In this issue:
The Trade Corridor Bulletin
Volume 16 – No. 4 | July 2022
THUD Appropriations: House & Senate Offer Similar Proposals
By: CAGTC Staff
On July 20, the House of Representatives passed the fiscal year (FY) 2023 Transportation, Housing and Urban Development (THUD) Appropriations Act, H.R. 8294. The Upper Chamber, meanwhile, previewed its own THUD proposal on July 28, alongside 11 other FY23 spending bills. While there are differences between the two proposals, both fully fund the Bipartisan Infrastructure Law (BIL) programs and, in several instances, provide supplemental funding for infrastructure investment.
House of Representatives FY23 THUD Proposal
The House proposal, which passed the chamber by a vote of 220-207, was combined with five other FY23 spending bills: Agriculture and Rural Development, Energy and Water Development, Financial Services and General Government, Interior and Environment, and Military Construction and Veterans Affairs.
The House’s THUD proposal would provide the U.S. Department of Transportation (USDOT) with $105.4 billion in budgetary resources for FY23, a $2.4 billion increase over 2022. Lawmakers chose to supplement BIL funding for several programs that include eligibility for freight infrastructure. The legislation provided a combined total of $1.708 billion for the Rebuilding American Infrastructure with Sustainability and Equity Program (RAISE), Consolidated Rail Infrastructure and Safety Improvements Program (CRISI), and Port Infrastructure Development Program (PIDP) grants in addition to the $2.95 billion allocated for FY23 through the BIL. The total funding provided to each of these grant programs is below:
- RAISE (formerly BUILD/TIGER) grants: $778 million in FY23 funds in addition to the $1.5 billion provided by the BIL, totaling $2.278 billion
- CRISI grants: $630 million in FY23 funds in addition to the $1 billion provided by the BIL, totaling $1.63 billion
- PIDP grants: $300 million in FY23 funds in addition to the $450 million provided by the BIL, totaling $750 million
While the FY23 House THUD proposal did not provide additional funding for the Nationally Significant Multimodal Freight & Highway Projects (INFRA) and megaprojects programs, the programs will receive their authorized BIL amounts for FY23 of $1.64 billion for INFRA and $1 billion for the new megaprojects program.
Accompanying the legislation is the House Appropriations Committee’s annual report, which provides guidance on the proposed funding provisions. The annual report provided recommendations for USDOT to consider when awarding grants, including prioritizing INFRA applications that address interstate capacity and create critical commerce corridors; PIDP applications that reduce emissions; and RAISE applications that focus on multimodal, transformative projects.
Given supply chain congestion and delays, the committee encouraged USDOT to achieve progress on its Supply Chain Assessment, which included 62 recommendations outlining how to improve supply chains. Further, the committee directed USDOT to submit a status report on its progress to the House and Senate Committees on Appropriations within 180 days of the bill’s enactment. Committee members also urged FMCSA to provide an update on its progress to implement the Safe Driver Apprenticeship Pilot Program, which allows commercial motor vehicle drivers under 21 to operate in interstate commerce.
Senate FY23 THUD Proposal
On July 28, Senate Appropriations Chairman Patrick Leahy (D-VT) released the chamber’s THUD proposal, which contains $106.6 billion in total budgetary resources for USDOT, $1.6 billion more than the House proposal.
Like their House counterparts, Senate appropriators chose to supplement BIL funding provided for several programs that include eligibility for freight infrastructure. The legislation provided a combined total of roughly $1.77 billion for RAISE, CRISI, and PIDP grants in addition to the $2.95 billion allocated for FY23 through the BIL. The total funding provided to each of these grant programs is below:
- RAISE (formerly BUILD/TIGER) grants: $1.09 billion in FY23 funds in addition to the $1.5 billion provided by the BIL, totaling $2.6 billion
- CRISI grants: $534 million in FY23 funds in addition to the $1 billion provided by the BIL, totaling $1.534 billion
- PIDP grants: $234 million in FY23 funds in addition to the $450 million provided by the BIL, totaling $648 million
Like the FY23 House THUD proposal, the Senate did not provide additional funding for the Nationally Significant Multimodal Freight & Highway Projects (INFRA) and megaprojects programs.
