Transportation outlook: Commodities, farmers face more congestion

By Agri-Pulse staff

© Copyright Agri-Pulse Communications, Inc.



WASHINGTON, Oct. 15, 2015 - A recent Government Accountability Office (GAO) report sheds new light on the hurdles that producers, manufacturers and consumers will continue to face as economic activity improves and more freight moves across already overcrowded U.S. roads and railways. In addition, the report - which was originally requested by Montana Sen. Max Baucus -- underscores the need for a more comprehensive federal freight-moving strategy.

The report focuses specifically on how commodity flows are affecting local freight-related traffic congestion in 12 areas of the country. For businesses already impacted by the lack of timely rail service or backlogged freight service, the national trends are troubling.

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Other highlights from the GAO report spell out additional challenges:

•           DOT projects that total tonnage of freight moved in the U.S. will increase 51 percent annually from 2007 to 2040 (from 18,879 million tons to 28,520 million tons).

•           In 2012, the U.S. transportation system moved 19.7 billion tons of goods, valued at more than $17 trillion, according to the Department of Transportation (DOT). Freight travels over an extensive network that consists of approximately 4 million miles of highways and roads and 140,000 miles of rail lines, as well as inland waterways, pipelines, and airways.

•           Based on tonnage, trucks transport most freight in the United States (about 70 percent), but railroads carry significant volumes of commodities and consumer goods over long distances. GAO's analysis of Surface Transportation Board (STB) rail data from 2007 through 2012 showed that the total number of carloads in 2012 (about 34 million) remained 8 percent below the total number of carloads in 2007 (about 37 million), although it represented a significant increase compared to the low of 2009 (about 30 million).

•           Although 2013 STB data were not available, the Association of American Railroads (AAR) data show that the total number of carloads in 2013 continued to climb toward 2007 levels. These trends include an increase in intermodal traffic, a decrease in overall coal traffic but an increase in coal traffic related to export, and a sharp increase in crude oil transported by rail. (See chart below.)

•           Seventy five percent of U.S. crude oil rail carloads in 2012 originated in North Dakota and shipments of crude oil are expected to keep growing. According to the North Dakota Department of Transportation's State Freight Plan, North Dakota has lacked adequate pipeline capacity to handle the huge increase in crude oil production since 2008-from about 122,000 barrels a day in 2008 to about 933,000 barrels per day in January 2014-with the state's crude-oil pipeline capacity in 2013 being 583,000 barrels per day.

•           The congestion is not limited to the Dakotas and the Pacific Northwest. In Miami, officials provided GAO with a study documenting the costs of heavy trucks moving product to waterways, showing that trucks are about one-third of the almost 16,000 vehicles that travel to and from the Port of Miami through the downtown streets every day, and the associated cost of congestion was estimated to be about $300 million in 2008. GAO notes that the impacts of freight trucks on roads around East and Gulf Coast ports may increase when the expansion of the Panama Canal is completed in 2015, bringing more cargo on larger ships and a potential increase in the number of ships.

The GAO makes several recommendations for the DOT to consider impacts on local communities - some rural and some urban - in developing its national freight strategy, but also some advice for Congress:

“In reauthorizing the federal highway program, Congress should consider establishing a clear purpose for the national freight network and primary freight network that incorporates inclusion of the types of roads where communities are likely to experience significant freight-related traffic congestion, and, as relevant to this purpose, consider revising certain requirements such as the mileage limit of 27,000 miles or changing the requirement from a centerline to a corridor approach.”

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