National Academies Press: OpenBook

Public and Private Sector Interdependence in Freight Transportation Markets (2009)

Chapter: Section 3 - What Can Be Done to Better Align Public and Private Freight Interests

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Suggested Citation:"Section 3 - What Can Be Done to Better Align Public and Private Freight Interests." National Academies of Sciences, Engineering, and Medicine. 2009. Public and Private Sector Interdependence in Freight Transportation Markets. Washington, DC: The National Academies Press. doi: 10.17226/14285.
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Suggested Citation:"Section 3 - What Can Be Done to Better Align Public and Private Freight Interests." National Academies of Sciences, Engineering, and Medicine. 2009. Public and Private Sector Interdependence in Freight Transportation Markets. Washington, DC: The National Academies Press. doi: 10.17226/14285.
×
Page 23
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Suggested Citation:"Section 3 - What Can Be Done to Better Align Public and Private Freight Interests." National Academies of Sciences, Engineering, and Medicine. 2009. Public and Private Sector Interdependence in Freight Transportation Markets. Washington, DC: The National Academies Press. doi: 10.17226/14285.
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Page 24

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There are actions public officials can take that help better align public and private freight inter- ests. This section describes these mechanisms and contains the answers to the question: “What can the public sector do?” If these actions are implemented by public agencies, the enormous challenges the country faces from the demand on its freight transportation system may be more easily solved. Summary of Lessons for Successful Cooperation from Case Studies Freight projects involving both public and private sectors were evaluated for this study. The case studies are described in greater detail in Appendix D to this report. Key lessons for success- ful cooperation between public and private entities were gathered from these case studies. Among these lessons are the following: • Building and maintaining communication and cooperation among the many private and pub- lic stakeholders is an absolute necessity. • Educating the public on the benefits of freight projects through public outreach and in the media is important to overcome any opposition to freight activity. • Being aware of how a joint public and private process works is important at the start; • Maintaining key companies and officials who have undertaken an initiative is essential. It is important to keep institutional memory. • Managing new multijurisdictional freight infrastructure projects through a governing agency with responsibility for the design and construction of the project is important. • Clearly identifying the public and private project benefits to cement the desire for both sides to make a project work is essential. • Public sector understanding of the private requirements for funding and the timing of financial flows to make public–private partnerships work better is critical. Hire Qualified Public Agency Decision-Making Support Staff Public agencies need to have staff able to support the decision-making process in order to ful- fill their roles in the freight system. These staff should have training and experience to partici- pate in the decision-making processes, with specialized skills for each type of decision making as appropriate for the agency. Though maintaining staff capability for freight can be especially challenging for local and met- ropolitan area-level public agencies, there are federal training programs to support employee development in such areas as freight transportation planning and policy making. 22 S E C T I O N 3 What Can Be Done to Better Align Public and Private Freight Interests

