, these strategies offer a balanced
approach to enhancing freight mobility. Optimum results could be
furthered if three overarching economic and management principles are
applied in the development and refinement of reauthorization
provisions. These include (1) promoting efficiency by enhancing "user
pay" principle, (2) maximizing a performance-based program, and (3)
aligning the incentives for planning agencies and investment decision
makers to focus on efficiency and results.
One issue requires immediate attention because of its importance in the
process for both planning and financing transportation infrastructure.
State and local planners, in particular, need--but lack--sound,
economically based methods and approaches and sufficient freight-
related data to perform a variety of critical planning and financing
functions. The absence of these analytical methods and data undermines
local planners' abilities to develop evaluations essential to support
public transportation decisions; to assess viable alternative
solutions, including multimodal solutions; to justify government
involvement in and subsidy levels for projects; and to retrospectively
assess projects and hold planners accountable for their decisions.
Because this issue is so critical to the entire process, it is
important that state and local planners adopt sound, consistently
applied methods and develop and enhance data collection efforts.
Recommendations for Executive Action:
To encourage the use of sound evaluation and data collection efforts
among state and local transportation planners, we recommend that the
Secretary of Transportation:
* Develop evaluation approaches for state and local planners to use in
making freight-related and other transportation investment decisions
and actively work with transportation planners to achieve
implementation of these approaches. In developing these approaches, DOT
should promote the incorporation of key elements of effective planning,
including systematic cost-benefit analyses, evaluation of noncapital
alternatives, inclusion of external benefits (e.g., congestion and
pollution costs), and routine performance of retrospective evaluations.
* Facilitate the collection of freight-relevant data that would allow
state and local planners to develop and use a broad range of evaluation
methods and techniques, such as demand forecasts, modal diversion
forecasts, estimates of effects of proposed investments on congestion
and pollution, and other factors, as they make transportation
investment choices.
Agency Comments and Our Evaluation:
We provided a draft of this report to the Department of Transportation
for its review and comment. Generally, the department agreed with the
facts presented in the report. Department officials provided a number
of comments and clarifications, which we incorporated to ensure the
accuracy of our report. The department did not take a formal position
on GAO's recommendations. Department officials raised two points that
were either outside the scope of our work or were not addressed by
freight stakeholders at locations we visited or discussed in various
reports included in our evaluation synthesis. First, department
officials noted that expanding port business hours should be considered
as a nonbuild option to relieve congestion. Although we do not disagree
with the expansion of hours as a potential nonbuild option, it was not
raised in either our evaluation synthesis or expressed as a major
congestion issue during our case study work. Second, department
officials indicated that intermodal freight movement is larger than
depicted in the report and involves many transportation communities
essential to productive freight movement. These include shippers,
receivers, warehouses, and trucking companies. We recognize this point
as well, but we were asked to focus on international gateways around
major containerized ports, since this is where transportation
congestion is often most acute and where intermodal solutions are
critically needed. In addition, while we do not explicitly identify all
of the various communities involved in freight movement, our discussion
of the private and public sectors is intended to encompass all of the
communities involved in freight movement. To this end, we have
described the key entities involved in freight movement in the
background section.
As agreed with your offices, unless you publicly announce the contents
of this report earlier, we plan no further distribution until 30 days
from the report date. At that time, we will send copies of the report
to the Secretary of Transportation. We also will make copies available
to others upon request. In addition, the report will be available at no
charge on the GAO Web site at [Hyperlink, http://www.gao.gov] http://
www.gao.gov.
Signed by:
If you have any questions about this report, please contact me at
[Hyperlink, heckerj@gao.gov] heckerj@gao.gov or (202)512-2834 or
Randall Williamson at [Hyperlink, williamsonr@gao.gov]
williamsonr@gao.gov or (206)287-4860. GAO contacts and acknowledgments
are listed in appendix VI.
JayEtta Z. Hecker:
Director, Physical Infrastructure:
Signed by JayEtta Z. Hecker:
[End of section]
Appendixes:
Appendix I: Objectives, Scope, and Methodology:
The objectives of this report were to identify (1) the national
challenges to freight mobility and how these challenges were evident at
selected container ports and surrounding areas, (2) the existing
limitations to effectively addressing these challenges, and (3)
strategies that may help public decision makers improve freight
mobility, including a discussion of relevant provisions of selected
proposals related to reauthorization of federal surface transportation
programs. To address these objectives, we conducted an evaluation
synthesis of national reports and studies, an analysis of proposals
issued by numerous stakeholders addressing reauthorization of TEA-21,
and case studies at six international gateway container ports.
