Working Papers on Freight Themes

These working papers were prepared to provide initial analysis and discussion of the trends and issues affecting freight transportation productivity in the United States and North America.  The opinions expressed in the working papers are those of the authors, not the Federal Highway Administration.  The working papers are being circulated to generate discussion about emerging freight issues and may be updated in response to feedback from public and private sector stakeholders.  There are nine theme papers related to the changing nature of freight demand, carrier operations and infrastructure, and public policy.

Trade: From National Markets to Global Markets

The first working paper examines the continuing integration of the U.S. economy into a global marketplace.  Companies remain committed to developing trade, producing or assembling materials that are sourced throughout the world, which are shipped to both foreign and domestic markets.  With reliable transportation and communications, increased volumes of international cargos will place greater pressure on the infrastructure of the nation’s ports, airports, and border crossings.

Economy: The Rapid Change in both Manufacturing and Service Sectors

There is a continuing evolution of the U.S. into a service and information economy, although manufacturing remains a large component of U.S. business activity.  The manufacturing sector has benefited from new technologies and strategies, which encouraged firms to become more efficient, in both producing materials and satisfying client needs.  The transportation requirements for manufacturing are changing, and coupled with the more rapidly expanding service sector, shippers demand a more flexible and reliable transportation system. 

Business Logistics:  From Push to Pull Logistics

There is a shifting relationship between the shipper, the customer, and the transportation sector.  Businesses require different transportation services, with increased focus on providing customized, mass-market products and services.  To meet new production and distribution models, companies require manufacture-to-order and time-definite-delivery schedules.  Furthermore, the emergence of e‑commerce and e‑business underscores the evolution of carrier‑shipper relationship from costs to service requirements. 

Defense Logistics:  From DoD Stovepipes to “Focused Logistics”

The U.S. Department of Defense (DoD) has moved from isolated stovepipes to “focused logistics”, as larger volumes of military cargo move through the commercial transportation sector.  Like other firms, the DoD expects reliable and efficient service during both times of conflict and calm.  However, such reliance has raised concerns over the potential for the disruption of civil commerce from any unexpected military surges.

Freight Carriers: From Modal Fragmentation to Coordinated Logistics

Deregulation and changing shipper requirements provide an opportunity and incentive for carriers to coordinate.  This coordination has resulted in improved productivity, including the rapid adoption of shipment tracing and fleet and vehicle management technologies, but with more complex organizational and service arrangements.  Also, the freight industry has seen increasing concentration and consolidation of carriers, generating concerns about the barriers to market entry and competition.

Freight Systems:  From System Construction to System Optimization

The trend towards a system operations persepective examines the relationship between public sector’s supply and maintenance of system infrastructure, and the private sector’s use of these national assets.  Overall, new capacity will be added only sparingly, as much of the public sector’s transportation funds may be utilized for maintenance of the existing system.  System optimization will rely upon technology to generate additional capacity, but these gains must encourage financing system maintenance and integrating operational strategies between the public and private sectors.

Transportation Policy:  Evolution of Federal Freight Transportation Policy

Transportation policy faces a complex planning and investment environment, conflicting policy goals at all levels, and a mismatch between the scale of transport operations and the jurisdictions of public sector agencies.  The current public transportation planning and project delivery processes are slow, inflexible, and disjointed when compared to the private sector’s shorter time schedules, resulting in neither the public nor the private sector having time to fully engage the other.  Future productivity gains should seek to improve communication between all parties.  Developing multi-modal transportation policies may involve increasing state and local control of transportation investment, increasing the use of highway trust funds for system preservation, and re-linking transportation investment to economic development. 

Regulation:  From Economic Deregulation to Safety Regulation

The transportation sector has captured most of the expected productivity gains brought about by deregulation in the late seventies and early eighties.  While deregulation allowed companies greater latitude in their operations, concerns over safety and other policy goals may result in increased government oversight.  Productivity may decline, but the expected savings in terms of lives, equipment and liability may offset these expected costs.

These papers were prepared before the events of September 11. The terrorist attacks at the World Trade Center and Pentagon have provoked new discussions about the relationship between transportation infrastructure and national security and heightened concerns about system vulnerability. The Office of Freight Management and Operations is examining freight mobility in the context of understanding and/or reducing system vulnerabilities and mitigating the effects of an attack and subsequent disruptions to freight activities.