ITA Wants to Develop National Export Freight and Supply Chain Policy
On April 29, 2010, the Senate Finance Subcommittee on International Trade, Customs, and Global Competitiveness held a hearing on Doubling U.S. Exports: Are U.S. Sea Ports Ready for the Challenge? One of the primary topics of discussion at the hearing was the need to improve not just U.S. ports, but the entire freight infrastructure supply chain to effectively boost U.S. exports and allow U.S. companies to effectively compete in the world market.
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(In his January 2010 State of the Union speech, President Obama announced a goal of doubling U.S. exports within five years.)
Witnesses at the hearing included officials from the Department of Transportation, the International Trade Administration, and private industry stakeholders.
ITA Working Toward a National Freight and Supply Chain Policy
ITA Assistant Secretary for Manufacturing and Services Lamb-Hale testified that the lack of a sufficient freight supply chain to move goods to and from U.S. ports is becoming a competitive disadvantage for U.S. companies and is resulting in missed export opportunities.
Export and domestic movements. She stated that the ITA is working with the Department of Transportation to further discussions toward the development of a new, competitiveness-driven national freight policy. ITA is also considering establishing an industry advisory committee to address these supply chain issues relative to domestic and export freight movements.
Trade Says Focus Should Be on Improving Entire Supply Chain
Industry witnesses (e.g. Caterpillar, the International Longshore and Warehouse Union (ILWU), etc.) also testified about the importance of looking beyond ports to the entire freight supply chain and the emerging focus of U.S. companies to eliminate costs related to excess inventory in the supply chain.
U.S. ports being bypassed. Problems at U.S. ports (lack of capacity and export terminal connectivity) as well as problems that impede the flow of goods to and from them (inadequate channel depth, insufficient rail routes, etc.) have resulted in U.S. companies shifting their imports and exports to move through Canadian ports due to improved transit time and cost.
Cargo security programs, TWIC diverting resources. Industry witnesses also testified that the amount of funding being spent on cargo security screening programs is diverting federal resources that would be better spent on improvements to the U.S. freight supply chain infrastructure. The ILWU stated that the Transportation Worker Identification Credential (TWIC) program is expensive and provides very minimal security benefits.
Lack of permit uniformity. The lack of permit uniformity in the U.S. also impedes the flow of trade, industry witnesses stated. Various and conflicting state regulations and permitting requirements (such as hours of operation and axle weight requirements) result in added costs and delays as equipment must sometimes be disassembled and reassembled to meet the differing weight restrictions of the states it travels through, for example.
DOT Targeting Infrastructure Expenditures on Freight, Etc.
DOT Assistant Secretary for Transportation Policy Trottenberg testified that DOT was making the following proposals and taking the following steps to improve the nation’s infrastructure:
National Infrastructure Innovation and Finance Fund. DOT has proposed a new Infrastructure Innovation and Finance Fund in its FY 2011 budget request to provide funding for projects in whatever mode of transportation will meet its goals in the most cost-effective way.
TIGER investments targeted to achieve goals. DOT is targeting its infrastructure investments on freight projects, such as $1.5 billion in the American Recovery and Reinvestment Act for discretionary grants in the Transportation Investments Generating Economic Recover (or TIGER) program. Through the TIGER program, DOT has awarded $124 million to port projects; $431 million to projects to improve rail, highway, and intermodal freight transportation (primarily ocean containers and truck trailers); and $277 to highway projects.
Need for Better Transportation Data. One of the major obstacles to better transportation investment, Trottenberg testified, is the lack of quality freight transportation data. Major gaps exist currently—for example, imports and exports are recorded in the Journal of Commerce’s PIERS database, but inland movements of imports are not tracked separately; rail freight movements often lack a detailed description; and the Commodity Flow Survey doesn’t cover all categories of freight and has too small a sample size to provide detailed commodity-specific data.
Congress Should Create New Freight Project Fund, Increase Funding
Several industry witnesses stated that as part of the next surface transportation authorization bill, Congress should create a dedicated program to fund freight projects. They also urged increased funding for maintenance and improvement of U.S. waterways and tax credits for freight rail capital investments.
Hearing information, video (dated 04/29/10) available at http://finance.senate.gov/hearings/hearing/?id=a41ba5cb-5056-a032-526f-5f3933e34f08.