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Partnership to Promote Enhanced Freight Movement at International Border Gateways: A Strategic PlanPrevious Section | Table of Contents | Next Section 2. OPPORTUNITIES AND CHALLENGESOPPORTUNITIESThe opportunities afforded by the increase in international trade are significant. A growing volume of world trade has contributed to rising incomes, emergence of new markets, and a more efficient global supply chain. Innovative freight technologies offer an important opportunity to foster continuing growth. The US economy has gained significantly from the surge in global trade. The Gross Domestic Product (GDP) has grown as productivity rates in the high-technology segments of the US exports industries have climbed. Average costs in many sectors have declined as markets have become more competitive. Domestic producers have enjoyed the benefits of economies of scale as new markets have emerged. Declining transportation costs have stimulated global outsourcing, further contributing to declining logistics costs and the integration of the global supply chain.8 The US trade volume, currently exceeding $1.4 trillion per year, is expected to quadruple over the next quarter century. US export trade to Canada and Mexico alone has grown by roughly 12 percent per year since the NAFTA was ratified. This year’s NAFTA trade volume of $477 billion was up 13 percent from 1996. On the Southern border, trade with Mexico has more than tripled between 1987 and 1995, from $34.9 billion to over $109 billion. By the year 2000, trade with Mexico is anticipated to double to $212 billion, with a corresponding growth in tonnage from 50 million tons to 74 million tons.9 CHALLENGESThe challenges posed by the growth of world trade are also significant. Traffic congestion at the NAFTA land-borders, facility access problems, and information bottlenecks pose threats to US border security, Federal vehicle safety standards, and the efficient flow of commercial goods. Threats to the ability of US firms to gain adequate access to world markets exist from three interconnected sources: the physical infrastructure, the information network, and the border facilities where inspections occur and container handling for intermodal interchange takes place. These elements provide the motive power for moving world trade and linking global logistics supply chains. Growth in the volume of international trade has four particular concerns related to the nation’s physical transportation network, information infrastructure, and border facilities:
This strategic plan focuses on challenges associated with each of these four areas through activities directed toward the specific outcome goals presented in Section 1. Network Congestion Network congestion and capacity shortages at highways leading to NAFTA land- border crossings have created a significant problem. Growth in demand has not been matched by commensurate capacity expansion in the highway infrastructure. Congestion on freeways and arterial streets leading to border crossings poses a critical transportation challenge and poses significant environmental, security, and safety threats. Improvements of US freight infrastructure have failed to keep pace with the growth in border trade. Subsequently, there is a capacity gap within the border corridors for adequate networks to handle additional traffic. Traffic volumes at six major border crossings on the US-Canada and US-Mexico borders illustrate the patterns in commercial vehicle congestion. In 1994, the south-bound commercial lanes at the Ambassador Bridge, linking Detroit to Windsor, Ontario carried more than 1,000,000 commercial vehicles; Buffalo’s Peace Bridge connecting Buffalo, New York to Fort Erie, Ontario had an inbound traffic of 530,000 trucks; and Blue Water Bridge spanning the St. Claire River, between Port Huron, Michigan and Sarnia, Ontario, carried 600,000 trucks. Northbound commercial vehicle traffic at the El Paso crossing in 1994 was 580,000; in Laredo, the main commercial bridge to Nuevo Laredo carried more than 450,000 trucks; and at Otay Mesa the facility processed 385,000 trucks. In Section 3 actions described for achieving Outcome Goal 1 will address border congestion problems and outline strategies for augmenting the on-going congestion-mitigation highway construction projects with advanced technologies to enhance highway capacity and levels of service. Border Facility Bottlenecks Bottlenecks at border facilities have been compounded by the absence of container handling and intermodal loading/unloading space and lack of standards. Three factors contribute to the access bottlenecks at land border crossings and pose significant economic, environmental, and security threats:
At the US- Mexico border some 65 percent of the northbound traffic arrives at four crossings in Laredo, El Paso, Nogales, and Otay Mesa. At the US-Canada border more than 50 percent of the commercial traffic moves through three crossings in Detroit, Port Huron, and Buffalo. Figure 1 shows the crossings where the trade flows are funneled. Figure 1 – The Funneling of the NAFTA Trade The driving force of the recent decades’ trade growth has been containerization—a development that has enhanced the efficiency of intermodal freight system. However, this growth has not been accompanied by a commensurate growth in the intermodal mode share. Trucking has become the primary mode for moving the containers along the long-haul routes, while growth in the available container handling facilities has lagged. This capacity gap has led to severe congestion problems on highways and at rail and port container terminals. Figure 2 - Growth of Containerization This truck-dominated freight mode share has contributed to the skewed distribution of the traffic burden on the US border highways. Between 1991 and 1995, the number of northbound truck and rail conveyances crossing the border increased by 48% (at an average annual rate of 10%). About 12 percent of the conveyances were transported by rail, and more than 85 percent by truck. Increase in highway lane capacity has not matched the increase in demand. Nor has the mode share for rail freight risen to divert some the truck traffic. Divergent international truck size and weight standards have created numerous problems at land borders. Problems include pavement damage and safety concerns, as well as traffic congestion. Lack of standardization in truck weight, registration, and vehicle markings also restrict truck-rail intermodal interchanges at the borders. The current Federal Highway Administration Truck Size and Weight study evaluates the implications of alternative standards for commercial vehicle safety, pavement and bridge damage, traffic operations and geometry, truck costs, modal share, enforcement effectiveness, permits and pricing, and energy use and emissions.10 Activities under Outcome Goal 2 address facility bottleneck problems and outline strategies for removing