[Federal Register Volume 61, Number 64 (Tuesday, April 2, 1996)]
[Notices]
[Pages 14587-14590]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-7953]



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DEPARTMENT OF TRANSPORTATION

Office of the Secretary of Transportation
[Docket No. OST-96-1188]


Proposed Freight Transportation Policy

AGENCY: Office of the Secretary of Transportation, Department of 
Transportation.

ACTION: Notice of proposed policy.

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SUMMARY: The Department of Transportation is publishing for comment a 
proposed policy statement on freight transportation that establishes 
the most important principles that will guide Federal decisions 
affecting freight transportation across all modes. These guiding 
principles will direct decisions to improve the Nation's freight 
transportation systems to serve its citizens better by supporting 
economic growth, enhancing international competitiveness and ensuring 
the system's continued safety, efficiency and reliability while 
protecting the environment.

DATES: Comments on this proposed policy will be received until May 31, 
1996.

ADDRESSES: Submit written, signed comments to Docket No. OST-96-1188, 
the Docket Clerk, U. S. Department of Transportation , Room PL-401, C-
55, 400 Seventh Street, S.W., Washington, D.C. 20590. All comments 
received will be available for examination at the above address between 
9:00 a.m. and 5:00 p.m., ET, Monday through Friday, except Federal 
holidays. Those desiring notification of receipt of comments must 
include a self-addressed, stamped envelope or postcard.

FOR FURTHER INFORMATION CONTACT: Mr. Carl Swerdloff, Office of 
Economics, at (202) 366-5427, Office of the Secretary, 400 Seventh 
Street, SW., Washington, D.C. 20590. Office hours are from 8:30 a.m. to 
5:00 p.m. ET, Monday through Friday, except Federal holidays.

Proposed Freight Transportation Policy Statement

I. Introduction

    This statement of guiding principles for the Nation's freight 
transportation system sets forth a DOT policy framework that will shape 
important decisions affecting freight transportation across all modes. 
Our interest is to ensure the Nation has a safe, reliable, and 
efficient freight transportation system that supports economic growth 
and international competitiveness both now and in the future, while 
contributing to a healthy and secure environment. The goal of this 
statement is to provide guidance for making the Nation's transportation 
system serve its citizens better. To achieve this goal, new 
partnerships must be formed among public agencies, the freight 
transportation industries and shippers.
    Highways, airports, rail facilities, ports, pipelines, waterways, 
intermodal transportation, and the freight carriers they serve all play 
a vital role in the Nation's economic health. An efficient 
transportation system results in lower production and logistics costs 
for U.S. firms and better prices for consumers. In order to compete 
successfully in international markets U.S. firms must be able to rely 
on an efficient domestic freight transportation system that is 
effectively managed. The freight transportation system must also 
support achievement of other national goals by fostering safe, 
effective, timely and environmentally sound freight transportation that 
improves the quality of life for all U.S. citizens.
    Effective freight transportation policy and planning must consider 
that much of our transportation infrastructure is provided by the 
different levels of government while major portions are put in place by 
private capital. This fusion of public and private investment creates 
economic opportunities and regulatory conflicts, both of which must be 
considered in the development of a national freight policy.

II. Recent Trends in Freight Movements

    Freight moves on systems of increasingly integrated supply chains 
and distribution networks operating in States and metropolitan areas, 
as well as regionally, nationally, and internationally. Reliance on 
just-in-time production and inventory management practices has 
increased the demand for more efficient and reliable freight 
transportation that is fast and on time. Shippers are increasingly 
rationalizing the mix of transportation, inventory, handling, and loss 
and damage costs, striving to reduce their total logistics costs. They 
are increasingly using fast, reliable transportation in place of large 
inventories.
    The productivity of freight transportation firms and their ability 
to provide timely and reliable service depends not only on the 
efficiency of individual modal systems and the effectiveness of the 
laws and regulations under which they operate, but also on the 
efficiency of intermodal facilities that govern the effectiveness of 
their connections to one another. U.S. intermodal freight 
transportation links the various modes to meet customers' market needs 
by providing integrated origin-to-destination service. It utilizes 
advanced technologies and operating systems designed to enhance 
productivity, reduce transportation costs, increase service speed and 
quality for shippers and lower prices for consumers.
    International freight movement takes advantage of the latest 
innovations in the global marketplace that reduce cost and better serve 
the customer. Customers are establishing global supply chains. 
Innovations that are developed by individual carriers are copied by 
others when results in savings or service are seen. The use of real-
time, interactive electronic data interchange, and vessel/asset sharing 
agreements all provide more efficient and rapid transportation of 
international freight movements.
    Contractual regimes governing the movement of freight have been 
established by the private sector which sometime result in conflicts 
with public regulations and create impediments to the safe and 
efficient operation of freight transportation. Government typically 
regulates the safety, and environmental aspects of infrastructure and 
equipment. It also may be appropriate for Government to facilitate 
problem solving and provide technical assistance where private and 
public sector requirements create barriers to safe and efficient 
freight movement. Economic consequences are increasingly a matter of 
market decisions by the private sector.