We conducted an evaluation synthesis of research reports, analytical
studies, and proposals issued by numerous stakeholders to gain a
national perspective of freight mobility issues. This was done through
an extensive literature review and analysis of key categorical
findings. Findings were supplemented with interviews of key officials
in federal agencies and national association representatives to
include, at the Department of Transportation: the Office of
Intermodalism, Office of Freight Operations, the Federal Highway
Administration, Federal Railroad Administration, Maritime
Administration, and stakeholders including the American Trucking
Association, Association of Metropolitan Planning Organizations,
American Association of Port Authorities, Association of American
Railroads, and the American Association of State Highway and
Transportation Officials.
To identify challenges to freight mobility and the efforts to address
them, we also conducted case studies of international gateway ports and
their surrounding areas. We adopted a case study methodology because,
while the results cannot be projected to the universe of ports, case
studies are useful in illustrating the range and complexity of
challenges and projects implemented to address those challenges. Our
efforts included in-person interviews along with follow-up questions
via telephone and e-mail, visual observations of ports and their
surrounding areas, and collection of pertinent documents for analysis.
The ports selected were geographically representative and comprised
more than 65 percent of U.S. container traffic by volume. We conducted
case studies of six regions containing 10 container ports including
Charleston, SC; Seattle/Tacoma, WA; Los Angeles/Long Beach, CA; San
Francisco/Oakland, CA; New York/New Jersey; and Houston, TX. The
information collected and analyzed may not be representative of other
types of ports, such as smaller container ports and noncontainer ports.
The information collected included information regarding the planning
process, both at the state and local level; the metropolitan
organization's role, funding, and financing; private-sector
participation; data and use of nonbuild tools; and security. In the
area of security, we reviewed previous GAO studies on this issue, but
because of ongoing studies and the enormity and complexity of
evaluating the security issues involved in protecting the
transportation system, we did not address, in this report, barriers
that agencies and others face to implement sound security measures or
evaluate options offered by others or efforts under way to strengthen
transportation security. These issues will be more fully addressed as
part of other ongoing and future studies.
To identify strategies that may aid decision makers in enhancing
freight mobility, we relied extensively on perspectives gained from our
past work in transportation and infrastructure systems and federal
investment strategies and other perspectives gained through our
evaluation synthesis. We assessed the reauthorization proposals
developed by key stakeholders within the context of these strategies.
We conducted our work from October 2002 to November 2003 in accordance
with generally accepted government auditing standards:
[End of section]
Appendix II: Summary of the Administration's 2003 Surface Transportation
Reauthorization Proposal Freight-related Provisions and Observations:
I. Planning:
1. State planning and research (Title I, Section 1503(i)(1)(B)). Two and
one-half percent of the sums apportioned to a state for state planning
and research to be made available for a number of activities, including
freight planning.
2. Transportation planning (Title VI, Section 6001, subsection
5203(e)(4)). Metropolitan planning organizations (MPOs) are encouraged
to coordinate their planning processes with officials responsible for
other types of planning activities that are affected by transportation,
including freight.
3. Multistate corridor planning program (Title I, Section 1806(f)(1)).
States and other jurisdictions are encouraged to work together to
develop plans for multimodal and multijurisdictional transportation
decisionmaking and to prioritize multimodal planning studies.
Observation: Although these provisions are consistent with Intermodal
Surface Transportation Efficiency Act (ISTEA) and Transportation Equity
Act of the 21ST Century (TEA-21) in that they emphasize the importance
of freight transportation and continue the decentralized planning
approach, states and MPOs are best positioned to make decisions on
transportation planning and project selection; encouragement alone may
not be enough to overcome planning challenges.
4. State planning and research (Title I, Section 1503(i)(3)(A)). Not
less than 20 percent of the dedicated state planning and research funds
(2 ½ percent of the sums apportioned to a state for state planning and
research) to improve the collection and reporting of strategic surface
transportation data to provide critical information about the extent,
condition, use, performance, and financing of the nation's highways
(including intermodal connectors) for passenger and freight movement.
Observation: Requiring a set-aside may increase freight data collection
efforts, which may lead to an elevation of freight issues in the
planning process. Requiring a set-aside, however, may be viewed as an
unwelcome mandate that negatively affects the ability of states and
MPOs to address their unique transportation needs.
II. Financing:
1. Freight transportation gateways; freight intermodal connections
(Title I, Section 1205, subsection 325). Creates a new program that
adds state responsibilities and allows the use of Surface
Transportation Program (STP) and National Highway System (NHS) funds
for freight-related projects. (1) State responsibilities include
ensuring that intermodal freight transportation, trade facilitation,
and economic development needs are adequately addressed and fully
integrated into the project development process; designating a freight
transportation coordinator responsible for fostering public-and
private-sector collaboration needed to implement complex solutions to
freight transportation and freight transportation gateway problems; and
encouraging the adoption of innovative financing strategies for freight
transportation gateway improvements. (2) Allows states to obligate STP
funds for publicly owned intermodal freight transfer facilities, access
to such facilities, and operational improvements for such facilities.
(3) Requires a set-aside of NHS funds for NHS routes connecting to
intermodal freight terminals.
