SBW LOGISTICS
We are what we repeatedly do, Excellence therefore is not an act, but a habit. - Aristotle
Congress gets to work!
17/02/09 00:38
Jeff Berman, Group News Editor -- Logistics Management, 2/13/2009
WASHINGTON—A proposal made to Congress by the Coalition of America’s Gateways and Trade Corridors (CAGTC)—an organization dedicated to bringing national attention to the need to significantly expand U.S. freight transportation capabilities—is hoping to make funding for freight infrastructure a centerpiece of the next federal-aid surface transportation program, with the current legislation SAFETEA-LU expiring on September 30.
CAGTC officials said objective of this effort—entitled Freight 21: A National Strategic Freight Mobility Program and Trust Fund (FTF)—is to provide a new, separately-funded freight program that would improve the current federal-aid surface transportation program and balance and separate these interests—if based on user fees and funding from outside traditional sources. CAGTC added a new type of freight funding mechanism is vital, as “passengers and freight in the U.S. compete for an inadequate supply of infrastructure capacity and financial resources. Both suffer.”
CAGTC said Freight 21 is comprised of:
“With a [surface aide] re-authorization due to be worked on this year, chances are this would take place within that legislation,” said Leslie Blakey, CAGTC executive director, in an interview. “However, because this is going to fund transportation infrastructure with a new freight fee and not be a gas tax type of approach, it would need its own trust fund and need to be firewalled for freight only projects.”
Blakey added that with the shipper community and freight system users recognizing the need to invest in infrastructure, a user fee is likely going to need to be the optimal way to provide funding. And for this plan to be successful, Blakey said that it has to be something freight system users can live with, which will spur efforts to come up with a trust fund that would provide substantial funding that can be directly invested into infrastructure projects. And while the first dollars spent on these efforts will likely be from federal sources, she explained that often times that funding can be leveraged with other public and private funding sources.
Another focus area of Freight 21 she said that would be required would is to establish—at the Department of Transportation Secretary level—a new office dedicated to multimodal freight, which would be responsible for coordinating across all modes of freight transportation and working with various DOT offices to implement this program.
“This office would call for merit-based criteria to have those projects of national significance be first in line and apply for funding for projects where we can free up the most capacity and provide additional infrastructure that is going to have a national impact on our freight mobility,” said Blakey. “This criteria would be used to objectively select projects and provide for a participation…to bring the private sector to the table to help finance public-private partnerships.”
In some ways, the Freight 21 plan is similar to legislation introduced in September 2008 by Congressman Adam Smith (D-Wash.), entitled the National Freight Mobility Infrastructure Act.
This bill calls for the creation of a national fund that would be financed on an annual basis by $7-to-$9 billion in new fees from freight system users. These funds would be available only for freight projects and distributed on a competitive basis, the bill states. The $7-to-$9 billion in new fees for the fund would be collected through two mechanisms:
The initiative to establish a national freight fund underlies more important transportation infrastructure issues that need to be addressed, said Dr. Sotiris Pagdadis, former managing director of McKenna, Long & Aldridge LLP. The chief issue, he told LM in an October 2008 interview, being the need for a national strategy for freight and goods movement in the U.S. that has been agreed upon by various authorities and the federal government so that a freight fund can be enacted on a national strategy rather than enforcing random projects throughout the country.
“We are lacking a national strategy for goods movement,” said Pagdadis. “We are doing great at understanding the complexities that we have [on different parts of the country], but what we don’t have is a consistent language at the state, local, and federal level that says ‘we have a national strategy for goods movement’ that brings together all these different communities to act in unison. We don’t currently have that.”
WASHINGTON—A proposal made to Congress by the Coalition of America’s Gateways and Trade Corridors (CAGTC)—an organization dedicated to bringing national attention to the need to significantly expand U.S. freight transportation capabilities—is hoping to make funding for freight infrastructure a centerpiece of the next federal-aid surface transportation program, with the current legislation SAFETEA-LU expiring on September 30.
CAGTC officials said objective of this effort—entitled Freight 21: A National Strategic Freight Mobility Program and Trust Fund (FTF)—is to provide a new, separately-funded freight program that would improve the current federal-aid surface transportation program and balance and separate these interests—if based on user fees and funding from outside traditional sources. CAGTC added a new type of freight funding mechanism is vital, as “passengers and freight in the U.S. compete for an inadequate supply of infrastructure capacity and financial resources. Both suffer.”
CAGTC said Freight 21 is comprised of:
- a national strategy guide to long-term planning;
- dedicated and firewalled funding mechanisms;
- merit-based criteria for allocating funds; and
- a partnership with the private sector.
“With a [surface aide] re-authorization due to be worked on this year, chances are this would take place within that legislation,” said Leslie Blakey, CAGTC executive director, in an interview. “However, because this is going to fund transportation infrastructure with a new freight fee and not be a gas tax type of approach, it would need its own trust fund and need to be firewalled for freight only projects.”
Blakey added that with the shipper community and freight system users recognizing the need to invest in infrastructure, a user fee is likely going to need to be the optimal way to provide funding. And for this plan to be successful, Blakey said that it has to be something freight system users can live with, which will spur efforts to come up with a trust fund that would provide substantial funding that can be directly invested into infrastructure projects. And while the first dollars spent on these efforts will likely be from federal sources, she explained that often times that funding can be leveraged with other public and private funding sources.
Another focus area of Freight 21 she said that would be required would is to establish—at the Department of Transportation Secretary level—a new office dedicated to multimodal freight, which would be responsible for coordinating across all modes of freight transportation and working with various DOT offices to implement this program.
“This office would call for merit-based criteria to have those projects of national significance be first in line and apply for funding for projects where we can free up the most capacity and provide additional infrastructure that is going to have a national impact on our freight mobility,” said Blakey. “This criteria would be used to objectively select projects and provide for a participation…to bring the private sector to the table to help finance public-private partnerships.”
In some ways, the Freight 21 plan is similar to legislation introduced in September 2008 by Congressman Adam Smith (D-Wash.), entitled the National Freight Mobility Infrastructure Act.
This bill calls for the creation of a national fund that would be financed on an annual basis by $7-to-$9 billion in new fees from freight system users. These funds would be available only for freight projects and distributed on a competitive basis, the bill states. The $7-to-$9 billion in new fees for the fund would be collected through two mechanisms:
- a waybill fee for beneficial freight rail and commercial motor vehicle cargo owners—or shippers—that is assessed against the cost of transportation and not the cost of goods being transported; and
- a small increase in Customs fees that are already being collected, representing another 25 percent of the merchandise processing fee.
The initiative to establish a national freight fund underlies more important transportation infrastructure issues that need to be addressed, said Dr. Sotiris Pagdadis, former managing director of McKenna, Long & Aldridge LLP. The chief issue, he told LM in an October 2008 interview, being the need for a national strategy for freight and goods movement in the U.S. that has been agreed upon by various authorities and the federal government so that a freight fund can be enacted on a national strategy rather than enforcing random projects throughout the country.
“We are lacking a national strategy for goods movement,” said Pagdadis. “We are doing great at understanding the complexities that we have [on different parts of the country], but what we don’t have is a consistent language at the state, local, and federal level that says ‘we have a national strategy for goods movement’ that brings together all these different communities to act in unison. We don’t currently have that.”
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