U.S. House looks at how to improve the nation’s highway freight network

[ Like all books and articles I read on transportation for my book, this session assumes endless growth and worries about future congestion, which will not be a problem on the other side of peak oil, which is coming soon.  Conventional oil peaked in 2005, over half of the 500 giant oil fields that provide 50% of oil are declining at 6%, a rate that increases exponentially, and unconventional oil (10% of supplies) won’t be able to keep up with that.  At least this U.S. House of Representatives session is more concerned freight than cars, which are wasting what conventional oil remains…

Also of note is Susan Alt’s comment: “We have electric trucks, but the big, heavy ones we would not be able to haul any load because we would have 50,000 pounds of batteries unfortunately.” Alt is a senior vice president for public affairs at Volvo Group North America.

Alice Friedemann   www.energyskeptic.com  author of “When Trucks Stop Running: Energy and the Future of Transportation, 2015, Springer]

House 113-55. February 27, 2014. Improving the Nation’s Highway Freight Network. U.S. House of Representatives. 101 pages. 

Excerpts

THOMAS E. PETRI, WISCONSIN.  The Nation’s highway system is an essential part of the broader freight transportation system. Not every community is located adjacent to a railroad, airport, waterway or port, but consumer goods are almost invariably transported along the Nation’s 4 million miles of highways and roads for at least part of the journey.

America’s reliance on the highway system is growing faster than the system is itself. The Federal Highway Administration estimates that in the next 30 years there will be 60% more freight that must be moved across the United States.

ELEANOR HOLMES NORTON, DISTRICT OF COLOMBIA.  The American people understand all too well what we mean when we say we have got to transport people. They think about the roads and the highways. They think about their transit. They think about their cars, but I am not sure that they understand what makes this country great, and it is the transportation of goods so that those people can use the goods.

MARK GOTTLIEB, P.E., SECRETARY, WISCONSIN  Department of Transportation, on behalf of the America Associati0n of State Highway & Transportation officials  

I want to thank you for the opportunity to testify on behalf of AASHTO and the State DOTs on the importance of efficient and safe freight movement to our State’s economies and to provide input on our freight transportation challenges. We support the establishment of an overall national freight transportation policy. However, we believe that designation of highway and freight networks cannot be accomplished through a top-down Federal process. A one-size-fits-all set of designation criteria fails to address unique, state-specific freight considerations. The methodology used to designate the 27,000-mile national highway freight network resulted in critical gaps and omissions and does not reflect many significant freight corridors operating within, between and among the States.

Gerald R. Bennett, mayor, Palos Hills, Illinois, on behalf of the Chicago Metropolitan Agency for Planning.

My agency, the Chicago Metropolitan Agency for Planning, CMAP, elevated freight as a high priority within our region’s award winning Go to 2040 comprehensive plan. Our region is an unparalleled hub not only of domestic but also international freight. Over a billion tons of freight worth more than $3 trillion move through the Chicago region each year. A quarter of all U.S. freight and nearly all U.S. intermodal freight originates, terminates or passes through Metropolitan Chicago. Nearly half of the freight in the region is through traffic, an indication of our central role in the national freight system. To address freight congestion, the Chicago Region Environmental and Transportation Efficiency Program, called CREATE, the first in this Nation, was established in 2003. This is a public-private partnership of the U.S. Department of Transportation, the Illinois Department of Transportation, and the Chicago Department of Transportation, AMTRAK, the region’s Metra Transit System, and private railroads. CREATE is dedicated to implementing specific rail improvements in and around the Chicago area. Its 70 projects include new fly- overs, grade separations, improved signaling, equipment modernization, and as of November 2013, 20 projects have been completed and 9 more are under construction. Most of the completed projects are rail improvements, many of which are on the belt corridor that circles Chicago to the west and south, with connections to multiple railroads. Eight of the eleven belt corridor projects have been completed and another is under construction. In contrast, relatively few projects move forward to mitigate freight’s negative impacts on local communities. Only 3 of CREATE’s 25 highway rail grade separation projects have been completed and only 3 are under construction.

