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Freight Capacity for the 21st Century: Special Report 271 3 Data on System Performance: Trends and Case Studies As explained in Chapter 1, the committee relied on four kinds of information to support its conclusions: aggregate trends and projections regarding traffic volumes, infrastructure development, and system performance; case studies of freight projects and planning efforts; interviews with participants in the freight transportation industries; and a review of the conclusions of past studies of related transportation policy questions. Findings from the first three of these sources are summarized in this chapter; conclusions from the review of past studies were presented in Chapter 2. TRENDS IN TRAFFIC, INFRASTRUCTURE, AND PERFORMANCE Historical data on freight traffic, infrastructure development, and freight transportation system performance are summarized in the sections below. The presentation is organized in seven topical areas: highway trends; railroad industry trends; problems related to congestion at freight terminals and border crossings; the long lead times and rising costs of infrastructure projects; trends in congestion in urban areas, especially on facilities shared by passengers and freight; trends in other freight modes; and underlying trends in productivity, finance, and technology. The first five of these topics parallel the perceived developments identified in Chapter 1 as having been instrumental in shaping industry and public views on freight capacity problems. The degree of consistency of the aggre-
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Freight Capacity for the 21st Century: Special Report 271 gate trend data with these perceptions and the extent to which the data support judgments about the nature and severity of freight capacity problems are examined in this section. The public policy questions regarding freight capacity are whether public investment in additional capacity is justified, public infrastructure is efficiently managed, and government policies are hindering private-sector investment and management. The answers to these questions depend on whether total costs would be lower at a different scale of the physical plant or with different management practices. Therefore, performance measures are required that indicate the costs of capacity constraints and hence the benefits of expansion (which may include reduced congestion, lower freight rates, or lower accident or environmental costs). Performance measures that could be useful for this purpose include carrier costs and prices and shipper delays. Some performance data are presented below, but readily available information is limited. Trend data on traffic and investment are, by themselves, insufficient as guides to policy. For example, a declining ratio of capital stock in an industry to the output of the industry does not necessarily indicate that the rate of investment is too low, but may rather reflect productivity growth. A further inadequacy of the aggregate data is that capacity constraints in transportation systems typically are local. The average link at an average time period may be operating well below capacity even if the performance of the system as a whole is hampered by problems at local bottlenecks during peak periods. Local problems can have a severe impact on a network transportation system such as an airline or a railroad. Problems at a hub airport or rail center can quickly spread hundreds or thousands of miles from the source. (Trucking is less vulnerable to such cascading impacts.) Another consequence of the local character of capacity problems is that severe congestion in a few of the culturally and politically most important urban areas (New York, Los Angeles, and Washington, D.C.) may bias the views of opinion makers and the public regarding the scope of problems. The case studies presented later in this chapter illustrate some of these local circumstances. Highway Spending and Traffic Growth Perhaps more than any other development, the perception that highway traffic growth has outstripped the ability to provide roads has given rise to concern among transportation professionals and the public that current trends in transportation capacity are unsustainable. Roads are shared by trucks and cars, so it is impossible to separate highway freight capacity from the question of overall system capacity for serving all vehicles. Trucking is the major freight mode in terms of expenditures in the United States. According to estimates by the Eno Foundation, 81 percent of domestic intercity freight transportation expenditures in 1999
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Freight Capacity for the 21st Century: Special Report 271 were for trucking, and trucks carried 27 percent of intercity ton-miles (Wilson 2001, 7, 12). In 1999, combination trucks accounted for 5 percent of vehicle-miles traveled (VMT) on all roads and 17 percent on rural Interstates (Figure 3-1) (FHWA 2000a, Table VM1). Highway engineers estimate that a large truck has approximately the same effect on traffic operations as two cars, so large trucks account for about 30 percent of all passenger-car equivalents on rural Interstates. Capital Expenditures, Capital Stock, and Traffic From the late 1940s to the 1960s, real capital expenditures for highways grew at least as fast as did highway travel; but since that time, while VMT has steadily grown, the long-run trend in real capital expenditures appears nearly flat (Figure 3-2). Capital expenditures on public roads in 1999 were $59.5 billion, VMT was 2.7 trillion, and VMT for combination trucks was 132 billion (FHWA 2000a). A more relevant question for performance is whether the stock of highways, rather than the rate of capital expenditures, is expanding in pace with traffic. A constant rate of capital expenditures can yield growth in capacity if assets are long-lived. Data on road-miles or lane-miles can serve as approximate physical measures of the capital stock of highways (although roads vary greatly in their traffic-bearing capabilities). These physical measures of highway capacity appear to be flattening in the past FIGURE 3-1 Combination truck share of traffic. (SOURCE: FHWA various years.)
