The Trade Corridor Bulletin

Volume 13 – No. 3 | June 2019

Freight Stakeholders Gather in D.C. for CAGTC’s 2019 Annual Meeting

CAGTC Members Call for $12 Billion in Dedicated Freight Funding

During National Infrastructure Week, members of the Coalition for America’s Gateways & Trade Corridors (CAGTC) took to Capitol Hill to remind Members of Congress that freight can’t wait. Four informative panels, 11 speeches from Members of Congress, 32 scheduled Hill meetings, one unexpected fire alarm, and 120+ attendees later, CAGTC members left the Hill on May 14 with freight’s voice ringing in the halls of Congress behind them.

May 14 kicked off with an update on infrastructure goings on both in the Administration and on the Hill from Jeff Davis, Senior Fellow and Editor at the Eno Center for Transportation. On April 30, 2019, leadership from both the House and Senate Democrats met with President Trump to discuss the long-awaited infrastructure bill.

Jeff Davis

Both sides came to an agreement in principle to work toward a $2 trillion infrastructure package but did not agree on a funding method. Mr. Davis provided attendees with a few options, including a large federal gas tax increase or counting existing spending (loan guarantees, grants like INFRA and BUILD, etc.) toward that number. Mr. Davis cautioned that the Senate, the House, the Administration and both sides of the aisle will all need to “hold hands and jump at the same time” in order to pass an actual bill.

With trust on all sides lacking and the 2020 elections looming, the window of opportunity is quickly closing. He estimated a bill would need to pass no later than February 2020 but deadlines, such as the debt ceiling limit being reached in October and appropriations bills still needing to be passed, will distract from the potential passage.

A second meeting between Congressional leadership and the President during which they were supposed to discuss funding mechanisms fell apart in mid-May due to unrelated conflicts. Despite this seeming stalemate between the White House and Congress, other entities have been proposing their own funding options. One often talked about is public-private partnerships (P3s). However, when P3s are mentioned in D.C., often folks only think about toll roads. CAGTC organized a group of P3 experts to discuss effective P3s at ports: Dave Casey, Senior Director of Port Solutions at GE/Wabtec, Bayard Hogans, Vice President at Ports America Chesapeake, and Bobby Landry, Vice President and Chief Commercial Officer at the Port of New Orleans. Shant Boyajian, Esq., Attorney at Law at Nossaman LLP and member of the CAGTC Board of Directors served as moderator.

Mr. Hogans began his presentation by explaining that Ports America is the largest independent marine terminal operator in the United States. Ports America, which has a comprehensive network of stevedoring, terminal operations and cargo handling services, currently operates a P3 with the Port of Baltimore, Maryland where Ports America Chesapeake (PAC) runs the Seagirt Marine Terminal. Ports America has been the terminal operator of this terminal since 1990 and, with the signing of a new concession agreement in 2010, agreed to construction of a new berth and four super post panamex cranes to help expand the terminal. Through the end of 2019, PAC estimates the total investment in this terminal will be $407.7 million.

Dave Casey, Bobby Landry, Bayard Hogans, and Shant Boyajian

Mr. Casey spoke about the partnership between Wabtec (formerly GE Transportation) and the Port of Los Angeles (POLA) to develop a Port Community Portal. The Optimizer stemmed from a Supply Chain Efficiency project out of the Federal Maritime Commission (FMC), which came to the conclusion that a Port Community Portal was needed to eliminate silos, share information, and predict and optimize the supply chain. The Port Optimizer pilot launched at POLA in summer 2017 and provided a dynamic window into port and cargo information, with a goal of increasing supply chain performance through visibility, predictability, reliability and throughput. The Optimizer Platform provides information on cargo velocity, dwell times, rail volumes, truck turn times, and chassis availability. Mr. Casey said the Optimizer is an ever-evolving platform built for the industry by the industry to improve the overall supply chain.

Mr. Landry noted that with the boom in resin and the addition of new services at the Port of New Orleans (Port NOLA), the port is growing. To help address and build upon that growth, Port NOLA entered into a P3 with Ports America featuring a 50-year lease agreement. Ports America will make a $66.5 million investment in the Napoleon Avenue Container Terminal and add up to four new 100-foot gantry cranes. Ports America has also made a minimum $300 million commitment in the Port’s new container terminal. Mr. Landry emphasized by having this partnership, Port NOLA can see more improvements and growth than they would be able to accomplish on their own.