Due to the lack of funding, 13 grade separations have not started at all and not one of the program’s 7 passenger corridor projects was completed in the past 10 years. This is also highly problematic because in a truly intermodal economy, grade separations facilitate the movement of truck traffic through the region.

Susan Alt, senior vice president for public affairs, Volvo Group North America

Volvo Group manufactures heavy trucks under the brand names of Mack Trucks, Volvo Trucks, Volvo construction equipment, Volvo Penta marine engines, Prevost and Nova transit coaches and city buses. The Volvo Group has six manufacturing facilities in the United States, in the States of Virginia, Tennessee, Maryland, Pennsylvania, New York and we are headquartered in North Carolina.

We rely on more than 50,000 truckloads of freight, of material coming into our factories each year. We rely heavily on the Ports of Norfolk and Baltimore to import 25 percent of our production material, and those same ports plus the Port of Charleston, South Carolina, for the export of our finished goods. We rely on the entire Interstate Highway System for the movement of our material, most notably Interstate 81, as four of our factories are located on or very near it. It is America’s infrastructure that makes all of this possible. The health of America’s freight network matters because it is important that our American manufacturing operations remain competitive in a global economy. In recent years the industry has embraced ‘‘just in time’’ or lean manufacturing philosophies that reduce manufacturing material in the production line. This new efficiency has manifested as a substantial benefit to Volvo, our customers and the economy as a whole. However, to be efficient, we have to have the right material at the right place at the right time.

In modern manufacturing, we cannot have excess inventory in our assembly or our delivery process. We deliver parts to the production line just as it is needed for assembly. Our ability to move parts from our supplier to our factory and finished goods from our factory to our end customer relies on the infrastructure of America. There are disturbances we can plan for, but what we cannot control for is unexpected delays due to congestion. This is where we get into real trouble. When, for example, a truck is caught in a traffic jam and cannot make its delivery, the ripple effect of that one delivery can be costly. It means we do not build the product on time, tying up capital. It means the product will have to be reworked, tying up man- hours, not following manufacturing quality processes. It means sending workers home early. It means not delivering to the customer on time and hurting our competitiveness all because of that one missed shipment.

Mr. PETRI. Chicago is where the railroad industry came together 150 years ago. Trains went to Chicago, and they went west from Chicago, and you can go to the center of Chicago and north, south, east, west tracks are the same grade level. They have to stop and wait for each other. I understand anyone who sees railroad cars up in my part of that area they are covered with graffiti because these trains stopped for hours or days negotiating their way through Chicago. And we understand still they take freight off one railroad, put it on trucks, drive it through Chicago to another railroad. In this age of ‘‘just in time’’ delivery and mobility, this is a significant burden on commerce,

Mr. BENNETT. You know, the story was it would take 2 days to go from Los Angeles to Chicago and 2 days through Chicago and then another 2 days to the east coast. Six of the seven major national Class I railroads come through the Chicago metropolitan area.

Ms. NORTON. And yet this is a crossroads of the United States, perhaps dramatically pointing to the need to create a stronger focus. We note that with the TIGER grants, which are probably the only lump sum we have for such intermodal projects, when freight competes with what people experience every day, which is getting in their own cars, freight sometimes loses out. So my question here goes to how do we get the focus on funding freight. When you consider, for example, that MAP–21 scratches the surface, if you will forgive the pun, of just daily transportation across the roads, of course freight uses that, too, but do you think, for example, that there should be a separate set-aside for freight? Do you think there should be a freight-only fund?

Ms. ALT. I do not think the consumers would accept an increase for freight because they do not appreciate the fact that it is the freight that brings them everything that they have every day.

Mr. MAIER. If you look at our business today, the fundamental change that is occurring is e-commerce, which means that, you know, 10 or 15 years ago packages went primarily to businesses. You know, with the growth of the World Wide Web and shopping online, more and more of our packages are going to people’s homes. And to be frank, I mean, that has changed the business. Package weights have come down, for instance, as shipments that used to be destined to a manufacturing facility or a distributor or to a retail store, those packages are now becoming smaller because they are going directly to somebody’s home. And in our business, our volume, and this would be LTL and certainly parcel express or ground, our business goes to where people are. So you have to look at population centers.

