The Trade Corridor Bulletin

Volume 13 – No. 2 | March 2019

CAGTC Board Member Joe Szabo Testifies on Multimodal Freight Funding Needs

Senate Commerce Subcommittee Kicks Off 116th Congress Focusing on Freight

Joe Szabo

Chicago Metropolitan Agency for Planning (CMAP) Executive Director and CAGTC Board Member Joseph Szabo testified before the Senate Commerce, Science, and Transportation Subcommittee on Transportation and Safety on February 26, 2019. At the hearing, titled “Connecting America: Examining Intermodal Connections Across Our Surface Transportation Network,” Mr. Szabo testified on the importance of increased freight funding in the Fixing America's Surface Transportation (FAST) Act’s upcoming reauthorization as well as in any potential infrastructure package introduced in the 116th Congress.

Representing both CMAP and CAGTC during the hearing, Mr. Szabo spoke about the interconnectivity of the multimodal freight system and the need for a sustainable, reliable, and dedicated funding source. He called for increased funding and flexibility in federal grant programs such as INFRA and BUILD as well as the freight formula program. Specifically, he urged Congress to eliminate the cap on non-highway projects under both the INFRA grants and the freight formula program. This will allow each state to invest in its most pressing freight infrastructure needs, regardless of mode. Citing the oversubscription of the INFRA program, $12 in unique requests for every $1 available in the most recent round, Mr. Szabo said the need for investment dedicated to multimodal freight infrastructure is around $12 billion annually.

In the Chicago Metropolitan area, Mr. Szabo highlighted CREATE’s 75th Street Corridor Improvement Project, which was awarded $132 million through the INFRA program’s most recent funding round. These funds will combine with $342 million from other CREATE partners to pay for the first portion of this project to separate several freight and passenger rail lines. However, this amount represents less than half the funds necessary to complete both portions of the overall project.

Other witnesses for this hearing were: the Intermodal Association of North America, a CAGTC Member, represented by Dr. Noel Hacegaba, Deputy Executive Director of Administration and Operations, Port of Long Beach; Mr. Chuck Baker, President, American Short Line and Regional Railroad Association; and Ms. Donna Lemm, Executive Vice President, IMC Companies, representing the Agriculture Transportation Coalition.

Effects of Partial Government Shutdown and FY19 Omnibus Appropriations Bill on the Transportation Industry

At midnight on December 21, 2018, the continuing resolution (CR) funding several federal agencies expired, resulting in a partial government shutdown. Depending on the number of furloughed employees, affected agencies fully or partially suspended services or continued operating without pay. Approximately 25 percent of the government was shut down; among the affected agencies were portions of the U.S. Department of Transportation (USDOT). Because both the Federal Highway Administration (FHWA) and the Federal Motor Carrier Safety Administration are funded through multi-year appropriations, indefinite appropriations, or contract authority, they remained open. One fourth to three fourths of employees in the Federal Railroad Administration, the USDOT Office of the Secretary and the Maritime Administration were furloughed, while both the Surface Transportation Board and the Federal Maritime Commission (FMC) suspended all activities.

The implications were felt in many areas of the transportation industry. An estimated 51,000 Transportation Security Administration agents deemed “essential” worked without pay, resulting in increased unscheduled absences, longer wait times at airports, and terminal closures. The FMC did not accept any new filings of carrier or marine terminal operator agreements, service contracts, complaints, or requests for dispute resolution services. A survey conducted by the American Public Transportation Association in early January found 36 percent of public transit agency members indicated that the partial shutdown “substantially” impacted their operations and/or capital programs with agencies reporting cutting back service, delaying hiring, transferring capital funds to operations and using reserve funds. Although the FHWA remained open, state departments of transportation in Oklahoma and New Mexico delayed bid lettings for highway projects, citing federal funding uncertainties.

After 35 days, Members of Congress and the Administration reached an agreement to reopen the government. On January 25, 2019, a three-week CR was signed into law, providing funding at fiscal year 2018 (FY18) levels through February 15. During this time, lawmakers negotiated an omnibus appropriations package funding affected agencies for the remainder of fiscal year 2019. The bill, signed by President Trump on February 15, contains $71.079 billion in Transportation Housing and Urban Development discretionary budget authority, slightly more than FY18’s $70.3 billion. The BUILD grant program (formerly TIGER) is funded at $900 million, $400 million more than the recent average funding levels of the TIGER grant program but $600 million less than FY18 levels. Additionally, the omnibus calls for an even split in project selections between urban and rural areas and includes $15 million for planning grants under the BUILD program. It also mandates that USDOT make the awards based on only the selection criteria laid out in the 2017 TIGER Notice of Funding Opportunity but stipulates that neither an applicant’s ability to generate non-Federal revenue nor the percentage of Federal share should be used as selection criteria.

