Sustainability Strategies Addressing Supply-Chain Air Emissions (2014)

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66 This chapter offers suggestions to public policymakers as they consider how best to integrate air quality and climate change considerations into the nation’s supply chains. The research team developed these suggestions with the help of interviews of public agencies, shippers, carriers, and others, and from an extensive literature review. In summary, nine points are most significant in achieving effective results that balance environmental, societal, and economic needs. 7.1 Consult Closely with Stakeholders to Craft Win-Win Solutions Public agencies (including ports) can best accomplish intended policy goals by consulting and collaborating closely with stakeholders, including the shippers and carriers who will carry out the desired actions and improvements to reduce air emissions. Generally, these private-sector actors operat- ing U.S. supply chains are sensitive to climate change and air quality concerns. Large companies, in particular, are knowl- edgeable about what can and cannot be readily achieved and are taking steps to reduce emissions where this makes sense for their businesses. They also are able to provide a business and operational perspective on policy development, invest- ment decisions, and regulatory mechanisms that is essential in ensuring win-win outcomes. Experience shows that consult- ing these players is an important prerequisite to developing, and implementing, effective solutions. Rather than one-off consultations, the creation of a culture of consultation and cooperation is essential to engendering trust and furthering mutual understanding of supply chain sustainability issues. In the best of cases, win-win opportunities can be devel- oped through joint discussion, sharing of perspectives, and assessing options. Such solutions result in the optimization of benefits for everyone. The research has shown that policy, regulation, and con- formance evolving from private-sector engagement typically results in a more balanced approach to sustainability. Pro- active outreach and engagement of the private sector should thus begin early at the freight planning stage, continue with decision making relating to infrastructure funding, and be maintained in developing regulations. This should encom- pass a range of engagement methods and forums to encour- age active involvement of the full range of private-sector stakeholders. Evidence from case studies indicates that sig- nificant economic and environmental benefits are derived from concerted efforts to involve industry in the planning and regulatory processes. A compelling example of the value of such an approach is found in the Port of Los Angeles Pier- PASS Program, which was developed in close collaboration with marine terminal operators (MTOs). This effort, which included paying a traffic mitigation fee to offset terminal operator costs, proved far more successful at reducing truck- ing emissions than the earlier Port Gate Appointment System, which was conceived with limited inputs from private industry and proved ill-suited to operations. In another example, Cali- fornia’s tractor-trailer regulations involving low-rolling resis- tance tires were significantly improved by allowing SmartWay retreads as a result of inputs received from a working group of private-sector players. This enabled reduced private-sector costs, as well as environmental benefits from emissions reduc- tions and fewer tires sent to landfills. For the private sector, engagement in this statewide initiative has resulted in changes to SmartWay policy at the national level, thereby extending benefits widely. The federal transportation bill, Moving Ahead for Prog- ress in the 21st Century (MAP-21), sets out a greater role for freight than did previous bills. In addition to requirements for national freight policy and state freight plans, MAP-21 also specifically directs the U.S.DOT to encourage states to estab- lish freight advisory committees. Such committees are to be formed of public- and private-sector freight stakeholders and include representatives of ports, shippers, carriers, freight- related associations, freight industry workforce, state DOTs, C H A P T E R 7 Suggestions for Policymakers

67 and state and local governments. Their purpose is to advise on freight issues, projects, and funding needs; provide a forum for discussion of decisions affecting freight mobility; promote the sharing of information; and participate in the development of the state freight plan. Similar public-private consultative freight forums have been successfully estab- lished in states such as California, Colorado, Washington, and Oregon. Such forums also could provide a platform for a discussion of options for reducing freight emissions and for regulatory decision making in this regard. At the metropolitan level, regions such as Kansas City and Chicago have set up freight forums that allow for collabora- tion and sharing of information as part of the freight planning process. In Chicago, this took the form of the Intermodal Advi- sory Task Force, formed for the purposes of providing inputs into the Chicago Area