III. Principles of Federal Freight Transportation Policy

    The following eight principles provide the basis for a Federal 
freight transportation policy:

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    1. Provide a planning framework that establishes priorities for 
allocation of resources for Federal funding of cost-effective public 
infrastructure investments that support broad national goals.
    2. Promote economic growth by removing unwise or unnecessary 
regulation and through the efficient pricing of public transportation 
infrastructure.
    3. Ensure a safe transportation system.
    4. Protect the environment and conserve energy.
    5. Use advances in transportation technology to promote 
transportation efficiency, safety and speed.
    6. Effectively meet our defense and emergency transportation 
requirements.
    7. Facilitate international trade and commerce.
    8. Promote effective and equitable joint utilization of 
transportation infrastructure for freight and passenger service.
1. Provide a Planning Framework That Establishes Priorities for 
Allocation of Resources for Federal funding of Cost-Effective Public 
Infrastructure Investments That Support Broad National Goals
    Enactment of ISTEA, with its requirement for greater emphasis on 
intermodal and freight policy issues, marked a new era in 
transportation investment decision-making. The transportation planning 
process has become increasingly important. Metropolitan and state 
officials are now required to identify major freight distribution 
corridors; they are also urged to work with carriers and industry to 
find ways for improving the efficiency of freight movements. The 
transportation planning procedures adopted in ISTEA resulted in an 
improved approach to developing freight transportation policy at all 
levels of government.
    While much of the surface transportation infrastructure is provided 
by the private sector (e.g., rail freight facilities, waterside and 
truck terminals, oil and gas pipelines), a greater portion of it would 
not be built or maintained without public financial support, and all of 
it is affected by Federal policies. Private facilities are often 
dependant on public investment for their effectiveness, (e.g. waterside 
terminals that require public channels, etc.). Federal participation 
may be appropriate when infrastructure investment projects have a 
national or regional significance or when Federal involvement may 
facilitate the resolution of a freight transportation problem. The 
value of a particular transportation facility is often dependent on the 
existence and effectiveness of a regional or national network which is 
often a Federal concern and responsibility.
    In cooperation with DOT and other Federal agencies, the Office of 
Management and Budget (OMB) has established guidelines for the economic 
analysis of Federal infrastructure investments.1 The guidelines 
apply rigorous cost-benefit standards to all proposed investments, 
including a provision that requires the measurement of costs and 
benefits over a project's life-cycle. The OMB guidelines also seek to 
encourage, when appropriate, private sector participation in 
infrastructure projects and more cost-effective State and local 
infrastructure investment programs.

