- THE MAGAZINE
Passing the 2012 surface transportation bill was one thing. Implementing it is quite another. Two months before the legally-required Oct. 1, 2013 implementation deadline for Moving Ahead for Progress in the 21st Century Act (MAP-21), guidelines were still being developed that would be used to write the final implementing regulations. Add the government spending debates and government shutdown and the impending battle over the government spending ceiling and it is little wonder that the final rules are not yet final.
“MAP-21 is the policy architecture for the 21st Century,” notes Oliver McGee, former U.S. deputy assistant transportation secretary under President Clinton and founder of Partnership Possibilities for America. MAP-21 forms the framework upon which specific regulations will be crafted and, as such, is a legacy document for future transportation secretaries, he stresses. MAP-21 established the framework to improve the condition and performance of the national freight network. Its goals include improving competitiveness, efficiency, congestion, productivity, safety, security and resilience of freight transportation. Achieving those goals includes the use of advanced technology to improve performance and accountability. For the first time, the bill calls for developing a national freight strategy and a national freight network.
“Until we see the final regulations, it will be difficult to know the full impact,” notes Susan Kohn Ross, international trade counsel, Mitchell Silberberg + Knupp LLP. She says she expects to see final proposals — but not the actual regulations — by the deadline. As she points out, “The Food Safety Modernization Act (FSMA) required rollout by June. When it was late, the government was sued in the San Francisco area. It made the case that it needed additional time because of the enormous complexity of the regulations. I’m not sure the government could make that case here, because the concepts aren’t new.”
“The bill isn’t perfect. MAP-21 has both good and bad points,” Stephen Craig, managing partner of enVista, judiciously points out. Typically, the transportation strategic vision has focused upon people-moving, he says. This plan, however, includes freight considerations, so planners may invest more attention to such details as how to connect to intermodal networks and the use of on-dock rail.
“It increases local decision-making,” Craig says. Therefore, crafting a national freight strategy that works for the 21st Century requires carriers and logistics providers not only to pay attention but to become involved in local and regional planning. Because local governments can prioritize projects, “some money could get back into the game. But, Congress left open some serious funding questions.
“It will be years before the U.S. has a national freight strategy, but at least we are starting to have the discussion,” Craig continues. He predicts some serious arguments about the timing and budget as planners begin to design the infrastructure policies that will govern freight movement in 2025. “It’s important to be involved in the planning process. Deep-in-the-weeds discussions are happening and companies need to be involved in the details because those details will affect infrastructure spending.”
For example, Craig elaborates, “When you define the strategic plan, you must focus on freight volumes, potential bottlenecks, routes and best practices. The DOT has rolled down many of the decisions of municipal councils of governments, so cities and counties are talking with their local rail, ports and carriers to get better assessments of volume. Participating in those meetings is necessary.”
The Advisory Committee on Supply Chain Competitiveness (ACSCC) has been working with the Department of Commerce since 2011. Consisting of some of America’s leading carriers and shippers, it is providing real-world insights and expertise to shape the final regulations regarding freight policy, competitiveness, information technology, finance, infrastructure and the regulatory environment.
In June, the ACSCC recommended using existing network data as an adjunct to the DOT’s pending study of major routes, bottlenecks, transfer hubs, customs clearance locations and congestion. With this data, the committee suggests the DOT can achieve a higher return on investment. The committee also suggested creating a national supply chain executive dashboard using real-time data to provide deeper insights into immediate threats, thereby enabling faster reaction.
The national freight network will work in parallel to the national freight strategy. It is envisioned as a way to “assist states in strategically directing resources toward improved movement of freight on highways,” according to the DOT. The national freight network identifies primary freight corridors, other interstates and rural freight corridors. Up to 30,000 miles of interstate and rural freight corridors are included.
“The national freight network is a signal that the FMCSA is trying to be a smart agency,” McGee says. “FMCSA is trying to make a network that is as smart and sophisticated as that of the FAA.” The U.S. has seven grand challenge problems — infotech, biotech, wireless tech, microtech, nanotech, cognitotech and eldertech,” he explains. Transportation involves many of them in terms of developing and deploying the technology to move people and things safely and efficiently. “They all must be integrated to create a smart motor carrier administration.”