What Can Be Done to Better Align Public and Private Freight Interests 23 Having qualified staff that understands the private sector decision-making process will facil- itate interaction with the private sector. Improve Communication and Education Communication and education are keys to success, and steps that improve them are fundamen- tal to achieving better results. The objective is to reach the point where there are engaged and edu- cated senior leaders in both sectors that understand the other sector and maintain relationships with managers in that other sector. Public sector agencies can lead by example in the following ways: 1. Develop Focused Staff Expertise. Assign professional staff, experienced in understanding freight dynamics and in the associated private and public relationships to dedicated freight- oriented positions. Agencies that can develop or hire freight industry specialists will be bet- ter able to be effective in addressing freight-related issues. 2. Nurture Freight Advisory Groups. Metropolitan planning organizations (MPOs) and state and regional agencies can organize and sponsor Freight Advisory Councils consisting of freight transportation providers, transportation intermediaries, and shippers, who can provide feed- back and perspective on impacts and consequences of public sector actions. 3. Invest in Leadership Exchanges. Executives and managers from MPOs and state and regional agencies can exchange jobs with individuals in the private transportation sector to gain an appreciation for and a perspective on private freight decision makers. While organizing tem- porary exchanges formally between public agencies and companies is difficult, informal exchanges (by hiring individuals at different stages of their careers with experience in the other sector) can achieve some of the same benefits. 4. Joint Task Forces. Formal joint task forces can be established between companies and gov- ernment agencies where executives and managers from companies can have significant impact on MPOs and state and regional agency decisions with respect to the freight system. Whether these groups are called goods movement or freight task forces, they need to be given real power of input in public decision making. Benchmarking Progress Benchmarking is an established management practice applicable to improving the outcomes of public and private sector freight decision-making facilitation efforts. Use of benchmarking as an approach to measuring the performance of policies, programs, and projects can lead to quick redirection and reprioritization of efforts to best achieve desired results. Commonly, this requires information on results achieved by one agency in comparison with results achieved by similar agencies elsewhere or results achieved from parallel efforts within the same agency. The objective is to be able to make changes or set priorities so that an optimal combination of effort is reached over time. Those efforts that are underperforming are either modified or resources are redirected toward those that are working better. Circumstances are unique to each agency and there are no set standards that can guarantee success everywhere. Each agency can thus tailor its set of benchmarking metrics to its needs and projects. Public–Private Task Teams Develop Project Milestones In the 1990s, the federal government commenced an extensive effort to introduce and expand systemic performance measurement for its programs. Use of performance measurement will support attempts to apply more private sector approaches to the implementation of public sec-

24 Public and Private Sector Interdependence in Freight Transportation Markets tor decision-making practice. Public–private task teams can bring their combined experience and knowledge to develop realistic project milestones for project evaluation and monitoring. Prior efforts to obtain input from the private sector have shown positive results for public agen- cies in areas of improved operations (such as asset management and maintenance practices) as well as quantification of activities and processes. Invaluable to better public sector management has been the improved availability of performance data for benchmarking, comparing, and demonstrating improvements for the public. Forge Public–Private Financial Partnerships Mutually established cost and benefit sharing plans in projects can be developed for the ben- efit of both public and private sectors. New public-private investment mechanisms have been developed at the state and local levels. Federal program funding is being leveraged for freight applications as well. Examples of new public–private freight investment tools include the following: • Florida intermodal freight investment priority list, • California goods movement bond funding, • Intermodal investment credits leveraged by public funding for infrastructure, and • Congestion mitigation air quality credits. Each of the examples requires participation by both public and private sectors in • Identifying opportunities for improvements to the freight system, • Agreeing on cost and benefit sharing from the projects, • Setting priorities, and • Executing selected projects. In each case, the engagement of senior officials from both private sector and public sector orga- nizations has led to success in making the partnerships work. These partnerships have worked to bring billions of needed dollars to the freight system, generating jobs and helping the economy. Conclusions The purpose of this primer was to foster understanding about the respective roles of the pub- lic and private sectors in freight transportation. Such understanding is crucial because the decision- making roles of the two sectors are intertwined but not always aligned. By better understanding the differences and commonalities in roles and interests, both sectors can take steps to facilitate cooperation on freight issues. Public sector officials can take a leading role in fostering such coop- eration by (1) establishing communication channels and partnerships with the private sector, (2) creating joint task forces, and (3) training staff in specialized freight areas. Public–private cooperation becomes even more important because the amount of freight moved on U.S. infrastructure is projected to increase. Truck volumes alone will double. By work- ing together on investment and operating decisions, the two sectors can ensure that goods will move through the economy in an efficient and effective manner.

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TRB’s National Cooperative Freight Research Program (NCFRP) Report 1: Public and Private Sector Interdependence in Freight Transportation Markets is designed as a primer on relationships between public sector and private sector stakeholders in the freight transportation industry. The report explores the freight industry through the use of examples, case studies, and a broad-based examination of the mutually dependent issues facing public and private investment decision makers.

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