Observation: Since the STP funds are part of the state apportionment
and the provision is not requiring the use of the funds for freight-
related projects, freight transportation projects would still have to
compete with other projects in the planning process. While the
mandatory set-aside of NHS funds for intermodal connectors would
directly address the problems associated with NHS intermodal
connectors, it runs counter to the funding flexibility established in
ISTEA and TEA-21.
2. Transportation Infrastructure Finance and Innovation Act (TIFIA)
amendments (Title I, Section 1304). Modifies the TIFIA program by (1)
expanding the eligibility to include a public or private freight rail
facility, an intermodal freight transfer facility, access to such
facilities, and service improvements for such facilities; or grouping
of such projects with the common objective of improving the flow of
goods; (2) reducing the threshold from $100 million to $50 million; and
(3) revising the lines of credit clause by removing the requirement
that TIFIA lines of credit be drawn upon as a last resort.
Observation: (1) Adding "private freight rail facilities" would suggest
that rail lines would be eligible for TIFIA assistance. In such a case,
public funds could potentially be used for privately owned
infrastructure. The expanded definition would also allow for the
grouping of projects, which may enable smaller projects to be packaged
together to meet the eligibility project cost threshold requirement.
(2) Lowering the loan threshold would make many more projects eligible.
(3) Expanded use of TIFIA loans as a result of these changes could
heighten federal risks.
3. Private activity bonds (Title IX, Section 9004). Expands the
eligibility of private activities that can be financed with tax-exempt
private activity bonds to include surface freight transfer facilities,
defined as facilities for the transfer of freight from truck to rail or
rail to truck (including any temporary storage facilities directly
related to such transfers). The total amount of the bonds issued for
highway facilities and surface freight transfer facilities cannot
exceed $15 billion.
Observations: Expanding eligibility could encourage development of new
funding sources for freight projects by attracting private-sector
participation in such projects. However, expanded eligibility could
potentially result in higher costs to the taxpayers. Bonds can be more
expensive than grants because the governments have to compensate
private investors for the risks that they assume.
III. Nonbuild Tools:
1. Infrastructure Performance and Maintenance Program (Title I, Section
1201). Creates a new program intended for projects that would preserve,
maintain, or extend the life of existing highway infrastructure
elements or provide operational improvements, including traffic
management and intelligent transportation system (ITS) strategies and
limited capacity enhancements, at points of recurring highway
congestion.
2. Transportation planning (Title VI, Section 6001, Subsection
5203(g)(2)(C)). A transportation plan will be required to contain,
among other things, operational and management strategies to improve
the performance of existing transportation facilities to relieve
vehicular congestion and maximize the safety and mobility of people and
goods.
3. Transportation systems management and operations (Title I, Section
1701, subsection 165(b)(3)). Allows the Secretary of Transportation to
assist and cooperate with other departments and agencies to improve
regional collaboration and real-time information sharing; issue, if
necessary, new guidance or regulations for the procurement of
transportation system management and operations facilities equipment,
and services; and approve for federal financial assistance support for
regional operations collaboration and coordination activities that are
associated with regional improvements.
Observation: While these provisions allow for the use of these tools,
there is no explicit requirement to evaluate the effectiveness of the
tools to discern whether intended benefits have been achieved.
4. Intelligent Transportation Systems Performance Incentive Program
(Title I, Section 1703). In the area of ITS, the provision would allow
funds to be used for projects involving planning, deployment,
integration, and operation of ITS. The funding formula would be based
on the following criteria that reflect each state's (1) reductions in
delay due to incidents, (2) improvements in the operation and safety of
signalized intersections, (3) reductions in delay and improvements in
safety of work zones on the NHS, (4) improvements in the efficiency and
reliability of transit services, (5) overall improvement in integrated
regional transportation operations, (6) improvements in the quality and
availability of traveler information, (7) improved crash notification,
and (8) improvements in the safety and productivity of commercial
vehicle operations in the NHS.
Observation: Tying funding to performance outcomes increases the
likelihood that agencies will endeavor to improve performance.
5. Toll programs (Title I, Section 1615). The provision would allow a
state or public authority to toll any highway, bridge, or tunnel,
including facilities on the Interstate Highway System, to manage
existing high levels of congestion or reduce emissions in a
nonattainment area or maintenance area. The tolls must vary in price
according to time of day to manage congestion or improve air quality. A
state may also permit vehicles with fewer than two occupants to operate
in high-occupancy vehicle (HOV) lanes as part of a variable toll
pricing program.
6. Use of HOV lanes (Title I, Section 1610). Responsible agencies may
permit vehicles that do not satisfy the established occupancy
requirements to use an HOV facility only if they charge such vehicles a
toll. Any agency electing to toll such vehicles shall also (1)
establish a program that addresses how motorists can enroll and
participate; (2) develop, manage, and maintain a system that will
automatically collect the tolls that vehicles must pay; (3)
continuously monitor, evaluate, and report on performance; (4)
establish the policies and procedures for varying the toll that is
charged to manage the demand to use the subject facilities and enforce
violations; and (5) establish procedures that will limit or restrict
the use of such vehicles, as necessary, to ensure that the performance
of individual facilities or the entire system does not become seriously
degraded.