Private enterprise already is building certain elements of a network through freight matching sites that match loads to truckers and thereby help minimize the miles run empty. “The idea of a national network that does this is very appealing, but confidentially is a concern,” Ross says.
MAP-21 also calls for the Department of Transportation to develop a freight conditions and performance report. This report should capture and consolidate capacity and usage information. Although many agencies and associations track information, the data is not as robust as it could be. The report aims to improve data quality by making it more complete, more accurate and more timely. The report also may make the data more widely available and accessible. “It also looks at truck size and weight,” Craig says. “The DOT has let a contract to fund a study not done by carriers to get that information.”
“MAP-21 Has accomplished quite a bit already in terms of getting more information to drivers,” McGee says. He cites such industry accomplishments as the growing use of electronic on-board devices that provide information about vehicle operations and status, in-cab communications so drivers can always be contacted and the increased development and sharing of best practices. “We still have a long way to go in reducing fatalities,” he adds. He suggests that making surface transportation systems smarter will help.
The downside to the plan involves funding. Joshua Schank, writing on a blog at The Eno Center for Transportation, supports the MAP-21 goals, but points out that it lacks adequate discretionary spending and that its performance metrics are weak. It also fails to supply a long-term solution to the Highway Trust Fund and does not address the formula factors that affect state highway funding.
Ports Not Addressed
Ports were not addressed specifically in MAP-21. “They have to fight for Transportation Investment Generating Economic Recovery (TIGER) grant funding,” Craig says. “Each project is multi-modal, multi-jurisdictional or otherwise challenging to fund through existing programs,” according to DOT. Competition for the grants is intense. Therefore, Craig adds wryly, “I envision Thunder Dome.”
“TIGER is one of our main focuses at the DOT,” Kip Payne, Manager of Government Relations at the American Association of Port Authorities. “Members of both parties now mention ports specifically when they discuss infrastructure. That’s encouraging.”
The available TIGER funding, however, has been dropping each year. Congress dedicated $1.5 billion for TIGER I for fiscal year 2009, $600 million for TIGER II for 2010, $526.944 million for 2011, $500 million for 2012 and $473.847 million for 2013. Payne says he expects funding to continue to tighten. “The DOT appropriations bill seems to be stalled in the House and Senate,” he commented before the government shutdown.
Although the President’s 2014 budget requested $4 billion for TIGER grants, the U.S. House of Representatives zeroed it out. The budget sequester further pared the budget, so actual funds available were undetermined. As Congress has not passed a budget since 2009, relying instead on continuing resolutions, that solution is likely this year, too.
Payne also notes that MAP-21 expires September 30, 2014 and, therefore, must be reauthorized. “AAPA and our members are working with the DOT and the Department of Commerce to implement provisions of MAP-21,” he says.
The main interests are the first mile/last mile outside the port properties. Congestion and on-dock rail are key concerns. “Some ports are members of the DOT committee (established summer 2013) to identify the key transportation networks in the U.S.,” Payne says. Port authorities also have representatives working with the House Transportation and Infrastructure Committee panel to help design the freight strategy for the 21st Century, he adds. “Shippers and other customers depend upon efficient freight movement. Our goal is to ensure it moves in a timely manner.”
The challenge facing the transportation industry is the cascade of regulations confronting them, Ross says. “If it was MAP-21 alone, it would not be bad, but it’s MAP-21 and a dozen other things affecting trade” that makes the business climate challenging. Hours of service rules; Compliance, Safety and Accountability (CSA) regulations; and electronic on-board recorders, for example, are legislated into bills other than MAP-21.
Ross, who focuses on international trade, says brokers and forwarders face a particular challenge. They often act as property brokers, but regulatory changes are increasing their operational costs. Now, to act in that capacity, a company must be properly licensed as a property broker and post a $75,000 bond. A firm also must develop and deploy internal controls around selecting and managing carriers, gathering information, managing liability and other elements of conducting business. For example, she asks, “What is the broker’s liability exposure to truckers’ accidents?” A noted liability case in 2004 cost C.H. Robinson $20 million. “The driver or carrier may have little insurance, but the broker is perceived as having deep pockets and therefore, may be held liable.”