Congressman Earl Blumenauer (D-OR)

Congressman Blumenauer (D-OR) addressed the group next, emphasizing the importance of keeping American commerce moving. He criticized some for saying they support investment in infrastructure but failing to articulate how to deal with the drop of investment, noting that the Federal government has been missing in action in investment. He called for an increase in the Federal gas tax, indexing it to inflation, and then eventually replacing it with a sustainable funding mechanism, like a road user charge (RUC). He called a RUC the ultimate solution to funding, noting that it is sustainable over time, fair, and allows for congestion pricing. He called on stakeholders not to let Congress off the hook and emphasized that while the lack of investment has been a bipartisan failure, bipartisan solutions do exist.

The next panel discussed how new technologies will shape freight supply chains. Panelists included: Kerry Cartwright, Director of Goods Movement at POLA, Mark Griffin, Director of Facility Planning at Port Houston, and Joe Waggoner, Chief Executive Officer of the Tampa-Hillsborough Expressway Authority. The panel was moderated by Fran Inman, current Chair of the California Transportation Commission and Senior Vice President of Majestic Realty.

Joe Waggoner, Mark Griffin, Fran Inman, and Kerry Cartwright

Mr. Cartwright discussed freight technology systems at POLA, first talking about the Eco-FRATIS demonstration project at the port. The project is meant to optimize the sequencing of container delivery and pick-up and featured a P3 between the California Energy Commission, LA Metro, a private sector system developer, and a trucking company. The demo project is focusing on one trucking company from May 2019 through May 2020, which will use the system to see real-time traffic data, real-time container terminal visit times, and account for terminal appointments. Additionally, two of the trucks will be Volvo battery electric-diesel hybrid trucks. The demo also has an eco-drive element to it that will minimize signal delay and optimize acceleration and deceleration of vehicles by using connected trucks and vehicle to infrastructure communication.

Mr. Waggoner spoke about a connected vehicle pilot currently taking place on the Tampa-Hillsborough Expressway Authority (THEA) toll road. The pilot uses on-board units and road side units that communicate with one another. The technology then communicates various information, such as morning backups, wrong-way drivers, pedestrian collision warnings, transit signal priority, streetcar conflicts, and traffic progression. THEA also features the only USDOT-approved autonomous vehicle (AV) test site. Utilizing their Reversible Express Lanes, THEA has hosted tests of AVs, including autonomous trucks.

Mr. Griffin noted with the increased growth at Port Houston, they are considering innovative ideas to move goods out of the port and to other locations quicker: a freight shuttle. The freight shuttle would be a hybrid system that features the best parts of truck and rail, including steel-on-steel rails and use of single-container transports. The shuttle would operate on a dedicated, elevated guideway that could be built within an existing highway or other right of way. As an AV, the shuttle could operate 24/7 and take over 17,000 trips per day. The shuttle would take containers off of trucks and rail and instead ferry them directly to the next location, reducing congestion and emissions while increasing efficiency.

Eugene Mulero, David Shepardson, and Paul Hubler

At the conclusion of the freight technologies panel, attendees heard from a panel of Congressional staffers that was off the record. Then Eugene Mulero, a staff reporter at Transport Topics, and David Shepardson, a correspondent at ThomsonReuters, sat down with Paul Hubler, Director of Government Relations at the Alameda Corridor-East Project of the San Gabriel Valley Council of Governments and now-CAGTC Board Chairman, to discuss how a potential infrastructure bill could garner more media coverage.

