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The Avenue

It’s time for a national freight investment program

Adie Tomer and Joseph Kane

Between the West Coast port disputes and a recent train derailment in West Virginia, we’re reminded daily of the crucial role trade plays in the national economy. Yet, for all its importance, the nation conducts trade without a coordinated freight program. In an era of increasing global competition and value chains, we can no longer afford this passive approach.

That’s why we’re proposing (PDF) a new national freight investment program: one that invests where it matters most and maximizes benefits for the entire country.

The foundation of this proposal is recognizing where goods flow. Based on our research, 80 percent of U.S. goods either start or end in the 100 largest metro areas, leading to an immense concentration of freight activity. Meanwhile, major rural producers like Iowa or Wyoming rely on large metro areas to purchase their goods and move them elsewhere.

Additionally, the United States also has a highly interconnected economy. Over 75 percent of goods cross state lines, meaning interstate commerce largely defines our freight network. Since so many goods flow through our metropolitan hubs, though, their congestion spreads like a virus—delaying shipments across the country and annually costing $27 billion in wasted time and fuel alone.

Although the United States already funds many freight projects connected to our national highway network—with states receiving formula money to maintain assets—federal programs often spread resources thinly and focus strictly on connecting regions, a goal we have now effectively accomplished. These same programs also frequently isolate funding by mode, ignoring the multimodal interplay of road, rail, aviation and seaborne commerce along different trade corridors.

We should no longer omit strategy when it comes to making freight investments. Instead, we need a new program that targets efficiency and reliability.

  • We can better tailor investments in particular areas though a metropolitan-focused, competitive program that recognizes places of national significance. By requiring states and localities to apply together, that program can support suites of projects or single megaprojects in places where inefficiencies affect the whole country. We recommend a similar competitive program for key rural areas with major production hubs and significant freight needs.
  • Likewise, to support freight planning efforts in each state, we recommend a formula program based on actual interstate and international trade levels, in place of other potentially arbitrary criteria.
  • Getting the most value from these investments also requires a set of supporting policies. First, we need to ensure dollars flow to freight-related projects—not general transportation wish lists. Second, we need upgraded data to better track where goods flow and the pinch-points in our network. If done right, eligibility and data policies can get the greatest returns from multimodal investments.

While Congress continues to debate several upcoming transportation bills, we recognize political realities may stall progress. Funding is especially problematic, considering the difficulty paying for current programs. That makes it hard to imagine Congress finding a dedicated freight revenue source in the next few months. Yet, some elements of our proposal can be implemented with little cost now—such as new data investments and strong planning requirements—and then inform future legislation when the time is right.

As these debates continue in Washington, though, we will continue to face clogged roads, ports, and other critical infrastructure. Our proposal offers a path forward, one where objective criteria guides our shared investments and provides new opportunities to grow our economy.

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