Observation: Pricing incentives such as these can enhance economic
efficiency by making users take into account the external costs they
impose on others.
[End of section]
Appendix III: Summary of Freight-related Recommendations Developed by
the Transportation Research Board:
I. Planning:
1. Department of Transportation (DOT) data and analysis programs.
Continued support should be given to the development of DOT
capabilities for economic analysis of the federal aid highway program
and federal highway user fees and to the application of this analysis
in support of decisions.
2. Evaluation methods. As one means of promoting more useful evaluation
at the federal and state levels, a clearinghouse devoted to evaluation
methods within DOT should be created where DOT program agencies and
local and state governments could share and compare methods and
examples of evaluations.
II. Financing:
1. Maintain and reinforce the principle of user financing by reforming
the structure of fees so that they more closely relate to costs each
highway user imposes.
2. Provide funding adequate to ensure that the states have resources to
maintain the overall performance of the highway system.
3. Programs in successor legislation should meet certain criteria. These
programs should (1) sustain the "user pays" principle, which involves
paying capital and operating costs from the revenues of fees charged to
the direct users of the facilities; (2) sustain the support of the
affected parties that the federal user fee financing system enjoys by
funding projects that fee payers recognize as having value to them; (3)
ensure that the market outcomes of competition between trucking and
other modes are in the public interest, primary reliance should be
placed on adjusting user fees rather than supply offsetting subsidies
to the competing modes; and (4) establish requirements for ongoing and
retrospective evaluation of the performance of the programs for federal
multimodal credit assistance programs.
4. DOT should study the costs and market potential of exclusive truck
facilities.
5. State and local governments should routinely conduct evaluations to
quantitatively test the economic rationale for government involvement
in their freight transportation infrastructure projects. Federal
programs should require such evaluations of projects receiving federal
assistance.
[End of section]
Appendix IV: Summary of the Freight-related Reauthorization Proposals
Developed by Stakeholders:
I. Proposals to Address Planning Barriers:
American Association of State Highway and Transportation Officials
proposed (1) the development of a freight planning capacity building
process jointly sponsored by Department of Transportation (DOT) and
American Association of State Highway and Transportation Officials
(AASHTO) wherein up to $10 million annually would be provided to
support an initiative through which DOT and the state DOTs would
jointly develop and implement a training and capacity-building program
to strengthen the ability of state and local transportation agencies to
effectively address freight transportation issues, (2) enacting an
increase in the Federal Highway Administration's (FHWA) research and
technology program allowing a greater emphasis on freight
transportation research and creating a Freight Transportation
Cooperative Research Program, and (3) creating a Freight Advisory Group
to communicate with one voice to DOT on freight transportation issues.
Local Officials for Transportation proposed (1) encouraging the
development of a seamless transportation system by connecting all modal
elements to ensure the efficient movement of people and goods and (2)
developing new approaches to help localities combat increasing urban
congestion.
Association of American Railroads proposed encouraging that freight
issues be given additional consideration in state and local
transportation planning.
American Trucking Associations proposed (1) producing a national
Freight Transportation Improvement Program (FTIP) that focuses on
transportation corridors with heavy freight usage relative to the
national economy and relative to regional populations and economic
activity;[Footnote 51] (2) establishing a Freight Advisory Board to
review and comment on the FTIP; (3) requiring that MPO governing boards
include representatives from the freight community; (4) setting aside a
portion of the MPO funds for the salaries and training of freight
planning specialists; (5) establishing a Freight Cooperative Research
Program; (6) establishing a discretionary program that provides
research grants to states, MPOs, multijurisdictional transportation
planning groups, and private-sector groups; and (7) funding and
supporting multimodal research programs that benefit and improve the
safety and productivity of the trucking industry, as well as fostering
innovative partnerships with the private sector.
Association of Metropolitan Planning Organizations proposed continuing
efforts in the area of goods movement data and setting regional
priorities.
American Public Transportation Association proposed a pilot program
that will identify the benefits of shared use of freight rail corridors
by freight and light rail. Although shared use is common in Europe,
Federal Railroad Association (FRA) has a number of regulatory
requirements that restrict this practice. The proposals called for
amending federal transit law to provide for this pilot program to be
carried out jointly by Federal Transit Administration (FTA) and FRA. It
would draw on European experience with shared use of freight rail
corridors to demonstrate that operations can be safe, effective, and
smooth. Separate funding would not be available for the program.
Instead, applicants would use existing resources to support it.
Conclusions drawn from the pilot program would be the basis for FRA to
revise its current regulatory framework.
