MANAGEMENT'S DISCUSSION AND ANALYSIS
Secretary Mary E. Peters is committed to ensuring that our transportation system remains safe, secure, and efficient and that it serves as the engine that drives our Nation's economy. Because economic activity and global trade are increasing, our roads, railways, pipelines, public transit systems, airways, and waterways are experiencing increasing growth in demand.
This Administration is working to ensure that our transportation system has the capacity to accommodate the needs of a growing and prosperous America. Below, we present the highlights of our fiscal year (FY) 2007 results in our five strategic areas: safety, mobility, global connectivity, environmental stewardship and security. We also present our internal organizational achievements that enhance DOT's performance as a results-driven Federal agency.
Transportation makes possible the movement of people and goods fueling our economy and improving our quality of life. Development of transportation systems has become a major determinant of a nation's economic success. At the same time, transportation exposes us to the risk of harm. While we have made progress in making all modes of transportation safer, the Department's top priority and central focus remains improving safety. All modes of transportation have a share in achieving our strategic safety goal: Enhance public health and safety by working toward the elimination of transportation-related deaths and injuries.
The number of people who died on the Nation's roads fell last year, leading to the lowest highway fatality rate ever recorded and the largest drop in total deaths in 15 years. In 2006, 42,642 people died in traffic crashes, a drop of 868 deaths compared to 2005. This two percent decline in traffic deaths contributed to the historic low fatality rate of 1.42 fatalities per 100 million vehicle miles traveled (VMT). This decline is the largest in terms of both number and percentage since 1992. Preliminary 2007 data indicates that the fatality rate will decrease to 1.40 fatalities per 100 million VMT. DOT is firmly committed to meeting the Department's longstanding overall highway fatality rate goal of 1.0 fatalities per 100 million VMT by 2011. New performance targets have been established in key areas that encompass all areas of motor vehicle crashes. This will enable the Department's efforts to focus on the critical areas responsible for the slow rate of decline in the overall highway fatality rate, stagnant impaired driving fatalities, and ever increasing motorcycle rider fatalities. These key focus areas include passenger vehicle occupants, non-occupants (pedestrians, cyclists, etc.), motorcycle riders, and large trucks and buses. They were chosen in part to cover the breadth of all road users. The Department will begin to report on these focus areas in the FY 2008 PAR.
In response to the tragic collapse of the I-35W Bridge in Minneapolis, MN, FHWA issued two technical advisories. The first strongly encouraged States to re-inspect all steel deck truss bridges and to follow-up on any critical findings, and the second advised States to ensure that the construction equipment loads and stockpiled raw materials placed on a structure do not overload its members. The Department understands that future National Transportation Safety Board findings along with a program audit by the DOT Office of Inspector General may result in additional recommended improvements to the FHWA Bridge program.
Wisconsin Department of Transportation bridge inspectors Jim Kast, right, and Matt Murphy inspect the support structure of the Highway 51 bridge over the Rock River, just south of Edgerton, Wis., Wednesday, Aug. 8, 2007. The structure, one of about 16 deck truss bridges in the state, is generally similar to the Interstate 35W bridge that collapsed in Minnesota on August 1, 2007. This bridge was scheduled for a regular inspection next month but the special inspection is considered a precautionary measure. (AP Photo/The Gazette, Bill Olmsted)
Although FAA did not meet its commercial aviation safety measure, this remains one of the safest periods in aviation history for both commercial and general aviation. Over the last five years, nearly three billion airline passengers reached their destination safely. As the stewards of aviation safety in the U.S., FAA and its industry partners have built a system that operates nearly 32,000 scheduled commercial flights daily and has reduced the risks of flying to all-time lows. FAA's efforts during the past ten years have also resulted in reduced general aviation fatal accidents and Alaska fatal accidents. Both measures are at their lowest recorded levels in history.
