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Shippers Must Speak Out on Infrastructure in General -- and Highway Infrastructure in Particular
Roughly three quarters of freight moves by truck today, and projected growth in demand far exceeds the investments planned for our highways (the most recent U.S. highway bill, SAFETEA-LU, came in at least $100 billion short of needed investment). Shippers who depend on the trucking industry need to join the call for increased infrastructure funding and need to emphasize the critical role of truck transportation for today's supply chains.
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DO YOU CARE whether your freight moves by truck or train, water or air? It is often said these days that what counts is getting freight where it needs to go, reliably, safely and on time. The implication is that modes matter less than they used to, and this is sometimes true. For example, if FedEx uses a truck instead of a plane to get your freight from origin to destination overnight, there may be no problem.
However, many shippers would not want their freight to be subject to the erratic service that characterizes many rail shipments. The rise of just-in-time supply chains, with minimal inventory and warehousing, has been made possible through the ability of the trucking industry to meet tight delivery deadlines with better than 90 percent on-time reliability. Rail carriers generally operate with looser schedules, greater variability, and few, if any, service guarantees.
Roughly three quarters of freight moves by truck today, and projected growth in demand far exceeds the investments planned for our highways. The most recent highway bill, SAFETEA-LU, came in at least $100 billion short of needed investment, and part of the funding that was appropriated for the period ending in 2009 will go to mass transit and to Congressional "earmarks," including performing arts centers, bike trails and "bridges to nowhere."
The nation's failure to invest adequately in necessary transportation infrastructure is attracting high-level attention. However, it remains to be seen whether the U.S. will invest the right amount or will obtain funding from the right sources or will invest in ways that adequately recognize the needs of freight shippers and carriers. As is often noted, commuters vote but freight doesn't.
In February, the U.S. Chamber of Commerce held a seminar in Washington, D.C., at which Department of Transportation Secretary Peters warned that public funding can no longer be counted on to meet the need for expanded highway infrastructure. Consistent with Administration policy, Secretary Peters said that new tolls, user fees, privatization and public-private partnerships will have to increase because significant increases in highway fuel taxes are not realistic.
Even a partial shift away from the traditional system of public funding of the nation's highways should concern shippers dependent on reliable, economical truck transportation. Also troubling is the possibility of involuntary modal shifts due to inadequate truck and highway capacity.
At an April 11, 2007 hearing on rail capacity and infrastructure requirements before the Surface Transportation Board, the CEOs of the four largest Class I railroads - Union Pacific (UP), Burlington Northern Santa Fe (BNSF), CSX Transportation and Norfolk Southern (NS) - all testified that they expect the market share of railroads to increase in coming years as capacity constraints force shippers to divert freight from trucks to trains.
Many policymakers support such results, citing reduced highway congestion, fuel use and air pollution. However, many policymakers do not understand the implications for just-in-time supply chains of such modal shifts.
The desire of the railroads to grow and increase market share is understandable, and increased rail capacity must be part of the answer to increasing freight volumes. Moreover, increases in truck-rail intermodal transportation can help increase freight capacity. Resistance to larger and heavier trailers is hindering efforts to improve trucking industry productivity. However, for most of the nation's shippers, trucks and trains are not interchangeable elements of efficient supply chains.
The American Trucking Associations (ATA) recently took an important step in promoting the need for infrastructure investment that adds to highway capacity. ATA announced the formation of Americans for a Strong National Highway Network. The new organization is expected to support greater funding for public highways and to resist privatization and new tolls on existing roadways.
The trucking industry needs help. Shipper organizations and shippers who depend on the trucking industry need to join the call for increased infrastructure funding and need to emphasize the critical role of truck transportation for today's supply chains.
NASSTRAC members are predominantly shippers of freight who do not engage in the long haul shipment of bulk commodities for which railroads tend to be the main carriers. Given its members' focus on truck transportation, it makes sense for NASSTRAC to support greater highway infrastructure investments. It is in the interest of all shippers who depend on truck transportation to speak out as the U.S. confronts critical infrastructure investment decisions.
NASSTRAC (National Strategic Shipper Transportation Council) provides education, advocacy, connections and solutions for professionals involved in all areas of transportation, ranging from full truckload and LTL to containerization and global logistics.