Members of Congress who worked on the omnibus conference committee also published a conference report in conjunction with the legislative text of the bill. The report provided additional details about the conferees’ intent. In this report, they indicated that they “expect the Secretary [of Transportation] to prioritize INFRA funding awards to port projects and the intermodal connections that serve those facilities, where eligible under the FAST Act.” This does not change the INFRA program statutorily but does indicate Congressional support for multimodal freight funding.

Freight Infrastructure Projects Receive 66% of BUILD I Grant Awards

Grant Recipients Include Several CAGTC Members

In December 2018, the U.S. Department of Transportation (USDOT) announced 91 infrastructure projects across the country that received funds through the inaugural round of the Better Utilizing Investments to Leverage Development (BUILD) program, formerly known as TIGER. BUILD is a discretionary grant program intended to provide funding for infrastructure investments across all modes of transportation. The first round of BUILD awarded $1.5 billion in grants, triple the typical amount available under TIGER. This was made possible by a budget deal signed early last year that increased spending caps for fiscal years 2018 and 2019. In addition to this round seeing the largest amount of total funding so far, it was also the most advantageous to freight. A record 66 percent of funds went to freight projects or projects with a freight component, besting the previous record of 56 percent set earlier in 2018 during the ninth and last round of TIGER.

CAGTC Members put forward, partnered, or consulted on several successful projects in BUILD’s initial round, including:

  • Imperial County Transportation Commission, subregion of Southern California Association of Governments (SCAG),  Calexico East Port of Entry Bridge Expansion
  • Washington State Department of Transportation, Washington State Rural Rail Rehabilitation
  • Maryland Port Administration, in partnership with Ports America Chesapeake, Seagirt Marine Terminal Berth 3 Modernization P3 Project
  • Minnesota Department of Transportation (MnDOT), in partnership with Port of Duluth (with assistance from CAGTC Member WSP), Twin Ports Interchange Reconstruction
  • Kern Council of Governments, in partnership with the California Department of Transportation (Caltrans), State Route 46 Widening Segment 4B

Calexico East Port of Entry Bridge Expansion
$20,000,000

The project will widen the Calexico East Port of Entry bridge along the US-Mexico border to accommodate two additional northbound commercial truck lanes and two additional northbound passenger vehicle lanes. The project also includes improvements to the bicycle and pedestrian facilities at the border crossing.

Washington State Rural Rail Rehabilitation
$5,666,982

The project will make improvements to three branch lines of the Palouse River and Coulee City Shortline Rail System to support 286,000 lbs. rail cars, including replacing or rehabilitating approximately 10 bridges, replacing about 4.6 miles of rail and rehabilitating nearly 16.3 miles of track structure.

Seagirt Marine Terminal Berth 3 Modernization P3 Project
$6,554,575

The project will add a second berth capable of serving 50-foot draft Ultra Large Container Vessels and make necessary supporting landside improvements. Project elements include an expanded access channel and turning basin, repairing existing wharf substructure, superstructure and paving, installing concrete runways in the container yard and hardware to support large ship-to-shore cranes.

Twin Ports Interchange Reconstruction
$20,000,000

The project will replace eight bridges with an at-grade and divided interstate roadway at the I-35/I-535/US 53 interchange and replace the remaining weight-restricted ramp bridges to the interchange; reconstruct six concrete box girder bridges on US 53; and reconstruct four weight-restricted bridges at the I-535/Garfield Avenue interchange.

State Route 46 Widening Segment 4B
$17,500,000

The project will widen an approximately 5.3-mile segment of Route 46 from two to four lanes in each direction. The project also includes the addition of an 18-meter median, upgrading seven intersections, bringing the road into compliance with the Americans with Disabilities Act (ADA), adding approximately one mile of bicycle lanes and sidewalks, and building one new bridge.

USDOT Publishes FY19 INFRA Grant NOFO, Updates Evaluation Criteria

The U.S. Department of Transportation (USDOT) issued a notice of funding opportunity (NOFO) for the fiscal year 2019 (FY19) round of the INFRA grant program. INFRA, previously known as FASTLANE, is a competitive grant program created by the Fixing America’s Surface Transportation (FAST) Act in 2015 to provide federal funds to nationally or regionally significant freight and highway projects.

