The U.S. government is stepping up efforts to alleviate congestion on America's highways as well as at its air and sea ports. But it's not planning to do it alone. The government wants private industry to play a major role in funding the initiatives.
Speaking to the National Retail Federation last month, Transportation Secretary Norman Y. Mineta outlined a plan to reduce congestion. The plan includes a major push to encourage individual states to seek private investors to help fund infrastructure improvements. At the same time, the government is encouraging major financial institutions and their clients to invest billions of dollars in roads and airports.
Mineta said the government would hold discussions with local officials and consumers of transportation about the growing role that the private sector should play in transportation decision-making and investment. "Our goal will be to greatly expand the list of states that have flexible laws to permit greater private-sector involvement in transportation projects," he said, adding that increased taxes and user fees might also figure into the solution.
"I don't know if that's a good thing or a bad thing, but they've made it clear that they don't want to come up with the money themselves," says Paul Bingham, an economist with Global Insight. "The Feds are not going to be the 'deep pockets' to pay for this, and they are putting the burden back on the private sector."
Reaction to the plan has been mixed. Some, like the National Retail Federation (NRF), have endorsed Mineta's initiative. In a press release, NRF president and CEO Tracy Mullin expressed optimism that the plan "will go a long way toward reducing the impact that transportation congestion has on our nation's economy."
Others are more circumspect. Collaboration between private and public sectors won't be easy, says John Bowe, who is regional presi dent for the Americas for APL and its sister company, APL Logistics. Dr. Chris Caplice, executive director of the Center for Transportation & Logistics (CTL) at the Massachusetts Institute of Technology (MIT), agrees with Bowe. He says that research by MIT shows that government agencies and policy-makers do not see eye to eye with carriers and shippers over the root causes of congestion and capacity constraints, and how to address them. Caplice says the main reason is that carriers and shippers are anxious to address operational issues in the short term, while government policy-makers at the state, regional and federal levels take a long-term view of infrastructure issues.
On top of that, the politics of funding infrastructure investment will make implementing a comprehensive policy difficult. Shippers and carriers at a symposium held by CTL last month, for example, complained about the "earmarks" in last year's highway bill that dedicated a large portion of the funds to legislators' local pet projects.
And although the Department of Transportation has developed a framework for a National Freight Policy, getting agreement on the details of what projects to fund and how to fund them promises to be a protracted discussion.
Gartner, Inc.