Transportation Study. In Kansas City, the Mid-America Regional Council set up a Goods Movement Committee as part of the Transportation 2040 process. The committee continues to meet on a regular basis (at least quar- terly) to review freight data and corridor analyses. The Goods Movement Committee also provides a forum for MARC to engage the private sector in taking a proactive stance by join- ing the dialog on regional air quality standards, measurement, and regulation, as well as taking voluntary action to maintain air quality in support of the region’s Clean Air Action Plan. Research has shown that a basic problem for public planners is their ability to attract and sustain private-sector engagement (Rawling, 2005; FHWA, 2010a; supported by pers. comm. with MPOs). This is partly because of the differences in expectations, operating styles, and timelines between public and private sec- tors, which may lead to reluctance on the part of business lead- ers to engage in public-sector processes. The private sector has a stronger incentive to participate in such forums where they have the opportunity to contribute their perspectives on policy, infrastructure investment, and regulatory changes. Neverthe- less, medium-sized MPOs especially may find that they lack the ability to ensure sustained industry engagement efforts. Strong institutions are required on both sides for effective engagement to occur. The approach adopted in Chicago is instructional. The public agency worked with business representatives as a team of experts, as opposed to occasional consultees to the freight planning process (Rawling, 2005). This can create a dynamic whereby the private sector may be more interested in sharing its knowledge and experience. Building on this approach, private-sector participation in freight decision making might take the form of a Board of Directors appointment. The option of paying participants (or their companies) for their time could be explored. The offer of payment infers a two-way transaction and may be likely to elicit an obligation on the part of the pri- vate sector to engage in freight policy planning, regulation, and decision-making processes. Private-sector inputs may thus be procured in much the same way as are consulting services. In practice, DOT or EPA will likely have to agree, but given the importance of private-sector input to the freight planning and environmental regulation process, this may be considered an acceptable and efficient use of public funds, and may support more engaged commitment to the process on the part of the public sector. 7.2 Analyze Trade-Offs and Options Policymakers at local, regional, and state levels need to carefully analyze the trade-offs involved in setting air emis- sions requirements for supply chain operations. In particu- lar, local impacts of air emissions should be weighed against global GHG impacts. Costs for shippers, carriers, and con- sumers should be weighed against environmental and health benefits. Both federal and state regulators have developed detailed methods to conduct such analyses. Examples are the regula- tory impact assessments (RIAs) required by the federal gov- ernment in support of proposed regulations. RIAs used by EPA to assess impacts of environmental regulations have generally been found to be both accurate and beneficial (e.g., in terms of reducing cost or enabling the net economic benefits of the Clean Air Act amendments to be realized) (Hahn and Tetlock, 2008; Morgenstern, 2011). At the state level, California will require RIAs as of November 1, 2013, as part of the Initial State- ment of Reasons for any regulation that will have an impact of more than $50 million on California businesses or individu- als. Assembly Bill 1504, introduced in January 2012, would reduce this threshold to $25 million and introduce several other requirements as well, including an analysis of alterna- tive means to achieve the statutory purpose. Such assessments are required to consider impacts on new businesses; business competitiveness; investment in the state; innovation; and the health, safety, and welfare of residents. Both the federal and California RIA processes include opportunities for public comments and inputs. One consideration that seems to be missing from the Cali- fornian RIA approach to date has been that it considers the impacts of each regulatory measure in isolation and does not consider the cumulative impacts of various layers of regula- tion on the private sector. Further, CARB typically considers only the costs or impacts of regulations within its own juris- diction (California) and not in other states. States considering adopting California air emissions stan- dards as an alternative to EPA standards, or those consider- ing adopting regulations to curb air emissions from freight transportation sources, should consider undertaking a full impact assessment that takes into account costs and benefits of regulation in their own jurisdictions and other states, as

