New fund would dedicate Federal Monies necessary for goods movement
The establishment of a new federal trust fund to finance a growing backlog of goods movement projects is necessary to ensure American retailers, manufacturers and their products remain competitive in the coming years, according to the Coalition for America’s Gateways and Trade Corridors (CAGTC). Only a dedicated Freight Trust Fund (FTF) can assure that vital, but under-funded freight projects receive the dollars needed to keep pace with the growth of imports and exports that will double by 2020.
‘Goods movement projects are disadvantaged because freight now competes for funding with all other transportation projects, from transit needs to congestion mitigation and air quality and safety,’ said Michael Huerta, managing director of the Transportation Solutions Group of Affiliated Computer Services, Inc. and a CAGTC legislative spokesman. ‘More often than not, when forced to compete with ‘people projects,’ freight infrastructure improvements are put on the back burner,’ Huerta added.
The efficient movement of freight is essential to a growing economy, the competitiveness of US companies and job creation. Today, foreign trade accounts for nearly one-third of US GDP and world output is predicted to increase 33% over the next ten years. When this demand outstrips supply, the resulting congestion will have a devastating effect on both consumers and freight transportation providers. In fact, a 2005 study found that congestion caused 3.7 billion hours of travel delay and 2.3 billion gallons on wasted fuel, for a total cost of $63 billion. This growth will continue place an unprecedented demand on our highways, ports and rail lines and if our supply chain cannot handle the load, America will be left behind.
‘Will we be ready?’ asked former Deputy Secretary of Transportation Mortimer L. Downey, III, currently president of PBConsult, pointing out that major transportation infrastructure projects take at least ten years on average to complete. ‘Not unless we have a means to assure critical freight transportation projects get the dollars needed to provide for the safe and efficient movement of goods through improved infrastructure, better system operations and the deployment of technology.’
Experience with federal transportation policy has shown that progress in meeting transportation needs is greatest when federal-aid programs are linked to dedicated funding sources. Good examples of this are federal highway trust fund programs in the 1950s and 60s which largely built the Interstate Highway System, and mass transit trust fund programs in the 1980s and 90s that delivered bus and passenger rail systems in cities coast-to-coast.
Over the next fifteen years, container volume through America’s ports is expected to double. Yet, according to the most current projections, by 2020 demand will exceed capacity at most US gateways and many will have capacity constraints as early as 2012.
According to Leslie Blakey, CAGTC’s executive director, ‘We cannot wait to address this challenge. America’s freight is America’s future. Freight infrastructure requires a dedicated funding source to stave off economic gridlock. We must act now to ensure tomorrow’s economic security.’
CAGTC has commended Congress to consider the following tenets with respect to establishment of a federal Freight Trust Fund (FTF):
- Revenue should be assessed based on benefit.
- The revenue structure should be developed in such as way that growth in demand for goods movement yields an increase in trust fund revenue.
- All potential funding mechanisms and sources should be considered including, traditional highway user fees, tolls, as well as customs and cargo fees.
- Funding should be dedicated and sustained.
- Funds should be available to support projects, across all modes, of various size and scope, but with special priority for projects of national significance.
- Funds should be available to support multi-jurisdictional and mu