Perspective on Freight Congestion
National efforts and stakeholder collaborations offer tools and resources for addressing the challenges of moving goods on the Nation's busy highways.
Virtually everything manufactured, bought, or consumed in the United States at some point is transported by truck. The American Trucking Associations has documented that if truck movement stopped in America, within the first 24 hours, service stations would begin to run out of fuel, manufacturers using just-in-time manufacturing would develop parts shortages, and U.S. mail and other package deliveries would cease. After 1 day, food shortages would develop, automobile fuel availability would dwindle, and assembly lines would shut down, putting thousands out of work. Although trucking represents only one mode within the freight network, this example demonstrates the critical importance of the U.S. transportation system.
The freight transportation system, which facilitates the efficient movement of goods and services, is a complex network of roadways, seaports, airports, railways, intermodal facilities, and pipelines that are vital to the Nation's economic prosperity and quality of life. Stakeholders span all levels of government and include carriers and shippers in the private sector, businesses, and consumers. Because freight transportation has significant direct and indirect effects on economic productivity and growth, traffic congestion can have far-reaching consequences. Congestion reduction is a critical and national priority for the U.S. Department of Transportation (USDOT).
USDOT's National Strategy to Reduce Congestion on America's Transportation Network, also known as the Congestion Initiative, includes a six-point plan to reduce congestion in the short term and build the foundation for success in the longer term. The Congestion Initiative's activities that relate most directly to freight movement include targeting major freight bottlenecks, expanding freight policy outreach, incorporating private sector investment resources, and establishing USDOT's Corridors of the Future program.
In 2006, USDOT proposed the Framework for a National Freight Policy, which works hand-in-glove with the Congestion Initiative to improve freight movement and decrease congestion. The Framework for a National Freight Policy focuses on the first objective of the Congestion Initiative — reducing major freight bottlenecks and building an outreach component to bring together the public and private sectors to address seven key goals:
- Maximize safety and security of the freight transportation system — "job one" every day for USDOT
- Improve the operation of the existing freight transportation system, including changing how the public and private sectors use the freight system to improve throughput or capacity
- Add physical capacity to the freight transportation system wherever investment improves system throughput
- Use pricing to improve alignment of costs and benefits between freight system users and owners and to encourage deployment of productivity-enhancing technologies
- Reduce or remove statutory, regulatory, and institutional barriers to improved performance in freight transportation
- Proactively identify and address emerging transportation needs, including conducting research into freight movement, data, and modeling to improve investment choices and understanding of freight movement
- Mitigate and better manage environmental, health, and community impacts of freight transportation
Freight Movement On the Highways
U.S. freight carriers moved 17.5 billion metric tons (19 billion short tons), worth more than $13 trillion in 2002. In 2035, the volume of freight shipped on the U.S. transportation system is expected to increase to 33.7 billion metric tons (37 billion short tons), worth about $38 trillion.
The demand for goods and services increases the amount of truck traffic on the Nation's highways. Commercial truck traffic doubled over the past two decades, and vehicle miles traveled by truck are expected to increase more than 3 percent per year through 2020, compared to 2.5 percent for passenger vehicles. According to a 2005 U.S. Census Bureau report, trucking, couriers and messengers, and warehousing and storage revenue reached $292 billion in 2005, up from $266 billion the year before. Truck transportation alone reached $206 billion, up 11 percent from the previous year, and long-distance general freight revenue rose 11.2 percent to $117 billion.
Trucks carry the lion's share of overall freight movement. Data from the Federal Highway Administration's (FHWA) 2006 Freight Analysis Frame-work (FAF) indicate that trucks carried about two-thirds of the value of goods and moved approximately 60 percent of the freight tonnage in 2002.
Effects of Congestion on Freight Movement
The U.S. surface transportation network, which includes rail and highway, is reaching or has reached capacity in many areas, causing congestion. There are two sources of congestion. Recurring congestion largely stems from lack of capacity to meet traffic demand or lack of optimal operation of the infrastructure. Nonrecurring congestion results from unpredictable or unexpected disruption of the infrastructure. Goods movement also can be impeded by route restrictions, administrative procedures (such as customs clearance, regulatory compliance, and security), and facility or operational inefficiency and constraints. In some instances, changes in freight handling, yard location and layout, scheduling, and shipment coordination can play a role in minimizing delay and moving freight more efficiently.
For the freight industry and trucking companies, congestion on the transportation network diminishes productivity and increases the over- all cost of transportation services. Increased costs may be due to higher costs of fleet operations, decreased fleet and vehicle utilization, decreased fuel efficiency, increased emissions due to idling, and decreased hours of "productive" service for drivers.
