“the transportation trifecta” global competitiveness– highway and bridge preservation &...

““The Transportation Trifecta”The Transportation Trifecta”Global Competitiveness– Global Competitiveness–

Highway and Bridge Highway and Bridge Preservation & Clean AirPreservation & Clean Air

June 18, 2008June 18, 2008FHWAFHWA

““Talking Freight Seminar”Talking Freight Seminar”

Gregory G. Nadeau MaineDOT Deputy Commissioner

HIGHWAY & BRIDGE PRESERVATION

GLOBAL COMPETITIVENESS

TRANSPORTATION

Investment

CLEAN AIR

(CLIMATE CHANGE)

The Transportation TrifectaThe Transportation Trifecta


Global CompetitivenessGlobal Competitiveness• ChinaChina

10.5% annual GDP growth (2002-2006)10.5% annual GDP growth (2002-2006) China will invest 9% of GDP for new China will invest 9% of GDP for new

infrastructure up to 2011infrastructure up to 2011 4 of the top ten container ports in the world 4 of the top ten container ports in the world

are in Chinaare in China 52,000 mile national expressway system 52,000 mile national expressway system

planned (41% complete)planned (41% complete) Planned 18 major intermodal rail yardsPlanned 18 major intermodal rail yards


Air QualityAir Quality• Climate Change will be a central policy Climate Change will be a central policy

focus of the next federal transportation focus of the next federal transportation reauthorization act in 2009.reauthorization act in 2009.

• California and the Northeastern states California and the Northeastern states are leading the nation in policy are leading the nation in policy development to reduce GHG emissions development to reduce GHG emissions from the energy and transportation from the energy and transportation sectors.sectors.

The Transportation TrifectaThe Transportation Trifecta Highway & Bridge PreservationHighway & Bridge Preservation

• One freight car equals four trucks on our highways and bridges One freight car equals four trucks on our highways and bridges - Approximately 85% of all freight tonnage is moved by truck in - Approximately 85% of all freight tonnage is moved by truck in Maine (down from 89% in 2000).Maine (down from 89% in 2000).

• Maine alone is looking at a shortfall of over $3 Maine alone is looking at a shortfall of over $3 billion just to adequately maintain our highways & bridges and billion just to adequately maintain our highways & bridges and invest in basic strategic investments over the next 10 years.invest in basic strategic investments over the next 10 years.

• According to FHWA, freight movement will double over the According to FHWA, freight movement will double over the next twenty years. next twenty years.

• We’ve got to get more freight off the roads and on to rail – an We’ve got to get more freight off the roads and on to rail – an ounce of prevention is worth a pound of cure.ounce of prevention is worth a pound of cure.

Forces of NatureForces of Nature The AASHTO Freight Bottom Line report states that freight The AASHTO Freight Bottom Line report states that freight

demand will grow nearly 90% over the next twenty years. demand will grow nearly 90% over the next twenty years. The four major drivers of this freight demand identified are:The four major drivers of this freight demand identified are:

FirstFirst -- -- ConsumptionConsumption – the U.S. population reached 300 – the U.S. population reached 300 million in 2006 and will reach 380 million by 2035. This million in 2006 and will reach 380 million by 2035. This population growth will drive more demand for goods driving population growth will drive more demand for goods driving the demand for more freight transportation.the demand for more freight transportation.

SecondSecond -- -- ProductionProduction – Growth in service employment will – Growth in service employment will outpace manufacturing employment, but investment in outpace manufacturing employment, but investment in technology and improvements in manufacturing processes technology and improvements in manufacturing processes will increase manufacturing output and generate demand will increase manufacturing output and generate demand for freight transportation.for freight transportation.

