National Strategy to
Reduce Congestion on
America’s Transportation Network

March 2007

THE SECRETARY OF TRANSPORTATION
WASHINGTON, D.C. 20590

Transportation system congestion is one of the single largest threats to our economic prosperity and way of life. Whether it takes the form of trucks stalled in traffic, cargo stuck at overwhelmed seaports, or airplanes circling over crowded airports, congestion costs America an estimated $200 billion a year. In 2003, Americans lost 3.7 billion hours and 2.3 billion gallons of fuel sitting in traffic jams and wasted $9.4 billion as a result of airline delays. Congestion is also affecting the quality of life in America by robbing us of time that could be spent with families and friends and in participation in civic activities.

Thanks to an array of new opportunities, we no longer have to accept congestion as our inevitable fate. Last May, Secretary Mineta announced the Bush Administration’s National Strategy to Reduce Congestion on America's Transportation Network – a bold and comprehensive new national initiative to reduce congestion across our entire transportation system. The strategy called upon the leadership of the Department to establish Urban Partnership Agreements with selected communities, and encouraged states to tap private sector resources and expertise to improve transportation systems. It established a competitive process for designating new “Corridors of the Future,” and focused Departmental attention and resources on freight congestion – particularly at key freight gateways in Southern California and along our nation’s border. Finally, it described policies to accelerate major airport capacity projects and move planes in and out of airports more efficiently.

Over the past eight months DOT has focused and deployed its resources, funding, staff, and technology to improve policies and programs, cut traffic jams, relieve freight bottlenecks, and reduce flight delays. Less congestion means less wasted fuel, leading the President to include our National Strategy within the energy policies that he presented in his 2007 State of the Union Policy Initiatives. We are working to find 21st century solutions to 21st century mobility challenges, and we are making a difference.

When I was sworn in as Secretary of Transportation in October, I promised that the Department would not shy away from tough issues, and that we at DOT would do everything we could to reduce the costs of transportation system failures. This National Strategy – the policy embodiment of that promise – demonstrates the Bush Administration’s commitment to getting our nation moving again. We will continue to refine and improve the Strategy and look for ways to implement the great ideas of transportation experts across the country.

Sincerely yours,

Mary E. Peters

Congestion Harms Travelers

Growing congestion in U.S. transportation systems poses a substantial threat to the U.S. economy and to the quality of life for millions of Americans.

• According to the Texas Transportation Institute (TTI), in 2003, congestion in the top 85 U.S. urban areas caused 3.7 billion hours of travel delay and 2.3 billions gallons of wasted fuel, for a total cost of $63 billion.

• In the 10 most congested areas, each rush hour traveler “pays” an annual virtual congestion tax of between $850 and $1,600 in lost time and fuel and spends the equivalent of almost 8 work days each year stuck in traffic.

• Commercial airline passenger delays cost the nation another $9.4 billion annually.

Cost of Congestion in Wasted Time and Fuel in the Largest U.S. Urban Areas

Congestion Hurts Families

Congestion and the growing unreliability of the highway system impose severe costs on the quality of life for millions of Americans. Parents are increasingly missing events with their children, friends and families are finding it harder to spend time together, and civic participation broadly is being negatively impacted. Evidence suggests that each additional 10 minutes in daily commuting time cuts involvement in community affairs by 10 percent (Robert Putnam, Bowling Alone, 2000).

Congestion Threatens Businesses

Beyond lost time and fuel, transportation congestion imposes significant additional costs on U.S. businesses. As transportation congestion mounts, the economic benefits generated by trucking, rail and aviation deregulation are increasingly threatened. The TTI totals and aviation figures take into account only time and fuel, and would be much higher if they incorporated other costs, such as the cost of unreliability, the loss of productive delivery cycles, the need for increased inventory, or the cost of congestion-related emissions. To date, these costs have been insufficiently quantified, but even the anecdotal evidence is telling:

• A national retailer that keeps $2.5 billion worth of merchandise on-hand recently added 10 days of “buffer stock” to its inventory due to increased delays. This buffer stock costs the retailer $2.7 million annually.

• For a container carrier who handles almost 20,000 twenty-foot equivalent units (TEUs) of cargo per week, one full day of port delay adds $4 million in annual operating costs.

• An Atlanta area distributor of pet food with an 11-truck fleet finds it difficult for one truck to make more than 12 daily deliveries; in 1984, one truck made as many as 20 deliveries each day.

• In 2005, congestion at the Otay Mesa and Tecate crossings along the California-Mexico border was estimated by the San Diego Association of Governments to cost the U.S. economy $3.7 billion in output and almost 40,000 jobs.