Although private and public sector efforts to quantify the operational cost of congestion to the freight industry have been limited, a 2004 USDOT report, Freight Transportation: Improvements and the Economy, estimates the cost of carrying freight on the highway system at between $25 and $200 an hour, depending on product type and other factors. The report also cites a 2001 USDOT white paper, "Creating a Freight Sector within HERS," that estimates unexpected delays can increase the cost of transporting goods by 50 to 250 percent.
Because a supply chain is a "network of retailers, distributors, transporters, storage facilities, and suppliers that participate in the sale, delivery, and production of a particular product," as defined by "investorwords.com," congestion resulting in unreliable trip times and missed deliveries can have major business implications, causing a ripple effect that adds costs at every link of the supply chain. If the transportation function is reliable, manufacturing and retail firms can carry less inventory because they can rely on goods being delivered when and where they are needed. In addition, they can potentially expand their sourcing. The inverse also is true. If the transportation system is congested and unreliable, a firm must carry more inventory to ensure production processes are uninterrupted and the availability of goods is maintained. Stock-out situations and interrupted manufacturing operations have a negative and growing impact on business operations that have been reengineered around a just-in-time lean inventory business model.
Carrying inventory is a cost to a firm. Not only is a firm's capital tied up in inventory, precluding its use for more productive activity, but inventory must be stored and insured, and the capital invested is at risk should the inventory lose its shelf life. This model of businesses carrying more inventories to buffer transportation unreliability has negative cost implications and also affects customer service.
NHS Estimated Peak Period Congestion: 2002
NHS Estimated Peak Period Congestion: 2035
Transportation always has been integral to the ability of businesses to capitalize on economic and competitive advantages. Now, with businesses integrating fluid transportation into their operations, it is not just transportation, but efficient, speedy, and reliable transportation that will play a significant role in maintaining and expanding economic activity.
"Gone are the days when on-time delivery is an option — it is now a requirement," says Rosalyn Wilson, independent consultant and author of the Council of Supply Chain Management Professionals (CSCMP) State of Logistics Report, published in 2006. "Shippers, particularly those employing just-in-time management techniques, expect freight carriers to deliver goods on time, in the right amount, and in undamaged condition. Missed deliveries to manufacturing plants and retail outlets can halt production, hinder sales, and potentially sever business relationships. Efficient and reliable freight transportation enables businesses to respond rapidly to changes in customer and consumer demand, shorten product cycle times, and reduce inventory."
According to CSCMP's report, inventories have slowly crept up, reversing the trend toward leaner logistics. The report notes that the 17 percent increase in inventory carrying costs in 2005 is in part a response to longer and sometimes unpredictable delivery times. According to the report, during the same period, trucking costs increased by $74 billion due in part to factors such as worsening congestion and higher fuel expenditures.
Putting into perspective the carrier costs, Allen Lund, a transportation third-party logistics provider based in La Cañada, CA, commented in a 2003 interview with Logistics Today, "We have $125,000 trucks and drivers going 4 miles [6 kilometers] an hour on congested highways."
From a shipper perspective, Bill MacKenzie, communications manager for Intel® Corporation, says, "As congestion has grown in the Portland, OR, metropolitan area, we have had to pull in our pickup times for our outbound shipments to ensure they meet the throughput time requirements of our internal and external customers."
In a 2004 Portland Tribune article, "Stalled Freight Costs Big Bucks," MacKenzie said that product delivery is as critical to a company's success as quick and precise product development. "We operate on precise timeframes....Any deviation from schedules has a cost associated with it." The article notes that the timing issue is so crucial that "Intel has poured its own cash into adding wiggle room to the corset that is U.S. Highway 26 and to the squeeze play that is Oregon Highway 217. The company donated $500,000 for the Oregon Department of Transportation's Highway 26 onramp project." Intel also donated the land for a light-rail transit stop at an Intel campus to ensure access to mass transit for its employees.
Strategies and Solutions
USDOT's white paper "An Initial Assessment of Freight Bottlenecks on Highways" details the problem with freight congestion and where future resources perhaps could be targeted. The assessment points out, "Freight congestion problems are most apparent at bottlenecks on highways: specific physical locations on highways that routinely experience recurring congestion and traffic backups because traffic volumes exceed highway capacity." Freight bottlenecks are found on highways serving major international gateways such as the San Pedro Bay port complex, which includes the Los Angeles/Long Beach Port, the Port of New York and New Jersey, and the Detroit/Windsor border crossing. Bottlenecks also exist at domestic freight hubs such as Chicago, Kansas City, and Memphis, and in major urban areas where transcontinental freight lanes intersect congested urban freight routes.