There are several significant differences between the two proposals, so additional negotiations will be necessary to develop a final package that can be advanced through both chambers. While the House and Senate both included earmarks in their proposals, the House’s earmark total – $1.72 billion – roughly doubled the total in the Senate proposal, $887.3 million. The House community funded project list can be found here and the Senate project list can be found here.
Funds provided by both proposals would begin October 1, 2022, and end September 30, 2023. THUD’s passage is necessary to prevent a government shutdown when FY22 funding expires on September 30. In his press release, Senate Appropriations Chairman Leahy (D-VT) emphasized the importance of passing a full-year funding package as soon as possible, noting that a long-term continuing resolution would not account for inflationary cost increases.
Infrastructure Stakeholders Gather to Discuss Inflation and Supply Chains
By: CAGTC Staff
The U.S. Bureau of Labor Statistics announced on July 13 that the Consumer Price Index rose 9.1 percent from a year ago, the largest increase in 40 years. Eno Transportation Center reported that the funding increase provided by the Bipartisan Infrastructure Law (BIL) for fiscal year 2022 through 2027 will be eroded if highway cost inflation is higher than 7 percent each year.
In response to rising costs, Republican Members of the House Committee on Transportation and Infrastructure hosted a roundtable to discuss inflation’s impact on executing infrastructure projects. Representatives from the manufacturing and trucking industries as well as state and local government officials joined the panel to examine current challenges and discuss solutions to mitigate the impacts of inflation.
During the roundtable, witnesses explained that supply chain delays and rising material costs have extended project timelines, prevented early completion bonuses, and diminished the buying power of the BIL. Similar to other industries, the transportation industry is also experiencing labor shortages and high gasoline prices, which also contribute to climbing costs.
Panelists voiced concerns over high material prices, especially amid reports that the U.S. may be headed toward a recession. This is particularly concerning for preexisting contracts that require material suppliers to honor previously set prices for infrastructure projects. Representatives from the manufacturing and construction industries discussed the difficulty of remaining competitive when forced to pass cost increases on to consumers. Witnesses noted that companies are not bidding on multi-year projects due to inflation and worker shortages.
While experts have warned of the impending truck driver shortage for years, it is becoming more acute with inflation. According to Harold Sumerford, Chairman of the American Trucking Associations, the trucking industry has a shortage of 80,000 drivers and would need to hire 1 million drivers over the next decade to keep up with expected demand. Working conditions, such as the limited availability of truck parking, continues to be a contributing factor. Mr. Sumerford noted that drivers often spend an hour searching for safe parking, eliminating roughly $4,500 of a driver’s annual pay and still, drivers often are forced to settle for unsafe locations.
Equipment availability is driving up the cost of truck purchasing and maintenance. Mr. Sumerford shared examples of cost increases he has experienced. Tankers, for example, are up 100 percent over 2020 costs. He paid 17 percent more for tires this year over last year.
Despite wide-held concern for high gas prices, the panelists did not support the federal gas tax suspension proposed by President Biden. Instead, panelists encouraged policymakers to establish a predictable energy policy and increase domestic energy production.
Members of Congress introduced several bills this legislative session aimed at alleviating pressure on the transportation and infrastructure industries. Witnesses expressed their support for the Modern, Clean, and Safe Trucks Act of 2022, which would repeal the federal excise tax on the purchase of new heavy-duty trucks, semitrailer chassis, tractors, and trailers. Additionally, witnesses supported legislation aiming to streamline and expedite the Transportation Worker Identification Credential (TWIC) enrollment process, as proposed by the TSA Security Threat Assessment Application Modernization Act. This bill would allow workers applying for two or more of the TWIC, hazardous materials endorsement (HME), or TSA PreCheck programs to do so through a single application.
Roundtable participants also offered solutions such as: provide additional funding for trade schools to increase the number of skilled laborers; remove redundancies in receiving National Environmental Policy Act (NEPA) clearance; and ensure truck owner-operators can continue to operate as independent contractors rather than employees.