Forces of NatureForces of Nature ThirdThird -- -- International TradeInternational Trade – Between the – Between the

1860’s and the 1960’s, trade grew slowly – 1860’s and the 1960’s, trade grew slowly – imports and exports each represented less than imports and exports each represented less than 10% of the U.S. Economy. Trade as a percent of 10% of the U.S. Economy. Trade as a percent of GDP reached 27% in 2005 and is projected to GDP reached 27% in 2005 and is projected to increase to 37% in 2015, and 60% by 2030. This increase to 37% in 2015, and 60% by 2030. This will intensify the flow of goods through our will intensify the flow of goods through our international gateways around the country.international gateways around the country.

FourthFourth -- -- Supply Chain ManagementSupply Chain Management – most – most businesses are moving to pull or on-demand businesses are moving to pull or on-demand supply chains, replenishing whatever the supply chains, replenishing whatever the customer consumes as soon as it is sold. The customer consumes as soon as it is sold. The result has increased the importance of result has increased the importance of transportation over warehousing. transportation over warehousing.

Rail Is Increasingly Important toRail Is Increasingly Important toShippersShippers

But needs some attention!But needs some attention!

Freight Rail Improvement Program-Freight Rail Improvement Program-Danville ProjectDanville Project

MaineDOT’s first FRIP project is a $5 million joint investment MaineDOT’s first FRIP project is a $5 million joint investment between PanAM Railways / St. Lawrence & Atlantic & MaineDOTbetween PanAM Railways / St. Lawrence & Atlantic & MaineDOT

Interline rail traffic between these two railroads is interchanged at Interline rail traffic between these two railroads is interchanged at Danville and grew 68% in four years. From 14,400 carloads in Danville and grew 68% in four years. From 14,400 carloads in 2002 to 21,000 carloads in 2005. 2002 to 21,000 carloads in 2005.

Increased traffic has resulted in increased public wait time at at-Increased traffic has resulted in increased public wait time at at-grade crossings – increased noise and air pollution – increased grade crossings – increased noise and air pollution – increased transit time for Maine shippers.transit time for Maine shippers.

This project will realign the interchange allowing SLR & PanAM to This project will realign the interchange allowing SLR & PanAM to eliminate the at-grade crossing of the two mainlines. This track eliminate the at-grade crossing of the two mainlines. This track reconfiguration will significantly speed up interchange reconfiguration will significantly speed up interchange movements.movements.

Public benefits include:Public benefits include:- - Reduced public wait time and increased safetyReduced public wait time and increased safety

- Reduced noise and air pollution- Reduced noise and air pollution- Reduced transit time for shippers of up to two days - Reduced transit time for shippers of up to two days

Who can make it happen?Who can make it happen? State GovernmentsState Governments The U.S. Federal GovernmentThe U.S. Federal Government The Canadian Federal Government The Canadian Federal Government Canadian ProvincesCanadian Provinces Railroads, Shippers, Retailers, Railroads, Shippers, Retailers,

Manufacturers, Distributors…..and Manufacturers, Distributors…..and other elements of the economy that other elements of the economy that depend on the transportation systemdepend on the transportation system

““The Feds” - A New MindsetThe Feds” - A New Mindset

““We don’t want the federal government to We don’t want the federal government to get out of the way, we want them to get on get out of the way, we want them to get on board!board! The Federal Government’s funding for The Federal Government’s funding for rail and intermodalism is anemic at best. We rail and intermodalism is anemic at best. We need to make the federal government and states need to make the federal government and states full financial partners with the private sector in full financial partners with the private sector in the business of moving goods in this country. It the business of moving goods in this country. It will enhance our global competitiveness, reduce will enhance our global competitiveness, reduce greenhouse gas emissions, and preserve our greenhouse gas emissions, and preserve our highway and bridge system.”highway and bridge system.”

Federal AuthorizationFederal Authorization SAFETEA-LU Expires in 2009.SAFETEA-LU Expires in 2009. Congress must immediately determine how to Congress must immediately determine how to

cure the $3.2 billion (or more) shortfall in FFY cure the $3.2 billion (or more) shortfall in FFY 2009. in the HTF (Baucus/Grassly pending.)2009. in the HTF (Baucus/Grassly pending.)