    \1\ Executive Order 12893, ``Principles for Federal 
Infrastructure Investments,'' Federal Register, Volume 59, No. 20, 
January 31, 1994.
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2. Promote Economic Growth by Removing Unwise or Unnecessary Regulation 
and Through the Efficient Pricing of Public Transportation 
Infrastructure
    Although freight transportation services are provided almost 
exclusively by the private sector, the Federal Government plays an 
essential role in maintaining competition in the transportation 
marketplace and in protecting the public from unsafe and 
environmentally damaging transportation operations. By promoting 
competition, Federal policies can help to foster an environment that 
encourages improvements and changes that reduce transportation and 
logistics costs. National objectives for the freight transportation 
system can be addressed through Federal activities such as deregulation 
of entry and ratemaking in the trucking and air cargo industries, in 
order to foster an effective, competitive freight transportation 
environment.
    As the logistical requirements of businesses become more complex, 
some shippers and transportation providers will rely increasingly on 
intermodal services. Such services should not be hindered by artificial 
constraints. Physical and institutional barriers that impede the flow 
of freight from one mode of transportation to another should be 
eliminated. The elimination of physical, and operational barriers to 
freight intermodal operations is primarily the responsibility of 
transportation carriers, shippers, and state and local government. The 
Federal Government, however, may take action to improve public 
infrastructure that is inadequate to support essential freight 
intermodal operations or to reduce legal and regulatory barriers such 
as those that until 1996 impeded railroad ownership of barge and 
trucking companies. The Federal Government may also encourage state and 
local governments to take necessary action, or in extreme cases even 
preempt them, in order to reduce statutory impediments to intermodal 
transportation.
    The prices charged for public sector transportation facilities and 
services determine whether they are used efficiently. Public facilities 
costs that are not included in the transportation rates paid by 
shippers may lead to inefficient use of the Nation's limited 
transportation resources. Whenever feasible, fees and taxes adequate to 
cover the cost of building, operating, and maintaining public 
infrastructure facilities should be recovered from the parties that use 
and benefit from them.
    Federal actions must be evaluated not only for their short-term 
impacts but for their longer-term consequences for maintaining viable, 
competitive, multimodal freight transportation to serve the Nation. 
Therefore, freight regulatory and investment policies must be evaluated 
in the context of likely future changes in the linkages between freight 
transportation performance and economic performance at the local, 
regional, national and international levels. The DOT has recently 
completed a comprehensive assessment of its regulations as part of the 
National Performance Review. It will reexamine its policies, programs 
and regulations periodically to assess their effectiveness and whether 
they should be continued.
3. Ensure a Safe Transportation System
    Making the transportation system safer is a critical Federal policy 
objective. Because the marketplace alone may not be effective in 
producing an acceptable level of public safety, the Federal Government 
will continue to promote transportation safety through regulation and 
enforcement, education, and support of voluntary compliance efforts by 
industry. Responsibility for maintaining and improving the safety of 
our freight transportation networks requires the cooperation of each 
level of government and the private sector.
    The Federal Government will continue to support safety research and 
the dissemination of information related to safety. The DOT will 
continue to support activities to improve the information base needed 
to monitor the safety performance of all freight transportation modes 
including the full social costs of accidents. Federal research will 
focus on the causes of transportation accidents: the role of