President Biden, USDOT Announce More Than $573 Million in Available Funding from the New Railroad Crossing Elimination Program
On June 30, the U.S. Department of Transportation issued a Notice of Funding Opportunity (NOFO) announcing more than $573 million in available grant funding this year alone for the Railroad Crossing Elimination Program. This new competitive discretionary grant program – which will help improve safety, eliminate lengthy delays at railroad crossings in communities across the country and ultimately lower the costs of transporting goods, making them more affordable for American families – was created by the Bipartisan Infrastructure Law and will be administered by the Federal Railroad Administration. At least 20% of available funding will go to rural and Tribal areas. Incidents this week in Missouri and California have underscored the tragic consequences of collisions between trains and vehicles that occur throughout the country. In 2021, there were approximately 2,148 grade crossing incidents, resulting in 236 deaths and 662 injuries.
"In too many communities across America, outdated railroad crossings are unsafe, result in lengthy wait times, and can even create significant delays in our supply chains," said U.S. Transportation Secretary Pete Buttigieg. "With resources from President Biden's Bipartisan Infrastructure Law, we can improve rail crossings and help people and goods get where they need to go more safely."
“The Railroad Crossing Elimination Program will make many grade crossings safer or eliminate them altogether in the coming years,” said FRA Administrator Amit Bose. “The projects funded by the program demonstrate the Bipartisan Infrastructure Law’s lasting impact on communities by strengthening their infrastructure, reducing congestion, and saving lives.”
The Railroad Crossing Elimination Program will fund projects that create grade separations – such as overpasses and underpasses – as well as closures, track relocations, and improvement or installation of warning devices at crossings if related to a separation or relocation project. Planning, environmental review, and other preliminary design elements are also eligible for grant funding.
FRA will evaluate project proposals based on their potential to improve safety by eliminating crossings or improving existing highway-rail grade crossings; increase access to emergency services; reduce emissions; provide economic benefit; and hire locally, among other possible community enhancements.
The Railroad Crossing Elimination Program is one of several funding opportunities supported by the President’s Bipartisan Infrastructure Law to improve the safety of rail infrastructure across the country.
Read the full release here.
President Biden Announces Key Nominees
On July 21, President Joe Biden announced his intent to nominate the following leaders to serve as key leaders in his administration:
- Shailen P. Bhatt, Nominee for Administrator of the Federal Highway Administration, U.S. Department of Transportation
- Jeff Marootian, Nominee for Assistant Secretary for Energy Efficiency and Renewable Energy, U.S. Department of Energy
- Stephen A. Owens, Nominee for Chairman of the Chemical Safety and Hazard Investigation Board
Shailen Bhatt is Senior Vice President of Global Transportation Innovation and Alternative Delivery at AECOM, a multinational infrastructure consulting firm. Bhatt previously served as the Executive Director of the Colorado Department of Transportation, Cabinet Secretary of the Delaware Department of Transportation, and as a presidential appointee at the U.S. Department of Transportation. In these roles, Bhatt spearheaded innovative solutions, collaborations, and partnerships to support the delivery of safe, sustainable, and cost-effective transportation systems for the 21st century. He previously worked as the CEO of the Intelligent Transportation Society of America, Chair of the Board of Directors for the National Operations Center of Excellence (NOCoE), Chair of the Executive Committee of the I-95 Corridor Coalition, and was a member of the World Economic Forum’s Global Agenda Council on the Future of Automotive and Personal Transport.
Bhatt chairs an external advisory board for the United States Department of Energy, is a member of the Aurora Safety Advisory Board for autonomous driving, and is the Chair of the ITS World Congress Board of Directors. Bhatt is a proud husband and father to two daughters. He graduated summa cum laude from Western Kentucky University with a degree in Economics.
Read the full release here.
Biden-Harris Administration Takes Step Forward to Combat Climate Change, Announces Proposed Transportation Greenhouse Gas Emission Reduction Framework
On July 7, to advance President Biden’s commitment to combat climate change and bring down costs for families, the U.S. Department of Transportation’s Federal Highway Administration (FHWA) announced a Notice of Proposed Rulemaking (NPRM) for states and municipalities to track and reduce greenhouse gas (GHG) emissions. President Biden’s Bipartisan Infrastructure Law (BIL) makes available more than $27 billion in federal funding to help State Departments of Transportation (State DOTs) and Metropolitan Planning Organizations (MPOs) meet their declining GHG targets. The new rule would take two important steps to combat climate change:
- Establish a national framework for tracking state-by-state progress by adding a new GHG performance management measure to the existing FHWA national performance measures to help states track performance and make more informed investment decisions.
