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Ohio Freight Summit Toledo

Ohio Freight Summit Toledo. September 18, 2007 Fred Abousleman Deputy Director fred@narc.org. Setting the Stage for Reauthorization of SAFETEA-LU. More demands being placed on urban and rural communities and the transportation community in general. Fiscal Public Environmental Modal

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Ohio Freight Summit Toledo

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  1. Ohio Freight SummitToledo September 18, 2007 Fred Abousleman Deputy Director fred@narc.org

  2. Setting the Stage for Reauthorization of SAFETEA-LU • More demands being placed on urban and rural communities and the transportation community in general. • Fiscal • Public • Environmental • Modal • Operational • Security • Future Trends • Need • NARC

  3. Building Better Regions? • Does SAFETEA-LU do this? • Maybe • Not an evolution in regional (or State) policy • Pieces together programs • Authorization vs. Appropriations • No clear Consensus on future trends • But it’s done

  4. Policies • Some policy shifts • Expediting project delivery • Easing Conformity • Shifts in authority • Beginning to recognize Safety and Freight as clear policy areas • Coordinated Service Delivery • Increase in PL funding

  5. SAFETEA-LU • Does not address new and shifting concerns • Moves boxes • Doesn’t address imbalances • Doesn’t fundamentally redefine our business to meet our needs

  6. Future Trends • Political • Construction Costs • Post Katrina/Rita • Future Funding • Asia • Freight

  7. Future TrendsOverview • Urban Land Institute Report cites U.S. as lagging behind Asia and Europe • Inadequate investment over 40 years • by some estimates up to and over $1 trillion • Investing in systems that are not integrated – stove piped – and legacy • Not investing in the vanguard

  8. Future TrendsOverview Issues facing States and Regions (NYC case) (can we extrapolate?): • Major state/city disconnection • Dysfunctional planning process • Limited inter-agency collaboration • Absence of coherent regional and subregional vision • Lack of political priority for the governors and mayors • Lack of financial capital from Washington • Everyone is to blame – from consumer to producer – from politician to voter • Disassociated investment • Not mode neutral • Investments not made to “fix” cross-functional problems “Elliot Sander, director of the New York University Center for Transportation Policy and Management”

  9. Future TrendsPolitics • SAFETEA-LU reauthorization 2009 • Presidential Election 2008 • Congressional Elections • Potential shift in power bases • Including domestic agendas • New Administration • New Secretaries • Can a bill be ready to move my 2009? • Probably? • No • More like 2010 – 2011 • What does this mean for funding? • Short term bills? • CR’s?

  10. Future TrendsConstruction Costs • Project cost overruns up to 60% • Why? • No material in some cases • We, China and India have glutted the world’s cement stock. Production will not meet needs until 2010 • Predicated upon a slowdown in Chinese and Indian construction. • No domestic cement supply • No capacity • No labor in others • In the SW – there isn’t enough labor to meet project demands • Contractors have stopped bidding

  11. Future TrendsDisasters • Post Katrina/Rita • $5 billion and counting • Treasury solvency • Only available money for recovery is in domestic discretionary accounts • i.e. transportation, housing, aging, education, social programs • The current Continuing Resolution to fund the government holds your transportation spending at 2006 lvls • We are fighting to keep domestic programs alive

  12. Future Trends:Funding – Not Disaster Related • War and Defense spending… • Entitlements… • Debt and debt loads and ratios… • What will our transportation funding look like over 20 years? • Trust fund – insolvent – 2009 • Transportation as a whole of the economy • How much can business and the consumer absorb? • Tied to other Federal Domestic accounts

  13. Future TrendsAsia • Chinese and Indian Competitiveness • Purchasing power • Goods production • Shipments • Ability of our system to absorb? • Thin

  14. Future Trends:Freight

  15. Basic Numbers Chinese Freight Capabilities will grow by 35% over the next 10 years. Ours – 7% Our current system CANNOT meet expected global trade demands

  16. The State of Goods Movement • In 1970, trade was 12.4% of U.S. gross domestic product (GDP). Today, it is over 25%. • Shipment of containerized cargo in and out of the U.S. will increase by more than 350% by 2020. • To handle these increased loads, truck traffic, measured in vehicle miles traveled (VMT) will increase by 200 billion miles and rail shipments of freight are projected to grow by 1 billion tons. • Nearly 12.7 billion metric tons of goods and raw materials valued at $8 trillion moved over the U.S. transportation system in 1997 (the last year for which statistics are available).