USDOT anticipates $855-902.5 million in available funding for this round. Statutorily, 10 percent of each year’s INFRA funds must go toward “small” projects with an overall cost of $100 million or less. At least 25 percent of total funding is reserved for projects in rural areas. Additionally, there is a $500 million aggregate limit over five years for non-highway projects. After the first three rounds of the program, approximately $200 million of that cap remains available.

The NOFO maintained the same four evaluation criteria as the previous INFRA round, but some descriptions were updated or expanded. USDOT will continue to evaluate project applications based on their ability to support national and regional economic vitality. While this NOFO again calls on applicants to leverage federal funding to attract non-federal sources of infrastructure investment, it adds that ratings will be assigned to each project based on how the proposed non-federal share compares to other INFRA applications. It also drops a requirement from the previous NOFO that stated federal credit programs, including the Transportation Infrastructure Finance and Innovation Act (TIFIA) and Railroad Rehabilitation & Improvement Financing (RRIF), are considered non-federal funding.  Whereas the previous NOFO listed recommended innovation areas as “environmental review and permitting; use of experimental project deliveries; and safety and technology,” the FY19 NOFO encourages “the accelerated deployment of innovative technology and expanded access to broadband; use of innovative permitting, contracting, and other project delivery practices; and innovative financing.” Applicants addressing at least two out of the three innovation areas will be assigned a higher rating. Finally, this NOFO calls for applicants to include a full lifecycle cost plan and accountability measures under its “Performance and Accountability” criterion.

Applications for the INFRA grant program are due March 4, 2019.

Industry News

Report: Renewing the National Commitment to the Interstate Highway System: A Foundation for the Future

The Transportation Research Board released a report making recommendations on the “features, standards, capacity needs, application of technologies, and intergovernmental roles to upgrade the Interstate System.”  The 2015 Fixing America's Surface Transportation (FAST) Act included a provision requiring this study to be conducted and the report to be submitted to Congress.

The report identified several challenges to the Interstate System including: the rebuilding of aging infrastructure; managing increased congestion; keeping pace with population and economic growth; improving safety; adapting to changing vehicle technologies; adopting user-based funding sources; and considering changing climate conditions.

Combined state and federal capital spending on interstates has been approximately $25 billion annually.  The report found that continued improvements and modernizations on these highways over the next 20 years would require $45 billion to $70 billion annually. The committee noted, however, that these estimates do not include investments to reconstruct interchanges, climate change resiliency, and several other improvements that they stated “are certain to require billions, and perhaps tens of billions, in additional annual spending.”

The committee recommended the creation of an Interstate Highway System Renewal and Modernization Program (RAMP), modeled after the original Interstate Highway System Construction Program, to reinforce the partnership between federal and state governments. To raise the additional revenue necessary to make lasting improvements, the report suggests increasing the federal gas tax and allowing the implementation of tolls or a vehicle miles traveled fee on Interstate users.

Several CAGTC members contributed to this report: Steve Heminger (Metropolitan Transportation Commission) and Michael Townes (HNTB) served on the committee that developed the report; Cambridge Systematics and WSP consulted on the writing of the report; Cambridge Systematics, the Florida Department of Transportation, and the California Department of Transportation testified during the hearing process; and Ananth Prasad (Florida Transportation Builders’ Association) reviewed the report. Additionally, the California Department of Transportation, Port of Long Beach and Broward County’s Port Everglades are mentioned in case studies.

Read the full report here.

Industry News

Rep. Brownley Introduces the National Multimodal Freight Network Improvement Act

Representative Julia Brownley (D-CA)

On January 29, 2019, Congresswoman Julia Brownley (D-CA) introduced the National Multimodal Freight Network Improvement Act, which would require the U.S. Department of Transportation (DOT) to include the Port of Hueneme and other ports with annual cargo value of $1 billion or more on the National Multimodal Freight Network (NMFN). The Network was established to strengthen economic competitiveness, reduce congestion and bottlenecks, and improve the safety, security, efficiency, and reliability of freight transportation. There is concern that the Port of Hueneme and other major ports will be excluded from the Network – contrary to original Congressional intent – if only cargo weight, and not value, are considered for inclusion.

Read the full press release here.