Mr. Mulero and Mr. Shepardson discussed the current state of play on Capitol Hill, describing the recent talks between the President and Congressional leaders that lead to the promised $2 trillion infrastructure package. Mr. Shepardson speculated any infrastructure bill would take a two-track approach: one a mini infrastructure bill to fulfill the promised package but likely closer to $800 billion than $2 trillion; and another the reauthorization of the FAST Act.  Both questioned if Congress would be able to agree on a sustainable funding source and cautioned that Congress almost never acts unless something (unfortunately usually in the form of a tragedy) forces them to. Mr. Mulero noted that there has not been enough congressional education on funding methods, a potential barrier to any passage. Mr. Hubler asked how to ensure both the media and the public take infrastructure conversations more seriously and not as a joke. Mr. Shepardson and Mr. Mulero did acknowledge that some of the media coverage making “Infrastructure Week” a punch line could hurt the cause. Mr. Mulero called for more nuanced coverage of movement on any bill. Mr. Shepardson said infrastructure impacts everyone and so media will be interested and properly cover it should the Administration or Congress propose something substantive with funding.

To highlight Infrastructure Week, CAGTC released the 14th edition of its series of “Follow That…” brochures. This edition follows the bubble gum supply chain from sourcing ingredients at a sugar cane farm in Florida to a confectionary facility in Illinois, and finally to a gift shop in New York. Find the brochure online here. CAGTC also released the third edition of its Freight Can’t Wait publication, containing examples of freight infrastructure projects from across the country that, should they receive the needed investment, stand to benefit national supply chains as well as the U.S. economy. Find the publication online here.

Senator Tammy Duckworth (D-IL) meeting with CAGTC members

Following the conclusion of the morning panels, CAGTC members took to the Hill on May 14 to attend 32 scheduled meetings with Congressional offices. Not even a slight roadblock in the form of an unexpected fire alarm that resulted in the evacuation of the Rayburn House Office Building could stop CAGTC members from getting our message across. CAGTC members and staff held meetings with offices in parks and parking lots, demonstrating the flexibility that is so often needed in our supply chains. Some meetings were missed of course, but CAGTC staff followed up with them directly after the meeting’s conclusion to ensure they still received our message.

CAGTC members with Senator Tom Carper (D-DE)

Using the new Follow that Bubble Gum and Freight Can’t Wait as well as CAGTC’s recently-approved reauthorization policy platform, CAGTC members informed Congressional offices about the importance of Federal investment in our goods movement network. Members specifically called for three main changes: 1) provide $12 billion annually for freight through a multimodal competitive grant program; 2) eliminate the cap on non-highway spending under the INFRA grant program; and 3) increase the funding and eliminate the cap on non-highway spending under the freight formula program.


House Transportation and Infrastructure Committee Ranking Member Sam Graves (R-MO)

Attendees at the annual Goods Movement Reception, which took place during the evening of May 14, heard remarks from many Members of Congress, including House Transportation and Infrastructure Ranking Member Sam Graves (R-MO), Congressman Greg Stanton (D-AZ), Congresswoman Eleanor Holmes Norton (D-DC), Congressman Hank Johnson (D-GA), Congressman Donald Payne, Jr. (D-NJ), Congressman Alan Lowenthal (D-CA), Congressman Harley Rouda (D-CA), Congressman Bob Gibbs (R-OH), Congressman Daniel Webster (R-FL), and Congressman Rodney Davis (R-IL).  All expressed interest and dedication to finding a long-term transportation funding solution.

CAGTC Elects New Board Members and Officers

Founding Chairman Mort Downey, Immediate Past Chairman Tim Lovain, and Chairman Paul Hubler

On May 15, CAGTC members participated in the annual closed-door CAGTC membership meeting, during which the membership elected two individuals and re-elected four individuals to the Board of Directors and named three new Board officers. Darin Chidsey, Chief Operating Officer of the Southern California Association of Governments, and Captain John Murray, Chief Executive Officer and Port Director of the Port Canaveral Port Authority, were both elected to the Board. Rick Cameron, Deputy Executive Director of the Port of Long Beach, Paul Hubler, Director of Government and Community Relations at the Alameda Corridor-East Project of the San Gabriel Valley Council of Governments, Glenn Miles, Executive Director of the Kootenai Metropolitan Planning Organization, and Thomas Saunders, Director of Government Affairs for Ports America, were all re-elected to the Board.

Tim Lovain, who had been Chairman of the CAGTC Board since 2016, moved into the role of Immediate Past Chair. Paul Hubler, former Vice Chair of the Board, moved into the role of Chairman. Paul Anderson, Port Director of Port Tampa Bay, was elected Vice Chair and Rick Cameron was elected Treasurer. CAGTC members also had the opportunity to meet with staff from the U.S. Department of Transportation for a briefing on the implementation of the freight provisions of the FAST Act as well as some additional information about what USDOT is currently focused on.

