Top News

• Highway Trust Funds Needs $8 Billion Bailout, DOT Says

• Toll Roads Downgraded

• ATA Submits Final Brief in Ports' Concession Plan Challenge

Also in the News: Bush Urges Oil Drilling to Ease Fuel Price Pain; Rep. Mica Says Congress Must Close $4 Billion Funding Gap; Citgo Withdraws Request for Oil from the SPR; U.S. DOT Awards $14.7 Million for Rural Roads Safety; ATA Truck Tonnage Index Fell 0.3 Percent in July; Factory Orders Strong in July
 

BUSH URGES OIL DRILLING VOTE TO EASE FUEL      PRICE PAIN
President George W. Bush said Congress is dragging its feet and should schedule a vote to permit offshore oil drilling and other measures designed to trim energy costs that are a drag on the U.S. economy, Bloomberg News reported Aug. 23.

“This Congress has been one of the most unproductive on record,” Bush said in his weekly radio address from his ranch in Crawford, Texas. “They need to stop standing in the way of expanding domestic production and take meaningful steps now to address the pain caused by high energy prices.”
 

REP. MICA SAYS CONGRESS MUST CLOSE $4 BILLION FUNDING GAP
U.S. states have slowed road construction projects, initially budgeted at more than $41 billion for 2009, in response to a shortfall in federal gasoline tax receipts that help fund them, Rep. John Mica, the top Republican on the House of Representatives Transportation Committee, said in an interview Sept. 3 with Reuters.

Reuters reported that Mica said the problem should create new urgency in Congress to close the estimated funding gap of at least $4 billion when it returns from its August recess.

“We've got to make that commitment sometime between now and when the fiscal year expires or it could be dire consequences,” Mica told Reuters.

Mica, who is pitching a $1.5 trillion highway bill plan, led a group of Republicans on a tour of the Interstate 35 bridge in Minneapolis that collapsed in 2007. The bridge’s replacement span is almost completed. Mica’s highway bill plan would raise funds through federal revenue, public-private partnerships and by selling bonds.
 

DOT/DOE/DOC

HIGHWAY TRUST FUND NEEDS $8 BILLION BAILOUT,
DOT SAYS
Department of Transportation Secretary Mary Peters today asked Congress to approve pending legislation that will move $8 billion from the general fund to the Highway Trust Fund to cover its imminent deficit.

Today’s announcement marks a sharp contrast to previous DOT policy. Until today, the agency has resisted efforts by Congress to move money from the general fund into the highway trust fund. Earlier this year, DOT proposed tapping the highway trust fund’s transit account to shore up the highways account.

However, without the move, which requires congressional approval, Peters said the Highway Trust Fund could run dry “as soon as this month.”

Ironically, Peters today accused Congress of choosing to do nothing to address the rapidly growing trust fund solvency issue. Yet in opposing a bill passed by the House this summer, the Bush administration called a congressional proposal to shift funds “both a gimmick and a dangerous precedent.” Peters today called that bill DOT’s preferred vehicle for fixing the trust fund issue. However, Peters said the move “is not an ideal solution.”

The Highway Trust Fund had been projected to run into deficit by the end of the 2009 fiscal year, but Peters said reductions in vehicle miles traveled has sharply reduced federal income for infrastructure projects. The less Americans drive, the less gas tax revenue is collected.

Peters said today that while Congress acts on legislation, the Federal Highway Administration is instituting a series of immediate steps designed to stretch out revenues and allow continued highway payments to states.

Effective next week she said FHWA will begin making reimbursements to states on a weekly basis, instead of the twice daily cash reimbursements. Those reimbursements will only be made on a pro-rated basis.

CITGO WITHDRAWS REQUEST FOR OIL FROM THE SPR
Citgo withdrew its request of the Department of Energy (DOE) to draw 250,000 barrels of oil from the Strategic Petroleum Reserve saying the partial opening of its Lake Charles refinery will supply the necessary oil to meet refinery needs. The request withdraw came just one day after DOE said it wound in fact allow Citgo Petroleum Corp. to draw oil from the SPR to assist with an oil supply disruption caused by Hurricane Gustav.

Separately, Marathon Petroleum Company’s Robinson and Catlettsburg refineries made formal requests with DOE to draw oil from the SPR. DOE said it is reviewing Marathon’s request. Marathon also cited Hurricane Gustav as the reason for its request.

When Hurricane Gustav hit the region, the Calcasieu ship channel was closed. The waterway serves the various ports at Lake Charles. The closing of the channel blocked 100 percent of the oil output in the U.S. Gulf of Mexico, according to published reports. Thirteen refineries, which produce an estimated 1 million barrels of oil per day, were reportedly closed in the Gulf Coast region.

U.S. DOT RELEASES $4 MILLION FOR HURRICANE GUSTAV REPAIRS
The federal government is making $4 million available immediately in emergency relief funds for Louisiana and Mississippi to help pay for urgent repairs to roads and bridges damaged by floods, U.S. Transportation Secretary Mary E. Peters announced Sept. 5.

"We want states to get roads cleared, bridges reopened and traffic moving as quickly as possible,” said Secretary Peters.

Secretary Peters said the $4 million quick release was intended to help Louisiana and Mississippi to address repairs that need immediate attention, to pay for debris removal and initiate repair contracts. The states will receive $3 million and $1 million respectively.

The Secretary added that the Department would continue to work with officials from Louisiana and Mississippi as they evaluate the extent of road damage caused by the floods. She said more resources will likely be made available based on those evaluations.

"Restoring transportation links is key in the aftermath of a natural disaster," FHWA Administrator Thomas J. Madison.

