What the World of Highway Transportation What the World of Highway Transportation Looks Like in Washington, DC in 2008-2009Looks Like in Washington, DC in 2008-2009

Presented to the:Presented to the:

Steel Manufacturers AssociationSteel Manufacturers Association

November 6, 2008November 6, 2008

Jake Jacoby – Lobbyist and Jake Jacoby – Lobbyist and Consultant for Jacoby ConsultingConsultant for Jacoby Consulting

jjacoby@aset-safety.org 202-441-1571 202-441-1571

The National Surface Transportation Policy and The National Surface Transportation Policy and Revenue Study CommissionRevenue Study Commission

Report released January 15th with immediate divisions within the commission itself amongst the majority and minority commissioners

Commission authorized to make recommendations on surface transportation policy matters, particularly highway funding & infrastructure

Goals include improving current infrastructure, easing congestion, reducing accidents and improving environmental impacts

Majority RecommendationsMajority Recommendations

Streamline federal programs from 108 into 10 larger ones Create independent commission to oversee national projects Make the highway trust fund solvent immediately Lift the current federal ban against interstate tolling to fund (only)

new infrastructure Create a national freight program to help eliminate bottlenecks Support light rail services between metro & regional corridors Push for tax incentives to railroads to increase capacity Raise gas taxes between 25-40 cents over next 5 years

Minority RecommendationsMinority Recommendations

Centralizing transportation system decisions at the federal level will only cause problems – the states should be the ones to decide

Fuel taxes are inefficient & should not be seen as a solution Need-based systems must be redefined and reassessed to

ensure their viability and necessity An independent commission overseeing national projects is

not practical or sound policy There should be no limits on tolling and congestion pricing

Reactions to the ReportReactions to the Report

Congressman John Mica (R-FL) – the gas tax “does not stand a snowball’s chance in hell of passing Congress.”

Senator Grassley (R-IA) – “Everyone knows most members of Congress will toss that [gas tax increase of up to 40 cents a gallon] recommendation right in the trash.”

Congressman Jim Oberstar (D-MN) – “This report… provides a great starting point…”

U.S. Secretary of Transportation Mary Peters – Stood with the minority against the majority’s call for substantial state and federal gas tax increases and new federal bureaucracy

Other Issues & Questions Facing Other Issues & Questions Facing the Transportation Modesthe Transportation Modes

Ports – The L.A./Long Beach environmental plan: Will they implement a new emissions plan soon? Will drivers be forced to unionize? Will shippers & carriers fight back?

Security – Will all cargo coming into the U.S. being checked and will this cause an undue delay in freight movement?

HAZMAT – Homeland Security taking over for hazardous materials movement and security as PHMSA is pushed to the side – does this make sense?

Rail – Will they receive tax incentives? Will shippers continue to be held captive? Will the Congress act?

Trucking – Will they have one voice and not cut a deal? Will truck size and weight be a top agenda item?

The Highway Congressional The Highway Congressional Reauthorization Bill in 2009Reauthorization Bill in 2009

Congressional highway is bill due for final passage in the fall of 2009 – deliberations have already begun

Priorities will include funding for existing infrastructure, expanding highways in high-use corridors, increasing light rail/commuter rail funding, reducing emissions/going green and debating how to do all of this on a very tight budget

Taxes vs. tolling and congestion pricing New Administration may weigh in heavily in 2009

Will productivity for trucking take a step forward finally?

Americans for Safe & Efficient Transportation

Introduction

Presented to:

Steel Manufacturers AssociationNovember 6, 2008

Current State of TruckingCurrent State of Trucking

Capacity Constraints

All Modes of TransportationMotor CarrierRail CarrierDomestic Marine

Expanding EconomyGDP growth rate over the past 25 years has been averaging over 3% annually

Interstate trucking is expected to nearly double between 2000 and 2020

Under present policies, motor carrier capacity requirements will not grow at same rate.