- Create a flexible system under which State DOTs and MPOs would set their own declining targets for on-road greenhouse gas emissions from roadway travel on the National Highway System.
Read the full release here.
Nossaman’s Shant Boyajian Named “Rising Star” in Transportation
Shant Boyajian, a partner in Nossaman’s Infrastructure Practice Group, was named a 2022 Rising Star by Law360 in the transportation category. The Rising Star Awards are targeted at a select group of attorneys under 40 years of age whose accomplishments belie their age.
In the Law360 profile that accompanied the honor, the publication noted Shant’s work over the past several years on such high-profile projects as the Los Angeles County Metropolitan Transportation Authority’s Sepulveda Transit Corridor project, a new rail solution that will connect the San Fernando Valley to Los Angeles’ west side, with an eventual extension connecting to Los Angeles International Airport.
Law360 also noted his assistance resuscitating the Massachusetts Bay Transportation Authority’s Green Line extension project. The five-mile extension project called for building six new stations, as well as relocating and rebuilding the Lechmere station, to better serve the communities of Somerville, Cambridge and Medford. Amid costs that ballooned to $3 billion, the MBTA hired Nossaman to review the existing construction manager/general contractor delivery model the transit agency used. To help rein in costs, Nossaman drafted a procurement that included an affordability limit, among other things.
The profile also noted Shant’s years of experience as a staffer on Capitol Hill. Earlier in his career, he was counsel to the House Committee on Transportation and Infrastructure’s Subcommittee on Highways and Transit, and later was senior counsel to the Senate Environment and Public Works Committee. In both roles, he negotiated and drafted sprawling multiyear surface transportation funding bills that gave him valuable insight into federal policymaking. Shant brings all that perspective into how he approaches his work on state and local infrastructure projects that have national significance.
In 2022, Law360 selected 176 honorees (from more than 1,350 submission) across 36 practice areas for Rising Stars designation.
Read the release here.
California Allocates More Than $3 Billion for Transportation Infrastructure
The California Transportation Commission (CTC) allocated more than $3 billion on July 1 to repair and improve transportation infrastructure throughout the state, including $1.3 billion in funding from the federal Infrastructure Investment and Jobs Act to support local projects and to protect local roads and bridges from extreme weather and natural disasters. Senate Bill (SB) 1, the Road Repair and Accountability Act of 2017, accounts for more than $930 million of the total funding.
Read the full release here.
New Report Details How to Reduce Carbon Emissions by 22% in Global Supply Chain by Adopting a Freight Data Exchange Standard
On June 28, the Coalition for Reimagined Mobility (ReMo), a global initiative created to shape policy and ideas for more equitable and sustainable movement of people and goods around the world released a report that details the impact of freight sector data sharing to improve the sustainability and reliability of the global supply chain.
The report includes new modeling from the International Transport Forum (ITF), which found that the adoption of an open freight data exchange standard would not only improve operational efficiencies across the supply chain, reducing the unprecedented level of goods stuck at global ports, it will also result in an estimated 22% reduction in carbon emissions by 2050 and eliminate 2.5 billion barrels of oil per year.
Freight data exchange standards are open or freely available technical specifications that define how to share critical information to seamlessly facilitate global freight logistics. Standardizing the exchange of freight data will support a transition to widespread software-enabled communication forming the backbone of better stakeholder coordination across the global supply chain.
Read the full release here.
CSCMP’s 33rd Annual State of Logistics Report
The 2022 State of Logistics Report was unveiled Tuesday, June 21, 2022 at the National Press Club in Washington, D.C., with the 33rd annual publication finding that U.S.-based supply chains are out of sync, while adjusting to short-term changes and perhaps uncovering long-term solutions. It is produced annually for the Council of Supply Chain Management Professionals (CSCMP) by global consulting firm Kearney and presented by Penske Logistics.
The publication delivers a snapshot of the American economy through the lens of the logistics sector and its role in overall supply chains. The report is a rigorous compilation of leading logistics intelligence from around the world and shines a spotlight on industry trends and key insights on ever evolving supply chains across a number of sectors.
A key statistic that the report generates is the United States business logistics costs, or USBLC. In 2021, USBLC was elevated by 22.4% to $1.85 trillion, representing 8% of 2021’s $23 trillion GDP.
Read the full release here.