Rail and transit safety continue to meet their safety targets. Based on preliminary estimates, DOT expects to better the FY 2007 target of 16.70 rail-related accidents/incidents per million train miles, limiting accidents/incidents to 15.03 per million train miles. Much of FRA's success can be attributed to its use of data and sophisticated technologies to more effectively and efficiently alert and direct FRA safety inspectors and other resources to potential track safety anomalies. This advanced notice enables FRA resources to proactively manage safety concerns. Additionally, FRA has built substantial partnerships with State and local agencies to address accidents and casualties at highway-rail grade crossings and from trespassing. Although the transit fatality rate increased slightly in FY 2007, safety performance continues to meet expectations. The transit fatality rate increased from 0.344 fatalities per 100 million passenger miles traveled in FY 2006 to 0.378 in FY 2007. Strong growth in transit ridership and the continued expansion of transit service significantly increased the number of transit passenger miles in FY 2007 over FY 2006.
A Union Pacific freight train crosses an intersection in Pine Bluffs, Wyoming, Tuesday, April 10 2007. A freight train traveling at top speed often needs a mile or more to stop after applying its brakes. The train was carrying about 150 passengers who had signed up for a presentation on train safety that was given during the ride. (AP Photo/The Wyoming Tribune Eagle, Gregory Hoenig)
The Department continues its effort to lower the number of serious incidents-those presenting the greatest risk to people-from the transportation of hazardous materials across all modes of transportation. Overall, we have cut the risk by about one third over the past twenty years.
Historically, the mobility that transportation provides has helped define us as a people and as a Nation. Our ability to travel from place to place allows us to connect with other people, work, school, and marketplaces throughout the United States and around the world. In partnerships with the States and private transportation providers, we have made continuous improvements in mobility as stated in our strategic goal: Advance accessible, efficient, intermodal transportation for the movement of people and goods. Highlights of our results are presented below.
Over two million people a day travel on our Nation's airlines and more than one-third of the value of all goods is moved by air. Air travel exceeded pre-9/11 levels in FY 2006, and is on track to reach more than one billion passengers by 2015. This increased passenger traffic along with adverse weather conditions resulted in the flying public experiencing increased delays in their travel plans during FY 2007. Not surprising, the FAA fell short of the FY 2007 on-time target of 87.40 percent, achieving a rate of only 86.50 percent. To manage the increased air traffic, FAA continued to focus on easing congestion in seven metropolitan areas; improving overall capacity at the Nation's top 35 airports; building new runways; and increasing traffic coordination and communication by using new technologies. Airspace redesign is one of the key components in optimizing the U.S. airspace and allowing for increased capacity. To help reduce delays and create more efficient routings, significant changes were made to crowded en-route and terminal airspace in Atlanta, Southern California, and the Cincinnati/Northern Kentucky International Airport. In addition, a new runway at Boston-Logan International Airport and a relocated runway at Los Angeles International Airport opened during FY 2007.
An airline passenger watches for flight delays on monitors at LaGuardia Airport in New York, Friday, June 8, 2007. U.S. airline delays are at their highest level in at least 13 years, and analysts say fliers can expect continued delays. The Department of Transportation on Monday, Aug. 6, 2007 said the industry's on-time performance in the first six months of the year was its worst since 1995, the earliest period for which the agency has comparable data. In June, nearly a third of domestic flights on major U.S. airlines were late. (AP Photo/Frank Franklin II, File)
Mobility and accessible transportation go hand-in-hand. For our aging population and for persons with disabilities, we must be proactive to ensure their mobility and access to transportation, now and in the future. For FY 2007, DOT met one of its two performance targets measuring compliance with the Americans with Disabilities Act (ADA). An estimated 97 percent of bus fleets continue to be ADA compliant either being lift-equipped or having low floors to accommodate wheelchairs and people with limited mobility. However, it is estimated that only 92.3 percent of key rail stations are ADA compliant, slightly missing the FY 2007 target of 93 percent. FTA is developing an action plan and working with station operators to address this issue.
