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January 21, 2008 8:00 AM, EST

Panel Urges Infrastructure Overhaul

Higher Taxes, HOS Change Recommended
By Sean McNally, Senior Reporter
This story appears in the Jan. 21 print edition of Transport Topics.
WASHINGTON — In a controversial report calling for huge new spending on the national transportation system, a congressional commission last week made several recommendations that would affect trucking, including new flexibility in the federal driver hours-of-service rule in congestion-prone areas.
The commission, which recommended a large fuel-tax increase that Transportation Secretary Mary Peters rejected in a minority report, also proposed higher truck and tire sales taxes and more highway tolls, and had what commission member Patrick Quinn called an “unprecedented focus” on freight movements and freight corridors.
Quinn, co-chairman of truckload carrier U.S. Xpress and a former chairman of American Trucking Associations, said the focus on freight could lead to “the ability to transport heavier and larger vehicles, perhaps in separated lanes along major corridors.”
The 12-member National Surface Transportation Policy and Revenue Study Commission recommended sweeping changes to federal financing structures and policies.
“There is a looming crisis growing,” commission Vice Chairman Jack Schenendorf said Jan. 15. “To keep America competitive, we are recommending a significant increase in investment.”
That crisis, he said, is fueled in part by “a tremendous increase in freight . . . a 70% increase by 2020. The system simply can’t handle it,” he said.
The report recommended congestion pricing to cut traffic in metropolitan areas but said that, to ease the burden of congestion-pricing schemes on the trucking industry, the driver-hours rule should be changed to allow drivers to take off-duty rest breaks in those areas during their work days, a change from the current rule.
The rule limits drivers to 11 hours of driving in a 14-consecutive-hour work day, then mandates they rest for 10 hours. Allowing drivers to take off-duty rest breaks would mean breaks would not count against their 14-hour day.
The report said congestion pricing programs, such as New York City has proposed, may hurt trucking companies, which have “little or no influence” on delivery schedules.
To combat this pricing, the commission recommended using “direct incentives to shippers” to change delivery schedules and that “an adjustment be made to the hours-of-service regulations to take into consideration the need for rest breaks to accommodate congested metropolitan areas.”
Since the workday was shortened to 14 consecutive hours in 2003, trucking has been seeking some change to the rules to grant such flexibility.
Tim Lynch, senior vice president of federation relations and strategic planning for American Trucking Associations, said the group was “very pleased” the commission recommended the change.
Brian Turmail, spokesman for DOT Secretary Peters, said the department “would look at any suggestion about hours-of-service,” but a leading enforcement official panned the recommendation.
Steve Keppler, director of policy and programs for the Commercial Vehicle Safety Alliance, said Jan. 17, his “initial reaction is, we shouldn’t be modifying the regulations to be accommodating for convenience and congestion.” The HOS rules are “safety regulations and should be based upon sound science.”
Rep. Peter DeFazio (D-Ore.), chairman of highways subcommittee, said he would not back changing the hours rule. “There’s still an ongoing controversy about the hours-of-service rule, and what the implications of allowing that flexibility imposed on the current rule would be, I don’t know,” he told reporters Jan. 17.
“My preference would be not to rely on congestion pricing and make it a barrier to the efficient delivery of goods,” he said.
During a hearing on the report, DeFazio blasted congestion pricing, saying anyone who believed trucking companies would simply adjust their schedules “has not been involved in a trucking company.”
Trucking companies “don’t determine when deliveries are ready and when they have to park,” DeFazio said. To suggest that “the entire economy could rejigger itself” because of congestion pricing “is a little Pollyanna-ish.”
In addition to raising fuel taxes, the report recommended increased use of tolling and private partnerships and said additional revenue should be raised by boosting other taxes, such as the heavy-vehicle use tax, and that the truck-tire tax be increased at the same rate as the fuel tax. It also recommended applying new fees to freight and customs fees, as well as new levies on transit tickets.
Commissioner Matt Rose, chief executive officer of BNSF Railway, said the report doesn’t prescribe a specific fee but “clearly states it must not burden commerce.”
Rose was one of several commissioners involved in the freight industry who told the House panel the investments were needed.
“Continued underinvestment and business-as-usual policy and programs . . . will have a detrimental impact on the United States and our ability to compete in a world economy, as well as in the everyday lives of Americans,” said Steve Odland chief executive officer of Office Depot.
“Congestion causes us to carry more inventory and therefore increases use of capital. It causes us to have a more variable operating costs, lower customer service, lower efficiency and profits and less global competitiveness,” he said. “In a just-in-time world, America needs to make sure that it has the right capacity in the right places to keep just-in-time.”
While the report was released on Jan. 15, portions of the commission’s findings were leaked to reporters a week earlier.