Read CAGTC's press release here.

USDOT Publishes FY19 BUILD NOFO, Updates Some Criteria

On April 16, 2019, the U.S. Department of Transportation (USDOT) published the fiscal year 2019 (FY19) notice of funding opportunity (NOFO) for the BUILD grant program. The FY19 appropriations omnibus made $900 million available for this round of BUILD grants, no more than 10 percent of which can be awarded in a single state. The maximum grant award is $25 million; for rural projects the minimum award is $1 million while the minimum for urban projects is $5 million.

The fiscal year 2018 (FY18) NOFO mandated at least 30 percent of funds be awarded to projects in rural areas, and USDOT ultimately made 70 percent of funding available for such projects. The FY19 NOFO requires an even split between urban and rural projects, each receiving 50 percent of available funding.

The FY19 appropriations omnibus mandated this year’s BUILD NOFO use the selection criteria from the fiscal year 2017 NOFO, but excluding a previous provision that considered a project’s ability to generate non-federal revenue. USDOT complied with Congress’ requirements by maintaining the 2017 selection criteria and no longer considering a project’s non-federal share, but did make minor changes to some of the criteria descriptions.

This year’s NOFO also makes up to $15 million available for planning grants, but indicates that these applications will be considered less competitive than capital grants as USDOT will prioritize projects ready for construction.

Applications are due July 15, 2019 and, per the omnibus, awards must be made no later than 270 days after the omnibus’ passage, February 15, 2019, so selections should be announced by November 12, 2019.

Industry News

House Committee Approves THUD Funding Bill

The House Appropriations Committee on June 4, 2019 approved the fiscal year 2020 Transportation, Housing and Urban Development, and Related Agencies bill on a vote of 29 to 21. The legislation funds the Department of Transportation, the Department of Housing and Urban Development, and other related agencies, including the United States Interagency Council on Homelessness.

In total, the legislation provides $137.1 billion in budgetary resources, an increase of $6 billion above the 2019 enacted level and $17.3 billion above the President’s budget request. The bill includes $75.8 billion in discretionary funding, an increase of $4.7 billion over the 2019 enacted level and $17.3 billion over the President’s 2020 budget request.

Read the full release here.

Industry News

Rep. Lowenthal Introduces Bill to Establish Freight Transportation Infrastructure Trust Fund

Congressman Alan Lowenthal (D-CA)

On May 14, 2019, Congressman Alan Lowenthal (D-CA) introduced bipartisan legislation which will create a dedicated revenue source to direct more than $100 billion over ten years into rebuilding our crumbling national freight infrastructure and strengthen America’s economic competitiveness.

The bill, H.R 2723, The National Multimodal and Sustainable Freight Infrastructure Act, builds on the success of the FAST Act and ensures continued investment in the goods movement network. The bill would raise over $10 billion a year dedicated to freight-related infrastructure projects throughout the nation, with a focus on multimodal projects and projects that rebuild aging infrastructure while relieving bottlenecks in the freight transportation system.

To accomplish this, the bill would establish the Freight Transportation Infrastructure Trust Fund, funded through a national 1 percent waybill fee on the transportation cost of goods.

The bill invests these funds in two programs: a formula program to distribute funds to each state based on the amount of existing infrastructure within the state, and a competitive grant program what would be open to all local, regional, and state governments. Within the competitive grant program, 5 percent of funds would be set-aside for zero-emissions projects.

Read Congressman Lowenthal's full press release here.
Read CAGTC's press release here.

Member News

San Gabriel Trench Project Wins Statewide Top Honor

SGVCOG Senior Project Manager Phillip Balmeo and Chief Engineer Mark Christoffels

The California Transportation Foundation (CTF) named the San Gabriel Trench Project as the overall Project of the Year at its 30th Annual Transportation Awards held in Sacramento on May 28, 2019. The award recognizes the premier transportation project in California from all regions of the state.  This year’s statewide winner was selected from among more than 60 nominations.