The next Transportation Funding Act needs to The next Transportation Funding Act needs to address the long-term funding crisis. New address the long-term funding crisis. New sustainable source of revenues.sustainable source of revenues.

Climate Change policy will influence Climate Change policy will influence transportation funding in the next Congress. transportation funding in the next Congress. Freight rail offers one of the few near term Freight rail offers one of the few near term solutions.solutions.

New England Governors & Eastern New England Governors & Eastern Canadian Premiers ConferenceCanadian Premiers Conference

ConnecticutConnecticut MaineMaine MassachusettsMassachusetts New HampshireNew Hampshire Rhode IslandRhode Island VermontVermont

New BrunswickNew Brunswick Newfoundland & LabradorNewfoundland & Labrador Nova ScotiaNova Scotia Prince Edward IslandPrince Edward Island QuebecQuebec


The NEG/ECP Conference has been active The NEG/ECP Conference has been active for the past 31 years.for the past 31 years.

It has a history of collaboration on regional It has a history of collaboration on regional issues – particularly environmental issues.issues – particularly environmental issues.

Focus on issues that don’t recognize Focus on issues that don’t recognize borders like energy – environment & borders like energy – environment & transportation.transportation.

Reduction of GHG emissions has been a Reduction of GHG emissions has been a particular focus since 2001.particular focus since 2001.


3131stst Conference held in Prince Edward Conference held in Prince Edward Island, Canada on June 26, 2007.Island, Canada on June 26, 2007.

Received report of a Ministerial Forum on Received report of a Ministerial Forum on Energy and Environment held in Quebec Energy and Environment held in Quebec City on February 12, 2007.City on February 12, 2007.

Preparation for the Ministerial Forum Preparation for the Ministerial Forum included a forum entitled – Transportation included a forum entitled – Transportation Solutions to Climate Change held in Solutions to Climate Change held in Portland, Maine on December 15, 2006.Portland, Maine on December 15, 2006.


Governors and Premiers adopted Governors and Premiers adopted recommendations of the Ministerial Forum recommendations of the Ministerial Forum in PEI.in PEI.

They included creation of a Standing They included creation of a Standing Committee on Transportation and Air Committee on Transportation and Air Quality.Quality.

The Committee is charged by Governors The Committee is charged by Governors and Premiers to implement specific action and Premiers to implement specific action items included in the Forum items included in the Forum recommendations.recommendations.

Standing Committee on Standing Committee on Transportation and Air QualityTransportation and Air Quality – –

Action StepsAction Steps The Committee make includes transportation and The Committee make includes transportation and

environment officials from the eleven jurisdictions.environment officials from the eleven jurisdictions. Goals and Objectives:Goals and Objectives:

- Reduce air emissions - Reduce air emissions RGGIRGGI (Regional Green (Regional Green House Gas Initiative)House Gas Initiative)- Set regional goals for greenhouse gas - Set regional goals for greenhouse gas reductions from the transportation sector.reductions from the transportation sector.

Develop Regional Transportation Action Plan and Develop Regional Transportation Action Plan and report to 2008 NEG/ECP Conference to be held in report to 2008 NEG/ECP Conference to be held in Maine.Maine.


Action StepsAction Steps

1)1) Development of Development of environmentally friendly environmentally friendly biofuels.biofuels.

Consider policy options like CA proposed Consider policy options like CA proposed Low Carbon Fuel Standard (LCFS)Low Carbon Fuel Standard (LCFS)

LCFS sets a 10% GHG reduction target LCFS sets a 10% GHG reduction target for fuel providers by 2020.for fuel providers by 2020.



2) Promotion of fuel efficiency in 2) Promotion of fuel efficiency in all modes of transportation.all modes of transportation.

Investigate use of incentives for public to Investigate use of incentives for public to acquire fuel efficient vehicles like feebate acquire fuel efficient vehicles like feebate programs.programs.