II. Proposals to Address the Limitations with Existing Funding/Financing
Programs:
American Association of State Highway and Transportation Officials
proposed (1) the use of existing innovative finance tools and new
financing mechanisms for investments in freight transportation
infrastructure such as lowering the Transportation Infrastructure
Financing and Innovation Act (TIFIA) project dollar threshold,
expanding the eligibility of freight projects and relaxing repayment
requirements, allowing pooling of modal funds, expanding the state
infrastructure bank (SIB) program to all states, creating tax
incentives for freight rail and intermodal infrastructure investment,
and exploring the utility of a Transportation Finance Corporation as a
financing mechanism for freight projects; (2) tailoring existing and
proposed innovative financing techniques to make increased investment
in intermodal connectors possible in combination with increases in core
Transportation Equity Act for the 21ST Century (TEA-21) programs; (3)
focusing the National Corridor Planning and Development Program and the
Coordinated Border Infrastructure Program more tightly on freight
corridors and augmenting funding from the Highway Trust Fund with
innovative financing; (4) clarifying the eligibility of freight
projects for Congestion Mitigation and Air Quality (CMAQ) funding; (5)
increasing the funding for the highway rail grade crossing program
(section 130)[Footnote 52] proportionate to the increase in the overall
highway program; and (6) expanding and reforming the Rail
Revitalization and Improvement Funding Program (RRIF).
Association of American Railroads proposed (1) providing tax incentives
and tax-exempt financing to companies making investments in intermodal
freight infrastructure; (2) allowing funding of rail infrastructure
through the issuance of tax-exempt indebtedness, increasing the amount
of low-interest loans and loan guarantees available through the RRIF
program, and removing overly restrictive regulatory requirements that
have hindered program implementation; (3) increasing funding for the
section 130 grade crossing program and allowing funds to be spent on
maintenance activities; (4) increasing funding and clarifying freight
project eligibility for the CMAQ program; and (5) increasing funding
for the Corridors and Borders program and liberalizing project
eligibility criteria.
American Road and Transportation Builders Association proposed
increasing the amount of funding available nationally under TIFIA and
reducing the overly restrictive qualifications and criteria that
discourage expanded use of the tool.
American Trucking Associations proposed (1) ensuring that revenues are
dedicated to projects and programs that serve national economic,
safety, and research interests; (2) preventing further diversion of
highway user revenues to nonhighway projects; (3) creating new
innovative financing programs that allow states to fund extremely high-
cost highway projects designed to expedite the movement of freight; (4)
opposing the adoption of any new highway user fees on the trucking
industry or increases in existing user fees; (5) preventing further
diversion of highway user revenues to nonhighway freight projects; and
(6) dedicating adequate resources to the development of infrastructure
and human resources along the U.S. borders with Canada and Mexico in
order to meet the challenges associated with rapidly increasing trade
growth.
Association of Metropolitan Planning Organizations proposed (1)
promoting the use of innovative financing arrangements, through
providing more incentives, greater flexibility in regulations, and
removal of barriers to public-private joint development;[Footnote 53]
(2) giving additional assistance to metropolitan areas at major entry
ports and intermodal hubs; (3) using Highway Trust Fund or other
federal funding sources in excess of current authorizations to increase
program capacity to support the safe and efficient movement of goods in
corridors that are crucial to national economic security and vitality;
and (4) broadening the eligibility of freight project funding,
providing incentives to attract private investment, and allowing port
access and gateways to be eligible for the Corridors and Borders
programs.
III. Proposals That Would Allow for the Use of Nonbuild Tools:
American Road and Transportation Builders Association proposed
exploring new technologies to help meet system and mobility needs.
American Trucking Associations proposed elevating highway operations to
a level comparable to highway construction and maintenance with
comparable increases in funding for operations. As part of this
increased focus on operations, the DOT should continue to support and
fund research into improved highway operations.
Association of Metropolitan Planning Organizations proposed (1)
managing existing capacity better through traditional congestion
management techniques and ITS and (2) giving MPOs the responsibility
for determining which institution in their region should lead the
development of metropolitan-level management and operations plans.
Local Officials for Transportation proposed increasing funding for all
existing research and technology programs that directly benefit local
government.
U.S. Conference of Mayors proposed (1) suballocating surface
transportation funds to metropolitan areas for repair and maintenance
of existing urban highways while giving equal weight to other
transportation needs and (2) dedicating resources to combat increasing
metropolitan congestion through the expanded use of ITS technology.
[End of section]
Appendix V: Assessment of Stakeholder Proposals:
Stakeholder proposals vary considerably in the degree to which they
address the various elements of the strategies to address planning and
financing limitations. Table 6 shows the most extensive proposals that
have been made, together with our assessment of which elements of the
two strategies are present in the proposal. (In the table, a "Yes"
indicates whether the proposal addressed this element in some manner;
it does not indicate the nature or extent of the action.) As the table
shows, the broadest representation of these elements is contained in
the administration's surface transportation reauthorization proposal.