The Federal Highway Administration's emergency relief program provides funds to states for the repair or reconstruction of federal-aid highways damaged by natural disasters or catastrophic events. The program typically works on a reimbursable basis. These emergency relief funds are provided from the General Fund of the Treasury and not the Highway Trust Fund.

U.S. DOT AWARDS $14.7 MILLION FOR RURAL            ROADS SAFETY
Fourteen states, three counties and two parishes competed for and will receive $14.7 million in Rural Safety Innovation Program (RSIP) funds to improve safety on rural roads, Department of Transportation Deputy Secretary Thomas J. Barrett announced Aug. 27.

“Making one road safer is important. But making rural roads around the country less deadly is absolutely essential,” said Barrett. “Thanks to these funds our rural roads are on their way to becoming as safe as they are beautiful.”

Rural roads carry less than half of America’s traffic but account for more than half of the nation’s vehicular deaths. Last February, the U.S. Department of Transportation launched the “Rural Safety Initiative” to address this issue.

Though last year’s fatality rate – 1.37 per 100 million vehicle miles traveled – is the lowest in the nation’s history, the 41,059 fatalities in 2007 remain “entirely too high,” said Barrett. “The RSIP program will help us put a national focus on a local problem.”

The awards, made possible by funds from the DOT’s Delta Region Transportation Development Program and Intelligent Transportation Systems Program, are part of a $287 million effort to help local and state governments reduce crashes on dangerous rural roads.

A complete list of the awards can be found at: http://www.dot.gov/affairs/DOT12308.htm.

ATA TRUCK TONNAGE INDEX FELL 0.3 PERCENT IN JULY
The American Trucking Associations’ advanced seasonally adjusted For-Hire Truck Tonnage Index decreased 0.3 percent in July, marking the first month-to-month drop since April. The seasonally adjusted tonnage index equaled 116.2 (2000 = 100) in July, while the not seasonally adjusted index fell 0.1 percent to 119.7.

The seasonally adjusted index was 4.4 percent higher compared with July 2007, marking its ninth consecutive year-over-year increase, although the gain was a full percentage point lower than the improvement in June. Year-to-date, the index was up 3.6 percent compared with the same period in 2007. Tonnage contracted 1.7 percent and 1.5 percent in 2006 and 2007, respectively.

ATA Chief Economist Bob Costello said July’s tonnage reading matched several anecdotal reports from motor carriers that freight was softer in July than the previous month. Costello cautioned that truck tonnage could be volatile in coming months because the economy is expected to further soften before improving. However, slight declines in fuel prices and tightening capacity could help offset softer freight volumes.

TOLL ROADS DOWNGRADED
Fitch Ratings has downgraded the outlook for U.S. toll roads from stable to negative. The bond ratings agency cited lower traffic volumes due to volatile fuel prices, economic weakness and inflationary pressures as the reason for its revised forecast. The report, U.S. Transportation Assets: Facing a Temporary Decline or a Permanent Change, stated that toll roads are experiencing declines in traffic of as much as 16 percent.

FACTORY ORDERS STRONG IN JULY
The Department of Commerce reported Sept. 3 morning that factory orders rose 1.3 percent in July, higher than the 0.9 percent increase expected by economists. Non-defense capital goods excluding aircraft, seen by economists as a measure of economic strength, rose 2.5 percent. In addition, June’s originally-reported 1.7 percent increase in orders was revised upwards to a 2.1 percent increase.
 

ATA SUBMITS FINAL BRIEF IN PORTS’ CONCESSION  PLAN CHALLENGE
The American Trucking Associations, with the support of its Intermodal Motor Carriers Conference, filed its legal reply in the U.S. District Court in California to the Ports of Los Angeles and Long Beach’s defense of their “Concession Plans” on Aug. 29.

ATA believes the concession programs unlawfully re-regulate the port trucking industry to the detriment of motor carriers, shippers, businesses and consumers that depend on the products that are handled at those ports.

ATA asserts in its brief that the ports are reshaping the port drayage market and undercutting the ability of smaller motor carriers to compete in the market by utilizing subsidies to entice national motor carriers to operate under what ATA considers a costly and “draconian” regulatory system. The port “Concession Plans” structure the market by state regulation rather than competition, driving up cargo costs that quickly will translate to higher prices for consumers.

ATA also believes under the concession plans there will be less money for truck retirement subsidy programs designed to meet port environmental goals. The ATA’s lawsuit will have no effect on the port actions that will actually clean the air. The ATA supports the ports’ bans on older, polluting trucks, the time schedule for replacing them, and the funding programs to speed replacement of the trucks.

“The Port of Los Angeles’ further intrusion into the competitive structure of the drayage market makes the ATA lawsuit even more important and illustrates precisely the type of disruption of trucking services in the economy that Congress found so inefficient and disruptive,” said ATA President and CEO Bill Graves. “Creating an artificial, non-competitive market with highly inflated costs and prices hinders our national competitive ability and sets a dangerous precedent.”

ATA on July 28 challenged the port “Concession Plans” as approved by the Cities of Los Angeles and Long Beach and their harbor commissions. The plans will limit access to the ports to only those trucking companies that have entered into concession contracts approved by the port program administrator.

ATA believes the concession plans impose a broad range of operational requirements that create a regulatory environment very similar to state intrastate economic regulation. The ports have acknowledged that these intrusive regulatory systems will result in far fewer trucking companies being able to service the ports, reducing competition. ATA’s brief concludes the process leading up to the court’s Sept. 8 hearing on ATA’s challenge.