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Freight Capacity for the 21st Century: Special Report 271 FIGURE 3-2 Highway capital expenditures and vehicle-miles traveled. (SOURCES: FHWA 1987–2000; BEA 1998, 159; BEA 2000, 132.) decade, after nearly three decades of rapid postwar expansion. For example, mileage of limited-access divided highways grew rapidly during the peak years of Interstate highway system construction; mileage is still growing but much more slowly compared with the 1960s and 1970s (Figure 3-3). An economic measure of the capital stock of highways is estimated by the Commerce Department’s Bureau of Economic Analysis (BEA). It is defined as the replacement cost of all past capital expenditures less depreciation, in constant dollars. The BEA measure of capital stock, published only since 1985, exhibits more rapid growth than do the data for road miles. BEA estimates that capital expenditures have been considerably exceeding depreciation (Figure 3-4). Much highway capital expenditure today—for example, projects to widen roads, improve roadway geometry, or improve traffic control—increases capacity but is not reflected in gross indicators of physical capacity like road-miles. Between 1985 and 2001, average annual growth rates were 2.8 percent for VMT on all roads, 2.0 percent for BEA capital stock, and 0.7 percent for miles of limited-access highways. Another estimate of highway capital stock, produced by the Federal Highway Administration (FHWA) using a definition somewhat different from that of the BEA estimates, indicates that productive capital stock grew at an annual rate of 1.7 percent from 1985 to 1995, 1.3 percent from 1975 to 1985, and 5.1 percent from 1955 to 1975 (Fraumeni 1999).
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Freight Capacity for the 21st Century: Special Report 271 FIGURE 3-3 Miles of limited-access divided highway. (SOURCE: FHWA 1987–2000.) Performance As noted above, a declining ratio of roadway stock to travel does not in itself demonstrate that more rapid expansion of the system is called for. The system may have been larger than necessary in earlier decades, or the declining ratio may represent productivity growth rather than a decline in the level of service. The overall pattern of a declining ratio of capital to output does not seem to be rare in U.S. industry; the trend in the rail industry has been parallel, as shown in the next section, and another FIGURE 3-4 Net capital stock of highways and streets; annual vehicle-miles. (SOURCES: FHWA various years; Katz and Herman 1997, Table 12; Lally 2002, Table 12.)
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Freight Capacity for the 21st Century: Special Report 271 network industry, electric utilities, shows a similar trend (Figure 3-5). The electric utility industry, like the railroads, has recently experienced a severe temporary regional supply disruption, which has stimulated debate about the adequacy of capacity and the need for government intervention. In both industries, more productive use of capacity in recent decades has benefited the public, but it may have increased vulnerability to disruptions caused by extraordinary external circumstances. There is evidence that highways are becoming more productive, in part because of changes in users’ behavior. Traffic engineers have discovered that roads today maintain free-flowing traffic conditions while carrying traffic volumes that would have resulted in slow-speed or stop-and-go traffic conditions according to traffic models calibrated in earlier decades. The data suggest that a freeway can today carry perhaps 15 percent greater peak traffic volume before speed slows to 80 percent of free-flow speed, compared with the 1960s (TRB 1996, 64, 142). Apparently drivers, as they become more accustomed to high-speed, high-traffic-density driving, are learning to make more efficient use of the available road space. Changes in the dimensions and performance of vehicles may also be affecting the relationship of speed to traffic density. Improved traffic management has the potential to significantly increase the effective capacity of existing roads, but the most powerful techniques have as yet seen little application. Data on time trends in performance of the entire highway system are sparse, and forecasting future performance has proven to be difficult. A 1987 study of urban freeway congestion estimated an annual cost of 1.2 FIGURE 3-5 Electric power consumption and utility capital stock. (SOURCES: Katz and Herman 1997, Table 4; EIA 2002, Table 8.5.)
