"Privatization" and "infrastructure" seem to be two very popular words in Washington these days, especially at the U.S. Department of Transportation, where DOT Secretary Mary Peters has been pushing to turn toll-funded highways and construction projects over to private interests.
Proponents say private operators do a better job of using toll revenue to maintain highways than their public counterparts do. And many budget-minded state governments welcome the prospect of handing off the cost and responsibility of highway maintenance while still getting a piece of the revenue pie. That's why nearly two dozen states—including Michigan, California, Virginia, Indiana, and Illinois—have either signed agreements with private operators to lease and/or build toll roads, tunnels, and bridges, or are considering doing so.
On the surface, it appears that everybody wins in a private-operator scenario: States get millions of dollars in lease payments without having to bear the cost of operations and maintenance, and highway users supposedly get better service for their toll dollars.
However, Clayton Boyce, vice president of public affairs for the American Trucking Associations, says some privatization deals may not be so attractive in the long term. Speaking at the joint conference of the Transportation & Logistics Council and the Transportation Loss Prevention and Security Association in April, Boyce noted that some lease agreements forbid states from building new highways that might compete with the toll roads, essentially preventing infrastructure expansion that may be urgently needed in the future.
John Cutler Jr., general counsel for NASSTRAC and a transportation attorney with the law firm McCarthy, Sweeney & Harkaway, warned attendees about other developments in Washington that may affect shippers—some in a positive way, and others not. He noted that although Democrats now control both the House and Senate, they don't necessarily agree with one another on transportation issues. For example, Cutler said, New Jersey Democrat Frank Lautenberg, who chairs the Senate's Surface Transportation and Merchant Marine subcommittee, is resistant to the idea of privatizing roads and is "hostile" to any relaxation of the current freeze on truck size and weight limits. However, Rep. James Oberstar (D-Wis.), who chairs the House Committee on Transportation and Infrastructure, has said that he's willing to take another look at longer trucks.
On the security front, the Transportation Security Administration (TSA) is making an effort to be more responsive to constituents' complaints, Cutler said. The agency moved quickly after shippers complained that truckers were insisting that a new rule required dockworkers to show identification to carriers that were picking up or delivering air freight at the shipper's premises. TSA issued a clarification saying that shippers only need to show identification when they go to a carrier's or a forwarder's facility. Another example: TSA is now working on developing a "certified shipper" status under its Known Shipper program. According to Cutler, the agency is considering allowing approved shippers' cargo to bypass initial screening when tendered.