68 well as considering the combined effects of various regula- tory measures on the private sector. Those states consider- ing adopting California standards should pay attention to the economic impacts of regulation. Although the research found no evidence of loss of business as a consequence of recent air emissions regulations in California, this is likely a result of this state’s favorable position in respect to freight flows. The risk of freight diversion (with potential economic and air emissions costs) may be higher in other locations. 7.3 Coordinate Across Jurisdictions Supply chains and freight transportation are activities that, by their nature, are likely to cross multiple jurisdic- tions. Ocean transport, for instance, typically involves long intercontinental hauls of containerized freight. The opera- tors of ocean-going vessels are required to navigate numer- ous international, national, and local regulations. In the case of road and rail modes in the United States, freight is often moved across state lines. To the extent possible, state and local agencies seeking to address air pollution or GHG emissions should coordinate with national and international bodies to ensure consistent approaches and regulations that facilitate efficient operation of global or national freight networks. Well-established organizations, such as the International Maritime Organization for international shipping or EPA and DOT at the federal level, can serve as valuable guides for state and local agencies. Supply chain efficiency issues can arise where there are dif- ferences in the air emissions standards and the regulations applied between geographies. Dual standards or regulations can, for example, complicate equipment design, thus increas- ing manufacturer costs and risks, and may cause difficulties for global and national carriers. Consistent approaches, on the other hand, benefit industry and consumers by stream- lining administrative requirements, allowing optimal sup- ply chain operations, keeping costs down, and maintaining certainty. Nevertheless, regional differences in air quality, as well as impacts on public health and the environment, imply that uniform national emissions standards and regulations may be economically inefficient in low-pollution areas and potentially ineffective for meeting NAAQS in regions that face extreme air quality problems. Under the Clean Air Act, states wish- ing to adopt standards that are more stringent than the EPA’s requirements have the option to adopt California emission standards. In doing so, such states are obliged to adopt stan- dards identical to those in California. Based on the research team’s analysis and previous studies (National Research Coun- cil, 2006), states with limited specialist air emissions resources may benefit from additional guidance during their regulatory decision-making process. For example, states contemplating adoption of the higher California air emission standards might need assistance in addressing their technological feasibility, costs, and usefulness in attaining air quality goals, as well as potential impacts. One option might be for EPA to provide this guidance. Either by formally issuing guidelines, in the role as a mandatory consultee on rulemaking, EPA might be granted the authority to review, advise on, and, even deny state adop- tion decisions in respect of emissions standards, if necessary (National Research Council, 2006). These changes could help avoid unintended consequences and contribute to ensuring a balance between the benefits of additional emissions reduc- tions and costs to industry and consumers. Corridor-based approaches to freight transportation plan- ning and air emissions management can provide an effective way of planning, financing, and regulating freight move- ment. The cross-jurisdictional cooperation required under a corridor-based approach can contribute to ensuring that the necessary funds are directed to large-scale projects and better distribute economic, community, and environmental benefits and costs. This concept is being advanced by the EU, which promoted the Green (Freight) Corridors concept through their Freight Transport Logistics Action Plan (2007) aimed at inte- grated, efficient, and environmentally friendly freight trans- portation. Specifically, the focus along these Green Corridors, which are marked by a concentration of freight traffic between major hubs, is on co-modality and advanced technology to accommodate rising traffic volumes, as well as environmental sustainability and energy efficiency. They are characterized by the development of the necessary trans-shipment facilities at strategic locations, advanced Intelligent Transport Systems (ITS) applications, and supply points for alternative fuels and other forms of green propulsion. The corridor-based approach is broadly supported by MAP-21, which requires the DOT to establish a national freight network to assist states in strategically directing their resources. However, the focus is on highways rather than on co-modality. Nevertheless, MAP-21 also calls for a national freight strategic plan, which will identify major trade gate- ways and national freight corridors; set out best practices for mitigating the impacts of freight movement on communities; and provide a process for addressing multistate projects and strategies to improve freight intermodal connectivity. 7.4 Develop Supply Chain Sustainability Metrics Agreed-upon metrics for supply chain sustainability are lacking. This is an area that cries out for an effective public- private resolution. Developing a definition of supply chain sustainability that is shared by both public and private-sector agencies, and agreements as to how this should be measured would go a long way toward enabling concerted and joint