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Freight Capacity for the 21st Century: Special Report 271 billion vehicle-hours of delay, and projected a 5.6 percent annual rate of growth of vehicle-miles of congested travel on urban freeways through 2005, compared with a projected 1.9 percent rate for all vehicle-miles (Lindley 1987). However, a 1997 FHWA analysis found that the fraction of daily peak-hour vehicle-miles of travel on urban Interstates that takes place in congested conditions was fairly constant between 1990 and 1995 (Figure 3-6), while total urban Interstate travel grew at 4.1 percent annually during the period. Projections Projections of total and combination truck VMT typically predict lower rates of growth in the next decades than occurred during the 1990s. On the supply side, highway capital expenditures for the next few years may be projected on the basis of the size of the federal-aid program enacted periodically by Congress, if it is assumed that the ratio of state to federal expenditures remains constant (Figure 3-7). The 1998 program provided for moderate spending growth through 2003, and preliminary proposals for the successor legislation also call for increases. FHWA produces a biennial projection of national highway capital spending requirements based on a benefit–cost analysis, using its HERS (Highway Economic Requirements System) model. The model employs a sample of road segments, reported to FHWA by the states, with information on traffic, geometry, and state of repair of each sample segment; and a set of cost factors to allow projections of infrastructure and user costs for FIGURE 3-6 Percent of peak-hour travel that occurs under congested conditions, urban Interstates. (SOURCES: FHWA 1997a; FHWA 2000d, Exhibit 4-5.)
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Freight Capacity for the 21st Century: Special Report 271 FIGURE 3-7 Forecasts: VMT, combination VMT, capital expenditures. (SOURCES: VMT: FHWA various years, Table VM-1; real capital expenditures: FHWA various years, Table HF10 and BEA 2001, 133; combination truckVMT: FHWA various years, Table VM-1; truck VMT, forecast: EIA: EIA 1999, Table 55, heavy trucks; truck VMT, forecast: ATA: ATA 2000.) each segment for specified assumptions about future road improvements and traffic growth. Given a forecast of traffic and a budget, the model computes the most cost-effective highway improvements. The DOT model has two major shortcomings. First, it does not support comparisons of highway expansions with congestion pricing or other demand management alternatives. Therefore, the model overlooks attractive policy alternatives in many instances. Second, it does not incorporate a network model. Consequently, the estimate of benefits from expansion of a highway link does not change if a decision is made to simultaneously expand a substitute or complementary link. Necessary revisions to DOT models to make them more useful for planning are identified in Chapter 4. The most recent projections using this model (Figure 3-8) assume VMT growth of about 2.2 percent annually, depending on the level of investment. FHWA estimates that a highway capital spending program in which projects were carried out in order of cost-effectiveness and the level of spending was just sufficient to maintain present physical conditions of pavements and bridges would require annual capital expenditures averaging $57 billion (in 1997 dollars) over the period 1998–2017, a rate
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Freight Capacity for the 21st Century: Special Report 271 FIGURE 3-8 Projected annual highway capital spending versus cost to maintain physical conditions and cost of all cost-effective improvements. (SOURCE: FHWA 2000d, ES-13.) of spending 16 percent above the actual 1997 level. In this scenario, the average benefit–cost ratio of all projects carried out (other than bridge projects) is 6.1. If all projects with a benefit–cost ratio greater than 1 were carried out, FHWA estimates that annual spending would be $94 billion, 93 percent greater than the 1997 level, and the average benefit–cost ratio of all projects would be 3.7 (FHWA 2000d, ES.13–ES.15, 7.15–7.18, 9.5). Summary Although the picture that can be formed from aggregate trends is necessarily incomplete, as emphasized earlier, the data suggest a more complicated situation than the simple conclusion that the nation is near to running out of highway capacity. Real highway capital spending slumped severely in the 1970s but recovered afterwards, spurred by larger federal-aid programs. The stock of highway capital is growing, although not as fast as VMT. Although the available data on highway performance are inadequate, they do not demonstrate widespread deterioration. Nonetheless, DOT economic analysis indicates that at current funding levels many opportunities for high-payoff, mobility-improving projects are being missed. Railroad Infrastructure Downsizing and Service Disruptions Capital Expenditures and Traffic In 1999, railroads carried 37 percent of intercity freight ton-miles in the United States and rail revenues accounted for 10 percent of expenditures
