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E-Commerce Poised to Influence Next Surface Transportation Bill

E-Commerce Poised to Influence Next Surface Transportation Bill
E-Commerce Poised to Influence Next Surface Transportation Bill
December 6, 2019   //   

By Joanna Marsh

As members of Congress consider how to fund surface transportation projects over the next several years, they must consider the ways that e-commerce is transforming supply chain logistics, leaders and witnesses told a U.S. House panel on Dec. 5.

“Without appropriate planning for last-mile infrastructure, we run the risk of not only congestion but total gridlock in urban areas where 80% of the American people now live,” said Del. Eleanor Holmes-Norton (D-Washington, D.C.) at a hearing& held jointly by the U.S. House Subcommittee on Highways and Transit and the& Subcommittee on Railroads, Pipelines and Hazardous Materials.

E-commerce and the last mile

Congress didn’t even talk about e-commerce when it was reauthorizing the surface transportation bill four years ago, said Holmes-Norton, chair of the highways subcommittee.

As Congress moves towards reauthorizing the bill in 2020, it will need to show strong support for intermodal by helping states and local partners invest in infrastructure regardless of the mode, she said. There should also be a focus on seamless transitions between modes, Holmes-Norton added.

The current surface transportation bill, the Fixing America’s Surface Transportation Act, popularly known as the FAST Act, is in effect through September 2020.

Witnesses at the hearing backed Holmes’ argument for multimodal solutions. The boom in e-commerce has resulted in a race to achieve overnight shipping or even packages and goods received within a few hours of shoppers’ orders.

The last mile is the “current” obsession of the supply chain industry because it can be the most costly, said Anne Goodchild, founding director of the Supply Chain Transportation and Logistics Center at the University of Washington.

The last mile and even the last 50 feet need to be considered in urban areas, Goodchild said.

Furthermore, state departments of transportation are facing competing demands in addition to providing curbside needs for freight transportation, such as the construction of bicycle lanes and the potential growing usage of autonomous vehicles.

“They all want space,” Goodchild said.

A national freight strategy that incorporates multimodal

Erin Aleman, executive director for the Chicago Metropolitan Agency for Planning and a board member of the Coalition for America’s Gateways and Trade Corridors, said the federal government needs to conduct a comprehensive study of the state of freight transportation today to so that it can develop a national strategy that can guide long-term planning.

The plan can serve as a “north star” to shape future federal funding authorizations, enable the government to see what funding has worked and serve as a way to hold grant programs and discretionary funding more accountable, Aleman said.

The government should also establish an office of multimodal freight within the U.S. Department of Transportation’s Office of the Secretary to guide freight mobility policy, Aleman said in written testimony.

“Because the movement of goods spans different modes of infrastructure, specialized knowledge at the federal level is essential. An office of multimodal freight will allow experts in the unique operational and economic needs of each mode to work together to make the best investments in our system,” Aleman said “Additionally, this investment strategy should include innovative and flexible approaches to structuring federal financial assistance in a manner that encourages private sector investment.”

Collecting freight data

The federal collection of data could also inform policy decisions, such as using data to allow federal, state and local policymakers to see where the bottlenecks are and document whether grants addressed those bottlenecks, witnesses said. Data on the movement of goods at the regional or mega-regional scale could also serve to encourage state and local collaborations to address problems.

Related to data collection is data sharing and the government efforts to encourage freight transportation to utilize technology that can relieve congestion and ensure supply chain efficiencies, witnesses said. An example of using technology in this manner would be enabling delivery trucks to see in real time where there’s parking availability so that they can park their trucks and deliver packages.

Federal grants should be more flexible

Meanwhile, grant programs supported by the surface transportation bill, such as the Infrastructure for Rebuilding America (INFRA) discretionary grant program, should encourage cross-border coordination between states. Grant programs should also promote multimodal investments and give states some flexibility in how they dole out federal grant money.

“We need the federal programs to provide flexibility so states can choose what works best,” said Jim Tymon, executive director of the American Association of State Highway and Transportation Officials.

States can use federal dollars to set up mini-INFRA grants within the state, enabling localities to address bottlenecks, Tymon said.

Freight’s contribution to GHG emissions

While supply chain efficiencies are one issue that the next surface transportation bill should address, the other is freight transportation’s environmental footprint. Freight transportation is expected to emit more than 500 million metric tonnes of greenhouse gas (GHG) emissions in 2020, according to Holmes-Norton.

To address freight transportation’s portion of GHG emissions, the federal government should consider incentives to promote infrastructure that support the charging of electric vehicles, said Jason Mathers, director of vehicle and freight strategy for the Environmental Defense Fund.

The government should also create a commission that would develop strategies to transition drayage trucks to be zero emissions by 2030, Mathers said.

“Drayage trucks – which transport goods over short distances, for example, hauling cargo in and out of ports and rail yards – are often old and poorly maintained. The low-speed, high idling operation of these vehicles exacerbates the shortcomings of diesel emission control equipment. These vehicles also operate in densely populated areas,” Mathers said in written testimony.

He continued, “Given that the performance requirements of drayage operations pair well with the EV [electric vehicle] drivetrain, and the urgent need to drive down pollution around ports and rail yards, a federal commission should be established to develop recommendations for transitioning these vehicles to zero emissions by 2030.”

The railroads’ role

Although Congress’ surface transportation bill has traditionally addressed highway-oriented transportation, the FAST Act included the railroads.

While the Class I railroads privately invest in their network infrastructure, the smaller shortline railroad companies need a tax credit to support their network investments. Short lines also support first- and last-mile deliveries. Chuck Baker, president of the American Short Line and Regional Railroad Association, called for the permanent passage of the 45G tax credit, which incentivizes such investments.

Ian Jefferies, president of the Association of American Railroads, called for the federal government to allow industries to develop technology that promotes safety and efficiency. Jefferies also called for a fully-funded Section 130 program, which addresses rail-grade separations or rail-highway crossings. He also said the federal government should make the program more flexible, so that the railroads can upgrade their devices at grade separations as more advanced technology becomes available.