Collectively, the proposals touch on all of the elements of these
strategies, although no single proposal currently contains the breadth
of elements that will be needed to address the multidimensional
limitations inherent in the public planning process and in federal
funding/financing programs.
Table 6: Coverage of Strategy Elements in the Most Extensive
Reauthorization Proposals:
Reauthorization proposal: Administration's 2003 surface transportation
reauthorization proposal;
Elements of planning strategy: Coordination: Yes;
Elements of planning strategy: Private involvement: Yes;
Elements of planning strategy: Data and tools: Yes;
Elements of financing strategy: Expand eligibility: Yes;
Elements of financing strategy: Alternative finance: Yes;
Elements of financing strategy: Nonbuild tools: Yes.
Reauthorization proposal: Freight Stakeholders Coalition;
Elements of planning strategy: Coordination: Yes;
Elements of planning strategy: Private involvement: Yes;
Elements of planning strategy: Data and tools: No;
Elements of financing strategy: Expand eligibility: Yes;
Elements of financing strategy: Alternative finance: Yes;
Elements of financing strategy: Nonbuild tools: No.
Reauthorization proposal: American Association of State Highway and
Transportation Officials;
Elements of planning strategy: Coordination: No;
Elements of planning strategy: Private involvement: Yes;
Elements of planning strategy: Data and tools: No;
Elements of financing strategy: Expand eligibility: Yes;
Elements of financing strategy: Alternative finance: Yes;
Elements of financing strategy: Nonbuild tools: No.
Reauthorization proposal: Association of American Railroads;
Elements of planning strategy: Coordination: No;
Elements of planning strategy: Private involvement: No;
Elements of planning strategy: Data and tools: No;
Elements of financing strategy: Expand eligibility: Yes;
Elements of financing strategy: Alternative finance: Yes;
Elements of financing strategy: Nonbuild tools: No.
Reauthorization proposal: American Trucking Associations;
Elements of planning strategy: Coordination: Yes;
Elements of planning strategy: Private involvement: Yes;
Elements of planning strategy: Data and tools: No;
Elements of financing strategy: Expand eligibility: No;
Elements of financing strategy: Alternative finance: No;
Elements of financing strategy: Nonbuild tools: Yes.
Reauthorization proposal: Association of Metropolitan Planning
Organizations;
Elements of planning strategy: Coordination: No;
Elements of planning strategy: Private involvement: No;
Elements of planning strategy: Data and tools: Yes;
Elements of financing strategy: Expand eligibility: Yes;
Elements of financing strategy: Alternative finance: Yes;
Elements of financing strategy: Nonbuild tools: Yes.
Reauthorization proposal: American Road and Transportation Builders
Association;
Elements of planning strategy: Coordination: No;
Elements of planning strategy: Private involvement: No;
Elements of planning strategy: Data and tools: No;
Elements of financing strategy: Expand eligibility: No;
Elements of financing strategy: Alternative finance: Yes;
Elements of financing strategy: Nonbuild tools: Yes.
Source: GAO analysis of selected system stakeholder reauthorization
proposals.
[End of table]
[End of section]
Appendix VI: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
JayEtta Z. Hecker (202) 512-2834 Randall B. Williamson (206) 287-4860:
Staff Acknowledgments:
In addition to those individuals named above, Jack Burriesci, Jay
Cherlow, Tom Collis, Sarah Eckenrod, David Hudson, Elizabeth McNally,
Albert Schmidt, Sharon Silas, Stan Stenerson, and Stacey Thompson made
key contributions to this report.
(544058):
FOOTNOTES
[1] The six metropolitan areas are Charleston, SC; Seattle/Tacoma, WA;
Los Angeles/Long Beach, CA; San Francisco/Oakland, CA; Houston, TX; and
New Jersey/New York. Except for Charleston and Houston, each of the
areas has two ports. The percentage is based on the number of 20-foot
equivalent container units (TEUs), a standard measurement of container
volume.
[2] U.S. General Accounting Office, Surface and Maritime
Transportation: Developing Strategies for Enhancing Mobility: A
National Challenge, GAO-02-775 (Washington, D.C.: Aug. 30, 2002); U.S.
General Accounting Office, Marine Transportation: Federal Financing and
a Framework for Infrastructure Investments, GAO-02-1033 (Washington,
D.C.: Sept. 9, 2002); and U.S. General Accounting Office, U.S.
Infrastructure: Agencies' Approaches to Developing Investment
Estimates Vary, GAO-01-835 (Washington, D.C.: July 20, 2001).
[3] For the purposes of this report, intermodal freight transportation
refers to the transport of goods in containers that can be moved on
land by rail or truck and on water by ship or barge.
[4] Through various partnerships, the FAST Corridor is a project that
has identified solutions to problems where transportation systems meet
along the freight corridor between Everett and Tacoma.
[5] A portion of highway user revenues is dedicated to mass transit.
