Two years ago, the President signed a transportation bill which recognizes that the nation’s ability to move goods by truck, train, ship or plane in a safe and efficient manner is of critical importance if the United States is to remain in the forefront of international trade, given ramped up global competition. That wake-up call is resonating. Bottlenecks, inadequate infrastructure and other challenges impacting freight delivery in California and throughout the nation are sweet music to our competitors’ ears. If shippers cannot get their goods to the marketplace quickly and efficiently, they’ll pursue other options at California’s expense.
The national freight policy, plan and network that are now being developed are designed to get at these challenges and improve the system. Not a simple task. Not only is there a need to move forward with new infrastructure projects, existing dilapidated highways and bridges are crying out for repair.
A parallel effort is being made in California with Caltrans developing a state freight plan that identifies the near and long term investments needed to upgrade the system. And that‘s the rub. The pressing question is how these improvements will be paid for since the Highway Trust Fund, the primary source of federal transportation dollars, is nearly broke. Fed by federal gas tax revenue, the Fund has been squeezed as consumers switch to fuel-efficient and alternative fueled cars. The Fund is also encumbered by a stagnant tax rate that has remained the same for 20 years. Experts indicate that the trust fund will likely be fully depleted this fall, at about the time that the current transportation bill expires.
Congress will soon be grappling with this issue. In late April, the Obama administration presented the Grow America Act, a four-year, $302 billion transportation reauthorization proposal. For the first time, $10 billion for a freight program is included. As legislation moves through Congress, retaining this funding level for freight is an imperative. And, there is no time for hesitancy here. U.S. Transportation Secretary Anthony Foxx has said, “Failing to act before the Highway Trust Fund runs out is unacceptable – and unaffordable. This proposal offers the kind of job creation and certainty that the American people want and deserve.”
We have to get it right. The importance of a vital freight system to California cannot be overstated. Over 1 billion tons of cargo valued at almost $2 trillion moves across the Southern California region annually, fueling economic growth.
And, millions of jobs are at stake. Upward of 1.6 million jobs throughout the Southern California region are related to the movement of goods, and 3 million logistics jobs throughout the U.S. originate from the container trade in California.
Challenging California’s position as the international trade leader of the United States, competitors are on the hunt, grabbing market share from our ports. Improving our freight system and ensuring there are sufficient dollars available to do just that will go a long way in helping California “deliver the goods” and maintain its competitive edge.