Alarming Trends

Highway Congestion on the Rise

Highway congestion has increased dramatically over the past two decades. In 2003, in the largest U.S. cities, highway congestion:

• Impacted 67% of travel (vs. 33% in 1982);

• Lasted 7 hours per day in duration (vs. 4.5 hours in 1982); and

• Increased by 37% the length of the average rush hour driver’s trip (vs. 13% in 1982).

Based on current trends, highway congestion is on its way toward becoming a problem in medium-sized cities within the next 10 years, while smaller cities, towns, and the suburban and rural fringe can expect to face similar challenges over an additional 10 to 15 years.

Growing Public Frustration

The American public has become increasingly frustrated with the performance of its highway network. In a 2001 survey by the U.S. Conference of Mayors, 79% of Americans in the 10 metro areas surveyed believed that congestion had gotten worse over the last 5 years; 50% believed that congestion had become “much worse.” And in a 2005 National League of Cities survey, traffic congestion led all other categories – including education and healthcare – when respondents were asked to identify the most deteriorated conditions in their cities over the last 5 years.

Causes of Congestion

At its most fundamental level, highway congestion is caused by the failure to develop mechanisms to efficiently manage use of existing capacity and expand capacity in locations where the benefits are the greatest. While congestion in our aviation and rail systems also deserves national attention, the ability to formally assign rights to various users through air traffic control and dispatch systems helps prevent the type of gridlock we see on our highways.

Economists have long advocated congestion pricing as the most viable means to address this problem and reduce overall congestion costs. The price of highway travel (gas taxes, registration fees, etc.) currently bears little or no relationship to the cost of congestion. Put differently, the average rush hour driver pays out of pocket costs that do not reflect the true costs of the travel. As a result, the network gets swamped, vehicle throughput collapses, and the cost of congestion to all users grows rapidly.

In more immediate terms, congestion is caused by a number of additional factors, including traffic incidents, special events, weather, work zones, and poor signal timing. According to the Federal Highway Administration, approximately half of all congestion can be traced to “recurring” causes (physical bottlenecks, poor signal timing, etc.), and the other half to “non-recurring” (accidents, work zones, weather, etc.).

Immediate Causes of Congestion

Congestion is Not a Fact of Life

We know that congestion is a problem facing families, communities and businesses, and we know that more can be done to improve the performance of the existing transportation network. As a country, we justifiably do not accept equivalently low service levels from our other network and public utility services, and there is no reason to accept it in our transportation system.

Transportation congestion is not a fact of life. It is not a scientific mystery, an uncontrollable force, or the insurmountable fate of the American people. Rather, congestion results from poor policy choices and a failure to separate and embrace solutions that are effective from those that are not. A confluence of trends offers an opportunity to deliver better results:

• Strong public discontent with both congestion and spending decisions that do not effectively provide congestion relief;

• The development of new transportation technologies, which can greatly improve system management, provide more timely information to system users, and lower the costs of toll collection;

• The demonstrated success of road pricing in major cities around the world, including London, England and Stockholm, Sweden, which have reduced congestion and improved throughput almost immediately through the implementation of congestion pricing strategies;

• Increased private sector interest in U.S. transportation infrastructure investment, as demonstrated by transactions such as the multi-billion dollar leases of the Chicago Skyway and the Indiana Toll Road, as well as the creation of large transportation infrastructure funds;

• A growing consensus on the limitations of current financing mechanisms, leading transportation policymakers and economists to anticipate that existing financing mechanisms for highway and aviation infrastructure will be unable to keep pace with projected transportation demand; and

• Challenges to the supply chain revolution, as growing congestion and unreliability threaten supply chain productivity and ultimately the ability of sellers to deliver products to market.

The Six-Point Plan

The Congestion Initiative is a Departmental priority first announced by Secretary Norman Mineta in May 2006 and continued by Secretary Mary Peters. It includes six major components that demonstrate the potential to both reduce congestion in the short term and build the foundation for successful longer-term congestion-reduction efforts.

1. Urban Partnership Agreements (UPAs)

The Department has issued a request for proposals and is seeking UPAswith one to five model cities, who will commit to pursuing the following actions:

• Implementing a broad congestion pricing or variable toll demonstration;

• Creating or expanding express bus services that benefit from free flow traffic conditions;

• Securing agreements from area employers to expand telecommuting and flex scheduling and

• Utilizing advanced technology and operational approaches to improve system performance.

To the maximum extent possible, DOT will financially support its urban partners through some combination of grants, loans, and borrowing authority. The Department has offered up to $130 million in UPA funding, drawn from a number of discretionary programs, and the President’s FY08 budget proposal includes another $100 million for UPAs. As further discretionary resources become available, DOT will commit a portion of them to support UPAs as well. Finally, in addition to its financial resources, the Department will support its urban partners with regulatory flexibility and dedicated expertise and personnel.