69 efforts by the public and private sectors to act on shared objec- tives. The research has made a start by developing a working definition of supply chain sustainability, based on consulta- tion with public and private stakeholders. The research team also developed a supply chain metrics map and a table of potential measures (see Appendix F). SmartWay is the most widely recognized U.S. supply chain sustainability success story of public- and private-sector col- laboration. The program is already extending its international and modal reach. The research team suggests that SmartWay (or an equivalent program) could be an appropriate vehicle to tackle the broader issues of supply chain sustainability and measurement on a public-private collaborative basis. Never- theless, this would be contingent on an appropriate level of funding to support such an initiative. Further, issues to be addressed include the following: • The extent of SmartWay’s jurisdiction and remit, especially given that international companies are reluctant to submit data to a part of the EPA; • The need to broaden SmartWay’s expertise to include inter- national ocean-going vessel operations; and • The requirement for data verification and consistency in the units used for measurement. 7.5 Adopt Performance-Based Approach to Regulation Performance-based approaches are generally technology- neutral and set an upper limit for emissions from a given source. Performance-based standards and regulations reduce rigidity and redundancy as well as offering more scope for innova- tion, compared with prescriptive requirements that stipulate a single technology or solution (e.g., prescribing the use of cold- ironing technologies or low-rolling resistance tires). Examples of the use of performance-based approaches include performance-based mobile-source emissions stan- dards developed by EPA and CARB. In California, these stan- dards have typically been “technology forcing” (technology forcing refers to a regulatory agency’s requirement for achiev- ing an emissions level within a specified timeframe, using unspecified technologies that have been shown to be feasible on an experimental or pilot-demonstration basis, but are not yet widely available commercially). As such, these standards have driven advances in technology development, result- ing in California becoming a “laboratory” for emissions- reduction innovations. CARB’s regulatory process is supportive of this laboratory role, allowing California’s standards to be amended rapidly in the face of changing market and technological conditions. EPA and the NHTSA’s recently introduced fuel economy standards for heavy-duty on-road vehicles provide a further example of performance-based standards. These standards, which are vehicle-based and not just engine-based, are set according to the unit of work performed (gallon or ton-mile, and CO2 emissions per ton-mile). This leaves manufactur- ers various options to combine the most appropriate and cost-effective GHG emission reduction methods in product development and to select from among different technolo- gies, components, and strategies. Other flexibilities widely supported by stakeholders include meeting the standards on the basis of fleet averaging, banking or trading of emis- sion credits, providing allowances for making GHG-reducing improvements to vehicles or for innovative technologies to reduce GHG emissions, incentives for advanced technology vehicles, or optional standards for companies selling smaller volumes of vehicles. An essential task for regulatory agencies using performance standards in air quality nonattainment areas is to test these standards to ensure that the desired emissions reductions are possible. Performance-based outcomes can then be established, rather than prescribing technologies or operating procedures. This approach allows private-sector innovation to flourish and leaves business to meet these standards as it sees fit. 7.6 Provide Incentives to Change Grants, tax credits, and funding for pilot projects are all effective methods by which the public sector can shift ship- per and carrier behavior. Results typically include achieving desired emissions reductions ahead of (or even exceeding) regulatory requirements. There are a number of successful examples of such incentive programs overseen by ports as well as at the state or metropolitan government. At the state level, California created a billion-dollar Proposi- tion 1B Goods Movement Emission Reduction Program aimed at reducing emissions and health risks from freight operations in priority trade corridors. Under this program, CARB makes grants available to local agencies (e.g., seaports and air dis- tricts) for specific types of projects like truck programs, ships at berth, cargo-handling equipment, locomotives, and harbor craft. Local agencies then offer grants via a competitive process to diesel equipment owners to co-fund the upgrade of their equipment to cleaner technologies ahead of regulation. Match- ing funds are attracted from private, local, and federal sources. It is anticipated that 2,500 tons of PM and 62,000 tons of NOx will be avoided over the life of the grants (CARB, 2011:2). At the metropolitan level, similar approaches have been successfully employed as follows: • The Texas Emissions Reduction Plan (TERP) committed $20 million to reduce locomotive emissions in the Houston- Galveston area, which suffers from the most severe locomo- tive emissions and the highest ozone levels in the state. TERP

