Written
Submission of
Michael P. Huerta
Senior Vice President and Managing Director
ACS State &
Local Solutions
On
Behalf of
The Coalition for America’s Gateways and Trade Corridors
Before
Subcommittee on Surface Transportation and Merchant Marine
Committee on Commerce, Science and Transportation
And
Subcommittee on Transportation, Infrastructure and Nuclear
Safety
Committee on Environment and Public Works
Unites States Senate
on
Freight Transportation and Intermodal Connections
September
9, 2002
The Coalition
The
Coalition for America’s Gateways and Trade Corridors is an intermodal
organization comprised of more than 22 groups.
The Coalition’s sole interest is
to encourage adequate federal investment in our nation’s intermodal freight
infrastructure and technology to ensure safe, efficient and cost effective
goods movement.
Borders and
Corridors Programs Overview
Recognizing the
unprecedented demands international trade is placing on our nation’s
transportation infrastructure, and bringing a clearer focus on needed freight
transportation and intermodal connector projects, Congress established the
National Corridor Planning and Development Program (NCPD) and the Coordinated
Border Infrastructure Program (CBI) often referred to as the Borders and
Corridors Program. Section 1118 and
1119 of the Transportation Equity Act for the 21st Century (TEA-21)
provided $140 million annually through a discretionary grant program
administered by the Federal Highway Administration’s (FHWA) Office of Freight Management
& Operations to fund planning, development, construction and operation of projects
that serve border regions near Mexico and Canada and high priority corridors
throughout the United States.
The
Coalition believes that current Borders and Corridors Programs have fallen
short of the intended goals when these programs were established for two
reasons.
First,
the programs included in the TEA-21 Conference Report were funded at levels far
less than necessary to meet freight transportation and intermodal connector
needs. As witness to that, since the beginning of the programs, funding requests
from states and Metropolitan Planning Organizations (MPOs) have exceeded
available funds by a ratio of 15:1.
Second,
programs were extensively earmarked in the annual appropriations process. In fact, in the transportation
appropriations bill for FY ’02 these programs were earmarked for specific
projects at more than twice the authorized funding level, causing the FHWA to
decline taking grant applications for that year. As a result, funds have not always been allocated to projects
with the greatest national significance to the movement of freight.
Reauthorization
With respect to the reauthorization of TEA-21, the
Coalition strongly recommends the programs be continued, but bolstered to
ensure the original goals are met. With respect to modification, the Coalition
respectfully commends several recommendations to the Committee for
consideration.
·
To meet the high level
of demand, funding for the Borders and Corridors Program must be increased to not
less than $ 2 billion annually.
· The
distribution of funds should be freight specific, and there should be a
qualification threshold based on freight volumes and freight-related congestion
to ensure limited dollars reach high-volume corridors/borders/gateways.
· Under current
law, only states or MPOs are eligible to apply for funding under the Borders
and Corridors Programs. It is
recommended that the designation of entities eligible to apply for Program
funding be expanded to include other public and quasi-public organizations.
· The programs should be redefined to address the needs
of all trade gateways, not only land borders, and gateway connected trade
corridors. Many gateways that handle
high volumes of freight are not eligible for funding because they may not be “borders.” For example, while Illinois is not a “border state,” one-third of the nation's freight passes through Chicago and it is the largest intermodal
hub in the nation. Similarly, inland ports
are also important gateways that enable the efficient movement of goods
throughout the country.
· The designated “high
priority” corridors eligible for funding under the Corridors Program need to be
reexamined to ensure freight intensive areas can apply for funding. Currently, there are many important projects
in need of funding that do not fall in one of the 43 priority corridors
designated under TEA-21. Highest
priority should be given to corridors that move goods to and from trade gateways.
Overall Needs
International
trade is the key to America’s economic future.
Imports and exports, which fuel our economy, are doubling every ten
years. At the same time, freight
traffic within the United States’ borders will increase 100 percent by
2020. In 1970, foreign trade was 10.8
percent of U.S. gross domestic product (GDP).
By 2000, it grew to more than 26% of the GDP.
This
growth trend is expected to continue in all modes of transportation. In the next 20 years, foreign trade moving
through American ports is expected to increase by 187 percent, while
containerized cargo will experience an explosive 350 percent increase. In response to the overwhelming growth in
trade, truck traffic will increase by 200 billion vehicle miles and rail
freight shipments are projected to grow by 1 billion tons.
Rapidly
accelerating trade combined with domestic growth have created a $10 trillion
U.S. commodity flow that produced millions of new job opportunities and a
higher standard of living for Americans.
These
benefits will only last as long as we keep the freight moving.
While
so far freight carriers have done a good job keeping goods moving, in coming
years, better, smarter and more truck, rail and intermodal gateway
infrastructure will be needed to keep the traffic from stalling in
gridlock. Even today, congestion and
heavy volume often impede access to major freight terminals. Near dock rail capacity requires significant
expansion and capital investment.
Unfortunately,
too small a portion of TEA-21 is devoted to freight-related intermodal
projects. Meanwhile, intermodal
connectors currently have up to twice as many engineering deficiencies and
pavement deteriorations as National Highway System non-Interstate routes. While the current port and trade corridor system
is pressed to accommodate the current traffic levels, demands on it are
expected to double by 2020.