Another scenario, she points out, occurs when one division of a large corporation arranges the transportation for another division and is paid a commission for that service. “Will that division have liability exposure and will it be governed by property broker requirements?” she asks. “Those questions are open because the final regulations haven’t been written.”
Although many guidances have been written and appointments made, many things remain to be completed. The freight policy section of MAP-21 needs to designate primary freight networks, clarify the guidance and best practices for special permits and finalize the rule regarding the 550 pound allowance for idle reduction equipment.
The tolling and innovative finance section needs to revise its program guide and develop guidances for tolling and financial plans and to post model contract revisions for review. The federal and tribal lands segment of the bill needs a review and decision on the TTP safety set-asides and an update of tribal bridge regulations. Other MAP-21 program elements are in a similar stage of completion.
What’s Coming Next?
Although not a part of MAP-21, the Hours of Service rules have a significant effect on U.S. transportation. The courts upheld the ruling in August, but made an exception for short-haul truckers by not requiring them to have the 30-minute breaks required for long-haul truckers. Now the definition of “short-haul” is being questioned. The American Trucking Associations (ATA) petitioned the FMCSA for clarification shortly after the ruling was delivered.
“It will be interesting to see how this ruling is applied and how it affects capacity,” Craig muses. “There was a lot of science behind the rules, but it is an open question as to how much this will affect the industry. If shipping networks were finely tuned to the old rules, they’ll be affected.” The shippers whose transportation networks were not that finely tuned will be affected less, he predicts.
The requirement for electronic on-board recorders (EOBRs) is more significant, Craig says. EOBRs (now referred to as electronic logging devices or ELDs) may be required as early as next summer. Deploying them increases costs but, “For those companies that incorporate the data throughout their transportation operations, there could be significant benefits.” For example, Criag mentions linking delivery confirmation messages to store inventories and scanning merchandise at the distribution center to save in-store labor. “Integrating EOBRs into broader operations could reduce phantom sales because you have better knowledge of inventory,” he surmises.
In June, FMCSA submitted its report to Congress outlining its proposed timeframe to resume the Commercial Vehicle Information Systems and Networks (CVISN) program. That program focuses safety enforcement on high-risk operators; integrates systems to improve credentialing accuracy; screens commercial vehicles electronically; and enables credentials to be applied for and issued online. One month earlier, FMCSA issued a proposed rule to allow state and federal enforcement officials to view and share the most current information about drivers’ medical certification status.
The future of the Highway Trust Fund depends on the extent of gridlock in Congress. “If Speaker of the House John Boehner (R-OH) and Senate Majority Leader Harry Reid (D-NV) can agree, there will be no bankruptcy,” McGee speculates. Infrastructure is a critical investment, but where that money to make that investment comes from is the question. He predicts small differential changes in the tenor of Washington, D.C., but no major shifts during the next five to six years.
None-the-less, “There are interesting things going on,” Ross says. She points to a memorandum of understanding (MOU) between the U.S. Customs and Border Protection and the Federal Maritime Commission. This is in addition to the MOUs filed between CBP and 47 other agencies to implement the Automated Customs Environment (ACE) program.”Agencies already are exchanging information,” Ross says, letting them ask questions nearer to the time of the actual transaction. “That’s the big thing now. More and more agencies are realizing they can get interesting, valuable information by data mining.”
“As we have technological advances, what is deployed is an economic decision,” McGee emphasizes.
“Brokers and forwarders need to be prepared,” Ross says. Although the regulations are not yet finalized, brokers and forwarders have some inkling of what’s coming. “They should register now as property brokers, get their bonds in place and identify the criteria they will use to select carriers. Some of it is just old-fashioned due diligence.” [The bond requirement actually went into effect October 1st.]
Shippers, carriers and brokers alike also need to begin thinking about the type of freight network they want in 2050, McGee says. “We were planning MAP-21 in 2000. Now we’re looking at 2015 through 2050.” Although he says he does not envision “too many dramatic shifts,” in the near future, the integrated dimensions of the seven grand challenge problems will form the basis of the next generation transportation system. It will incorporate technologies we can barely imagine today. “If we’re visionary and vigilant, and if we provide very good services for the public, they will follow this plan,” McGee asserts.