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Freight Capacity for the 21st Century: Special Report 271 for domestic intercity freight services (Wilson 2001, 7, 12). The recent history of the development of the railroads differs markedly from that of highways and trucking. Rail freight traffic grew slowly, and the rate of real capital expenditures declined in the post–World War II period through the 1970s. Since the end of most economic regulation of the industry in 1980, traffic growth has accelerated, and spending for roadway and structures has grown more rapidly than traffic (Figure 3-9). In 1999, capital expenditures for roadway and structures by Class I railroads (the largest U.S. railroads, accounting for 91 percent of rail freight revenues) were $4.4 billion, and the number of ton-miles was 1.4 trillion (AAR 2000). The mileage of track owned by Class I railroads has contracted throughout this period (Figure 3-10). Some of the decline shown in the figure reflects divestitures of track to small regional and shortline railroads, which operated 29 percent of road-miles in use in 1999. Rail roadway operated by all U.S. railroads declined from 181,000 miles in 1987 to 171,000 miles in 1999 (AAR 2000, 3; AAR 1988, 2). Much of the reduction in mileage since World War II was the result of the decline in passenger service. Technology also has played a role; for example, computerized traffic management has increased effective capacity. Patterns differ by region: in the East and Midwest after World War II, multiple independent railroads operated redundant mainlines and branchlines. The South had fewer carriers and less duplication, and far fewer multiple-track lines, and the West was largely single-tracked. From the 1960s, the FIGURE 3-9 Class I railroad roadway and structures capital expenditures and ton-miles. (SOURCES: AAR 1999; AAR 2000; BEA 2000, 132.)
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Freight Capacity for the 21st Century: Special Report 271 FIGURE 3-10 Track-miles owned, Class I railroads. (SOURCES: AAR 1999; AAR 2000.) South and West were growing and rail traffic was generally on the rise. Growth on a large single-tracked system led to congestion problems in the West in the 1980s at the same time that track was being removed from the East and Midwest. Thus, it would be an oversimplification to ascribe any present capacity problems to rail infrastructure downsizing. Most of the downsizing occurred in the Northeast, where traffic growth has been relatively modest. According to BEA estimates, the strong rate of capital spending for new roadway and structures has not kept pace with depreciation and retirements, so the real net capital stock of all U.S. railroads has declined (Figure 3-11). Trends in rail roadway and structures spending and net FIGURE 3-11 Railroad structures net capital stock and ton-miles (all railroads). (SOURCES: Katz and Herman 1997, Table 4; Wilson 2001.)
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Freight Capacity for the 21st Century: Special Report 271 mobility needs. The act also placed greater project selection authority in the hands of local governments and their metropolitan planning organizations (MPOs). Consequently, the freight industry and port authorities saw an urgent need for greater local engagement by freight interests in the transportation planning activities that determine public-sector investment priorities. Local public–private groups were formed in several areas to participate in planning and promote freight-related investments, and a coalition of national trade associations representing carriers, shippers, and port authorities formed the Freight Stakeholders National Network to support local freight advocacy nationwide (Freight Stakeholders National Network 1996). The premise of these freight advocacy efforts is that local and state governments systematically miss high-payoff freight-related projects when they establish their transportation spending plans. This is the result of ignorance of freight needs or bias in favor of improvements benefiting primarily passengers, or because local governments are unwilling to expend local resources on transportation projects whose benefits are spread regionally or nationally. This case study and the Washington State FAST Corridor case examine the success of local public–private planning initiatives in improving the efficiency of public infrastructure investments. The Stakeholders Task Force Process The Florida Freight Stakeholders Task Force, organized as an outcome of the 1998 Governor’s Intermodal Transportation Summit, was charged with identifying and prioritizing freight-related transportation projects for fast-track funding as well as developing recommendations for the Year 2020 Florida Statewide Intermodal System Plan. Task force members represented port and airport authorities, MPOs, state and local government agencies, shippers, carriers, and third-party transportation services (CUTR 1999). The Florida legislature appropriated $10 million for fast-track funding of projects recommended by the task force, as an experiment to see how the new planning approach would work. The task force contracted with the Center for Urban Transportation Research (CUTR) at the University of South Florida to define a Florida Strategic Freight Network. The resulting network definition includes the Florida intrastate highway system, ports, air freight terminals, rail intermodal terminals, highway freight terminals, and road connections between the Interstates and freight facilities. CUTR also developed eligibility criteria for project funding: projects were to be located on the Strategic Freight Network, facilitate freight movement, and have a ratio of public benefits to public costs greater than one. Finally, CUTR developed a prioritization methodology that rated projects according to the eligibility criteria, stage of development and environmental compliance,
