“Facilitate an international transportation system that promotes economic growth and development”
International trade in transportation goods and services plays an important role in the Nation’s economic well-being. In 2004, the U.S. traded $329.9 billion in transportation goods and $133.5 billion in transportation services. Over 1.9 billion tons of international freight, valued at $2.3 trillion, moved to and from the U.S. in 2004. Over 24 million containers were transported into the U.S. in 2004 — 10 million by ocean vessels and 14 million by truck and rail from Canada and Mexico, illustrating the challenge of maintaining transportation security while facilitating efficient freight flows. Further, 338 million inbound and outbound trips were made between the U.S. and other countries in 2004, compared to 315 million trips in 1990, with same-day travel between the U.S. and Canada or Mexico accounting for the majority of these trips. International freight volumes at these levels represent a significant source of stress on our domestic transportation system.
The globalization of the American economy has put pressure on our ports, borders, and airports. Many of the Nation’s most important infrastructure facilities (truck terminals, port facilities, rail yards, and airports) are located in major urban areas. When combined with increasing local traffic, greater volumes of international freight and passenger traffic will result in more congestion and delay and, as a result, higher shipping and travel costs.
Continued restrictions that prevent access to foreign markets for transportation services are harmful to U.S. commercial interests. Unless new technologies and operating procedures are adopted, heightened security requirements will increase transit times for passenger and freight movements, which would result in higher operating costs for transportation operators and higher costs for U.S. shippers and the traveling public. Higher transportation costs would make it more difficult for U.S. businesses to compete in international markets.
We will undertake several tasks to improve the safety, security, and efficiency of international transportation systems and the Nation’s gateways. We will liberalize international transportation markets; expand the capacity of our freight and passenger transportation systems; improve intermodal connections; and ensure the adoption of new technologies, procedures, and infrastructure improvements. We will also improve Federal marine transportation system coordination and policy development, and practice positive engagement with foreign partners to improve system linkages on both the foreign and domestic sectors of the transportation chain.
Our strategies to address international transportation issues and networks in the global economy have two synergistic thrusts. One is directed toward opening international transportation markets; the other is directed toward improving essential, intermodal transportation linkages. Both are needed to achieve outcomes that will yield better global connectivity and a more competitive and efficient global marketplace. Adopting a coordinated and strategic domestic and international intermodal approach is central to DOT’s role of promoting more efficient international transportation systems and improved global connectivity.
The human resources, programs, capital assets, information technology and other resources described in DOT's Annual Performance Budgets are needed to achieve our outcomes for global connectivity and to execute the strategies presented below. The schedule for executing our global connectivity strategies extends from fiscal year 2006 through fiscal year 2011.
Table 3 presents the relationship between our Global Connectivity outcomes and the performance measures that will track our progress toward that goal.
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Outcomes |
Performance Measures |
|---|---|
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1. Reduced barriers to trade in transportation goods and services 2. Safer, more efficient and cost effective movement of passengers and cargo throughout international and domestic transportation systems, including U.S. ports of entry, modal and intermodal supply chains 3. Sustained international leadership in promoting U.S. transportation policies |
Reduced Barriers to Trade - Number of international negotiations conducted annually to remove market distorting barriers to trade in air transportation. Target is 10/year or 50 by 2011. - Number of new or expanded bilateral and multilateral aviation agreements completed. Target is 3/year or 15 by 2011. - Number of potential air transportation consumers (in billions) in international markets between the U.S. and countries with open skies agreements. 2011 Target is 3.11 billion. - Number of proceedings to award U.S. carriers newly available international route rights. 2011 Target is 13. Efficient Movement of Passengers and Cargo - Through 2011, maintain the U.S. St. Lawrence Seaway system and lock availability at 99 percent - Number of freight corridors with an annual decrease in the average buffer index rating. 2011 target will be determined in 2007 - Travel time reliability at NHS border crossings. Baselines and 2011 targets to be determined in FY 2007. - Conclude at least eight (new or expanded) bilateral safety agreements that will facilitate an increase in the ability to exchange aviation products and services by 2011. Sustained International Leadership - Secure a yearly increase of 20 percent in intellectual and financial assistance for international aviation activities from the United States and international government organizations, multilateral banks and industry. Annual Target is $2.4M. |
