By Max Fisher, Vice President of Economics and Government Relations
The NGFA this week submitted extensive comments to the U.S. Department of Transportation (DOT) as it begins formulating a National Freight Strategic Plan.
NGFA urged the agency to provide additional resources to states with increasing grain transportation demand, particularly for rural roads and bridges. In comments submitted Feb. 10 to DOT, NGFA outlined several additional regulatory and legislative policy recommendations that would increase efficiency and capacity for the most prevalent agricultural transportation modes.
The Fixing America’s Surface Transportation Act, enacted in 2015, requires the development of a National Freight Strategic Plan to inform infrastructure planning, coordinate investments and support future freight efficiencies for the American energy, agriculture, manufacturing and natural resources industries. NGFA noted that large volumes of agricultural commodities are transported utilizing multiple modes, and that a reliable transportation system with adequate capacity is needed to move agricultural products from largely rural areas to numerous origin-destinations before these goods reach domestic consumers and export customers.
NGFA noted that virtually all agricultural products are transported on local roads (township, county, state and interstate) by trucks for the initial movement from field to storage. NGFA’s statement cited the U.S. Department of Agriculture Agricultural Marketing Service’s intermodal research study that shows that final movements of grain occur more than 60 percent of the time by truck, 24 percent by rail and 14 percent by barge. All three transportation modes are important in providing some degree of intermodal competition and, in so doing, disciplining transportation rates – helping U.S. agriculture remain competitive in domestic and international markets, NGFA said.
NGFA attested there is increasing demand for hauling U.S. agricultural products and quantified it by citing the growth in grain storage capacity between 1996 and 2019. U.S. grain storage capacity provides an indicator of a large proportion of agriculture’s local-level needs for transportation infrastructure since the majority of grain storage is constructed in rural areas where grain production is prevalent (e.g., at rural country elevators and on-farm storage), as well as in areas where grain is aggregated for further distribution (terminal elevators) or at the point of processing and distribution for domestic use, and at U.S. export port regions.
Using the available data, NGFA estimated that the current 25.1 billion bushels of U.S. grain storage capacity represents 29.2 million truckloads (assuming 860 bushels of grain per truckload), a significant increase from the 22.1 million truckloads of grain moved as recently as 1996.
The largest increase in grain storage capacity, and by inference transportation demand, not unexpectedly is in states that traditionally produce the most grain. Based on the trend between 1996 and 2019, NGFA forecast that states currently producing the largest quantities of grain will continue to increase their transportation demand relative to other states. In the formulation of the National Freight Strategic Plan, NGFA urged U.S. DOT to provide additional resources for these states, particularly by providing resources to construct and maintain rural roads and bridges.
In addition, NGFA provided in-depth information to DOT on additional ways to improve transportation efficiency and capacity for the three most prevalent transportation modes for agricultural products: truck, rail and water.
Truck: For truck, NGFA spotlighted the contribution that could be provided for freight transportation by adopting the following regulatory and legislative policies:
- Applying the agricultural exemption to the hours-of-service rules year-round;
- Expanding the definition of “agricultural commodity” in the agricultural exemption to the hours-of-service for truck drivers’ regulations;
- Removing interstate highway system commercial driver’s license restrictions on individuals ages 18-20;
- Expanding the short-haul exemption to the hours-of-service for truck drivers’ regulations;
- Establishing a 10-percent axle tolerance for dry bulk load shipments; and
- Increasing federal and state truck weight limits.
Rail: For rail, NGFA urged U.S. DOT to incorporate the following two items into its National Freight Strategic Plan with respect to actions for the Surface Transportation Board to take:
- Encourage the Surface Transportation Board to provide clarity on the meaning of the common-carrier obligation of freight railroads (to provide service upon reasonable request), given their adoption of the so-called precision scheduled railroad operating model; and
- Increase market-based competition by modernizing requests for ordered competitive switching to enable shippers to gain access to a second rail carrier.
Waterborne: For waterborne commerce, NGFA requested an increase in federal investment to rehabilitate U.S. inland waterways locks and dams (increasing the federal share to 75 percent versus the current 50 percent, with the remaining funds derived from the Inland Waterways Trust Fund comprised of barge fuel taxes. NGFA also urged full utilization of the Harbor Maintenance Trust Fund for its intended purpose of dredging U.S. ports and harbors.
More information on the National Freight Strategic Plan can be found here.