The pavement condition on the Nation's highways improved in FY 2007, but not enough to meet the Department's performance target. The estimated percentage of travel on the National Highway System exhibiting “good”-rated ride quality was 55 percent, missing the target by 1.0 percent. FHWA has found that more improvement is needed in key States that have the most influence on the nationwide results in order to meet the ride quality standard.
Congested travel was below the target level with a projection of 31.8 percent for urban-area travel occurring in congested conditions. The results from 2004 to 2006 suggest that the overall rate of growth nationwide in traffic congestion appears to be slowing. However, traffic congestion is still a significant problem, particularly in urban areas. The FHWA continued to promote operational and technological solutions to provide traveler information, improve traffic incident management, enhance mobility in the vicinity of work zones, improve traffic signal timing, and relieve traffic congestion at bottlenecks.
Congested traffic fills New York's Park Avenue, Thursday June 7, 2007. New York Mayor Michael Bloomberg's plan to ease Manhattan traffic through congestion pricing got a boost from U.S. Secretary of Transportation Mary Peters, who announced that New York was one of five metropolitan areas across the country selected to participate in the Urban Partnerships Program - a new Federal initiative that provides funding to fight traffic gridlock. (AP Photo/Richard Drew)
DOT selected five metropolitan areas across the country as the first communities to participate in a new federal initiative to fight traffic gridlock. The Department's Urban Partnership program aims to reduce traffic congestion using approaches like congestion pricing, transit, tolling, and teleworking. Funding has been provided to the cities of Miami, Minneapolis, New York City, San Francisco, and the Seattle area (King County) to implement transportation solutions that take advantage of new technologies to keep traffic moving, and promote flexible work schedules and telecommuting to ease traditional rush hours.
Transportation systems within and among nations are lifelines to economic growth, less restricted trade, and greater cultural exchange. A domestic and international intermodal approach is central to DOT's role in promoting global connectivity. Our strategies to address transportation in the global economy have two prongs. One is directed toward opening international transportation markets and the other is directed toward the improvement of essential, intermodal transportation linkages.
Supporting economic growth is a fundamental purpose of our transportation network. Transportation facilitates distribution of goods and creates economic value for the producer. Our strategic goal: Facilitate a more efficient domestic and global transportation system that enables economic growth and development, concerns the efficiency of transportation, an important part of our competitive edge in global trade.
In an effort to provide greater access to international transportation markets and assure a minimum standard of safety within those markets, the Department conducts negotiations for open skies agreements, enters into open skies agreements, and enters into Bilateral Aviation Safety Agreements once the open skies agreement is in place.
On April 30, 2007, after more than four years of negotiations, the United States and the European Union (EU) achieved a historic pact on Open Skies. Beginning on March 30, 2008, the agreement will deregulate air traffic on both sides of the Atlantic, a market that represents about 60 percent of international travel. The Agreement would replace existing bilateral agreements between the United States and EU member states and establish an Open Skies Plus framework between the United States and all 27 EU member states. As a result of newly implemented open skies agreements, DOT increased the number of potential air transportation customers to 3.83 billion, a 27 percent increase over FY 2006. Open skies agreements have made it possible for the airline industry to provide the opportunity for better quality, lower priced, and more competitive air service in thousands of international city-pairs to an increasing portion of the world's population.
Bilateral Aviation Safety Agreements (BASA) promotes aviation safety and environmental quality, enhances cooperation, and increases efficiency in civil aviation safety matters. These agreements improve global understanding of U.S. safety regulations, processes, and procedures, which leads to better international regulatory oversight. In FY 2007, FAA achieved its performance target, negotiating agreements with Singapore, Japan, and Mexico.
The Saint Lawrence Seaway is the international shipping gateway to the Great Lakes, with almost 50 percent of Seaway traffic traveling to and from overseas ports, especially in Europe, the Middle East and Africa. The Great Lakes Seaway System offers access and competitive costs with other routes and modes to the interior of the country, so it is critical that the locks maintained by the Saint Lawrence Seaway Development Corporation (SLSDC) be open and navigable continuously during the navigation season. Once again SLSDC met its target, making the Seaway available for shipping 99.4 percent of the season.
