Transportation Conference update

By Jan Teague
President Washington Retail Association

Over $8 billion dollars per year is added to the costs of products from increased shipping costs due to traffic congestion and related logistics costs. That’s a pretty big number, so big I had to ask the speaker, former U.S. Secretary of Transportation, Mary Peters, if I heard her right. I did and she went on to tell me a story about a business in L.A. that could only do four service calls a day because of the time it took to drive to each site, even if the repair took less than an hour.

While we may not have that level of congestion here, maintaining and improving our transportation system will be a key to Washington’s competitiveness in the very near future. The WashingtonPolicyCenter held a very well attended Transportation Conference this week to talk about the controversial issues surrounding funding major transportation improvements.

According the Mary Peters the key to economic growth will hinge on investing in the decaying transportation system which is now over 50 years old. She believes that tolling works if it is done with new technology where there are no toll booths to slow traffic. She cited successful projects in San Francisco, Miami, and Denver, noting that having the private sector participate in the projects will be needed. It sounded much like Washington state when she said that the Federal budget only has 25% of its money as discretionary and that the Transportation budget fit into that piece of the budget. Therefore, transportation has to compete with many other interests who want money.

Peters also said that the stimulus bill only used 5% of the $800 billion dollars to fund transportation projects with the rest going to ‘’pet projects”. She also said that President Obama and Congress signed a pledge that there would no longer be ear marks in the budget. Her prediction was that the definition of an “ear mark” would now change since each elected official believes their project is necessary for the well being on the nation.

Seattle Port Commissioner Bill Bryant told the group that one of the biggest threats to the Port of Seattle and Port of Tacoma was the 2014 opening of the expanded Panama Canal. Ports in the Gulf of Mexico are preparing for the new business they expect from shippers who will no longer have to rely on West Coast ports to transport goods across the country. This opinion was re-enforced by some of the eastern Washington business panelists who said they were already starting to do more business with the Long Beach port. Mark Anderson, CEO of Anderson Hay and Grain in eastern Washington, said that it costs 77% more to ship from the Port of Seattle than it does from the Long Beach port in California. He warned the audience that if anything happens to the current transportation system into the Port of Seattle that they will have to move south for the shipping services. As a world wide competitor time and costs are key to their competitive advantage.

Other speakers who represented the trucking industry echoed the concern over how long it take to get their product to the customer. Deliveries in Washington are taking longer and longer. This problem creates the need for more warehousing locations so that trucking companies can deliver to companies timely. These costs are passed on to the customer.

Tolling was a big discussion with Kemper Freeman pointing out that traditional tolls are OK, if they are for a specific project and end when the project is done. He said that a project that is planned to meet demand makes sense, but that manipulating traffic with the use of tolls doesn’t plan for the future growth of the area. And, these type of tolls get used for other projects with no accountability for the money. The 1-167 hot lanes were a 2 year experiment that only brought in 36% of the money needed to pay for the electronic tolling system. Most people stay out of the lane, causing more congestion. That was re-enforced by the Washington Trucking Association Vice President, Jim Tutton. He said that it was too dangerous to get into the hot lane with a big wheel truck. Many of them have to get off at exits along I-167.

What struck me about the conference was the idea that the state wants to be a key player in the country in exporting products around the world. We can’t do that if our transportation system doesn’t provide trucks quick enough time (time is money) to transport across the state, and if our Port costs are too much to ship out of Seattle. The state is investing in job creation trying to get more people interested in exporting. It may be a tough goal to accomplish if shipping costs and the transportation system become more expensive than other areas of the country such as Long Beach and the Gulf of Mexico.