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capacity woes dominate discussions at NITL freight policy forum

Despite what the cynics may say, it's not true that shippers and carriers can't agree on anything. They agree, for example, that the nation's aging transportation infrastructure and mounting traffic congestion threaten future economic growth. They also agree that shippers and carriers of all modes must work together to persuade Congress, regulators, and state legislators that the issues are urgent. But they don't always agree on the solutions which means translating their shared goals into action may be no easier than it has been in the past.

Just as it did last year, the issue of capacity and related concerns over infrastructure, congestion, and security initiatives dominated the discussion at a recent day-long forum on national transportation policy sponsored by the National Industrial Transportation League (NITL) and the Association of Transportation Law Professionals. The forum brought together leaders of large transportation trade organizations, union officers, federal transportation officials, and others.


NITL president John Ficker said that collaboration among all parties will be required to overcome the issues facing shippers and carriers. "Shippers and carriers are some of the most ingenious people I've met," he said. "They figure out how to resolve issues. But how many rabbits are left inside the hat? We can't do this in a modal silo environment. It is necessary to take a holistic view of freight."

Ficker said that capacity was one of NITL's two major concerns (the other being security), noting that projections call for the amount of freight to double by 2030 to 2035. "Even if that's half right," he said, "it's a problem."

Bill Graves, president of the American Trucking Associations (ATA), added that the transportation industry is likely to start feeling the pinch long before that. His group projects freight tonnage will increase 30 percent in the next 10 to 12 years across all major modes with rail intermodal growing fastest. Graves said that one of the most immediate concerns will be finding labor, noting that the ATA expects the trucking industry will need 100,000 new drivers by 2014 41 percent to replace retirees and 59 percent to absorb the growth in freight.

"There's definitely a feel that the entire freight community is recognizing how important it is that we get our act together to collectively go to the Congress to do things to advance our ability to move freight,"Graves said. "We are part of a global supply chain.We have to understand where we are headed with freight demand up and up and up."

Graves said the ATA's top legislative issue in coming years will be reauthorization of the federal highway spending bill, which expires in 2009. "Congress needs to recommit itself to a national program with freight a huge part of that," he said.

Laying down track
Edward Hamberger, president of the Association of American Railroads, may have summed up the quandary facing carriers, shippers, and policy-makers best when he compared the looming transportation crisis to the legendary Gordian knot.

"Capacity is constrained across all modes," he said. "It is going to get more challenging in the next 20 years. The thrust of every one of the studies is clear. There will be more and more demand for freight movement. That's a good thing, but infrastructure is becoming strained across all modes."

He said the railroad industry plans to add 80,000 new employees over the next six years and that the railroads are spending billions of dollars in new capital investment about $9.4 billion this year alone. However, Hamberger warns that railroad investment will continue only if that spending provides adequate returns. "At its heart," he said, "capacity is about money and capital investment."

Like the railroads, maritime industry players have been scrambling to invest in infrastructure, said Chris Koch, president of the World Shipping Council, a trade group representing the ocean liner shipping industry. "Infrastructure is an issue common to all users," he said. "Tens of billions of dollars are being invested to handle growth in international trade. A shortage of capital is not a problem. Getting environmental permitting is a problem. Hooking up to the infrastructure is a problem. Investing fast enough is an issue."

On the issue of security, Koch said he did not believe the recent legislative push to require that all ocean containers bound for the United States be inspected would get far. "It faces a lot of difficult hurdles," he said. "It is a tad on the extreme side and places barriers on our own trade."

But Koch does expect to see Customs and Border Protection succeed in its bid to expand its "24 hour rule," by requiring importers and carriers to provide additional data on incoming ocean containers 24 hours in advance of vessel loading. He expects to see a proposal for a new federal rule this summer that requires 10 data elements beyond what is on a bill of lading. "That's a big change for the import community," he said. He called it a logical extension of existing regulation, but one that could be difficult to implement.

Federal regulation of international shipping, he said, is constrained by the slow adoption of security rules by other nations. "We're moving to the next step before the rest of the world has moved to the first step," he said. "Many years down the road, it would be nice to see one international standard of the data elements for both importing and exporting. But we're a long way from that."

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