It is without a doubt that the state of our nation’s outdated infrastructure has daily effects on the logistics industry. FedEx and UPS even wrote an op-ed about it, and surely updating the infrastructure will have a large impact (fingers crossed for a positive one!). On Monday, February 12th, President Donald Trump released the details of the $1.5 trillion infrastructure plan, unveiling the administration’s proposal aimed at rebuilding roads, bridges and other outdated infrastructures. In this blog, we’ll give a quick overview of some aspects of the 53-page plan.
Let’s jump into some details.
The Trump Administration’s highly anticipated infrastructure funding plan calls for the repeal of the current ban on Interstate tolling and gives states flexibility to toll existing interstates to generate additional revenue for surface transportation infrastructure investments. Currently, states are required to reinvest toll revenues for infrastructure and this would continue to be the case. The plan also calls for states to have flexibility to commercialize interstate rest areas and eliminates constraints on public and private partnerships for transit projects. After hearing the proposed plan includes new tolling on existing interstates, the American Trucking Association President and CEO Chris Spears expressed opposition, calling tolls “ineffective and wasteful”, with as much as 33 percent of revenue being used for administrative and overhead costs. In a recent survey of Overdrive readers, 67 percent voted that tolls on the interstate highway system should not be allowed. In addition to ATA, other anti-toll groups say that the White House plan misses the mark on the need for highway funding certainty and instead would prefer to see a fuel tax.
There will be a raise in the federal gas tax by 25 cents per gallon to help pay for the infrastructure initiative that would generate nearly $400 billion worth of funds over the next decade. It’s possible that this may not carry through the plan, though Administration officials say they have not rejected the idea of a gasoline tax increase as an option for the Highway Trust Fund. After hearing the full proposed plan, the ATA instead called for raising per-gallon taxes on gas and diesel to generate needed revenue for the U.S. Highway Trust Fund. Additionally, the Owner-Operator Independent Drivers Association (OOIDA) pressed for a fuel tax increase late last month as a proper way to rebuild the country’s deteriorating roadways.
Selling, privatizing, or otherwise disposing of government assets has been suggested through the infrastructure plan. Some assets include Reagan National Airport, Washington Dulles International Airport, George Washington Memorial Parkway, Baltimore-Washington Parkway, the Washington Aqueduct, and many power transmission assets throughout the country. The Administration indicates that new approaches such as selling assets owned and operated by the federal government are a necessity to aid in funding infrastructure needs. Additionally, the plan states that certain infrastructure would be more appropriately owned by state, local, or private entities. However, project funding isn’t the only thing to consider; permitting rules and regulations are in place and may change.
There is more to fixing outdated infrastructures than just funding for projects. Many rules and regulations are in place to preserve our natural environment. As part of the proposed infrastructure program, some of these rules and regulations are called to change. The National Environmental Policy Act (NEPA) would undergo sweeping changes, including a “one agency, one decision” framework for environmental reviews. This means a lead federal agency would be responsible for issuing single record of decision for a major project within two years, as opposed to the current average of three- to five- years timeframe. Duplicate environmental reviews and processes would be eliminated with the intent to include relevant agencies earlier in the process. In short, if a roadway project received funding and approval, the project would be taken to construction and completed sooner (ideally). Putting a time limit on NEPA permitting raises concerns since a shorter review process could leave permits more vulnerable to potential lawsuits. However, a 150-day statute of limitations on permitting decisions would be implemented, instead of the current six years for most. With the current statute of limitations, a fully-funded and approved project could be blocked due to litigation. The road on the proposed infrastructure plan is just beginning (pun intended), but we will be keeping you up-to-date on any advancements and the effect it may have on the logistics industry.
Request a quote.
Find out what you need to know in the freight market update of May 2022.
Managing transportation costs is a top challenge for shippers, while another challenge that goes in hand is sourcing consistent and reliable capacity. Here enters the contract and spot markets. Which […]
Staying physically fit can be tough for anyone who has a job where most of their day is spent sitting. This rings especially true for truck drivers. Being a truck […]