Impacts of Public Policy on the Freight Transportation System (2011)

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8The nation’s freight transportation system is invisible to most Americans. In the public mind, “transportation policy” is usually associated with passenger transportation, primarily highways, public transit, and air travel. When freight trans- portation is considered, the focus is often on one mode of transport rather than on the freight system as a whole. And what is true of the general public is also true for a great many public officials whose decisions can significantly affect the freight transportation system. Because of freight transport’s lack of prominence, many policymakers have an inadequate understanding of how their decisions can affect the freight transportation system. This research is intended to address this shortcoming by exam- ining freight system impacts across a wide range of public policies. The study focuses on recently enacted policies as well as some policies being debated but not yet adopted. Both transportation and non-transportation policies are included. Through an extensive literature review, numerous inter- views with freight industry experts, and some new analysis, this report reveals the many ways that government policy deci- sions have affected (or could affect) the freight system. Poten- tial effects include shifts in freight mode as well as changes in the following: • Costs to freight carriers • Revenues to freight carriers • Costs to freight shippers • Freight volumes • Freight service quality • Freight operations • Freight system safety • Freight fuel use or emissions In addition to highlighting freight system impacts, the report assesses the extent to which such impacts were unex- pected by the relevant decisionmakers. Finally, the report con- siders the opportunity to improve public policy decisions through access to better information about freight system impacts. Definition of Policy It may be helpful to define “policy” in the context of this work. “Policy” is often used in two different ways. One has to do with general statements of principles or goals. The other has to do with specific government actions. Broad “policy state- ments” by government agencies or officials fall into the former category. These statements may convey intent or desire to adopt measures for stated purposes—cleaner air, greater fuel efficiency, reduced highway congestion, etc.—but are not, themselves, government actions that affect the behavior of individuals, firms, or other government agencies. One may call this policy-in-principle. One may call the latter case policy-in-fact. This comprises formal action by elected officials or government agencies, including programs for investment (e.g., direct spending, grants, and credits), taxes and fees of all kinds, rules and regu- lations that directly constrain behavior, and legal action by gov- ernments. Government decisions to adopt such measures— the real policy decisions—are the policies of interest here, because, one way or another, such decisions either directly affect behavior of various entities relating to freight carriage or change in some way the environment in which actors in the freight system operate and make decisions. Methodology The research team began the study by developing a broad list of public policies that could directly or indirectly affect the freight transportation system. This initial list of policies guided the next phase of the research—a search for literature analyz- ing the effects of these policies on the freight sector. The liter- ature search covered all of the primary freight transport C H A P T E R 1 Introduction

9modes: trucking, railroads, inland waterway towing, ports and maritime, and air cargo. The types of documents identified include Federal and state regulatory impact analyses, reports from Federal agencies such as the U.S. Government Account- ability Office (GAO), congressional testimony, academic jour- nal articles, news stories, and TRB publications. In the next phase of the project, the research team built on the information gathered in the literature search by interview- ing freight transportation stakeholders, primarily industry executives and academic researchers. The goal of the inter- views was to find out directly from industry experts which public policies have had the largest or most unexpected effects on the freight system. The research team developed a standard interview questionnaire, which was then customized for each transportation mode. The research team conducted approxi- mately 40 stakeholder interviews across all of the primary modes of freight transport. Based on the results of the literature search and the stake- holder interviews, the research team amended and winnowed its initial list of policies to identify approximately 12 policies most worthy of further analysis. In developing this list, we looked for policy choices with relatively strong and recent impacts on the freight modes and the efficiency of their oper- ations. For this purpose, the research team relied on the liter- ature and, importantly, on freight industry reactions to policy issues. The research team held two focus groups with trucking industry experts and railroad industry experts. The focus groups provided an opportunity for an in-depth discussion of some of the most important policy decisions affecting these two modes. For approximately ten policies or policy areas, the research team performed a more detailed analysis of freight system impacts. The research team also conducted four case studies to better understand the background and factors that led to a pol- icy action, the positions of stakeholders on the issue, and the effects of the policy action on the freight system. Report Organization The remainder of this report consists of five chapters and four appendices. Chapter 2 offers an overview of the freight transportation system, describing each of the major modes, the infrastructure, the private-sector stakeholders, and the general role of government. Chapter 3 identifies public policies that can affect the freight transportation system in nine policy cat- egories. Chapter 4 reviews 23 public policies to assess their freight system impacts and the degree to which the impacts were unexpected. Chapter 5 contains four case studies that present a more in-depth examination of select policy decisions. Chapter 6 presents a summary and synthesis of the research, including an examination of the role that information plays in influencing policy decisions. Appendix A lists the interviewees and focus group partici- pants. Appendix B contains a more detailed discussion of the effects of five specific policies. Appendix C lists the literature reviewed as part of this study. Appendix D lists abbreviations, acronyms, and initialisms found throughout the report.