[6] According to information provided by the Port of Los Angeles,
slowdown of this cargo in the Los Angeles area can have an economic
ripple effect for the nation as a whole. For example, the Los Angeles
Economic Development Corporation released estimates as part of a study,
placing the total trade disruption cost at $6.28 billion. However, the
Bureau of Transportation Statistics notes that costs of the shutdown
have ranged from $1.67 billion to $19.4 billion, depending on the
provider of the estimate.
[7] Trucks include both single unit trucks (six tires or more) and
combination trucks (trailers and semitrailers).
[8] Delay times for passenger and freight are measured in average
annual peak-person hours of delay. Annual person-hours of delay is
equal to daily vehicle hours of incident plus recurring delay times 250
working days per year times 1.25 persons per vehicle.
[9] Texas Transportation Institute, The 2002 Urban Mobility Study,
http://mobility.tamu.edu, Texas A&M University (June 2003).
[10] These are port facilities located on land, such as terminals
including warehouses, storage facilities, and intermodal connectors.
[11] The NHS is approximately 160,000 miles of roadway including the
Interstate Highway System, as well as other roads important to the
nation's economy, defense, and mobility. The Department of
Transportation (DOT), in cooperation with the states, local officials,
and metropolitan planning organizations developed the NHS.
[12] U.S. Department of Transportation, Federal Highway Administration,
The Role of the National Highway System Connectors: Industry Context
and Issues (Washington, D.C.: February 1999).
[13] U.S. Department of Transportation, NHS Intermodal Freight
Connectors: A Report to Congress (Washington, D.C.: July 2000).
[14] Michael E. O'Hanlon et al., Protecting the American Homeland: A
Preliminary Analysis (Washington, D.C.: Brookings Institution Press,
2002).
[15] Transportation Research Board, Special Report 270: Deterrence,
Protection, and Preparation: The New Transportation Security Imperative
(Washington, D.C.: 2002).
[16] Previous GAO studies on this issue include U.S. General Accounting
Office, Transportation Security: Federal Action Needed to Enhance
Security Efforts, GAO-03-1154T (Washington, D.C.: Sept. 9, 2003); U.S.
General Accounting Office, Aviation Security: Progress Since September
11, 2001, and the Challenges Ahead, GAO-03-1150T (Washington, D.C.:
Sept. 9, 2003); and U.S. General Accounting Office, Maritime Security:
Progress Made in Implementing Maritime Security Act, but Concerns
Remain, GAO-03-1155T (Washington, D.C.: Sept. 9, 2003).
[17] Federal Highway Administration, Office of Freight Management and
Operations, Freight Financing Options for National Freight Productivity
(Washington, D.C.: April 2001) and Federal Highway Administration,
Addressing Freight in the Transportation Planning Process (Washington,
D.C.: October 2001).
[18] Federal law requires the creation of MPOs for any urbanized area
with a population greater than 50,000. Composed of representatives from
local government and transportation authorities, MPOs are charged with
developing a comprehensive metropolitan long-range transportation plan
and transportation improvement program that consider other interests in
the planning process through cooperative partnerships with
stakeholders. MPOs receive federal funding in addition to other sources
to conduct their operations.
[19] Federal Highway Administration, Addressing Freight in the
Transportation Planning Process (Washington, D.C.: October 2001) and
Federal Highway Administration, Office of Freight Management and
Operations, Freight Financing Options for National Freight Productivity
(Washington, D.C.: April 2001).
[20] Federal Highway Administration, Office of Freight Management and
Operations, Freight Financing Options for National Freight Productivity
(Washington, D.C.: April 2001) and Federal Highway Administration,
Addressing Freight in the Transportation Planning Process (Washington,
D.C.: October 2001).
[21] Transportation Research Board, Special Report 271: Freight
Capacity for the 21ST Century (Washington, D.C.: 2002); Transportation
Research Board, Special Report 252: Policy Options for Intermodal
Freight Transportation (Washington, D.C.: 1998); and GAO-02-775.
[22] U.S. General Accounting Office, Executive Guide: Leading Practices
in Capital Decision-Making, GAO/AIMD-99-32 (Washington, D.C.: December
1998).
[23] Federal Highway Administration, Addressing Freight in the
Transportation Planning Process (Washington, D.C.: October 2001).
[24] Transportation Research Board, Special Report 252: Policy Options
for Intermodal Freight Transportation (Washington, D.C.: 1998) and
Transportation Research Board, Special Report 271: Freight Capacity for
the 21ST Century (Washington, D.C.: 2002).
[25] This process involves solicitation of freight projects from
potential public agency sponsors that are then screened, ranked, and
then jointly advanced for state and federal funding partnerships
(together with local, port, and railroad funds). Within this process, a
project-level, weighted point system is used, in combination with a
documented team review of all applications, that includes potential
funding sources and a project narrative that includes looking at
reduced delays, cost effectiveness, and cost alternatives. Once
advanced to the state, the Freight Mobility Strategic Investment Board
(FMSIB) reviews projects to be put forward as part of a statewide list
to the legislature for project selection and funding.