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truck, rail, aircraft, and vessel design and performance in accidents 
and their solutions, as well as the contribution of human factors and 
infrastructure design. The Federal Government will also continue to 
work with the private sector on a cooperative basis, to ensure that 
proven safety advances are rapidly incorporated into practice, 
especially when substantial public benefits will result from their 
adoption.
4. Protect the Environment and Conserve Energy
    Responsible environmental protection is another important Federal 
policy objective and, like transportation safety, environmental 
protection requires the cooperation of all levels of government and the 
private sector. The total social costs of environmental degradation are 
not borne by the transportation users, e.g., the social costs 
associated with pollution are not reflected in the costs incurred by 
the users or prices charged for transportation services. Thus, the 
Federal Government plays and must continue to play an important role in 
reducing these social costs and ensuring that they are more accurately 
reflected in the price of transportation services through appropriate 
regulation or modifications to existing programs. In addition, the 
Federal Government will continue to support research and technology 
development that is directed at increasing transportation productivity 
while maintaining environmental protection.
    In pursuing its environmental protection objective, the Federal 
Government needs to continue to assess the impacts of environmental 
regulation on the performance of transportation operations and will 
work with the private sector to implement appropriate environmental 
protection measures and technologies in a cost effective and 
environmentally sound manner. The Federal Government will seek to 
develop regulations that contain performance-based rather than 
technology specific standards or criteria so as to permit industry 
flexibility and innovation in meeting regulatory requirements. DOT will 
continue working to develop techniques for conserving energy and for 
better quantifying the social costs of environmental and community 
degradation.
5. Use Advances in Transportation Technology To Promote Transportation 
Efficiency, Safety and Speed
    Application of advanced technology in the transportation system 
offers significant opportunities to improve its safety, efficiency, 
capacity and productivity.
    Private firms invest in advanced communication, navigation, 
surveillance, and information technologies which improve the efficiency 
of their operations. These advanced technologies facilitate the 
movement and tracking of goods and vehicles as well as the exchange of 
information among carriers and their customers in the intermodal 
transportation system. They also offer tools for strengthening 
intermodal connections. Public and private investments for applying 
these advanced technologies to the air, highway, marine, and rail 
infrastructures have improved the overall efficiency of the 
transportation system.
    DOT's Federal role in research and development of technologies is 
to promote the efficiency and safety of the national transportation 
system and to support the application of technologies in the movement 
of freight. Specifically, DOT provides leadership for the interagency 
coordination of Federal transportation research. This includes 
maintaining close dialogue with the private sector and state and local 
governments to ensure that DOT research funding reflects priorities of 
freight transportation users and providers. DOT will maintain a 
leadership role in development of an intermodal research framework.
    Advances in information technology are having a dramatic effect on 
transportation requirements and the planning of future capacity 
investments. DOT works with the private sector to facilitate 
communications across modes for intermodal compatibility of technology 
applications, such as Global Positioning Systems (GPS) and Geographic 
Information Systems (GIS). DOT coordinates with other federal agencies, 
such as the Department of Defense and the National Oceanic and 
Atmospheric Administration, to ensure that underlying data (such as 
weather and positioning information) required as input to these various 
systems continue to be available.
    DOT will continue to work closely with the freight industry to 
ensure that the United States is well represented in international 
transportation technology and standards forums.
6. Effectively Meet Defense and Emergency Transportation Requirements
    Recent changes in our Nations defense strategy and the downsizing 
of the U.S. military establishment have increased the need for 
effective deployment of those forces in times of a national emergency. 
They have emphasized the need for rapid deployment of large numbers of 
people and large amounts of material on short notice. Similarly, when 
natural disaster strikes, a high-quality, multimodal transportation 
system is critical to ensuring the safety of the affected population 
and the ability of local, State and Federal officials to start 
rebuilding devastated communities. Deploying personnel, equipment, and 
supplies through the air, over land or on the seas, requires well-
planned and maintained transportation systems and facilities for both 
the military mission and disaster relief operations.
    The Department of Defense has adopted policies that will require 
greater use of civilian transportation resources in meeting its 
transportation needs. The Nation's freight transportation operators, 
therefore, have an essential role to play in the mobilization and 
deployment of personnel, equipment and supplies in the event of a 
national emergency or a natural disaster. The DOT will continue to work 
with the Department of Defense, other Federal agencies, and the 
transportation community to identify short- and long-term national 
defense and emergency transportation requirements and to ensure that 
the transportation system can meet those requirements.
7. Facilitate International Trade and Commerce
    To retain and enhance the Nation's competitive position and its 
economic vitality, domestic firms must have access to foreign markets 
through an efficient transportation system. A competitive international 
transportation industry requires highly efficient connections to and 
within the domestic transportation system. Where international trade 
agreements have been negotiated, as in the case of NAFTA and the GATT, 
regulatory policy decisions that primarily affect international freight 
movements should also consider their implications for domestic freight 
operations and competition. Government can provide new opportunities 
for American exporters by leading negotiations with countries in the 
European Economic Community and with emerging markets, such as those in 
East Asia and Latin America, and by providing technical assistance 
programs to promote American transportation and infrastructure 
technologies.

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8. Promote Effective and Equitable Joint Utilization of Transportation 
Infrastructure for Freight and Passenger Service
    The efficient use of the Nation's transportation infrastructure may 
require the joint use of facilities by freight and passenger transport 
operators. When appropriate, the Federal Government, in conjunction 
with State and local agencies and the private sector, will support the 
equitable sharing of transportation facilities and infrastructure and 
reasonable compensation for their use.
    Potential safety problems and reduced freight transportation 
operations efficiency may arise from the sharing of facilities. These 
concerns should be taken into account in policy initiatives that 
address the joint use of facilities. The DOT will continue to support 
research in this area and will encourage transportation firms to adopt 
new technologies and operating practices that would reduce the adverse 
consequences that may arise from the joint use of facilities.

    Issued in Washington, DC on March 26, 1996.
Federico Pena,
Secretary of Transportation.
[FR Doc. 96-7953 Filed 4-1-96; 8:45 am]
BILLING CODE 4910-62-P