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Freight Capacity for the 21st Century: Special Report 271 time to completion, current level of service, safety considerations, neighborhood impact, and current freight volume. Project applications were solicited from task force members, MPOs, ports, and airports. Seventeen projects totaling $101.3 million were identified and prioritized. The final project recommendations, selected to maximize the value of the projects funded, comprised five projects totaling $10 million. The scale of the budget suggests that the activity was seen as a trial. In addition to developing and demonstrating its project prioritizing method, the task force addressed seven recommendations to the state to improve planning and increase funding for freight infrastructure: Establish the Florida Strategic Freight Network as part of the state’s Intermodal Systems Plan, Adopt the Florida Freight Stakeholders Task Force process for prioritization and selection of future freight projects, . Fund future research and planning studies, Conduct a Florida International Trade and Port Strategy Study to define specific trader corridor strategies and the supporting port investment priorities, Establish a Florida Freight Advisory Council within the Florida Department of Transportation, Establish “freight mobility committees” in the largest MPOs; and Create a Florida Freight Investment Bank to fund freight projects. Thus the objectives were to find a mechanism for institutionalizing freight-sector input to state transportation planning, to develop a formal process for budgeting and setting priorities for freight-related improvements, and to study freight needs. Impact of the Task Force To fully judge the success of the freight task force planning experiment, answers would be needed to three questions: Did the state follow through on the task force recommendations? Did the task force’s project priority assignments actually redirect funding toward projects that otherwise would not have been conducted? Did the projects selected yield higher payoffs than the projects they displaced in state and local transportation programs? The Florida Strategic Freight Network has been included in the Florida Department of Transportation’s Year 2020 Florida Statewide Intermodal System Plan and is being updated by CUTR for the state. In addition, the network will be the starting point for a planned passenger– freight network, the Strategic Intermodal System. Presumably, inclusion of a facility in this system will tend to elevate the priority of any improve-
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Freight Capacity for the 21st Century: Special Report 271 ment to that facility in the state’s spending program. However, because this system may be extensive, the average effect on priority rankings may be small. The state has not evaluated the benefit of favoring on-network projects in this way. The task force went out of existence when it completed its report. However, several continuing state initiatives were affected by its work (FDOT 2000). As a complement to the task force’s efforts, in 1999 the state created the Fast Track Economic Growth Transportation Initiative, under which $59 million was made available for projects in aviation, rail, transit, seaport, space, or intermodal freight and passenger facilities. The task force recommended projects to be funded through this program, and projects were to be evaluated by procedures related to those the task force developed. In 2000, the legislature established the Transportation Outreach Program, which replaced the Fast Track Initiative. The program establishes a mechanism for funding projects according to selection criteria specified in the statute, which were influenced by the task force’s work. The state department of transportation, in support of its 2020 Intermodal Systems Plan, is developing a Florida Freight Network and Linkages Study to address the future of Florida’s trade corridors, project demand, analyze infrastructure needs, and evaluate operational issues relating to freight movement. Finally in 2000, Florida created a new wholly state-funded infrastructure bank with flexible rules regarding the kinds of transportation projects that can be funded, as the task force recommended. It is likely that the projects selected by the task force eventually would have been programmed as part of the department of transportation’s regular prioritization and funding process. However, it is also likely that the effort has raised the prominence of certain categories of projects of significance for freight mobility and thereby increased these projects’ chances of receiving funding. The task force’s efforts enhanced awareness of freight issues and influenced subsequent executive and legislative policy directives on funding priorities. It is not possible to ascertain whether the new priorities increase the efficiency of Florida’s transportation capital expenditures. As the task force recommended, $240,000 of its initial $10 million funding was allocated for continuing research on project benefit quantification and related tasks. Such analysis will be necessary before it can be determined whether the diversion of priorities has been beneficial. PrePass Automatic clearance systems, which screen trucks on the road and allow trucks that meet certain criteria to bypass enforcement stops, can increase enforcement efficiency in three ways: officers can concentrate their efforts on trucks that are more likely to be in violation; some enforcement func-