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4. Enhanced competitiveness of U.S. transport providers and manufacturers, in the global marketplace 5. Harmonized and standardized regulatory and facilitation requirements in the international arena 6. Expanded opportunities for all businesses in the transportation sector, especially small, women-owned and disadvantaged businesses |
Enhanced Competitiveness - Number of technology/information exchange agreements that promote the U.S. highway transportation industry. 2011 Target is three new or expanded agreements. - Dollar value of overseas contracts awarded to U.S. companies as a result of FTA’s promotional activities. 2011 Target is $50M. Regulatory and Facilitation Requirements - Number of countries with improved safety regimes achieved through well targeted U.S. technical assistance. 2011 Target is five countries. - By 2011, expand the use of Next Generation Air Transport System (NGATS) performance based systems or concepts to five priority countries. - Percent of hazmat proposals in which the U.S. prevails in international organizations. 2011 Target is 65 percent. Business Opportunity - Percent of total dollar value of DOT direct contracts awarded to women owned businesses. 2011 Target is 5.1 percent of total DOT Contracting Dollars or exceed government-wide achievement by at least 25 percent. - Percent of total dollar value of DOT direct contracts awarded to small disadvantaged businesses. 2011 Target is 14 percent of total DOT Contracting Dollars or exceed government-wide achievements by at least 25 percent. |
Globalization and economic cycles are external factors that could significantly affect our ability to achieve our global connectivity goal.
Globalization generally refers to the expansion of global linkages, the organization of social life on a global scale, and the growth of a global consciousness. People around the world are more connected to each other than ever before. Information and money flow more quickly than ever. International travel is more frequent and international communication is commonplace. Goods and services produced in one part of the world are increasingly available in all parts of the world. Although these links are not new, they are more pervasive than in the past.
In the United States, international trade represents a significant share of GDP. The "World Fact Book” published by the Central Intelligence Agency ranks the United States first in the world in imports and fourth in exports. While international trade is usually the primary meaning of globalization, personal international travel for business and leisure is a significant trend in the globalization of transportation.
As an external factor, globalization reinforces the need for opening international transportation markets and for highly efficient intermodal connections where the U.S. and international transportation networks meet. Continued growth in demand for port throughput – around 10 percent a year – and an increase in new vessel capacity as carriers respond to growing demand are expected. Globalization demands flexibility in the transportation network and flexibility demands investment in infrastructure. Pressures on transportation services and infrastructure from globalization may affect our ability to achieve our global connectivity goals.
Cyclical and long-term changes in domestic and international economic activity have a strong impact on discretionary personal travel and shipment of goods, affecting demand for transportation infrastructure and services. Economic growth spurs commercial development, increases travel and trade, creates bottlenecks and strains the capacity of the infrastructure. Conversely, economic stagnation reduces development, travel, and trade. Economic stagnation also shifts demand for transportation from higher cost to lower cost services.
Economic growth shifts the pattern of transportation in important ways. As people’s incomes grow, they tend to buy more expensive goods, with a higher value per unit weight. The higher value of these goods means that the time they spend in transit is more costly to the shipper, so the shipper is more willing to pay extra for more expedited forms of transportation. As a result, air freight has been the fastest growing form of freight transportation over the past decade, with trucking close behind.
The increase in high-value cargoes means that transportation costs are a smaller percentage of the overall delivered cost of the product. Consequently, shippers can afford to locate their production at a greater distance from the ultimate consumer, to save on production costs. The result has been the growth of global outsourcing that has characterized the U.S. economy for the past quarter-century. This in turn has had tremendous effects on the transportation system, placing a greater burden on the international supply chain – marine carriers, ports, and intermodal rail – to deliver the goods.
Economic growth has changed the nature of demand for passenger travel. As people’s incomes have grown, they have traveled more, but their choice of mode of travel has shifted to air travel with both domestic and international destinations. Air passenger travel is a service with a high income-elasticity of demand – people buy proportionately more of it as their incomes grow. Over the past 20 years, as real incomes have risen by roughly 100 percent, airline passenger-miles have increased by 146 percent, highway passenger travel has grown by 49 percent, and population has grown by 28 percent. Thus, the economy is a significant external factor that can affect our ability to achieve our global connectivity goal.