December 28, 2009
thought leaders | The DC Velocity Q & A

An insider's take on the great highway debate: interview with Mortimer L. Downey III

An insider's take on the great highway debate: interview with Mortimer L. Downey III

When it comes to handicapping the upcoming battle over highway spending, veteran public servant turned consultant Mort Downey may have the ultimate inside track.

By Mitch Mac Donald

Sometimes, it's just a matter of timing.

The nation is gearing up for one of the most critical periods in the history of U.S. infrastructure. And sitting in the sweet spot where influence and investment collide is one of the most knowledgeable authorities on infrastructure of the last 25 years: Mortimer L. Downey III.

Downey is a senior adviser to Parsons Brinckerhoff, providing advisory and management consulting services to the firm and its clients, which include public and private entities, developers, financiers, and builders of infrastructure projects worldwide.

Although he works in the private sector today, Downey has had a long career in public service. From 1993 to 2001, he served as deputy secretary of transportation, the longest-serving individual to ever hold the Department of Transportation's number-two job. As its chief operating officer, he developed the agency's highly regarded strategic and performance plans and had program responsibilities for operations, regulation, and investments in land, sea, air, and space transportation. His reputation is such that in 2008, he was named to the transportation policy committee for the Obama presidential campaign, and during the presidential transition was appointed leader of the DOT's agency review team.

Previously, Downey was for 12 years the executive director and chief financial officer of the New York Metropolitan Transportation Authority (MTA), the nation's largest independent public authority.

Downey has received numerous professional awards, including election to the National Academy of Public Administration, where he has served as chairman of the board of directors. He is a member of the board of directors of the Eno Transportation Foundation and has served on the National Academy of Science's Committee on Science & Technology Countermeasures to Terrorism. He has served on a DOT special panel to report on the safety impact of Mexican truck operations in the United States, he recently joined the Industry Leaders Council of the American Society of Civil Engineers, and he has served on the board of directors of the National Railroad Passenger Corp. (Amtrak).

Downey spoke recently with DC Velocity Group Editorial Director Mitch Mac Donald about his career, the nation's "vintage" transportation policy, and why he thinks freight interests might finally get a voice in the next round of transportation policy discussions.

Mortimer L. Downey Q: How did you end up in your current role as it relates to transportation and logistics?
A: I have been in the transportation world now for a little over 50 years in one role or another, a lot of it in the public transportation area in New York. I was executive director of the Metropolitan Transportation Authority, but I served during the Clinton administration as deputy secretary at U.S. DOT and got a much better appreciation of the goods movement side of the transportation world. I have kept part of my brain focused on that since I left DOT and entered consulting.

Q: You served on the transportation policy committee for the Obama presidential campaign and then worked as part of the DOT agency review team during the transition. What can you tell us about your work there?
A: It was an interesting experience revisiting federal policy and the Department of Transportation. During the campaign, the Obama folks had a very active group exchanging ideas and throwing in ideas about transportation policy. They published several fact sheets and working papers, more than have come out of any other presidential campaign that I can recall. I was fortunate enough to be asked to head up the DOT transition team.

Around this time last year, we began to organize that effort. Immediately after election day, we dropped everything and spent the next couple of months at DOT meetings with the career staff, meeting with virtually every interest group in the world who cared about transportation policy, and preparing documents that were handed over to the incoming secretary, Ray LaHood, when he came on board. We also had the opportunity to brief him. It was a great chance to re-immerse in the policy issues and throw in my two cents' worth on some of the directions. His team is off and running now, and I think the subject of goods movement and logistics is going to be an important part of its policy thinking.

Q: It has long been argued that freight "needs a seat at the table" when national transportation policy is developed, but that has yet to come to pass. What, in your view, makes things different this time around?
A: The two catch phrases one usually hears are "freight deserves a seat at the table" and "freight doesn't vote." But the developments over the last eight or 10 years are changing things in a positive way. In the last round of transportation legislation —the so-called SAFETEA-LU bill, which is now mercifully expiring —there was an effort to bring freight into the picture, and those of us who worked on it felt it was moderately successful.

The other thing that came out of that legislation was the naming of two study commissions to prepare policy views in time for the next round of legislation because Congress couldn't agree on a single charter. We had a commission devoted to policy and program development, and a separate commission that looked at financial issues.