70 funds projects in nonattainment areas for purchasing new locomotives, replacing old engines, and retro-fitting or adding emission-control technology. New locomotives are required to emit 25% less NOx than the engine replaced or 25% less than the federal standard (if new). These projects are expected to reduce NOx emissions by more than 3,300 tons (Scott, 2006). • The Chicago Region Environmental and Transportation Effi- ciency Program (CREATE) provides $1.5 billion in funding for some 71 projects, including road and rail overpasses and underpasses; roadway overpasses and underpasses; viaduct improvements; grade crossing safety enhancements; and upgrades to tracks, switches, and signal systems. Once completed, CREATE is expected to save more than 7.4 mil- lion tons of NOx emissions and more than 50 tons of PM emissions per year, as well as to provide congestion relief, reduce delay for freight and passengers, and offer safety benefits (CREATE, 2012). Incentives can play a significant role in enabling or acceler- ating regulatory compliance. This is especially true for CAP- reduction initiatives for which public benefits may not align as directly with shipper or carrier benefits as they do in the case of GHGs. Ideally, such incentive programs should yield a benefit-cost ratio of one or higher in order to be an efficient use of resources. 7.7 Push the Boundaries of Technology Regulatory agencies bear a responsibility to conduct suffi- cient analysis to assure that proposed criteria can be met with the available technology. If the standards are of a technology forcing type, then it is essential to allow sufficient time for an appropriate technology to be commercialized. Regulations calling for unattainable technical performance are counter- productive and frustrating to responsible industry partici- pants. Here again, local agencies can benefit from consulting with experienced federal, state, and international regulatory bodies and, of course, from the public-private consultative process advocated earlier in this chapter. Public agencies also can play a central role in pushing the frontiers of new technology. For example, California’s South Coast Air Quality Management District (SCAQMD) Tech- nology Advancement Office engages in cooperative part- nerships with public and private organizations (industry, academic and research institutions, technology developers, and government agencies) to co-sponsor projects intended to demonstrate best practices in the use of clean fuels and tech- nologies that lower or eliminate emissions. SCAQMD staff recently submitted an application for a $19-million federal grant to co-fund a demonstration project for zero-emission container transport between the San Pedro ports and the Intermodal Container Transfer Facility, 5 miles away. The tech- nology will include hybrid-electric trucks with all-electric range and wayside power to recharge and power such vehicles on the route. The Zero-Emission Truck Initiative is intended to cata- lyze the development and deployment of zero-emission trucks in Los Angeles County. It is being developed in conjunction with the Ports of Long Beach and Los Angeles (LA), Caltrans, Southern California Association of Governments, Gateway Cities Council of Governments, and LA Metro, and is being undertaken with the cooperation of Siemens (technology provider) (SCAQMD staff, 2012, pers. comm., May 11). Public agencies in California recognize that the extent of the freight air emissions challenge is such that a zero-emissions approach is required if they are to address pressing air quality challenges, drive down GHG emissions, and accommodate economic growth. Thus, agencies are taking an inspirational step—examining the potential for zero-emissions freight corridors. For example, the Southern California Area Gov- ernments Regional Transportation Plan includes a pro- posal for truck-only lanes from the San Pedro Bay ports to downtown Los Angeles along Interstate (I)-710; and a new east-west freight “truck-only” corridor near State Route 60 (SR 60), connecting I-710 with I-15 in San Bernardino, allow- ing for use of zero-emission truck technology as these tech- nologies evolve. Note that the terminology used is “zero and near-zero” emissions, with a conscious decision not to specify a particular technology. A clear message from industry is to maintain an open mind with respect to the type of technol- ogy to be adopted, while setting a standard for zero emissions. Working toward a zero-emission freight rail system is also a defined regional priority in the plan. Similar approaches are being adopted in Europe (e.g., as part of the EU Super Green Initiative). Envisioning and enabling a zero-emissions future is critical because it allows for growth in freight transportation without associated air quality, health, and climate change problems. It also allows the “either-or” approach to CAP versus GHG emissions reduction to be overcome. Planning for a zero- emissions future allows for technology assessment and testing to get underway at this early stage. This long-term approach ensures that future opportunities for zero-emissions tech- nologies are built into current infrastructure plans. 