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76 Infrastructure Investment Policy research team identified current and recent policy issues with potential freight system impacts, evaluated the magnitude The USDOT and Congress have both a high level of con- of the impacts, and assessed the extent to which the impacts cern for the condition of the highway system and a great deal have been unexpected. The research team drew the following of information on the issue, although little of that informa- general conclusions based on this research. tion is specifically on freight. Overall fiscal issues and the lack of adequate financing devices account for inadequate invest- 1. A wide variety of public policies can affect the freight ment, not lack of information or lack of concern. Thus, this transportation system. In many cases, this potential for is a Case 1 example. The research team believes the same is impacts is obvious, as in the case of investment and true at the state level. operations decisions concerning freight system infra- The highway system is ubiquitous, but the inland waterways structure or environmental and safety regulations are not; their role in the freight system is not widely known or affecting freight equipment. In other cases, the potential understood in Congress. USACE understands the importance to affect the freight system is less obvious. This is partic- of the waterways but has found it difficult to get its message ularly true for policies enacted to achieve goals unrelated across effectively. Waterway investment is a Case 2 example. to transportation (e.g., land use policies or dredge spoil More and better information could make a difference in policy disposal policies) and policies that affect the entire trans- choices in Congress and, indeed, within the Executive Branch. portation system, both passenger and freight (e.g., high- way investment policy, alien fingerprinting rules, or Infrastructure Finance and Pricing Policy renewable fuel standards). 2. There are relatively few examples of recent public poli- Finance and pricing issues are somewhat more complex than cies that have had unexpected impacts on the freight questions about the level of infrastructure investment. In Con- transportation system. Among the more than 30 individ- gress, highway and (potentially) waterway pricing issues are ual policies examined in this study, only a handful have perceived largely as getting the right level of revenue to support resulted in impacts on the freight system that were not rec- the programs. Questions about economically efficient prices ognized by the decisionmakers. These few examples and potential costs of distorted relative prices do not generate include highway and waterway investment and finance a high level of interest in Congress, state legislatures, or in the policies, as well as some local government decisions Executive Branch outside a fairly narrow circle. As the examples regarding land use and truck access. illustrate (see Appendix B), roadway pricing can have signifi- When they have occurred, unexpected impacts have cant freight system impacts, and this information could influ- been relatively minor in many instances. For example, the ence decision-making. Thus, the research team considers magnitude of the 2006 truck "pre-buy" that resulted from Federal and state infrastructure pricing to be Case 2 examples. new EPA emission standards was unexpected, but its effects Peak pricing for trucks at the Ports of Los Angeles and Long on the freight system were minor. Nearly all of the safety, Beach was instituted with limited information about potential environmental, and operations policies the research team impacts. In this instance, the local program was implemented examined have had either minimal freight system impacts to avoid what was perceived to be a less desirable state man- or impacts that were fully anticipated by policymakers. date. The decisionmakers in these types of policy debates have Some of the policies the research team reviewed, par- a concern about freight system impacts, and, at least in future ticularly those related to security, had not been in place policy decisions, their decisions would be influenced by a long enough to assess their impacts at the time of the better understanding of impacts. This is a Case 2 example. research. Some of these policies, such as the TWIC rules, Airport peak pricing appears to be a Case 1 example. FAA may have significant, and possibly unexpected, freight has a high degree of system understanding and appears to system impacts. have considered the impacts of its recent rulemaking on the 3. Significant unexpected freight system impacts are unlikely air cargo industry. to occur in a short time frame for policies recently adopted Table 6-2 summarizes how the three cases of decision con- or currently debated. The lack of unexpected impacts is not texts apply to the policy examples covered in this report. surprising, given the research team's focus on recent (prima- rily since 1990) policies and the nature of the policy issues during that period. One can certainly identify older policy Conclusions decisions that have eventually resulted in major freight sys- This study examined how public policy decisions can affect tem impacts. Examples include the Federal-Aid Highway the freight transportation system. Using interviews with Act of 1956 that established the Interstate system or the Jones industry experts and an extensive review of documents, the Act of 1920 that affects coastal shipping. But the major