UPA applications are due to DOT by April 30, 2007, and the Department plans to announce its selection of Urban Partners by mid-August 2007.

2. Public Private Partnerships (PPPs)

The Department is working to reduce barriers to private sector investment in the construction, ownership, and operation of transportation infrastructure by:

• Utilizing existing Federal program authorities to encourage formation of PPPs, including reforms included in the major surface transportation legislation signed by President Bush last August, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU);

• Providing information and expertise to State leaders contemplating an expanded private sector role in transportation;

• Developing – and posting on the Departmental website – model PPP legislation, which is intended to provide States with an example of the core provisions and issues that any PPP statute should address; and

• Releasing (in the near future) sectional analyses and commentary on the model legislation, to aid States in understanding the impact of its provisions.
  

3. Corridors of the Future

The Department is working to accelerate the development of new interstate highway and rail capacity within multi-state, multi-use transportation corridors. DOT’s efforts include:

• Fast-tracking major congestion reducing corridor projects that received funding in SAFETEA-LU, and giving priority to these corridors under SAFETEA-LU-authorized programs and pilots; and

• Competitively selecting 3-5 major “Corridors of the Future” in need of long-term investment, then convening a multi-state process to advance project development and seek alternative financial opportunities.

DOT received 38 responses to its September 2006 solicitation of proposals for the Corridors of the Future Program. In January the Department announced the eight corridors (encompassing 14 project proposals) selected to advance to phase 2 of the competition. Each of the phase 2 corridors will submit a more detailed proposal by May 25, 2007, and the Department hopes to make final determinations by late 2007.

4. Southern California Freight Outreach

The Department is working to bring together the public and private sectors to forge consensus on immediate and longer-term solutions that relieve freight bottlenecks at vital trade gateways – including, most importantly, Southern California – by:

• Establishing a Southern California Gateway Office in Long Beach, CA, to coordinate DOT’s activities within the region;

• Convening and managing a cooperative alliance among Federal, State, and local agencies, private interests and the public; and

• Collaboratively and expeditiously addressing regional goods movement and related community and environmental challenges.

5. A Focus on Border Congestion

The Department is working to find and implement solutions to border congestion that facilitate trade and travel without compromising the vital mission of securing America’s borders. These efforts include:

• Identifying and pursuing innovative solutions that maximize efficiency of border facilities while maintaining motor carrier safety; and

• Working with State and local governments – and with private sector stakeholders – to accommodate increased demand at the most congested bridges and highways on our borders.

6. A New Response to Aviation Congestion

The Department is working to address congestion in the aviation system by:

• Giving priority treatment and agency resources to projects and technologies that enhance aviation system capacity;

• Streamlining environmental reviews for airport and aviation capacity projects, such as new runways and airports; and

• Designing and deploying the Next Generation Air Transportation System (NextGen), which will be more flexible and adaptive than today’s system and meet up to three times current demand.

To provide a legislative and regulatory framework for NextGen, in February the Bush Administration sent to Congress the Next Generation Air Transportation System Financing Reform Act of 2007. This legislative proposal would comprehensively reform the programs that authorize and fund the Federal Aviation Administration (FAA), allowing for better management of airport and airspace congestion.

Economic prosperity and a population in excess of 300 million have combined to produce record demand for personal and freight mobility. Transportation is woven into the economic fabric of our nation as never before. But continued economic growth is seriously threatened by congestion and declining reliability, the costs of which are borne by shippers, manufacturers, operators, and ultimately consumers.

Our objective must be to reduce congestion, not simply to slow its increase. Congestion is not an insurmountable problem, but solutions will require a smarter approach to capacity expansion and improved productivity of existing transportation assets. We must make the right investments in our transportation capital stock, and we must manage our transportation networks more effectively.

Despite record funding for surface transportation in recent decades, transportation system funding needs outstrip the resources available to the public sector. The Federal Government’s most important role is to establish mechanisms to ensure that the right investments get made.

In order to sustain economic growth and job creation, we must be open to new approaches to building, financing, and managing our transportation infrastructure. In other words, the era of complacency about congestion must end. The National Strategy to Reduce Congestion on America’s Transportation Network provides the framework for government officials, the private sector, and most importantly, the citizen-user, to take the necessary steps to make today’s congestion a thing of the past. The Federal government can not and should not solve this problem alone. This new initiative allows leaders at all levels of government to embrace new solutions that reduce congestion, sustain economic growth, and give Americans more time to pursue their dreams.