The 2.2-mile project was the largest public works project in the history of the City of San Gabriel and the largest project in the $1.7 billion Alameda Corridor-East (ACE) grade separation program overseen by the Capital Projects and Construction Committee of the San Gabriel Valley Council of Governments (SGVCOG).

“This is a tremendous honor and a momentous achievement for the San Gabriel Trench Project to be selected as the most outstanding transportation project in the State of California,” said El Monte Councilwoman Victoria Martinez Muela, Chair of SGVCOG Capital Projects and Construction Committee.  “With significant federal, state, regional and local support, the project serves as a prime example of how all levels of government can come together to improve California’s transportation system and solve its critical infrastructure challenges.”
Read the full release here.


Member News

New Port Everglades Economic Impact Study Released

Broward County's Port Everglades

Elevated containerized cargo and passenger volumes at Broward County’s Port Everglades strengthened economic activity and create new jobs in Florida, according to a newly released report for fiscal year 2018 (October 1 through September 30) by internationally recognized maritime research company Martin Associates. Overall, the study reflected positive growth in all economic indicators including jobs, personal income, economic activity, local purchases and state/local taxes.

“These numbers clearly demonstrate that Port Everglades is a driving force in our strong economy, greatly contributing to the quality of life in Broward County and throughout Florida. The cargo, cruise and fuel operations create jobs and income, provide opportunities for local businesses, bring visitors to our area and generates billions of dollars in tax revenue that support cities and communities here and throughout the state,” said Broward Mayor Mark Bogen.

Read the full release here.

Research News

‘Lost Decade’ Casts a Post-Recession Shadow on State Finances

Pew Charitable Trusts

June 4, 2019

In the wake of the recession, state governments reduced investing in infrastructure. As a share of the economy, state spending on fixed assets—such as highways, sidewalks, airfields, electronics, or software—has been falling since 2009.

In real dollars, state governments’ investments in infrastructure dropped by 3.2 percent from 2007 to 2017, with ups and downs along the way. But infrastructure spending relative to gross domestic product (GDP) dropped almost every year between a 2009 peak and 2017, following more than two decades of stability. In fact, 2017 marked the lowest level of funding as a share of the economy in more than half a century. States’ declining infrastructure investment relative to GDP is a sign that spending on fixed assets has not kept pace with economic growth.

Because state-level data on infrastructure investment by category are unavailable, a look into combined investments by states and localities shows that infrastructure types were affected differently. For example, transportation structures—such as air transportation and mass transit systems—seem to have been prioritized, with a nearly 30 percent increase in spending. Funding for highways and streets, which generally receive the most state and local infrastructure investment, dropped 6 percent between 2007 and 2017, while spending on the second-largest recipient—educational structures such as schools—fell 14 percent after accounting for inflation.

Read the full report here.

Research News

Sea level rise could cost U.S. ports between $57 billion To $78 billion In upgrades

University of Rhode Island

June 3, 2019

A University of Rhode Island team has concluded that the top 100 US ports may need to invest between $57 billion to $78 billion to accommodate a two-meter increase in sea level rise and recent surveys indicate that some U.S. port designers are beginning to incorporate sea level rise into their planning process.

Austin Becker, a Department of Marine Affairs professor at the University of Rhode Island, told AJOT that the $57 billion to $78 billion projection, which appeared in a 2017 report, describes a model for estimating the cost and materials that is a “thought exercise to encourage U.S. ports to become more aware of the need for climate adaptation in their policies and practices.”

The University of Rhode Island report focused on container terminals and developed a generic container terminal model. Projections were made that U.S. sea ports would need to spend between $57 billion to $78 billion to “elevate the 100 ports by two meters (six feet) and to reconstruct associated infrastructure.” In California, for example, the report projected that ports would need to spend $9 billion for upgrades.

Read the full article here.

Upcoming Events

July 21 - 25, 2019: PNWER Annual Summit
Saskatoon, Saskatchewan

August 7 - 9, 2019: Ohio Conference on Freight
Cleveland, OH

September 10 - 12, 2019: FTR Transportation Conference
Indianapolis, IN

September 15 - 18, 2019: IANA Intermodal EXPO
Long Beach, CA

September 19 - 20, 2019NASCO 2019 Continental Reunion
Columbus, OH