container access bottlenecks, facilitating intermodal container interchange at border facilities, and promoting uniform equipment size and weight standards. Border Infrastructure Planning Border infrastructure planning has been piecemeal, and has failed to take into account the "total corridor" commercial vehicle traffic patterns. Until recently, common practice has been to consider the US roadways connectors, border facilities, and the infrastructure on the other side of the border as three unrelated undertakings. The Colombia-Solidarity International Bridge illustrates the problems with the failure to take the total corridor alignment into account. The $20 million state-of-the-art bridge, some 18 miles west of Laredo, is equipped with 100 cargo inspection docks. Yet, the bridge gets very little use because Mexico still has not built a connecting roadway capable of handling truck traffic. The commingling of the Northern and Southern border markets–both economically and in labor/residential markets–has significant implications for the border infrastructure planning. The growth in maquiladora (cross-border twin plants) trade in the Southern border region has been one of the key drivers of the commingled economies of the region. The growing interdependence of the economies along the US-Mexican border was shown through a feasibility study for a toll bridge in Laredo. The survey shows that truck traffic in the area is clearly non-local, and in support of the border manufacturing markets, thus justifying the toll charges for financing the bridge.11 A "total corridor" investment planning perspective would promote a more efficient freight infrastructure network as it takes the entire corridor into account rather than focusing on piecemeal improvements. A corridor-based perspective is likely to promote a more balanced modal distribution. At the Laredo and El Paso border areas, the ratio of the all-highway container moves to rail is 15 to 1. Similar modal imbalance prevails in the California border corridor with Mexico. Between Los Angeles and Mexico, some 277 million tons of export cargo originate annually, with 81 percent moving by truck, 13 percent by rail, and 6 percent by water. The Southern California highway network carries the largest share of truck traffic, with the busiest segments of Interstate highways 5, 15 and 805 carrying as many as 35,000 trucks per day. To reduce border truck traffic, rail and water shares of container traffic need to increase, but the infrastructure and institutional arrangements needed for this mode share shift are lacking. Outcome goal 3 addresses the strategies to promote total corridor planning efforts and a more balanced mode share. Information Bottlenecks Information bottlenecks have compounded physical infrastructure problems and pose potential threats to the US border security, efficient commercial vehicle operations, and Federal vehicle safety standards. The adage that "a container doesn’t move unless the information moves" has gained more poignancy as the logistics of goods movement has become closely coupled with information transmission. As container movement has become information-intensive, the fourth critical layer of information has gained prominence for goods movement over the three traditional elements of vehicle, physical infrastructure, and cargo. While the infusion of intelligence in all facets of the goods movement process expedites the movement itself, only a relatively small segment of the commercial fleet, those operated by the large carriers, have benefited from the smooth flow of cargo-related information. Two decades ago, the deployment of advanced vessel technologies for intercontinental goods movement was faced a serious problem. More often than not, cargo arrived well ahead of the paperwork. With the advent of even faster vessels and trucks this problem has persisted, in spite of significant developments in communications technologies. In a period of open borders and tariff reduction the lag in transmission of cargo information has helped maintain many "non-tariff" impediments to trade. Electronic information transmission offers the potential for tremendous gains in efficiency and security, but there are vast gaps in data availability across all operational levels. The extent to which needed freight information is incorporated in the door-to-door movement of international trade impacts how well international trade moves. The potential source of the problem is a twofold threat: The coexistence of the paper-based and automated transmission of bills of lading has created a dual system that exacerbates inefficiencies. As electronic commerce or EDI (Electronic Data Interchange) systems are not universally available or uniformly used, the gains of more rapid transmission of information on traded goods are not as large as they could be. The vast majority of the trading partners have had to deal with a checkered quality of data flow. Security risks and threats of disruption have increased as electronic sophistication of many potentially subversive elements at the border has grown across all levels of border trade. Delays caused by information gap and slow transmission of inspection data are estimated at $2.5 billion per year in added trade transaction costs.12 At intermodal terminals, delay costs at the gate due to document examination are estimated at $5 to $10 per container.13 With more than 10 million container loadings each year, these delays can add up to $100 million. Underlying much of the delay is that the needed information on commercial vehicle clearance is either not readily available or transmitted on paper documents. Myriad border agencies need to verify documents, often redundantly, before granting clearance to commercial vehicles crossing land borders. To illustrate, the normal inspection procedure for a container not dispatched through expedited pre-filed arrangements is to send the container to a "secondary" inspection point and use a variety of methods of inspection –ranging from "tailgate" cursory inspection, to a more thorough search. When suspected of containing contraband, the container is emptied and holes are drilled in the container walls, roofs or floors to detect false partitions. Delays created by the information bottlenecks compound the delays due to container inspections and the congestion generated by the funneling of land border traffic. Though progress has been made in application of advanced information and inspection technologies the market penetration and commercialization of these technologies is low compared to the volume of traffic moving through the land borders. Investments focused on Outcome Goal 4 support strategies for reducing inspection-related border delays by promoting electronic commerce for cross border transactions, including EDI, electronic pre-clearance, uniform bill-of-lading, and electronic fund transfers and toll payment. |
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