Jill Hochman, director of FHWA's Office of Interstate and Border Planning, says, "The Detroit/Windsor international border crossing is the busiest commercial crossing in the United States. In FY2006, it had 26 percent of all the northern border truck inspections. The corridor it is in accounts for 20 percent of the more than $500 billion annual trade between the United States and Canada. Because of the crossing's significance to the economies of Canada and the United States, [USDOT] is working as a partner with Canada, the Michigan Department of Transportation, and the Ontario Ministry of Transportation on a new crossing to ensure sufficient capacity for the next 30 years in a freeway to freeway corridor."
Jack Kyser, chief economist for the Los Angeles County Economic Development Corporation, wrote in his white paper "Goods Movement in Southern California: How Can We Solve Problems and Generate New State Sales and Income Tax Revenues?": "As one of the Nation's premier global gateways, southern California connects the region, the State, and the rest of the country with the dynamic economies of Asia. The volume of trade flowing through our ports has surged in recent years and is expected to at least triple over the next 20 years." Recognizing the importance of the California region and the necessity to ensure that transportation capacity is adequate to meet future demand, the Congestion Initiative will transform USDOT's existing Gateway Team in southern California into a larger "Southern California freight congestion team." The initiative charges the team to "convene the region's diverse freight stakeholder community to forge consensus on immediate and longer term transportation solutions." This partnership approach to addressing bottlenecks at or near international gateways then could be replicated at other locations throughout the Nation.
Unlocking key freight bottlenecks, such as in southern California, is a vital strategy to improve freight movement, but it is just one piece of the puzzle. Solving the full spectrum of freight movement constraints in the long and short terms will require coordinated collaborative action from public and private parties.
Truck Only Toll Lanes
One of the objectives in the USDOT Framework for a National Freight Policy calls for improving align— ment of costs and benefits between freight system users and owners and encouraging use of productivity-enhancing technologies. A strategy that supports this objective and also seeks to reduce congestion is truck only toll (TOT) lanes. TOT lanes are highway lanes reserved for commercial trucks, buses, and other commercial vehicles in order to make freight movement more timely and reliable. In most studies, TOT lane use is optional, meaning commercial vehicle drivers can use the lanes, for a fee, or continue to use the regular lanes. TOT lanes can be new facilities or created by reallocating existing lanes.
TOT lanes are similar in concept to high-occupancy toll (HOT) lanes. The price for using TOT lanes corresponds to a cost per distance traveled that will keep the TOT lanes performing at a level of service that provides more reliable travel. In the most optimal situation, the HOT lane facility would be integrated with a traveler information system that would inform drivers of commercial vehicles how much travel time would be saved by using TOT lanes and what the fee is. The decision on whether to use the TOT lane would be up to the driver or in accordance with company policy.
Adding truck only lanes (with and without a toll element) and truck bypass lanes to existing highway infrastructure may improve truck travel times and reliability. Using four selected sections of Interstate 10, the National I-10 Freight Corridor Study (a joint effort by eight State departments of transportation) estimated that truck-automobile separation would save $69.28 billion from 2002 to 2025, or $6.25 million annually per 1.61 kilometers (1 mile) of improvement. The study uses an average value of $25 per hour to estimate truck delay costs. A 2005 Georgia State Road and Tollway Authority study, Truck Only Toll Facilities: Potential for Implementation in the Atlanta Region, concludes, "TOT lanes hold substantial promise not only in improving commercial vehicle mobility, but also in improving the performance of the regional network of limited access highways and local roads."
Freight Data and Analysis
Another objective of the USDOT Framework for a National Freight Policy calls for identifying and addressing emerging transportation needs. This includes research into freight movement, data, and modeling to improve investment choices and understanding of freight movement.
Historically, efforts to quantify congestion in most cases were confined to jurisdictional boundaries in metropolitan areas making it difficult for freight transportation agencies to measure the extent and costs of congestion. Unlike commuter travelers, commercial freight carriers often make much longer trips that expose them to congestion at shipment origins, while in transit, and at shipment destinations. Measures of congestion such as travel times, costs, and reliability, and the variability of travel times may differ significantly when viewed from the local, regional, and corridor levels. Acquiring this freight data is essential to public transportation agencies for matching infrastructure supply to demand, for developing and assessing potential operational strategies, and for prioritizing freight investments.
Freight Analysis Framework. FHWA's FAF is a strategic tool that integrates goods movement measured in dollars and tons with transportation infrastructure facilities for the entire United States. Through this integration, the demand and production of goods from the Nation's economic activities are tied with the needs and adequacy of transportation infrastructures. The current FAF provides goods movement data covering base year 2002 and projections for years from 2010 through 2035 in 5-year intervals. FAF is used to support policy analysis under various scenarios.
Dr. Tianjia Tang, FHWA's program manager for FAF, says, "The tool does an excellent job for corridor analysis among States on the Nation's transportation infrastructure facilities. It provides the analytical ability to perform various capacity and congestion-related analyses over the highway network at a corridor level. These analyses enable the identification of regionally and nationally significant freight corridors." For local agencies, the key to using FAF data successfully is to fuse it with local data and gain a better understanding of how the data might be used as a basis for identifying and prioritizing needed improvements.
In addition to Federal efforts, many States develop freight data tools to assist them in making sound policy and investment decisions related to freight transportation. For example, the Minnesota Department of Transportation (Mn/DOT) has developed a freight facilities database and a freight planning information system. John Tompkins, director of Mn/DOT's freight planning and program development in the Office of Freight and Commercial Vehicle Operations, says, "Freight data are needed for my State's efforts to develop and implement strategies to improve our knowledge of freight transportation, and also to help improve or augment freight transportation service productivity and safety. By doing so, Mn/DOT enhances its contribution to our State's competitiveness in the regional, national, and global markets."
Freight Performance Measure-ment (FPM). The FPM initiative is an FHWA effort to develop performance measures for freight-significant corridors and border crossings. Data collected from commercial vehicles equipped with tracking and communications technologies are used to derive measures of speed and reliability along 25 freight-significant corridors and delay measures at 5 selected land border crossings: Blaine (Pacific Highway), WA; Pembina, ND; Ambassador Bridge (all Detroit crossings) in Michigan; Peace Bridge (all Buffalo Niagara crossings) in New York; and Champlain, NY. More than 50 percent of all U.S. inbound truck traffic crossed at these five land crossings in 2005. More information on FAF and FPM can be found at www.ops.fhwa.dot.gov/freight/freight_analysis/index.htm.
Freight Professional Development and Capacity Building
A necessary follow-on to providing analytic tools and improved freight data and capabilities is the professional capacity to use them and integrate them into the transportation planning process and across transportation disciplines. To enhance freight professional capacity, USDOT and FHWA are working with agencies, modes, and organizations to enhance freight professional development through research, education and training, and engagement with the private sector. A key component of FHWA's Freight Professional Development (FPD) program focuses on freight planning.
Freight Planning. Traditional State and local planning efforts tended to focus on passenger travel and related transportation facilities. The Intermodal Surface Transportation Efficiency Act of 1991 and the Transportation Equity Act for the 21st Century were key Federal legislative drivers that elevated the level of freight planning between public transportation agencies. Before those laws were enacted, freight transportation was viewed predominately as privately owned and operated, subject to varying degrees of government regulatory oversight.
Gloria Shepherd, FHWA's Associate Administrator for Planning, Environment, and Realty, notes, "Many of the Nation's most important freight transportation facilities — truck terminals, intermodal transfer facilities, seaports, rail yards, and airports — are in major urban areas, making it essential that planning organizations consider freight that is generated and received by these facilities when developing long-range transportation plans. Failure to do so can result in underestimated predictions on demand growth and congestion."
Because most freight moves through multiple jurisdictions, in many cities through traffic is of equal importance to origin or destination traffic. Shepherd adds, "Forecasting and planning for future transportation capacity to support freight may require additional emphasis on multijurisdictional planning. The global nature of freight transportation could mean that major benefits of capacity improvement will be in another planning jurisdiction or another State."
Professional Development and Capacity Building. The FPD initiative, administered by FHWA, is a program for research, training, and education to support enhancements in freight transportation. According to Tony Furst, director of FHWA's Office of Freight Management and Operations, "The program is designed to build and enhance freight professional capacity at the State and local levels."
He adds, "though many States have well-developed freight programs — California, Florida, Maryland, Minnesota, Ohio, and Washington, to name a few — the dynamic nature of freight transportation necessitates continuous dialogue among the various stakeholders, including transportation professionals, practitioners, and policymakers, on how freight uses and affects the transportation system." Freight capacity building is a vital component for integrating freight infrastructure and operational considerations into the transportation development and improvement process.
