Road-Funding Delay May Worsen Congestion and Reduce U.S. Competitiveness, Abney Says

This story appears in the Aug. 9 print edition of Transport Topics.

The continuing delay in passing a new long-term highway bill has trucking executives and transportation officials worried about the effects on the U.S. freight network.

“It’s a concern that it has gone longer than what we would like to see,” said David Abney, chief operating officer of UPS Inc. “The longer that this drags out, the more congestion and the more inefficient companies will be, and it can put us at a competitive disadvantage.”

The previous highway bill expired in September, but Congress has passed a series of extensions to keep money flowing to states for highway and bridge projects. The current extension lasts through the end of 2010.

John Horsley, executive director of the American Association of State Highway and Transportation Officials, said states are having a hard time planning and issuing contracts for new projects because of federal highway-funding uncertainty.

The U.S. Department of Transportation recently concluded a series of town hall meetings designed to shape the new highway bill, but it has yet to put forward any concrete proposals. That delay has led some to speculate that Congress will need to pass another extension of the current law before the year ends.

“I think there’s general frustration by all of the users of the highway system that there hasn’t been a bill coming forward,” said Patrick Quinn, co-chairman and president of U.S. Xpress Enterprises Inc.

He said although Transportation Secretary Ray LaHood has suggested there would be a new bill by year-end, it appears unlikely now.

Quinn served on a national commission that studied the nation’s surface transportation system for nearly two years, issuing a report that was supposed to serve as a guide for policymakers on the highway bill.

Issued in 2008, the report called for more highway funding, paid for by a gradual increase in the federal fuel tax, tolls and other fees.

To date, few in government, including the Obama administration, have been willing to embrace raising the fuel tax. At the same time, officials have said without more revenue, there won’t be a new bill.

“It will not be possible to pass an authorization bill unless there is an assurance of additional revenue,” Horsley said, adding that getting revenue with a fuel-tax increase “looks difficult.”

Abney said UPS was “willing to pay our fair share, but we are not willing to pay a disproportionate share.”

He stressed that his company believes the Highway Trust Fund should be used only for transportation infrastructure and not be part of the overall budget process.

Abney also said his company believes toll roads are a form of double taxation because the company is already “paying our fair share of taxes to the Highway Trust Fund.”

Quinn told Transport Topics the deterioration of infrastructure is troublesome for many reasons.

In particular, he said, congestion “adds transit time, which adds cost to goods and services being moved.”

Abney said congestion raises costs throughout the supply chain and causes burning more fuel, leading to additional pollution.

He called for making “serious efforts” in the coming months to convince Congress to pass a new measure, a sentiment that AASHTO’s Horsley shared.

“This is the time . . . before the end of the year to do everything possible to sustain the program,” Horsley said. Otherwise, concerns over deficit spending may make it “impossibly difficult” to sustain the highway program.