FedEx Ground is headquartered just outside of Pittsburgh. Last fall the Pennsylvania Department of Transportation imposed weight limits on approximately 1,000 bridges in the State. Now, they did that to slow deterioration and extend the operational life of the bridges pending the approval of transportation funding legislation that was subsequently signed last November. This requires transportation companies like ours to take alternate routes to go around those bridges and adds time and cost. We burn more fuel. We create more carbon emission. I mean, it requires us to engineer our network differently based on those changes, and that creates, you know, costs that we have to figure out how to cover somehow.

There are only 11 States in the country that allow the use of 33 footers within the border. We need Congress to change the policy so that we can use them nationwide.

Ms. ALT. Yes. So the Federal excise tax is 12 percent of the purchase price of the vehicle. Taking natural gas aside for a second, since 2010 the cost of the typical truck has gone up from an average of around $100,000 to $125,000.  And you add 12 percent to the purchase price, and the $25,000 increase has come from emission reduction control systems. So we have cleaner trucks. They are the cleanest they ever have been, and that is a great thing, but they cost a whole lot more to produce. So in the last 4 years, Federal excise tax went from $12,000 on a $100,000 truck to now another $3,000 more just to meet emissions. So the Federal excise tax already has been dramatically increased because the purchase price of the trucks has gone up so dramatically because of emissions. When we sell a truck with natural gas, primarily because the fuel tanks themselves are very expensive, you are now getting to sometimes as close to $200,000 for the cost of a truck, and regardless of a cleaner truck or a lower emission truck, you are paying 12 percent on the purchase price of that truck. So it is hard for the buyer to actually have to pay that extra tax. So they are being burdened.

Ms. HAHN. cargo leaves Los Angeles and takes maybe 48 hours to get to Chicago and then another 30 hours to get through Chicago. What do you think are some proposals out there? What are the best proposals we have out there for that last mile before it leaves or meets its destination of our cargo? And what can we do to really ease congestion, which in my mind will certainly help you on your own time deliveries? It also reduces pollution. We know that when trucks line up for that last hour queue getting in and out of ports, that is sometimes the worst pollution in those neighboring communities.  What is a proposal out there or a recommendation that we could make to ease congestion in the last mile?

Ms. ALT. We have electric trucks, but the big, heavy ones we would not be able to haul any load because we would have 50,000 pounds of batteries unfortunately.

Mr. BENNETT. grade crossings are very expensive, around $50 million per grade crossing,

Mrs. NAPOLITANO. People cannot afford $125,000 with the new equipment for environmental purposes. So they buy used ones and so we continue to pollute.

Mr. BARLETTA. I understand completely the impact that freight has on our local roads. And my question to you would be: how can we better assist the States as they support these critical roads and bridges, especially in light of Mr. Maier’s observation that the volume of freight moving by truck is expected to more than double by 2035? And then putting hard hat and mayor’s hat back on, being in a construction industry, I also know the difference between an interstate highway and a local road. I know there is up to 12 inches of concrete on an interstate, and I also know there is only a few inches of asphalt on the local road. My question to Mayor Bennett is: can you discuss the impact of freight on the first and last mile? And how do localities bear this burden?

Mr. BENNETT. It is obviously a lot of money, and as far as the situation in our community, and I think it was mentioned in California also, is that the last mile literally is most of these grade separations need to be fixed around the intermodal system of trains and freight or transport of freight from those trains to the highways, and it is in and around those rail yards. So it is all tied together. The cost of doing that for a local community is unbearable. It is a $50 million cost. It is not so much the roadway itself. It is the overpass or underpass that costs the huge amounts of money for the local government.

Mr. GOTTLIEB. Thank you. The first and last mile connections are critical and vital to have an effective network, and one of the things we have had happen in our State is we have become a leader in the production of frack sand for hydraulic fracturing, and we are sort of a hub for it in the western part of the State. And one of the things we have found as we have looked at the increasing demand for the transportation of frack sand both by rail and on the highway system is that we do not really have a big problem on our system, but when you get off of the State system and you get close to these facilities, then there can be problems.

 

 

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