[26] Freight Planning Support System, Final Summary Report (New Jersey
Institute of Technology, July 2003).
[27] For example, ISTEA and TEA-21 require the Department of
Transportation, through the FHWA and FTA, to review and certify that
all metropolitan areas with a population of 200,000 or more meet
certain transportation planning requirements, including developing a
Congestion Management System (CMS). Some transportation officials said
more detailed guidance was needed on how to implement a CMS that meets
specific requirements.
[28] When MPOs make infrastructure decisions based on the mode eligible
for federal funding, this can potentially result in greater funding for
one mode over another.
[29] U.S. Department of Transportation, Federal Highway Administration,
Office of Freight Management and Operations, Transportation Policy:
Evolution of Federal Freight Transportation Policy (Washington, D.C.:
2001).
[30] U.S. Department of Transportation, Federal Highway Administration,
Freight Financing Options for National Freight Productivity
(Washington, D.C.: April 2001).
[31] EPA uses six criteria pollutants as indicators of air quality.
When an area does not meet the air quality standard for one of the
criteria pollutants, it may be designated as a nonattainment area.
[32] GAO-02-775, GAO-02-1033, Transportation Research Board, Special
Report 252: Policy Options for Intermodal Freight Transportation
(Washington, D.C.: 1998) and Transportation Research Board, Special
Report 271: Freight Capacity for the 21ST Century (Washington, D.C.:
2002).
[33] National stakeholders include the Freight Stakeholders Coalition,
the American Association of State Highway and Transportation Officials,
Local Officials for Transportation, Association of American Railroads,
American Trucking Associations, Association of Metropolitan Planning
Organizations, American Road and Transportation Builders Association,
and U.S. Conference of Mayors.
[34] GAO-02-775.
[35] Title VI, Section 6001, subsection 5203(e)(4).
[36] Title I, Section 1806(f)(1).
[37] The Freight Stakeholders Coalition is composed of the American
Association of Port Authorities, the American Trucking Associations,
the Association of American Railroads, the Coalition for America's
Gateways and Trade Corridors, the Intermodal Association of North
America, the National Association of Manufacturers, the National
Industrial Transportation League, the U.S. Chamber of Commerce, and the
World Shipping Council.
[38] Title I, section 1205.
[39] Title I, Section 1503(i)(3)(A).
[40] Speech made by the Comptroller General of the United States on
September 17, 2003 entitled "Truth and Transparency: The Federal
Government's Financial Condition and Fiscal Outlook."
[41] Transportation Research Board, Special Report 252: Policy Options
for Intermodal Freight Transportation (Washington, D.C.: 1998) and
Transportation Research Board, Special Report 271: Freight Capacity for
the 21ST Century (Washington, D.C.: 2002).
[42] According to TRB, public support for freight infrastructure
projects is appropriate if a project possesses certain characteristics,
such as (1) reducing external costs of transportation, (2) producing
external economic development benefits, (3) providing offsetting
subsidies, (4) meeting a national defense need, and/or (5) is an
established government responsibility.
[43] Transportation Research Board, Special Report 252: Policy Options
for Intermodal Freight Transportation (Washington, D.C.: 1998).
[44] Title IX, Section 9004.
[45] GAO-02-1126T.
[46] Reason Foundation, Toll Truckways: A New Path Toward Safer and
More Efficient Freight Transportation (Washington, D.C.: June 2002).
[47] GAO-03-735T.
[48] Tolling for congestion pricing, discussed earlier as an
alternative financing approach, is another nonbuild alternative.
Congestion pricing can spread out demand on existing infrastructure,
thereby reducing congestion and expanding system capacity.
[49] Transportation Research Board, Special Report 271: Freight
Capacity for the 21ST Century (Washington, D.C.: 2002); Transportation
Research Board, Special Report 252: Policy Options for Intermodal
Freight Transportation (Washington, D.C.: 1998); and GAO-02-775.
[50] The Brookings Institution, Improving Metropolitan Decision Making
in Transportation: Greater Funding and Devolution for Greater
Accountability (Washington, D.C.: October 2003).
[51] The American Trucking Associations proposed that the purpose of
the FTIP is to identify corridors that are currently deficient or are
likely to become deficient given projected freight transportation
demands and specific local system bottlenecks, including deficient
intermodal connectors.
[52] Section 130 is a program to enhance safety at highway-rail grade
crossings on public highways.
[53] The Association of Metropolitan Planning Organizations provides
the following specific changes that should be considered: increasing
direct federal capitalization of infrastructure banks, making changes
to tax-exempt bond finance restrictions, removing barriers to public-
private joint development, and broadening eligibility rules and
relaxing thresholds on innovative financing tools already available.
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