Will Future Freight Capacity Be Adequate?
During the late 19th and most of the 20th century, the nation collectively made massive investments in transportation facilities, including railroads, ports, highways, and pipelines. The nation is now well interconnected (
Table 1), but many bottlenecks remain. During the last decades of the 20th century, overall investment in new capacity slowed even as the use of facilities continued to grow apace. The reasons for the slower expansion of capital facilities are complex. They include the completion of the Interstate highway system, the introduction of federal and state provisions for environmental protection that make it more difficult to add new capacity, and the evolution of the national economy from a production to a service orientation.
Yet the economy and population continue to grow. By the middle of this century, the U.S. economy’s output of goods, the volume of international trade, and vehicle miles of travel will have more or less doubled, and the population will have increased by half. The addition of major new facilities is a daunting task, often requiring one or more decades from approval of a concept to its realization. Hence, government officials must prepare over a long planning horizon—often far longer than that of the private sector—to avoid potential capacity shortfalls and lost economic growth.
The committee that addressed the issue of freight capacity for the 21st century took note of some worrisome trends (Special Report 271: Freight Capacity for the 21st Century; TRB 2003). Highway capacity expansion is falling behind traffic growth. Railroads have been downsizing, recent mergers have caused substantial service disruptions, and average speeds on major railroads have been declining. Many border crossings and freight terminals are experiencing increased congestion. And conflicts between passengers and freight for shared facilities are growing.
Despite these trends, the committee observed that the private freight industry can be quite dynamic and innovative in responding to inevitable bottlenecks in capacity as they arise. Moreover, workplaces and residences tend to move away from congestion within metropolitan areas and from more congested to less congested regions. Such adjustments have been a characteristic way of accommodating growth throughout the nation’s history. Yet this resolution, although tolerable, is certainly far from the economic optimum. Moreover, regions unable to address capacity needs face the loss of jobs and growth.
At the national level, the federal government can and should take a variety of actions to maximize the efficiency of public investment and freight movement. Virtually no federal measure affecting freight is as consequential as the level of investment in and the tax structure of the federal-aid highway system. Highway services are essential to the functioning of the rail, air freight, port, and waterway systems. Federal policy can encourage economic efficiency by maintaining and reinforcing the principles of user financing and by more closely aligning user-fee payments with the costs users occasion.
Other measures are also important, such as maximizing the efficiency of federal planning for and investment in improvements to waterways and port harbors and channels. Moreover, financing of these investments should be based on user fees rather than general fund subsidies, and more concerted efforts should be made to expedite the conduct of environmental regulatory reviews. Overall, the public role would be significantly enhanced by improved and better-informed analyses across all modes of the benefits, costs, beneficiaries, and appropriate means of financing new and managing existing capacity.