  17. Is it true? Why? • The growth rate of global goods movement is between 7%-10% annually and will continue to grow. • New markets, more economic integration, new consumers. • Less demand for warehousing stock parts. • Supply Chain Economics • E-tailing • Shortage of truck drivers • FedEx has out paced the S&P 500 over three years in a row. • Logistics Mergers • (Daniel Gross writes Slate's "Moneybox" column )

  18. Only Getting Bigger Largest Cargo Airplane Antonov - AN-124 Ruslan Up to 150 tonnes of cargo can be carried. Largest container ship The container ships with the largest declared capacity are the 9,200 TEU sister ships MSC Pamela and MSC Susanna. Bigger ships under constrcution

  19. Expansion • Panama Canal Expansion: $5.25 billion. Double Volume by 2025 • $685 Million Vancouver Port Expansion (plus millions in other facilities) • Hutchison Whampoa Ltd. expansion of Mexican port facilities • Hutchison Port Holdings (HPH) is the world's leading port investor, developer and operator that operates across Europe, the Americas, Asia, the Middle East and Africa • It operates in five of the seven busiest container ports in the world, handling 13% of the world’s container traffic • U.S. is under-investing!

  20. The Tie That Binds Freight and Economic Competitiveness ARE national priorities.

  21. NARC Freight Proposals • Emphasize freight mobility needs as a high priority in federal, state and local transportation planning. • Allow federal funds to leverage the monies of others (Federal, Private, local) especially with respect to freight projects whose impact reaches beyond regional borders. • Adopt a Freight Account in the Highway Trust Fund, similar to the Public Transit Account, • Include freight infrastructure in the earliest proceedings on SAFETEA-LU reauthorization.

  22. Continued • Distribute funding on a multi- and intermodal freight system wide basis. • Enhance security through adequate freight infrastructure protection using, for example, Urban Area Security Initiative (DHS) dollars. • Recognize that facility protection is assisted through electronic systems, design specifications, and other non-human interactions. • Support regional government collaboration on determining and employing solutions at the regional level.

  23. Continued • Provide incentives to the private sector and other governments to improve freight infrastructure. • Support creative financing provisions and direct federal investment for freight infrastructure. • Encourage partnerships between federal, state, regional and local government, as well as public and private industry and business entities.

  24. RIIZ’s • Regional Infrastructure Improvement Zones (RIIZs) will addresses the need for alternative sources of funding to help build infrastructure to keep people, businesses and the economy growing and moving through a simple change to the tax code to allow for corporate or individual investments in local infrastructure. • RIIZs, which are based on Urban Boundary designations, encourage private-sector involvement in infrastructure investment through favorable tax treatment of funds and streamlined approval processes through their local Metropolitan Planning Organization (MPO) or COG.

  25. RIIZ’s Continued • The MPO will be responsible for determining the eligibility of the proposed projects in local or state long-range plan documents with final approval of the RIIZ will coming from the MPO’s Board of Directors. • When these conditions are satisfied a certificate of approval will be issued to establish a RIIZ and filed with the state’s Attorney General and with the Internal Revenue Service. • All donations will be tax-deductible contributions to be spent only on pre-approved infrastructure upgrades that benefit the entire community.

  26. Planning Capacity • Cross training with freight partners • AAPA, AAR, National Retail Foundation • Understanding • Cross-linking • Better planning and coordination

  27. Rail Tax Credits • Freight Rail Infrastructure Capacity Expansion Act of 2007 (S 1125) • Calls for federal income tax incentives for freight railroad capacity expansion • Calls for 25% tax credit for investments in new track, intermodal facilities, yards, locomotives and other infrastructure projects that expand rail capacity, which is chargeable to capital account

  28. Tax Credits Continued - uses • railroad grading or tunnel bore, • tunnels or subways, • track, including ties, rails, ballast, or other track material, • bridges, trestles, culverts, or other elevated or submerged structures, • terminals, yards, roadway buildings, fuel stations, or railroad wharves or docks, including fixtures attached thereto, and equipment used exclusively therein, • railroad signal, communication, or other operating systems, including components of such systems that must be installed on locomotives or other rolling stock, or • intermodal transfer or transload facilities or terminals, including fixtures attached thereto, and equipment used exclusively therein.

  29. Future TrendsColliding • We have last century law and planning for new century needs • All of what we discussed is colliding and forcing us to make new decisions • We need new thought processes

  30. Need!! • Innovation • Empowerment • Streamlining

  31. Innovation • In funding in finance • In governance • In process and programming

  32. Empowerment • At the local level, regional, state levels.. • To raise $$ • Build Projects of all types • Plan accordingly • Work together – better

  33. Streamlining • Programs- • Collapse • Remove • Realign • Processes- • Funding • Regulation • Planning and implementation- • More and faster

  34. What is NARC Doing? • Series of regional meetings • Series of reports • Floating new ideas • RIIZ’s • Taxing strategies • Program fixes

  35. What is NARC? • Serve regional councils (metropolitan and rural/small city) and all Metropolitan Planning Organizations (MPOs). • Advocate on behalf of all regional councils and MPOs for the coordination, planning and delivery of new and existing federal programs. • Promote use of regional councils and MPOs as the forums for inter-jurisdictional decision making.

  36. NARC Programs

  37. Q&A Fred Abousleman Deputy Director 202-986-1032 fred@narc.org

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