MAP-21 Reauthorization: Bill Term and the Effects on Transportation Logistics

Guest post by Rico Fleshman, Corporate and Strategic Manager: Transportation, Logistics and Supply Chain for American Public University

As I discussed in MAP-21 Reauthorization and the Effects on Transportation Logistics, MAP-21, the nation’s current surface transportation bill, is set to expire on September 30, 2014, unless Congress approves a reauthorization or continuing resolution. If the latter, which many in the industry believe is likely, we continue with the status quo. This means continued lack of private investment due to market uncertainty; state DOTs  unable to begin or continue funding state and local projects due, in part, to an insolvent Highway Trust Fund; and a deteriorating infrastructure of national roads and bridges  

Alternatively, if Congress does act on reauthorization of the nation’s next surface transportation bill, what then? The answer is longer and more complex than the question.

Among the myriad issues facing lawmakers is the consideration of how the term length of that legislation will impact economic growth and public safety in the years ahead. In this discussion, I will analyze the bill’s economic impact on transportation logistics and the industry call to lawmakers to develop long-term policies that create sound funding strategies and influence transportation infrastructure, create jobs, and inspire market confidence.

Why a long-term bill? Would another short-term bill provide the flexibility needed to change or adopt new policies in lieu of outmoded, ineffective policies? A short-term bill would still provide funding for some projects and stimulate growth during that period without committing to program requirements for an extended period, would it not?

Overwhelmingly, the industry favors the benefits that multi-year, long-term provisions would offer. Whether from U.S. corporations with national or global logistics interests, industry associations, or state and local elected officials, though their motivations and needs may be varied, they all seek a long-term vision and funding stability.

For companies with expansive supply chain networks or over-arching logistics responsibilities, the desire for a long-term bill has significant implications for the bottom line.  In testimony earlier this year to the House Transportation and Infrastructure Committee, Stuart Levenick, Caterpillar, Inc. group president, called for a multi-year bill, citing the positive impact on the ability to remain globally competitive. Currently, equipment cannot be effectively moved around the nation due to ailing, restrictive, and deficient infrastructure. FedEx also reports staggering losses for every five-minute period that trucks sit in traffic due to congestion from diminished road capacity.  These are just two illustrations of how the current short-term bill has failed to support solutions to fix our long-term infrastructure problems.

But how is a long-term bill supposed to fix these or the multitude of examples like them? Let’s look at the potential impact of a long-term solution using infrastructure repairs and expansion along a ten mile stretch of highway as one example. Looking at the length of time it takes to complete that one highway project (disregarding recent projects like the new Tappan Zee Bridge in NY which was “fast-tracked” because of political influences), we can begin to see the need for longer guidance than a two- year bill would allow.  

From the onset of the project, states and metropolitan planning organizations (MPOs) would have to develop a set of performance targets, identifying the stretch of highway as a target in relation to preselected freight measures, freight bottlenecks, etc., and integrate that target into their planning processes. Either the MPO transportation improvement plan (TIP) or the state transportation improvement plan (STIP) would need to account for the project and the needed funding. Next would be a lengthy series of bid projects for design, environmental reviews, construction, and safety inspection.

This process can take three to four years and as many as six, during which time we are all impacted in some way by the process. With a two-year bill, this process is stifled, resulting in the agency’s inability to contract for infrastructure improvements which it has no way to fund. In addition, there is diminished capacity of manufacturers to create and ship their goods over that road; lost confidence among construction companies; and waning consumer confidence as retailers’ ability to receive and sell products in a timely manner is stunted. In short, it creates economic stagnation and decline.

A two-year bill has negative economic implications, and policy makers realize it. Whether it is U.S. Secretary Anthony Foxx’s GROW AMERICA Act, the Obama Administration and Rep. David Camp’s (R-Mich.) $305 billion bill calling for corporate tax reform, or the Senate’s Environment and Public Works Committee recent passage of a six-year bill, they all agree on the benefits created by a long-term solution.

Rep. Barbara Boxer (D-Calif.) said in a press release weeks before the Senate bill passed, "This job-creating legislation provides the long-term funding certainty that states, cities, and businesses need while maintaining and improving the efficiency of the successful TIFIA program and establishing a formula-based freight program to improve the movement of goods on our surface transportation system.” 

However, the House has yet to introduce a bill, the Highway Trust Fund is quickly depleting itself, and the clock is still ticking.

In my next post in this series, I will explore MAP-21’s creation of the National Freight Network (NFN), the bill’s mandate for statutory requirements from the Federal Motor Carrier Safety Administration (FMCSA), and the implications for future rail policy development from accidents like West, Texas, and Casselton, N.D.

About the Author

Rico Fleshman is the Corporate and Strategic Manager: Transportation, Logistics and Supply Chain for American Public University. He has worked with numerous transportation associations and has extensive knowledge of federal and state transportation policy, funding, metropolitan planning processes and regulatory compliance of transportation programs.  For information on the online Transportation, Logistics and Supply Chain programs at APU, visit StudyatAPU.com