7.8 Redefine Operational Optimization in Metropolitan Areas The research revealed various ways in which the private sector is optimizing operations with air emissions benefits. In urban areas, CAP emissions are of particular concern. Technologies to promote fuel efficiency and reduce GHG

71 emissions tend to be less effective under urban operating conditions. These operating environments can have a signifi- cant impact on freight emissions including factors such as the necessity of serving customers at congested times of day, the quality and congestion of delivery routes, and even the time it takes to park a vehicle or gain access to a shipper’s freight dock. Although the research has shown that shippers and carriers do a good job of optimizing their operations, a gen- erally unanswered question is whether a higher level of opti- mization could be achieved by reducing the constraints of the urban operating environment. This is important because urban areas are where air emissions outcomes (most nota- bly, health impacts) are felt most keenly. Put differently, how much sustainability potential is lost because of less-than- optimal infrastructure and facilities, municipal restrictions, and commercial practices in urban areas? The research also revealed examples of how successful approaches to supply chain sustainability have been formu- lated. For example, the sustainability successes of some ports have been made possible in part by the ability of port authori- ties themselves to realize operationally practical changes, as well as their influence over service providers (MTOs, marine carriers, drayage operators, and railroads) and the port envi- ronment itself. The ability of Chicago’s CREATE Project to generate sustainability benefits from changes in the rail network and its function echoes these success factors—the Class I railroads, working with the public sector, were able to invest in improving the system with operational and envi- ronmental benefits. Is there a way to reproduce these success factors in the far more fragmented world of motor carriage, and to do so in metropolitan regions, which are the operat- ing environments presenting the greatest challenge to logis- tics sustainability? More specifically, could the operational skills and experience of large companies be brought to bear to address the sustainability constraints of the urban environment, redefine the limits, and give rise to a new class of “optimum”? Suggested candidates to step into a leadership role are the large private truck fleets of major supply chain companies (e.g., those run by Wal-Mart, Coca-Cola, or Frito-Lay) and leading parcel and motor carriers such as UPS, Federal Express (FedEx), and Con-way. Freight-related air emissions fall within the GHG Protocol Scope 1 emissions for shippers and national carriers, and their sustainability initiatives tend to be already well advanced. They have the capacity, as well as the inclination, to further demonstrate their sustainability credentials. A partnership of such companies, together with leading less-than-truck-load carriers, acting jointly with public agencies in a few major cities, could identify and drive new practices that would raise the operating productivity of the metropolitan environment and yield benefits in terms of environmental sustainability. Working together with public agencies, such partnerships might identify infrastructure and operational improvements specific to the urban operating context. For example, an optimized operating environment could feature responsive parking reservations, modernized building access, truck routes designated for accommodation instead of restriction and managed from traffic operations centers, left-turn bays, information technology to improve driving decisions and dispatch planning, and e-commerce delivery planning for urban neighborhoods. The require- ment for public support would be sustainability gains, while the motivation for the fleets would be cost and service effi- ciency. Much of that efficiency would be within reach of other, smaller fleets and independent operators, thus enlarg- ing the public benefit, while the methods and approaches devised could be promoted and duplicated in other cities in which the partnership companies are active, thus increasing the value to the partners. The logic in establishing these “urban fleet forums” would be to create an organizing entity to tackle the questions faced by hundreds of motor carriers operating in urban areas. Pri- vate fleets and carriers with a national reach are considered ideal candidates because they tend to be at the forefront of sustainable freight practices and have an in-depth knowl- edge of operational issues. Their publicly stated commit- ment to sustainability would make them strong candidates to take a leadership role. Such forums might be facilitated by the MPOs or could be industry initiated, but under either approach, experience from our case studies of ports suggests these forums should be led by industry. 