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Freight Capacity for the 21st Century: Special Report 271 tions are automated, reducing their cost; and the cost of enforcement to carriers who obey regulations is reduced. The most extensive such system in the United States is PrePass, which allows certified commercial vehicles to bypass designated weigh stations and port-of-entry facilities (where states, in addition to weighing, check that trucks entering the state comply with registration, fuel tax reporting, and other state requirements). As a truck that is enrolled in the program approaches a PrePass-equipped station, a transponder in the truck communicates with a terminal at the station, and its weight is checked automatically as it traverses a weigh-in-motion installation. If the computer verifies that the truck’s credentials are in order and its weight is legal, the transponder in the truck displays a green light to the driver and sounds a tone. A red light alerts the driver to pull in to the station. The PrePass program is administered by a nonprofit corporation jointly governed by motor carriers and the states. It is funded by transaction fees paid by the participating carriers. PrePass began operation in 1995 and has 170,000 vehicles enrolled. It is deployed at 181 sites in 21 states and continues to expand (PrePass n.d.). Another multistate program, Norpass, is in operation in other states, and some states have their own independent systems. The system’s voluntary public–private structure places certain limits on its application. It is not used to collect tolls, and if a carrier found that information in such a system was causing enforcement officials to single it out for greater scrutiny, it could respond by dropping its enrollment. PrePass is one example of a technology with broad potential applications (Orban 2000). Already, similar automatic vehicle identification technology is used for toll collection. Extended applications would require enhancement of technical capabilities, greater investment in hardware by industry and public agencies, and new organizational arrangements. Improved enforcement capabilities could actually allow carriers greater freedom of operation with respect to routes, dimensions, and hours restrictions, because enforcement feasibility would become a lesser consideration in the design of regulatory programs. PrePass and related systems directly affect capacity. Trucks experience less delay; therefore equipment utilization is higher and fewer trucks are on the road at any time. The technique can smooth processing bottlenecks and increase throughput at terminals. The technology allows improved management of the road system by the highway agency in a variety of ways, including more efficient use of personnel and use of more refined and effective fees and regulations. Conclusions from the Cases The cases all illustrate how institutional complexities pose great challenges to public officials charged with construction and management of
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Freight Capacity for the 21st Century: Special Report 271 freight facilities. They suggest some reasons for optimism that progress is being made in overcoming these challenges. Innovation in planning is being attempted; examples are the use in state transportation departments of asset management systems and performance-based planning, which emphasizes performance measurement. More widespread and effective use of these methods is to be encouraged. In addition, transportation agency awareness of freight needs appears to be increasing. However, the cases do not reveal evidence that fundamental questions about the management of public transportation programs are being examined. The cases indicate that government evaluations of projects sometimes are weak; consequently there is inadequate assurance that low-payoff projects are not being selected while high-payoff ones are being overlooked. Evidently, local and state government transportation agencies sometimes do not have methods for evaluating trade-offs between investments yielding benefits to freight traffic and those yielding predominantly passenger benefits. Local priorities will inevitably be set through political processes involving contending advocacy groups. If freight interests become more involved in this process, priorities will be shifted. Nonetheless, more credible objective analysis of the relative benefits of competing uses of funds would have an impact on decisions. A recent DOT analysis of public funding of freight infrastructure improvements reached the same conclusion: “Planners lack data and tools that they can employ to evaluate a freight project against a non-freight project” (FHWA n.d., 5). Development of improved methods for conducting evaluations that consider options involving alternative transportation modes has recently been a priority in research sponsored by the National Cooperative Highway Research Program and by DOT. Benefit–cost analysis is necessary for evaluating the freight/nonfreight trade-off. The project evaluations in the Florida and Washington cases included benefit–cost analysis, although the results of the analyses were not heavily weighted in setting priorities and analyses were not highlighted or explained in the most widely distributed public reports of the activities. In general, in state highway programs throughout the United States, evaluation procedures for setting project priorities usually are defined in terms of engineering criteria rather than economic criteria (Hill et al. 2000, 100). Governments do not, in general, evaluate how alternative funding mechanisms would affect the performance of transportation programs or follow project funding practices that maximize the chance of producing successful projects. Governments often appear to favor capital-intensive solutions over operational improvements. None of the cases selected indicates government interest in reexamining the scope of public involvement in freight transportation.