Opportunities for Success
Along with the complexity of the U.S. transportation network comes complexity in determining the right mix of strategies and solutions for effecting positive change. Successful strategies and solutions require individual action and partnership between the private and public sectors.
In the public sector, many operations strategies focus on addressing the causes of nonrecurring congestion, such as traffic incident and work zone management, and the causes of recurring congestion through traffic management and unlocking freight bottlenecks. Foundational components include developing freight analytic capabilities and strategies for capacity building.
In the private sector, strategies center on operational changes such as shifting hours of operation of distribution centers and other shipment facilities, optimizing route selection (comparing travel times for the shortest route with a longer, less direct route), improving shipment planning (shipper providing more precise information on load times, weights), and load optimization. Other strategies include improving connectivity to rail and marine transportation infrastructure and clustering common destinations to reduce the travel required for goods distribution. Not only are these strategies good business, but they also reduce congestion.
The U.S. economy depends on an efficient and reliable freight transportation system. Congestion and insufficient investment may create a potential weakness in a system that for many years has been a major strength. Much work needs to be done to develop and access the most appropriate solutions to freight congestion. The Congestion Initiative and the Framework for a National Freight Policy provide opportunities for success.
Sources for Further Information
American Trucking Associations. "When Trucks Stop, America Stops," July 14, 2006. Online at www.truckline.com/NR/rdonlyres/5E2BCA15-7C12-43CA-9F82-154A5A7A2F3C/0/WhenTrucksStopAmericaStops.pdf.
Georgia State Road and Tollway Authority. "Truck Only Toll Facilities: Potential for Implementation in the Atlanta Region," July 18, 2005. Online at www.georgiatolls.com/pdf/TOT_Final_Report_July2005.pdf.
Kyser, Jack. "Goods Movement in Southern California: How Can We Solve Problems and Generate New State Sales and Income Tax Revenues?" (white paper), Los Angeles County Economic Development Corporation, undated. Online at www.laedc.org/sclc/studies/center_kyser-whitepaper.pdf.
Minnesota Department of Transportation. "Minnesota Statewide Freight Plan," Executive Summary, May 2005. Online at www.dot.state.mn.us/ofrw/PDF/MN_SFP_%20Exec_Sum.pdf.
Trunick, Perry A. "A Defining Moment for Logistics," Logistics Today, September 2003. Online at www.logisticstoday.com/sNO/6212/iID/20860/LT/displayStory.asp.
U.S. Bureau of the Census, 2005. Trucking-Related Revenue Rose to $292 Billion in '05 Trucking-Related Revenue Rose to $292 Billion in 2005. Online at www.census.gov/svsd/www/services/sas/sas_data/sas48.htm.
U.S. Department of Transportation. "Framework for a National Freight Transportation Policy" (Draft, April 2006; Web page updated 1/19/2007). Online at http://ostpxweb.dot.gov/freight_policy_framework.html.
U.S. Department of Transportation. "National Strategy to Reduce Congestion on America's Transportation Network." May 2006. Online at http://isddc.dot.gov/OLPFiles/OST/012988.pdf.
U.S. Department of Transportation, Bureau of Transportation Statistics (BTS). 2001c. National Transportation Statistics 2000, BTS01-01. Washington, DC.
U.S. Department of Transportation, Federal Highway Administration. "A Summary of Highway Provisions in SAFETEA-LU," August 25, 2005. Online at https://www.fhwa.dot.gov/safetealu/summary.htm
U.S. Department of Transportation, Federal Highway Administration. "An Initial Assessment of Freight Bottlenecks on Highways" (white paper), October 2005. Online at www.fhwa.dot.gov/policy/otps/bottlenecks/index.htm.
U.S. Department of Transportation, Federal Highway Administration. "Freight Transportation: Improvements and the Economy," FHWA-HOP-04-005, June 2004. Online at http://ops.fhwa.dot.gov/freight/freight_analysis/improve_econ/
U.S. Department of Transportation, Federal Highway Administration. "Creating a Freight Sector within HERS" (white paper), USDOT FHWA 2001b, November 2001.
Crystal Jones is a transportation specialist in the FHWA Office of Freight Management and Operations. She administers programs and initiatives related to measuring freight performance and freight movement at U.S. international land border crossings. Before joining the freight office in 2003, Jones was a traffic management specialist with the United States Army, specializing in supply chain management and automation.
For more information, contact Crystal Jones at 202-366-2976 or email@example.com.