7.9 Promote Sustainability Branding Companies are using green programs to differentiate them- selves, both with product consumers and corporate clients. In consumer goods, examples include shippers such as Wal-Mart, Nike, and Stonyfield Farm. Parcel carriers, including FedEx and UPS, have taken major steps to position themselves as green operators. Companies serving corporate customers— such as Staples, Maersk, and Con-way—have also promoted their supply chain sustainability practices to enhance their commercial appeal. Although industry participants report that consumers are not yet necessarily ready to spend more for superior environmental performance across the supply chain, great strides are nonetheless being made. The SmartWay Program is considered an outstanding suc- cess by public- and private-sector observers, including many shippers and carriers the research team interviewed. The ques- tion is, “What else can the federal (or state) government do to further promote sustainable brands for shippers and carri- ers?” SmartWay has been extended to railroads, for instance. What about parcel carriage or other modes of transporta- tion? Could the government (or international agencies) work out an agreed method to track environmentally and socially

72 responsible behavior across the entire supply chain of a prod- uct, in collaboration with shippers and carriers? This is what the outdoor apparel industry is doing for a particular industry segment. The success of SmartWay suggests there may be other oppor- tunities where a joint public-private approach could be valu- able in promoting sustainable supply chains. The attraction of brand recognition for leading-edge supply chain practices forms a strong motivation for operators to embrace environ- mentally friendly approaches. If not, overly simplistic (e.g., food miles) and potentially misleading efforts may arise that detract from the even playing field and optimal balancing of environmental, social, and economic benefits. 7.10 Conclusions The alignment between operating cost reduction (via fuel efficiency measures) and GHG emissions reduction is so direct that the private sector (shippers and especially carriers) is strongly motivated by their own financial interests to reduce emissions. Regulators need to be sure they do not impede the adop- tion of new technology or practices by issuing directives that “freeze” the solution without allowing flexibility for alternative solutions as they become available. Regulators can be helpful by coordinating across jurisdic- tional lines, given that supply chains necessarily cross these boundaries, and GHG emissions have global impacts. Uni- form requirements help assure a level playing field and achieve maximum benefits with the fewest potential distortions of economic activity. While the reality and anticipation of regulations is a fac- tor with shippers and carriers, the research team’s interviews show that private players are at least as motivated by con- sumer and competitive forces, and even by a desire to “do the right thing,” as they are by regulation. The issue is more pronounced with CAP emissions. This is because of the local nature of the impact. Transportation nodes (e.g., seaports, railyards, and intermodal facilities) are the locations where CAP emissions effects are greatest. At these locations, there will be potential conflict of objectives, between private parties (shippers, carriers, facility operators) and the local communities impacted, as represented by state and local air quality agencies and others. It is these situations that are the most challenging to resolve in a balanced fashion. Close collaboration at all stages of planning, investment, and public rulemaking is the best approach. This entails ongoing consultation with the private sector and effective coordination across public-sector jurisdictions and agencies. Port authorities across the country provide very effective examples of this type of public-private and cross public- sector collaboration. Local agencies faced with such issues can draw valuable lessons from the case examples cited in this research. Similarly, the research team suggests that a broad public- private initiative be launched to address urban freight sus- tainability at a national level. This effort could draw from the success of SmartWay, as well as regional initiatives (e.g., Kansas City SmartPort and CREATE in Chicago). The goal would be to establish a common nationwide approach to dealing with the problem of GHG and CAP emissions, and of congestion, linked to freight transport concentrations in or near urban areas. A coherent and uniform strategy across the country would yield benefits, both in terms of air pollution and congestion reduction, as well as improvements in supply chain efficiency.