Impact: - Ability to conduct U.S. Commerce - Ability to compete in North America / Globally

Current State of Trucking Cont’dCurrent State of Trucking Cont’dCompetitive Disadvantage

The United States – 80,000 lbs. on five axlesNAFTA Partners

Canada - 95,600 lbs. on six axlesMexico - up to 106,920 lbs. on six axles

European CommunityAllows up to 44 metric tons - approximately 97,000 lbs. on six axles

Impact: - Ability to compete in North America / Globally- Loss of Productivity / Opportunity Cost

Congestion / Capacity DemandFrom 1980 to 2000, Interstate highway tonnage doubled

For the same period, the Interstate infrastructure grew by 1%

Highway congestion will intensify over the next 20 yearsPast Federal Highway Bills: “Keep the lights on” - - Very Little New Growth“We're just Band-Aiding right now. We're not expanding.” Rep. Don Young(Traffic World: 2/14/04)

Impact: - Highway Gridlock- Energy Consumption / Environmental Damage- Public Safety

Current State of Trucking Cont’dCurrent State of Trucking Cont’dState Exemptions

• Several States given grandfathered rights to haul heavier weights on Interstate highways with the addition of extra axles.

Examples – NM=86,400 ID=105,500, SD=129,000, MI=164,000

• Nearly every state has permits available for heavier trucks on local roads and many states have enacted higher weight laws for their turnpikes or major state routes such as OH, MA, NY.

• Several states give permits for one industry but not another.

• Patchwork of permitting processes and regulations often mean trucks must use circuitous routes through small towns carrying the heaviest products.

• State infrastructure is harmed long-term by allowing permitted heavier trucks with only five axles onto their local roads and not onto the Interstate System.

Future Motor Carrier EnvironmentFuture Motor Carrier Environment

2000 2020

0%

100%

-100%

Inter-CityTonnage

Motor CarrierCapacity

Cost Inflation• Insurance• Fuel• Workers Comp

Productivity• Hours of Service• Clean Air Act• New Engine Regs

Chronic Issues• Dwell Time• Empty Mileage• Seasonality• Driver Shortage• Lane Imbalance

Year

Growth

GAP

GAP

Finding Quality Drivers Will Finding Quality Drivers Will Remain a ChallengeRemain a Challenge

GDP %

Annual GrowthRate %

2001 2005 2010

0.5% 0.4%

-1.1%

-0.1%

0.0% 0.1%0.2% 0.3%

0.0%

0.3%

-2%

-1%

0%

1%

2%

3%

4%

5%

2001

Demographic Shift vs. GDPMales Aged 20 - 44

Highway Congestion2000

Highway Congestion2020

RealityReality

Without fundamental changes, the growth in motor carrier capacity will not keep pace with demand.

The rail and marine infrastructure can not flex to handle the increased demand.

Our national highway system will not be able to accommodate this surge in usage.

The Shipper Community andMotor Carrier Industry must developa partnership to achieve these goals

Changes must be made to our national trucking policy that:

Promote Highway Safety

Reduce Congestion, Energy Consumption and Environmental Impact

Address Competitive Issues

Encourage Productivity Gains

MandateMandate

Highway SafetyReduction in VMT’s translates into fewer accidentsATA / DOT: 25,000 fewer accidents, 450 fewer fatalities / 8,000 fewer injuries

Energy / EnvironmentATA and DOT estimate that 97,000 lb. Trucks will save 2 billion gallons of fuel and prevent 7 million tons of pollutants from being emitted per year

Highway Congestion / ImpactFor appropriate freight -- 4 trucks to 3 trucksA minimum reduction of 10-20% in vehicle miles traveled by heavy-haul trucks17% reduction in Equivalent Standard Axle Loads – (pavement consumption)

Economic Growth & CompetitionDOT estimates that 97,000 lb. Trucks will result in $15 billion in annual savings

• Additional savings of $2.5 billion in highway pavement costs

Level playing field with Canada, Mexico and Europe

The Future – ASET LegislationThe Future – ASET Legislation 97,000 lbs Six-Axle Trucks97,000 lbs Six-Axle Trucks

Safety StatisticsSafety Statistics• 97,000-pound six-axle trucks had an improvement of approximately 5% in its Rearward Amplification during DOT’s testing compared with the 80,000-pound five-axle trucks.