Utilize fuel-efficient and GHG friendly Utilize fuel-efficient and GHG friendly vehicles in public transportation fleets. vehicles in public transportation fleets.



3) Expansion of alternative 3) Expansion of alternative transportation and commuter transportation and commuter services.services.

Explore regional transit system Explore regional transit system opportunities.opportunities.

Address funding issues and opportunities.Address funding issues and opportunities.


Action StepsAction Steps4) Alignment of infrastructure funding 4) Alignment of infrastructure funding

with energy and climate goals by with energy and climate goals by encouraging energy-efficient encouraging energy-efficient development in municipalities and development in municipalities and regional entities.regional entities.

Develop and promote programs that prioritize Develop and promote programs that prioritize funds for jurisdictions that employ “smart funds for jurisdictions that employ “smart growth” strategies.growth” strategies.

Incentives for transit-oriented development.Incentives for transit-oriented development.



5) Use of life-cycle greenhouse gas and 5) Use of life-cycle greenhouse gas and carbon emission analyses to set carbon emission analyses to set indicators for policy and project indicators for policy and project planning. (When appropriate)planning. (When appropriate)

The Committee will determine if The Committee will determine if transportation measures have adequate transportation measures have adequate Lifecycle Analyses (LCA) estimates associated Lifecycle Analyses (LCA) estimates associated with them – if not, research consistent with them – if not, research consistent sources.sources.



6) Governors and Premiers will seek to 6) Governors and Premiers will seek to adopt clean car programs including the adopt clean car programs including the CO2 and air quality standards, such as CO2 and air quality standards, such as California standards, throughout the California standards, throughout the entire region.entire region.

Expand CA-LEV to NH and Eastern Canadian Expand CA-LEV to NH and Eastern Canadian Provinces.Provinces.


Action StepsAction Steps7) Collaboration with the private sector to 7) Collaboration with the private sector to

seek new opportunities to enhance seek new opportunities to enhance regional interconnectivity and efficiency regional interconnectivity and efficiency of freight networks in the region.of freight networks in the region.

Engage the private sector to jointly assess Engage the private sector to jointly assess opportunities to improve freight movement opportunities to improve freight movement efficiency. efficiency.

Opportunity to reduce GHG emissions and Opportunity to reduce GHG emissions and improve regional competitiveness.improve regional competitiveness.

AASHTOAASHTO

Authorization Policy ProcessAuthorization Policy Process

Freight Funding Modal TeamFreight Funding Modal Team

FREIGHT STAKEHOLDERSFREIGHT STAKEHOLDERS

QUESTIONSQUESTIONS

Do you think that the freight industry in general would be willing Do you think that the freight industry in general would be willing to support new sources of revenue for investment in freight to support new sources of revenue for investment in freight transportation infrastructure?transportation infrastructure?

New sources of revenue that have been mentioned include New sources of revenue that have been mentioned include percentage of customs fees, waybill tax, tax credit bond percentage of customs fees, waybill tax, tax credit bond financing, ITC, container tax, VAT, and carbon tax. What would financing, ITC, container tax, VAT, and carbon tax. What would you add to this list?you add to this list?

Which of the above do you think is worth further consideration Which of the above do you think is worth further consideration and might and might get enough support to be enacted? get enough support to be enacted?

What general criteria would you apply to determine the What general criteria would you apply to determine the acceptability of a acceptability of a new revenue source? new revenue source?

Are there any analyses or position statements produced by your Are there any analyses or position statements produced by your organization or others that you would recommend as being useful organization or others that you would recommend as being useful on this subject? on this subject?

FREIGHT FINANCING QUESTIONS

The U.S. is preparing…….The U.S. is preparing…….

… … to address Global to address Global WarmingWarming

Connecting MaineConnecting Maine

Thank YouThank [email protected]@maine.gov

“the transportation trifecta” global competitiveness– highway and bridge preservation &...

Documents

freight transportation

freight demand

freight tonnage

freight movement

transportation sectors

importance of transportation

increased traffic

demand supply chains