Integrating Freight Considerations into the Highway Capacity Planning Process: Practitioner’s Guide (2013)

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20 Public-sector representatives increasingly understand that freight is directly linked to local, regional, statewide, and national economics. As a result, the integration of market-based considerations into planning practice currently is undergoing an evo- lution, from a low level several years ago to a stronger focus on these issues under present circumstances. Likely, the recent recession and the focus on infrastructure and economic development as a means to weather the economic downturn has contributed to a raised awareness of the benefits of promoting freight transportation. Several leg- islative efforts to boost the economy, from the American Recovery and Reinvestment Act (ARRA) to the multiple rounds of Transportation Investments Generating Eco- nomic Recovery (TIGER) grant funding programs, have encouraged jurisdictions not only to begin planning for freight transportation investments (if they have not already done so) but also to reorient existing planning, design, and construction programs to better accommodate freight movement. Overwhelmingly, industry representatives inter viewed during this guide’s development reported their support for a national freight policy—one that would help codify freight planning at the local, regional, and national level and help prioritize projects and programs that promote economic devel- opment. The MAP21 transportation authorization bill makes an effort to further this process through the following actions: • Establishment of a national freight policy to better align the goals of freight trans- portation system users throughout the United States; • Establishment of a national freight network to strategically direct resources to improve freight system performance; • Promotion of freight-planning activities, including the development of state freight plans and engagement with freight stakeholders at the state level; and 3 MARKET-BASED FREIGHT- PLANNING FACTORS

21 INTEGRATING FREIGHT CONSIDERATIONS INTO THE HIGHWAY PLANNING PROCESS • Prioritization of freight projects in the planning and funding allocation process by providing the opportunity for the secretary to increase the federal funding share to 95% for Interstate system and 90% for other projects. With the enhanced focus on freight within the transportation planning process, it becomes more important for agencies to also recognize and integrate market-based factors affecting goods movement into the planning process. According to interviews with industry representatives, market-based issues are sometimes considered in the freight-planning process, generally leaving room for improvement. Table 3.1 presents the strengths and weaknesses of the current practice of integrating market-based freight considerations into the planning process. HOW CAN WE INCREASE THE ATTENTION GIVEN TO MARKET-BASED CONSIDERATIONS? A growing understanding of how the private-sector market economy works and the roles that different freight stakeholders play in that market will improve the interaction with stakeholders in freight planning. Some key strategies could include the following: • Allowing staff to participate in private-sector sponsored conferences and work- shops to foster mutual understanding of freight issues.1 • Engaging with organizations that are more involved in day-to-day coordination with freight stakeholders such as chambers of commerce, economic develop- ment departments, or trade associations (e.g., state trucking associations or BCO groups). A strong recognition of freight transportation issues in the planner’s jurisdiction can go a long way to effective engagement with major freight stakeholders. Freight stakeholders need to know that they are dealing with someone who understands their issues and is serious about finding a solution that will positively affect the transporta- tion system. Invariably, projects and programs that are designed to add capacity to a particular highway corridor will be well received by the trucking community and other users; but it is the planner’s responsibility to work with those stakeholders to identify other solutions (which may be more feasible) to meet the same market-based goals. The next chapter provides some strategies to engage private-sector stakeholders based on lessons learned from existing literature, interviews with industry leaders, and case studies that highlight national best practices. NOTE 1. The I-95 Corridor Coalition's Freight Academy and the Freight Planning 101 Course offered by the FHWA can help prepare planners to better understand the perspective of private-sector freight stakeholders.

22 INTEGRATING FREIGHT CONSIDERATIONS INTO THE HIGHWAY PLANNING PROCESS TABLE 3.1. CURRENT STRENGTHS AND WEAKNESSES IN INTEGRATING MARKET-BASED FREIGHT-PLANNING CONSIDERATIONS Market- Based Freight Considerations Strengths in Existing Planning Practice Weaknesses (Room for Improvement) Economy National efforts to link highway funding to a robust cost-benefit analysis framework have contributed to freight-oriented highway projects getting needed attention and prioritization. Industry stakeholders are frequently involved in these efforts, especially railroads, marine terminal operators, and motor carriers. These cost-benefit analyses are largely related to maximizing economic development associated with transportation projects. In certain jurisdictions, freight projects have been prioritized based on economic development benefits. It is clear the state of the practice is moving in the right direction. Freight planning could be improved as public and private stakeholders reach a more comprehensive and mutual understanding of the way in which transportation decisions affect economic activity and vice versa. For example, there are challenges in reconciling the fundamental differences in timing/schedules of industry and government in project implementation (the private sector works on a schedule of weeks and months, while highway planners work on a schedule of years and decades). Industry logistics patterns State DOTs and MPOs are making an effort to better understand the decisions made by stakeholders in the supply chain management and logistics industry. Joint participation in workshops and advisory committees and the attendance of DOT planners at industry conferences could increase the sharing of knowledge and ideas. While the highway planning community is improving its knowledge of supply chains and logistics patterns, there is room for improvement. For example, planners may need to apply a supply chain orientation to questions and research on how logistics affect the highway system (e.g., What are your future export and import growth projections? and Where are you experiencing freight congestion in your supply chain?). In addition, planners need to better understand how supply chains are continuously adjusted to minimize business disruptions. Policy makers should care about what happens beyond their jurisdictional borders and take a broader view since supply chains are generally long and complex and not limited to a city or state. BCOs and logistics service providers should recognize that agencies would greatly benefit from their involvement in freight planning. (continued)

