Highway repairs will keep air cargo moving

Anyone struggling to understand just how bad our winter was this year in the U.S.’s capital need only go as far as the local tire store. Thanks to the thousands of potholes caused by the extreme cold, two of my car tires were damaged beyond repair and needed replacement. Upon arriving at my local tire center, I soon learned that my experience was not unique, as there were 20 other customers in the waiting room who had suffered a similar fate.

My tire replacement experience taught two lessons. First, that tires, regardless of manufacturer claims, will not survive a large pothole encounter when obeying local speed limits. Second, unless roads are repaired quickly, damage to other cars and commercial vehicles caused by rough street and highway conditions slow us down and begin to have an adverse effect on the U.S.’s ability to keep up with a rapidly globalizing and modernizing word.

You might be asking why a guy running an air cargo organization would care about road conditions. After all, the freight we handle flies high above the roads, right?

However, in addition to having to deal with potholes on our way to and from work, forwarders have a lot at stake in the condition of the nation’s roads and highways, over which most of the cargo we handle must travel at some point in the journey from shipper to receiver. Inadequate road repair can result in damage to our equipment and our freight, and poor quality roads can cause shipment delays while cargo is transported to and from airports, maritime ports and rail yards.

In sum, while forwarder truck assets may be limited, our reliance on the national road infrastructure has a direct effect on keeping our shipments moving.

The U.S. is now at a crucial decision point with regard to how necessary road construction and repair across the country is funded. The country’s transportation funding source, also known as the Highway Trust Fund, has seen its balance decline in recent years and is now on the brink of depletion.

The Highway Trust Fund was created by Congress in 1932 and has used the gasoline tax as its primary source of revenue for building American highways. The tax was really a user fee, as both private and commercial vehicle operators paid for construction and maintenance of the roads they used. Funding throughout the 20th century helped build the nation’s highway system as presidents regularly signed gas tax increases to keep up with inflation and our growing infrastructure needs.

But the gas tax has not been raised since 1993 and sits at 18.3 cents per gallon for gasoline and 23.4 cents per gallon for diesel. The U.S. transportation secretary recently said the fund could begin “bouncing checks” by this summer, forcing a halt to construction projects around the country while undermining as many as 700,000 jobs. Many states have already postponed or cancelled needed transportation projects because they don’t want to assume obligations that they will not be able to afford if federal highway aid coming from the Highway Trust Fund does not come through.

Washington, D.C., is divided on various approaches to inject money into the fund. The Obama administration wants to see a solution involving business tax changes and allowing states to collect tolls on existing interstate highways. For years, states have been restricted from doing that except for specific test projects. Critics contend that tolling is inefficient, diverts traffic off highways and increases supply chain costs that hurt businesses.

Another proposal gaining momentum is to increase the gasoline tax for the first time since the Clinton administration. Big industry groups including the American Trucking Associations and AAA back this approach, but increasing fuel efficiency and forecasted use of electric vehicles may adversely affect revenue in the long-term. A vehicle miles tax would alleviate this concern, although verifying and measuring the miles traveled by motorists is going to be a challenge.

Another proposal features a gas tax that would be a levy paid on oil production at refineries. Gas producers would simply pay a tax on each barrel of gasoline that would presumably be passed to cars and trucks at the pump.

Congress seems paralyzed on the issue, knowing of the general distaste among voters for raising taxes or fees of any kind.  But it is essential to our economy and our quality of life that they come up with a workable solution. Smooth roads are essential components in keeping freight moving economically and on time – and to keeping voters like me out of the tire stores and car repair shops.

As the Midas Man used to say on television, “You can pay me now, or pay me later.”

Brandon Fried is the executive director of the U.S. Airforwarders Association.

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