The
large burden placed on our freight transportation system has only been
exacerbated by increased security concerns since September 11. Intermodal freight infrastructure is
critical to national defense.
Thirty-eight thousand miles of the interconnected civilian rail system –
vital for carrying heavy, oversized equipment and weapons systems – links some
170 strategic defense installations to seaports for military deployment.
Ports
and their connectors have always been the point of embarkation for defense
materiel, and this role is even more important as our global strategy
emphasizes flexible response. Highway
connectors play a vital role in the rapid mobilization of personnel and
materiel toward points of deployment.
Value of
Investment/Cost of Neglect
Investing
in transportation yields economic paybacks for all corners of the country. Every dollar invested in the highway system
yields $5.70 in economic benefits to the nation. U.S. freight railroads contribute over $14 billion a year to the
economy in wages and benefits to about 200,000 employees and billions in
purchases from supplies. And, U.S.
ports generate 13 million jobs, contribute $743 billion to the GDP and supply
$200 billion in federal, state and local taxes.
Ignoring
these problems will cost our nation in numerous ways. Growing freight congestion puts our economic growth in peril by
creating costly delays for manufacturing, putting a drag on job creation and
undermining our ability to compete in the increasingly important global
market. Highway congestion alone costs
the U.S economy $78 billion annually, while also contributing to air pollution
and other environmental concerns. In
addition, delays at canal locks nationwide totally some 550,000 hours annually,
representing an estimated $385 million in increased operating cost borne by
shippers, carriers and, ultimately, consumers.
As
you are all probably aware, the Alameda Corridor recently opened in Southern
California. We believe this public-private
project exemplifies the type needed throughout the country. While at first glance this may seem to be
only a rail project, it will also facilitate more efficient truck, ship and
rail movement. The benefits from moving
freight in and out of our nation’s busiest ports faster will not only be felt
in Southern California, but will stretch across the rest of the country. The goods that move through the ports of Long
Beach and Los Angeles represent $97.3 billion in U.S. trade, support 2,121,500
jobs nationwide and deliver $4.51 billion in state and local taxes throughout
the country.
There
are many other projects, similar to the Alameda Corridor that still need funding. Here are a few of examples drawn from our
members:
·
To facilitate goods movement San Bernardino County,
California needs $383.3 million and Riverside County, California needs $926.7
million.
·
For infrastructure improvements Washington State needs
$183.8 million.
·
The Gateways Cities Council of Governments in California alone
needs $4 billion for improvements for goods movement and freight related
congestion.
These are just a few examples of tremendous
need for intermodal infrastructure improvements.
Recommendation
Detail
In
response to these problems, the Coalition for America’s Gateways and Trade
Corridors is asking Congress to:
1. Increase Funding for Freight Mobility
Funding needs for freight mobility are large, and
will be met in a variety of ways. It is
estimated that some 25 percent of the general highway expenditures go to the
benefit of freight movement. Special programs to encourage public-private
partnerships will be a key element as well. Given the need for major, targeted
investments that meet national needs, but are built by regional, state and
local entities, there needs to be a targeted program to encourage and support
these projects.
A
minimum of $2 billion per year for the Borders and Corridors Programs is required
immediately to support designated programs for freight technology and
infrastructure, such as intermodal connectors. This amount could productively
be doubled as projects move out of design and into construction in the next
reauthorization period.
Since
the beginning of the program, funding requests from states and MPOs have
exceeded available funds by a ratio of 15:1. Much of this funding has gone to
the planning, design and engineering of future projects. There is clearly large unmet demand for
funding and a growing backlog of projects that are “ready to go.” The U.S. Department of Transportation
projects that the volume of freight movements in the U.S. will double over the
next 20 years. As a result, demands for
infrastructure project funding will increase ever further.
2. Utilize Creative Funding Approaches
To
provide the level of funding required, Congress should actively explore a
variety of funding approaches including the possibility of utilizing general
funds. Available funds under the
current Borders and Corridors Programs should be increased to support
freight-related intermodal projects, especially projects that aim to reduce
greenhouse gases.
Attention
should also be focused on restructuring and expanding Federal loan and loan
guarantee mechanisms to provide grants and long-term credit for intermodal and
intermodal connector projects. The program should create incentives for state
and local actions taken in support of freight movement projects that are
designated under a national program.
3. Establish
Freight Mobility as a Central Element in National Transportation Policy and a Key
Factor in State and Local Planning
Establishing
and maintaining freight mobility as a high national priority must be
articulated and reinforced in a variety of ways. Through public pronouncements
and policy documents both Congress and the Administration need continually to
underscore the importance of freight transportation and the urgency of
increasing the capacity and efficiency of our national system.
The
Coalition is a member of the Freight Stakeholders Coalition and supports the
principles outlined in testimony presented by that organization, which not only
call for greater funding but also better freight data and planning.
Freight
mobility needs to be given higher priority as an element in state and local
transportation planning. Strong
relationships exist between the Departments of Transportation and Defense, but
these relationships need updating to align them with today’s priorities.
Congress
should create a National Council on Freight Mobility (including community
mitigation) with strong representation from both shippers and carriers, as well
as affected communities and other stakeholders, to advise the Secretary of
Transportation.
The
Council would provide advice and counsel on:
- Overall freight infrastructure
expansion strategy
- Developing trends and technology in
freight movement
- Determining public interest in freight
infrastructure projects
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