While transportation ties us together as a Nation, it can also produce unwanted side effects such as air and water pollution, the loss of ecosystems and disruption of communities. Americans want solutions to transportation problems that are consistent with sound environmental planning. DOT is committed to avoiding or mitigating the adverse environmental effects that can accompany transportation as stated in our strategic goal: Promote transportation solutions that enhance communities and protect the natural and built environment. Highlights of our results follow.
For the second year in a row, the number of areas in a transportation emissions conformity lapse was well below the target. During 2002 when this measure was adopted, approximately six areas were in conformity lapse in any given month. A number of changes to the conformity provisions were implemented in 2005 to streamline and provide more flexibility to the conformity process. The number of areas in a lapse was zero at the end of FY 2006, lowering the 12-month moving average number of areas in a conformity lapse to 1.3. In FY 2007, we sustained this effort and lowered the number of areas in a lapse to zero.
The Maritime Administration (MARAD) has more than 115 obsolete and deteriorating ships awaiting disposal that pose potentially costly environmental threats to the waterways near where they are stored. In FY 2007, MARAD removed 25 obsolete ships from the three fleet sites, twelve more than the 2007 target. All of the removals were the result of dismantling/recycling contracts with domestic ship disposal companies. Depending on the characteristics of each vessel and the capability of each contractor, it may take from several months to over a year to dismantle a ship once it has arrived at a disposal facility, In 2007, dismantling was completed on 18 ships, exceeding the target by three ships. These ships were removed from the fleet sites during the current and preceding fiscal years.
We continue to drive down the potentially harmful releases of hazardous liquids from pipelines. We are projecting that we will beat the target for FY 2007 by up to 50 percent. We believe that the improved performance over the past two years reflects the success of our integrity management program-pipeline operators are finding and fixing defects before they become failures.
Our transportation system must remain a vital link for maintaining the country's economy, supporting civilian emergency response and mobilizing our armed forces for military contingencies. Examples of our achievements under our strategic goal: Balance homeland and national security transportation requirements with the mobility needs of the Nation for personal travel and commerce, are described below.
The Department of Defense (DOD) relies on the U.S. commercial transportation industry as well as government-owned ships to deliver equipment and supplies throughout the world in order to maximize defense logistics capabilities and minimize cost. In addition to the availability of commercial U.S.-flag vessels, MARAD has 44 government-owned Ready Reserve Force vessels available to satisfy DOD's surge sealift requirements, a decrease of four vessels from FY 2006. MARAD, in conjunction with DOD, also negotiates an agreement with each DOD-designated commercial strategic port specifying which facilities will be needed to conduct a military deployment. These ports are expected to make their facilities available to the military within 48 hours of written notice. DOT met both the shipping capacity performance target of 94 percent availability within mobilization timelines, and achieved 100 percent readiness within established timelines for its target for commercial strategic port availability.
DOT's Inspector General Calvin L. Scovell III released the annual report on the Department's consolidated financial statements, for which we were issued an unqualified audit opinion. Consolidated financial statements show how the Department is accountable for budgetary resources, provided by American taxpayers for Federal transportation activities. Individual audits were also conducted for the Aviation and Highway Trust Funds, which both received unqualified opinions.
Secretary Peters' management strategy for achieving organizational improvement includes full implementation of the President's Management Agenda (PMA). The PMA contains five core, mutually reinforcing initiatives that the DOT team is integrating into its corporate culture in striving for continuous management improvement. The five core PMA initiatives are in the areas of strategic management of human capital, competitive sourcing, financial performance, performance improvement, and e-government. Our latest ratings from the Office of Management and Budget concerning the status of each core initiative resulted in the Department receiving two “green” ratings; two “yellow” ratings; and one “red” rating.