Congress Recommends New Policies and Revenues Focused Freight Transportation Network Improvement

MDeFabis PreOn June 26, 2013, International Warehouse Logistics Association Secretary Mark V. DeFabis, president & CEO of Plainfield, Ind.,-based Integrated Distribution Services Inc., testified before the U.S. House Committee on Transportation and Infrastructure on a panel tackling How Logistics Facilitate an Efficient Freight Transportation System.

At the time, the invitation to serve on the panel represented a fundamental shift in Congress’ awareness of the influential role the warehouse-based third-party logistics industry has on the efficiency of U.S. transportation, commerce and economy.

During the hearing, DeFabis highlighted the increase in intermodal transportation and the impact it has on efficient movement of goods. “We [warehouse-based 3PLs] have a holistic perspective of the entire industry because all freight will hit a 3PL warehouse at some point. We look at things through the eyes of the trucks, rails, shippers and warehouses,” DeFabis says.

Of particular importance during his testimony, DeFabis shared a need to develop a comprehensive freight policy in the United Statesexclusive of diversions. “The revenues generated by the commercial freight industry are oftentimes diverted into public transportation, when the intention of taxing commercial freight is to restore massive infrastructure needs such as ports and rails,” he says.

Nearly five months to the date, IWLA can report a positive return from this experience.

U.S. House Committee on Transportation and Infrastructure Chairman Rep. John J. Duncan, Jr., (R-Tenn.) and Ranking Member Jerrold Nadler (D-N.Y.) released the “Improving the Nation’s Freight Transportation System” report based on the commentary given by the special panel.

The following statement identifies the gained awareness of warehousing and 3PLs by members of Congress:  “All aspects of the supply chain rely on the warehousing, distribution center, and logistics industry.  Logistics is the planning, execution, and control of a complex organization involving many different moving pieces and interests, all within a system designed to achieve specific objectives. By optimizing the movement of freight across all modes of transportation, this industry helps ensure the health of the United States economy and the future of the nation’s global competitiveness.”

The report outlines next steps to safely and efficiently meet the needs of freight movement in the 21st century, recommending that Congress:

  • Direct the Secretary of Transportation, in coordination with the Secretary of the Army and the Commandant of the U.S. Coast Guard, to establish a comprehensive national freight transportation policy and designate a national, multimodal freight network;
  • Ensure robust public investment in all modes of transportation on which freight movement relies, and incentivize additional private investment in freight transportation facilities, to maintain and improve the condition and performance of the freight transportation network;
  • Promote and expedite the development and delivery of projects and activities that improve and facilitate the efficient movement of goods;
  • Authorize dedicated, sustainable funding for multimodal freight projects of national and regional significance through a grant process and establish clear benchmarks for project selection.  Projects eligible for such funding would have a regional or national impact on the overall performance of the multimodal freight network identified by the Secretary of Transportation;
  • Direct the Secretary of Transportation, in coordination with the Secretary of the Treasury and the Secretary of the Army, to identify and recommend sustainable sources of revenue across all modes of transportation that would provide the necessary investment in the nation’s multimodal freight network and align contributions with use of, and expected benefit of increased investment in, such network; and
  • Review, working through the Committee on Transportation and Infrastructure and the Committee on Ways and Means, the secretary’s freight funding and revenue recommendations and develop specific funding and revenue options for freight transportation projects prior to Congress’ consideration of the surface transportation reauthorization bill in 2014.

Other industry representatives joined DeFabis on the 21st Century Freight Transportation panel:

  • David Abney, Chief Operating Officer, United Parcel Service;
  • Tracy Rosser, Senior Vice President, Transportation, Walmart;
  • Edward R. Hamberger, President & CEO, Association of American Railroads;
  • Scott Satterlee, Senior Vice President, Transportation, C.H. Robinson Worldwide on behalf of the Transportation Intermediaries Association; and
  • Richard Fisher, President, Falcon Global Edge on behalf of the Airforwarders Association.

Special Committee Chairman John J. Duncan, Jr. (R-TN) of the Panel on 21st Century Freight Transportation presided over this hearing.

Read the Warehouses, Distribution Centers, and the Logistics Industry section of the “Improving the National’s Freight Transportation System” Report starting on page 39.

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