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Nov.24, 2014

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COMMENTARY THE JOURNAL OF COMMERCE 39 TH E LONG -ANTICI PATE D transportation capacity crisis is upon us, leaving shippers across the U.S. struggling with rail and truck availability. An improving economy and a growing driver shortage combined with the shale oil boom has spawned a perfect storm that's hindering the move- ment of freight and creating ripple effects for companies nationwide. Shippers have a right to be frustrated as they search for capacity, but many aren't aware of the rail industry's contribution to the problem. While all major railroads have been assuring shippers that they're working as hard as they can to add capacity and reduce bottlenecks, they're also directing substantial resources to block congressio - nal proposals that would improve trucking industry productivity. One effort drawing fierce and consistent opposition from the rail industry is truck weight reform legislation known as the Safe and Efficient Transportation Act, or SETA, which is pending in Congress and likely to be considered in 2015 as an amendment to the next highway reauthorization bill. SETA would help shippers address the capacity crisis by giving each state the option to raise truck weight limits on appropriate portions of its interstate highways, but only for trucks equipped with a sixth axle. The additional axle means additional tires and brakes, dis- tributing the weight to the pavement more evenly and furthering safety. By allowing shippers to consolidate their truck freight on fewer vehicles, SETA would reduce the number of trucks needed to deliver a specific amount of freight — cutting vehicle miles traveled and making roads safer and less congested, while help- ing to address truck and driver shortages. Shippers would gain immediate improve- ments in productivity and environmental sustainability, while states would be free to optimize their commercial freight net - works and get more for each dollar invested in infrastructure. The U.S. Department of Transporta- tion is completing a study of truck size and weight, and stakeholders soon will have the department's input as to where heavier, six- axle trucks are appropriate. Despite the fact that any truck weight reform proposal in next year's highway bill will be informed by the DOT study, shippers have reason to expect the railroads will esca- late their war on trucking, endeavoring to block any and all truck weight productivity improvements. Although rail industry opposition to more productive trucks in normal times might be seen as just another self-interest looking out for its own pricing power, the current transportation capacity crunch, if left unchecked, could have a hugely nega- tive economic impact. Railroads should be doing all they can to improve their own performance and not spending significant resources to obstruct increased productivity in the movement of goods already moving by truck. House Transportation Commit tee Chairman Bill Shuster, R-Pa., a co-sponsor of SETA before he became chairman, has said there is plenty of freight to go around, and indeed there is. The American Truck- ing Associations' Truck Tonnage Index, a bellwether for the state of trucking demand, rose 1.6 percent in August, lifting the index to a record high. By all projections, the U.S. needs more system capacity in all modes of transporta- tion. An aging trucker population, growing regulatory constraints and an improving economy are creating extraordinary pres- sures for our transportation network. Intermodal shipping, where trucks and rail carriers combine to meet shipper needs, must continue to grow, and shippers should demand that their logistics providers — rail- roads included — help solve transportation challenges, not create new ones. Shippers must unite and vocalize the need for a more productive transportation network, while insisting that railroads focus on improving rail service, not blocking truck productivity improvements. As we struggle to ensure that our trans- portation system remains globally competi- tive, all proposals to safely boost productivity must be considered, not undermined. JOC John Runyan is executive director of the Coalition for Transportation Productivity, a group of 200 shippers and allied associations that support federal truck weight reform known as the Safe and Efficient Transportation Act, H.R. 612. For more information, visit HOW TRUCKING CAN EASE THE US CAPACITY CRUNCH Source: American Trucking Associations FOR-HIRE TRUCK TONNAGE INDEX n Year-over-year and month-over-month percentage change, January-August 2014 -6% -4% -2% 0% 2% 4% 6% Month-to-Month Year-Over-Year A J J M A M F JAN 2014 ● Year-over-year ● Month-over-month By John Runyan Shippers must unite and vocalize the need for a more productive transportation network.

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