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77 Table 6-2. Decision context of policy examples. Level of Implementation Category Policy Federal State Local Safety HOS Rules for Drivers Case 1 Truck Speed Limits and Governor Rules Case 1 Case 2 Aircraft Fuel Tank Flammability Rules Case 1 Restrictions on Locomotive Horns Case 1 Case 3 Security TWIC for Ports and Inland Towboats Case 1 Alien Fingerprint Rules for Outbound Planes, Ships Case 2 Air Cargo Screening Requirements Case 2 Land Use Local Land Use Policies Case 2 Environment Emissions Standards for Diesel Engines Case 1 Case 1 Idling Restrictions for Trucks and Locomotives Case 3 Case 3 Restrictions on Port Drayage Trucks Case 2 Restrictions on Disposal of Port Dredging Spoil Case 2 Case 2 Case 3 Water Pollutant Discharge Rules for Vessels Case 2 International Air Emissions Regulations for Vessels Case 1 Energy and GHG Cap and Trade Case 2 Climate Change Renewable Fuel Standards, Incentives Case 2 Operations and Truck Route Restrictions Case 2 Case 3 Maintenance Local Policy to Oppose a Railroad Acquisition Case 3 Local Truck Access and Parking Policies Case 3 Truck Size and Weight Case 2 Case 3 Infrastructure Highway Infrastructure Investment Case 1 Case 1 Investment Inland Waterway Infrastructure Investment Case 2 Infrastructure Highway Tolls and Other User Charges Case 2 Case 2 Finance and Lockage Fees for Inland Waterways Case 2 Pricing Peak Pricing for Port Trucks Case 2 Peak Pricing for Airports Case 1 freight system impacts of these policies were not felt for Local land use decisions decades. Other historic examples, such as the Motor Carrier Environmental regulations on dredge spoil disposal and Act of 1980 that deregulated trucking, have resulted in major vessel water pollutant discharge freight system impacts in a relatively short time frame. But GHG cap and trade and alternative fuels regulations no current or recent policies involve such a major restruc- State truck route restrictions turing of the freight industry. Road pricing for trucks 4. There are a limited number of situations in which better Investment and finance decisions for inland waterways information on freight system impacts could change pol- icy decisions. In many cases, government decisions that These are the Case 2 examples. In all of these cases, more or affect freight transportation are made in the context of either better information on the freight system could improve policy (1) good information on potential impacts and a concern decisions at the Federal, state, or local levels. The key to bring- for the freight system or (2) a lack of concern about freight ing about better decisions--better in the sense that impacts on system impacts. In these situations, providing policymakers freight are considered--is greater awareness of freight on the with better information about freight system impacts would part of relevant officials. There is no single way to bring this likely make little or no difference. about. It is probably easiest to achieve at the Federal level, where executive agencies could ensure that they give freight impacts Examples of policy decisions that could be influenced by full consideration when analyzing effects of proposed rules. An better information include information program with the goal of calling the attention of state officials to non-transportation policy areas where deci- Truck speed limits sions can affect the efficiency of freight movement could also be Some Federal security regulations (e.g., air cargo screening) considered. Perhaps this might best be done by state DOTs

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78 making other elements of their own state governments more bilities, such efforts could be counterproductive. However, aware of potential impacts on freight. freight industry executives have pointed out that state eco- Table 6-2 shows that among the policies reviewed in this nomic development agencies have sometimes been effective report, only three of the Case 2 examples are at the local level, in showing local governments how, for example, new inter- and two of those are concerned with truck movements at ports. modal terminals can bring jobs and tax revenues. Clearly, there These are instances where state DOTs or other state agencies is no single or simple way to bring a higher level of freight could offer useful information in some cases. If local author- awareness to relevant officials, but there are many ways that ities perceive a state DOT as encroaching on their responsi- could be effective in different contexts.