Member News

Dewberry Promotes Rachel Vandenberg to Senior Vice President

Rachel Vandenburg

Dewberry announced on January 17 that Rachel Vandenberg, PE has been promoted to Senior Vice President in the firm’s Long Beach, California, office. Vandenberg has nearly 30 years of industry experience and has been with Dewberry for five years, previously serving as the National Director for Ports and Intermodal. During this time she oversaw the growth and expansion of Dewberry’s ports and intermodal practice across the east and west coasts. Vandenberg also serves as a member of the CAGTC Board of Directors.

Read the full release here.

 

Member News

Port NOLA, Ports America Expand Partnership for Long-Term Growth

On December 20, 2018, The Board of Commissioners of the Port of New Orleans announced a resolution to expand its partnership with Ports America. Under the new and restated agreement, the Port will issue Ports America a 50-year lease to continue operating at the Napoleon Avenue and Nashville Avenue Terminals. As part of the agreement, Ports America will invest $66.5 million in infrastructure and equipment to accommodate up to four new 100-foot gauge container cranes at the terminals. The investment will allow both terminals to facilitate larger ships and increases in volume.

“The Port of New Orleans and Ports America have had a longstanding and successful partnership, and we are pleased to share a blueprint for strengthening the Port NOLA gateway,” Brandy D. Christian, Port of New Orleans President and CEO said in a press release. “Our strengthened partnership supports the Port’s strategic vision to create long-term economic prosperity for the region and to reinforce our competitive advantage in the marketplace.”

Read the full release here.

Research News

Freight Issues in Surface Transportation Reauthorization

Congressional Research Service

January 16, 2019

Economic growth and expanded global trade have led to substantial increases in goods movement over the past few decades. The growth in freight transportation demand, along with growing passenger demand, has caused congestion in many parts of the transportation system, making freight movements slower and less reliable. Because the condition and performance of freight infrastructure play a considerable role in the efficiency of the freight system, federal support of freight infrastructure investment is likely to be of significant congressional concern in the reauthorization of the surface transportation program. The program is currently authorized by the Fixing America’s Surface Transportation Act (FAST Act; P.L. 114-94), which is scheduled to expire on September 30, 2020.

Until recently, the federal surface transportation program did not pay specific attention to freight movement. However, the two most recent surface transportation acts, the Moving Ahead for Progress in the 21st Century Act (MAP-21; P.L. 112-141), approved in 2012, and the FAST Act, passed in 2015, encouraged federal and state planning for freight transportation from a multimodal perspective. The FAST Act also directed a portion of federal funds toward highway segments and other projects deemed most critical to freight movement. It did this by creating two new programs: a discretionary grant program administered by the Secretary of Transportation and a formula program for distributing federal funds to states.

One significant question is whether additional funding for freight-related infrastructure should be distributed to the states by formula or on a discretionary basis. Federal projections indicate that a relatively small number of Interstate Highway segments and interchanges are likely to face large increases in truck traffic by 2045. However, individual states may have limited incentives to use their federal formula funds to alleviate increasing congestion in those locations, as many of the trucks affected may be passing through rather than serving local businesses. Discretionary grants may be more effective in providing large amounts of federal funding for very costly freight-related projects, particularly those requiring interstate cooperation, but could also lead to fewer projects receiving federal funds.

Read the full report here.

Research News

Transportation at the Ballot Box 2018

The Eno Center for Transportation

January 9, 2019

The midterm elections in November 2018 held major political ramifications for the United States given the high-profile Congressional, gubernatorial, statehouse, and mayoral choices American voters considered. But before and during Election Day, voters also played a critical role in shaping communities from coast-to-coast by casting their votes on investments and other decisions about transportation.

The Eno Center for Transportation has released a new issue brief analyzing the results of the 2018 transportation ballot measures.

Voters in 34 states approved over $40 billion for transportation this year, about 58 percent of what was considered. Every region of the country considered at least one measure, though most were in the West and Midwest. Florida voters approved the most new funding for transportation, in particular in Broward and Hillsborough Counties.

Read the full analysis here.

Upcoming Events

April 30 - May 2, 2019: IANA Intermodal Operations, Safety & Maintenance Business Meeting
Lombard, IL

May 1 - 3, 2019: SCAG Regional Conference & General Assembly
Palm Desert, CA

May 5 - 8, 2019: ACEC Annual Conference and Legislative Summit
Washington, DC

May 14 - 15, 2019: NASCO Capital Fly-in
Washington, DC