United States General Accounting Office

GAO Report to Congressional Committees

July 1996 INTERMODAL FREIGHT

TRANSPORTATION

Projects and Planning

Issues

G O A

years

1921 - 1996

GAO/NSIAD-96-159

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-260658 

July 9, 1996

The Honorable John H. Chafee

Chairman

The Honorable Max S. Baucus

Ranking Minority Member

Committee on Environment and Public Works

United States Senate

The Honorable John W. Warner

Chairman, Subcommittee on Transportation

 and Infrastructure

Committee on Environment and Public Works

United States Senate

To improve the nation’s surface transportation system over a 6-year period

ending in fiscal year 1997, the Intermodal Surface Transportation

Efficiency Act ([ISTEA], Public Law 102-240, Dec. 18, 1991) authorized

$155 billion. Although ISTEA primarily authorized highway construction and

improvements, it also emphasized how intermodal connections can

enhance the nation’s transportation infrastructure. Intermodal

connections link the various transportation modes—highways, rail, air,

and maritime facilities. According to the National Commission on

Intermodal Transportation’s 1994 report, these connections are typically

the weakest links in the nation’s transportation system. Economists and

transportation planners believe that productivity and efficiency gains can

be achieved by improving intermodal connections.

In preparation for reauthorization of ISTEA, you asked us to review several

intermodal freight transportation issues. We reviewed (1) the Department

of Transportation’s (DOT) efforts to track how states use ISTEA funds for

facilitating intermodal transportation and the nature and extent of ISTEA

funds used by states for intermodal freight projects, (2) how some local

and regional areas that handle a large volume of freight have considered

intermodal freight transportation issues as part of their planning process,

and (3) what kind of impediments some areas face in improving

intermodal freight transportation. In addition, we developed information

on intermodal freight transportation trends.

Background ISTEA made it U.S. policy to develop a national intermodal transportation

system that “provides the foundation for the Nation to compete in the

Page 1 GAO/NSIAD-96-159 Intermodal Freight Transportation
B-260658 

global economy, and will move people and goods in an energy efficient

manner.” In terms of freight transportation, an intermodal shipment is one

that moves by two or more modes during a single trip. Although

intermodalism is not defined in ISTEA, an example of an intermodal freight

project would be a port improvement project that facilitates the transfer of

cargo from ships to trucks or rail. However, DOT has not established an

all-encompassing definition of what constitutes an intermodal freight

project. While ISTEA required that DOT develop a data base that included

investments in public and private intermodal transportation facilities, it

contained no requirement for states to use a specific category of funds for

intermodal projects. The majority of ISTEA funding for surface

transportation improvements is provided to states through such categories

as the Surface Transportation Program or the National Highway System,

which have historically been directed to highway construction. However,

ISTEA authorized specific “priority intermodal” projects, some of which

were freight related.

Results in Brief DOT has not yet developed a data base that provides information on public

and private investment in intermodal transportation, nor has it tracked

how states use ISTEA funds for such projects. Our analysis of available DOT

data and interviews with agency officials showed that 10 states had

obligated about $35.6 million in ISTEA funds for 23 projects identified as

intermodal freight related as of September 30, 1995. In addition, DOT

provided information that $68.4 million, or 36 percent of the $191.8 million

authorized for obligation in ISTEA funds for 20 priority intermodal freight

projects, had been obligated by states as of December 31, 1995. The total

amount of funds obligated for intermodal freight projects through roughly

the first 4 of ISTEA’s 6 fiscal years thus equals $104 million—less than

1 percent of ISTEA funds apportioned to the states during that period for

highways and other nontransit infrastructure projects. DOT does not have

more complete data on funding for intermodal freight projects. Such

information would be necessary to assess whether progress has been

made toward improving intermodal connections.

In reviewing the approach of several local and regional areas to meeting

intermodal freight transportation needs, it became clear that metropolitan

planning organizations (MPO)1

 have had to balance their consideration of

1

Transportation planning at the local level is the responsibility of MPOs. