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In November 1998, the Subcommittee on Transportation Research and Development (R&D) of the National Science and Technology Council (NSTC) released the first Federal Transportation Technology Plan. This plan presents initial implementation strategies for the private-public partnerships identified in the 1997 NSTC Transportation Science and Technology Strategy. ¹ Among these partnerships, that on "Enhanced Goods and Freight Movement at Domestic and International Gateways" addresses the need for more flexible, efficient, and seamless freight transportation systems. The partnership promotes an integrated freight R&D and investment policy and private-public collaboration on large-scale investment projects.

This strategic plan outlines the partnership’s outcome goals, investment strategies, and impacts for freight gateways at the Nation’s ports and intermodal terminals. Together with a companion document for border gateways, this plan provides a framework for a comprehensive R&D investment strategy for freight transportation.

Vision, Goals, Outcomes, and Partners

A broad partnership among the Federal Government, State and local agencies, international societies, port and airport authorities, and industry, the gateways initiative will improve freight mobility through technology applications. As stated in the NSTC Transportation Technology Plan, the partnership’s vision is "a more productive national economy afforded by a more flexible, efficient, and seamless freight transportation system." Its ultimate goals are to (1) improve freight mobility at the Nation’s land borders and ports; (2) ensure diffusion of existing freight information technologies and networks; and (3) expedite the global flow of goods. Among the near-term outcomes of the partnership are the following from the Department of Transportation (DOT) FY 2001 Performance Plan:

The lead Federal agencies for the partnership are DOT’s Office of Intermodalism and Intelligent Transportation System (ITS) Joint Program Office. Other Federal partners include, from DOT, the Federal Aviation Administration, Federal Highway Administration, Federal Railroad Administration, Maritime Administration, Research and Special Programs Administration, and United States Coast Guard; the Department of Commerce; the Department of Defense; the Department of Energy; the Department of Justice’s Immigration and Naturalization Service; the Environmental Protection Agency; the Department of State; the Treasury Department’s U.S. Customs Service; and the Department of Agriculture.

Among the current and potential non-Federal partners are national governments and international societies, State and local agencies, port and airport authorities, air cargo companies, trucking companies, ship operators, railroads, parcel and freight companies, and equipment and vehicle manufacturers.

The gateways partnership is coordinated by the NSTC. Federal participants contribute resources and support as required, seeking ongoing guidance and involvement from state, local, and private partners. DOT’s ITS Joint Program Office provides overall leadership and management of the partnership.

Outcome Goals

This strategic plan covers the port and intermodal terminal elements of the gateways partnership. (A companion document addresses freight movement at border gateways.)

These elements support national goals for economic growth and trade and the following core goal in DOT’s 1997-2002 Strategic Plan:

This plan defines four key outcome goals for ports and intermodal terminals that support this broad national objective. For each outcome goal, the plan presents the following: (1) an investment strategy; (2) anticipated impacts; (3) critical technology (or other) elements; and (4) case studies. The four outcome goals are:

Scope of Efforts

Because it deals with investment in freight infrastructure - traditionally a private-sector function—and because of the nature of these investments - innovative, interagency, intermodal, and international - this partnership crosses the traditional boundaries of transportation investment decisions. Concepts such as "joint intermodal terminal," "consolidation hub," "intermodal condominium," or "integrated freight corridor" do not fit within the traditional frameworks guiding investments in transportation infrastructure. In this respect, this strategic plan is likely to present challenges to existing mode-based investment practices and the prevailing distinctions between the private and public realms. This partnership’s scope is bounded by the extent to which it can enhance freight movement at ports and intermodal terminals through the following three-pronged strategy:

The geographic scope of this partnership is ultimately international, as the ramifications of the flow of international cargo through the Nation’s ports and freight terminals are far beyond the domestic sphere. The activities undertaken by or in support of the Organization for Economic Cooperation and Development, World Bank, North American Free Trade Agreement, and Asia Pacific Economic Cooperation will all impact the effectiveness of the strategies that this plan presents.

The partnership’s system boundaries include, but are not limited to:

Finally, the technological scope of the partnership encompasses state-of-the-art freight vehicle technologies, communications equipment (stand-alone or imbedded), sensing and control devices, and information systems.

The Federal Role

Market imperfections have historically warranted government intervention. The need to provide for the public good, correct for externalities, and redress the problems resulting from the building of freight facilities provide the impetus for a strong Federal role in freight transportation infrastructure:

Ports, waterways, and intermodal terminals are a public good: they provide a key link in the global supply chain. The private sector lacks the incentive to provide adequate investment to meet the demands of trading partners.

The physical and communications infrastructures of ports and freight facilities have many of the attributes of a public good, even though their use may not always be "non-rival" and "non-excludable." As gateways to international trade, access to these facilities generates external benefits to both payers and non-payers. Such attributes make conventional market pricing inapplicable. National security and the public infrastructure aspects of waterways require performance levels that private markets are not able to meet.

Economies of scale involved in the construction of intermodal terminals often preclude investment responsibility by a single private entity.

Funding large-scale freight projects, such as the Alameda Corridor, is beyond the scope of most private firms. Moreover, the private funding of such projects would create pricing problems that would lead to the exclusion of many potential facility users. Marginal cost pricing for such public projects would not be possible because of the high startup costs. Finally, the "lumpiness" of many such projects would preclude dividing them into smaller units to place them within the range of a private firm’s budget and demand curve.

Multi-jurisdictional freight facilities involve significant externalities. Private or local-level decision-making processes are likely to arrive at locally optimal solutions that may undermine the Nation’s global objectives. Federal leadership is needed to promote advanced freight technologies, set interoperability standards, and help arrive at a global optimum.

National security, transportation safety, environmental externalities, and the economic impacts of major transportation facilities are such that they cannot be left solely to private or local markets. While control of these facilities is likely to promote the short-term market objectives of some individual or local stakeholders, the long-term impacts at the regional or national levels are likely to be sub-optimal. Inter-port competition for attracting containerships and railroad decisions to discontinue service to some markets are examples of such negative externalities. Evidence suggests that the magnitude of the potential social gains from Federal R&D investments is sufficiently large to provide a comfortable margin of error for choosing among technologies to back. ²

This plan outlines strategies that promote a research and technology approach to freight infrastructure investment and guide the following:

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