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Freight Capacity for the 21st Century: Special Report 271 A common theme in the cases is that obstacles to problem resolution, as well as poor management decisions, often arise from inadequate communication among the private sector (shippers and carriers), government transportation agencies, and general government at the federal, state, and local levels. Intergovernmental communication, as well as public–private communication, evidently is necessary for efficient project execution. Public–private communication cannot be limited to soliciting the advice of interested parties in the private sector. Market transactions also are communications, in which buyers inform producers of their willingness to pay for transportation services. Communication might also be through scientific market surveys for use in project evaluations. The Upper Mississippi case shows that the government planners, although they listened to farm groups, lacked the hard data about present and future demand that they needed to evaluate the proposed capacity expansion. Finally, PrePass is one example of the potential of technology applications to extend the effective capacity of infrastructure. The possibilities of these kinds of techniques may be just beginning to be realized. However, their success depends on institutional and management reforms in parallel with the opportunities opened by the technology. INDUSTRY INTERVIEWS The committee solicited views of shippers, carriers, and port operators, through informal interviews or requests for written comments, as an additional method of identifying freight capacity problems. The interviews were not a systematically conducted survey, so inferences must be limited. Nonetheless, the responses indicate the issues important to the respondents. The responses raised three sets of issues: characteristics of existing capacity constraints, emerging trends that affect those constraints, and potential solutions to existing and emerging problems. Labor supply was the immediate constraint most commonly identified, especially by motor carriers, who universally reported that qualified drivers are difficult to attract and keep. The interviews took place before the 2001 recession. Carriers believe they could expand sales and handle more freight if they could hire more drivers. Port operators also reported difficulties obtaining certain kinds of skilled workers and cited a need for new training programs to increase the pool of qualified workers available to the industry. A review of the labor practices of transport personnel in the port industry was called for by a port operator. Port operators identified needs to review and revise work practices that have outlived their original purposes, and to extend marine terminal operating hours to accommodate carriers. With regard to physical facilities, motor carriers were aware that road capacity is not keeping pace with growth in volume. They also cited the
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Freight Capacity for the 21st Century: Special Report 271 need for more efficient road operating practices, for example, faster toll collection and measures to reduce delays for weighings. Port operators noted that lack of available land for expansion is a concern. Respondents expect continued strong growth in trade and therefore believe that it is urgent to plan for new and larger facilities and to secure land for terminals before competing uses block the possibility of expansion. Respondents frequently cited regulatory constraints on efficient operation and expansion. Motor carriers identified interstate variability in vehicle size and weight limits and hours of service regulations that they regard as impractical and as aggravating the driver shortage. Shippers cited customs delays at ports and at the Mexican border as a substantial inefficiency. Port operators identified environmental regulations governing disposal of dredged material as a serious constraint on capacity expansion. The emerging trends affecting the adequacy of freight capacity that were most often mentioned mainly relate to continued change in the characteristics of freight demand. Examples are the emergence of e-business, changes in supply chain management practices (including preferences with regard to freight mode, shipment size and frequency, and procurement and inventory strategies), and shippers’ increasingly exacting requirements for reliability and speed. One respondent noted that higher energy prices may profoundly affect the market in the future. Taken as a whole, the responses illustrate forcefully that physical plant is not the only potential capacity constraint on the freight transportation system. Short-run constraints are more likely to be equipment or labor shortages than shortages of road space or trackage. Reported labor supply concerns presumably reflect upward pressure on the wages that operators must pay to attract qualified employees. Labor and equipment supply are primarily short-run problems that carriers, suppliers, and workers can resolve in the private market. However, public policy concerning education, regulation of workplace conditions, immigration, and rights of foreign carriers to enter the United States will be important for the long-term labor outlook. REFERENCES Abbreviations AAPA American Association of Port Authorities AAR Association of American Railroads AASHTO American Association of State Highway and Transportation Officials ATA American Trucking Associations BEA Bureau of Economic Analysis
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