•  97,000-pound six-axle trucks had less than a 3% decrease in its Load Transfer Ratio during DOT’s testing compared with the 80,000-pound five-axle trucks.

•  97,000-pound six-axle trucks had less than a 4% decrease in Static Roll Stability in DOT’s testing compared with the 80,000-pound five-axle trucks.

• The vehicle crash-rate for large trucks is 2.16 per million miles. This compares to 5.53 for cars and 4.33 for light trucks.

• In 71% of all accidents involving a truck and passenger vehicle, police officers on the scene assigned one or more crash factors to the passenger vehicle driver and none to the truck driver.

Anheuser-Busch averages 128 trucks/week from its Houston, TX brewery to San Antonio, TX (198 Miles).

• Trucks weigh 35,000 lbs. empty and can carry approx. 45,000 lbs. of beer before hitting the 80,000 lb. Interstate weight limit.

• If weight limits increased to 97,000 lbs, each truck could increase its 45,000 lbs of cargo to approx. 60,000 lbs.

• A-B could then transport the 5,760,000 lbs. of beer shipped to San Antonio each week to 96 trucks, resulting in:

• a reduction of 32 trucks and 6,336 miles traveled each week.

• a reduction of 807 gallons in diesel fuel per week.

• a reduction of 17,996 lbs. in CO2 emissions per week.

• Total weight reduction on roads and bridges weekly of 1,120,000 lbs.

•At a cost of $ .70 per mile in fuel costs, the resulting savings is diesel costs alone would be approximately $4,435 per week

Quotes from the DOTQuotes from the DOT“All other things being equal, increases or decreases in the exposure to crash risk proportionally increases or decreases the likelihood of a crash. Thus, changes in the number of truck trips made to haul the same amount of freight, could alter the likelihood of crashes.”

US DOT’s Comprehensive Truck Size and Weight Study

“Truck travel, as well as all vehicle travel, on lower standard roads… significantly increases crash risks compared to travel on Interstate and other high quality roadways. The majority of fatal crashes involving trucks occur on highways with lower standards.”

US DOT’s Comprehensive Truck Size and Weight Study

2008-2009 – The Final Push Is On!2008-2009 – The Final Push Is On!ASET 2008-2009 Strategy

ASET will follow-up with interested parties following the joint meeting hosted by the ATA and ASET to determine the interest of other associations in DC. Depending on the level of support, ASET is likely to press for a national bill for truck weights rather than pilots.

Bi-partisan National Bill Would be Part of 2009 Reauthorization– Would allow any state to adopt higher weights– Would require the highway user fee to be increased– Would adopt safety and infrastructure reviews

Back-up Plan - Pilot Projects as Part of 2009 Reauthorization– States targeted include ME, MN, WI, SC, GA & TX– Statistics would be collected to prove truck VMT reduction

Legislative Interface:– Continue to work with supportive Members of Congress and staff– Meet with State DOT’s and legislators– Strategic lobbying “fly-in” events in Spring & Summer of 2009– Constant dialogue with Congressmen Oberstar, DeFazio & Mica

What ASET Needs From You!What ASET Needs From You!

ASET Will Need Your Support In Order to Succeed:

– Your Financial Support of ASET– Your Time For Conference Calls, Meetings, & Strategic Planning– Your Commitment To Participate in Fly-In Events in 2009– Your Company’s Political Support both in Congress & in Key States

If We Don’t Succeed During This Reauthorization, It’ll be 2014 Before We Will Have Another Chance at Increased Productivity!

The Pyramid of BenefitsThe Pyramid of Benefits

Environmental Benefits

Bridge Reinforcement

Congestion Relief

Global Competition

Driver Shortage & Demographics

Productivity Enhancements

Safety Improvements

ASETASET

Jake Jacoby – Executive Director

ASET

1733 King Street

Alexandria, VA 22314

Work: (703) 549-9467

Cell: (202) 441-1571

jjacoby@aset-safety.org