23 INTEGRATING FREIGHT CONSIDERATIONS INTO THE HIGHWAY PLANNING PROCESS (continued) Market- Based Freight Considerations Strengths in Existing Planning Practice Weaknesses (Room for Improvement) Freight infrastructure Efforts by state DOTs, industry organizations, and the federal government to evaluate highway flows and freight infrastructure limitations have improved the base of freight- planning information. For example, recent highway bottleneck research by the FHWA has provided planners with an initial list of national highway bottlenecks for consideration in state and local planning efforts. Since commodity flows are regional, national, and international in nature, it is important to continue to track these efforts to better understand the impact of freight bottlenecks on the entire goods movement system. Supply chains operate across borders; attention to regional efforts in highway planning is critical to developing infrastructure that meets the needs of global supply chains. If there is a bottleneck, chances are that all efforts by industry to make operations more efficient (e.g., hours of service, rerouting, night operations) have already been employed to mitigate the negative impacts and resolve the bottleneck; the transportation agency will have to add capacity and/or implement operations improvements. Regardless, highway planners should work closely with industry (and industry with highway planners) to jointly identify potential solutions to freight infrastructure deficiencies—including changes to operations. Commodity flows Numerous educational opportunities and a strong culture of conferences and networking are improving public-sector understanding of commodity flows. Courses offered through the National Highway Institute, trainings and guides produced by TRB and FHWA, and other knowledge-sharing efforts have greatly contributed to the freight knowledge base of planners. The growing understanding of freight data and their utility in understanding commodity flows is improving. Highway planners should continue to improve their understanding of cargo origins and destinations to know which part of the market to monitor and where transportation issues might arise in the future. Quality of service Coordination between jurisdictions on highway planning has improved in recent years. Because freight moves across borders, this coordination is crucial to ensure that freight projects are developed in an operationally viable way. The I-95 Corridor Coalition (mid-Atlantic and Northeast states) and the Mid-American Freight Coalition (Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Ohio, and Wisconsin) are two examples of organizations that effectively promote freight- planning efforts across local and state borders. There is a lack of understanding about how freight stakeholders use the highway system across local, regional, and state boundaries. A greater effort in cross-border coordination is necessary (for both public-sector planners and private companies making logistics and real estate decisions). TABLE 3.1. CURRENT STRENGTHS AND WEAKNESSES IN INTEGRATING MARKET-BASED FREIGHT-PLANNING CONSIDERATIONS (continued)

24 INTEGRATING FREIGHT CONSIDERATIONS INTO THE HIGHWAY PLANNING PROCESS Market- Based Freight Considerations Strengths in Existing Planning Practice Weaknesses (Room for Improvement) Environment NEPA provides a codified process to assess environmental impacts from highway projects. It can provide an accounting of impacts relating to noise pollution, congestion, and other concerns relating to freight operations; and it can help identify appropriate mitigation strategies. The process also can validate freight projects by highlighting the benefits relating to air quality improvement from an improvement in highway flows or the quality of life benefits stemming from economic development within a depressed region. Land use and freight connections need to be better understood (i.e., low-cost land next to highway interchanges). The environmental impacts of not completing the project should also be considered, in a multimodal context. Safety Safety plays a major role in the business decisions of freight stakeholders. Many freight organizations have worked to determine funding priorities for safety projects. Many DOTs are currently working to assess safety challenges on the highway system; however, the safety findings are not always properly communicated. A closer connection should be forged between safety planning (i.e., Strategic Highway Safety Plans) and long-range freight highway planning (long-range plans, transportation improvement programs). TABLE 3.1. CURRENT STRENGTHS AND WEAKNESSES IN INTEGRATING MARKET-BASED FREIGHT-PLANNING CONSIDERATIONS (continued)