I think from a freight standpoint, the policy commission was the more interesting one. Out of a combination of presidential and congressional appointees, that commission wound up with some people who were articulate on these subjects, including [Burlington Northern Santa Fe CEO] Matt Rose. They continued to follow up individually on the implementation of their recommendations and made a very strong case for a better focus on freight. They crystallized the connection between freight and the national economy, and the importance of addressing freight capacity issues as part of the policy debate.

I am not too optimistic that we will see anything but a short-term extension [of the current highway reauthorization bill]. But the major piece of work has been done, which is the development of surface transportation legislation from the House. The House Transportation and Infrastructure Committee has picked up on a lot of our recommendations regarding ways of bringing freight to the table.

Q: This is consistent with the comment I've heard you make that the objective here is to avoid new authorization of old thinking.
A: Right. The House in its wisdom has really picked up on that, and Jim Oberstar [chairman of the House Transportation and Infrastructure Committee] refers to it as an authorization bill, not a reauthorization. He has very significantly changed the way programs will be delivered. He hasn't come up with a secret formula for paying for it yet. That remains an open issue, but he has really begun to change things around and he has created within the program structure a nationwide freight program operated through the states. He has also opened the door to federal support for important intermodal improvement projects in the freight arena.

Q: How can the freight community be confident that money appropriated for freight will be spent on freight-only projects?
A: I think the discussion about freight fees as well as a freight trust fund, which is not currently in Oberstar's legislation because that is not his jurisdiction, is an effort to assure the freight community that if they agree that improvements are needed and if they pay in, the funds will be segregated and used for that purpose.

The thinking is that if there is an outreach to that source of money, the funds will not simply be another bucket in the highway trust fund but instead be dedicated to good solid freight projects. Now you get into some nuances there. The truckers, for example, are very strong advocates for investment that would improve trucking. They actually are supportive right now of a diesel fuel tax increase. Not very many people in Washington are.

Q: At a recent conference, you noted the need for the nation to align its trade and transportation policies, but you added that while our trade policy is aimed at 2009, our transportation policy is vintage 1956. Can you elaborate?
A: That comes from thinking about how U.S. trade policy has developed, the fact that we are now much more involved in foreign commerce, both oceangoing commerce with the other continents and NAFTA-related trade. It is a very different world from where the United States was when the last significant investments were made —basically, the establishment of the Eisenhower interstate highway system.

But we haven't caught up. We don't necessarily frame the debate in the right terms when we make judgments. For example, we agreed that NAFTA should go forward, but we didn't really debate how to make that work. So here we are, still fighting over access for Mexican trucks to U.S. highways. There are good arguments on both sides, but we really should have thought that through.

What strikes me, and it is brought home every time I hear about it, is that our neighbor to the north gets it. In Canada, questions surrounding foreign trade and the handling of import and export shipments are an important part of national policy discussions. If you look at the steps the Canadians have taken to beef up the capability of [the Port of] Prince Rupert and to beef up the capability of Halifax, they are doing things that we have yet to really contemplate, and we are going to be handed our lunch.

Q: Wouldn't it be interesting if the two primary maritime gateways to North America were not in the United States?
A: Yes, or the three primary gateways. The Mexicans are looking to develop their facilities as well. I think much of the thinking both from Canada and Mexico is driven by how they handle their imports. I think we also have to figure out how we keep ourselves in the export business with something other than scrap paper.

Q: Any closing thoughts?
A: There are some important issues here. I believe we will see in the next six to 18 months a piece of legislation that shapes what goes on for probably the next 20 years. That is usually the pattern when one of these bills passes —it stays in place for a long time. This is an important round of policy discussions. I hope those who care about freight issues will find a way to be participants in that discussion.

About the Author

Mitch Mac Donald
Group Editorial Director
Mitch Mac Donald has more than 30 years of experience in both the newspaper and magazine businesses. He has covered the logistics and supply chain fields since 1988. Twice named one of the Top 10 Business Journalists in the U.S., he has served in a multitude of editorial and publishing roles. The leading force behind the launch of Supply Chain Management Review, he was that brand's founding publisher and editorial director from 1997 to 2000. Additionally, he has served as news editor, chief editor, publisher and editorial director of Logistics Management, as well as publisher of Modern Materials Handling. Mitch is also the president and CEO of Agile Business Media, LLC, the parent company of DC VELOCITY and CSCMP's Supply Chain Quarterly.

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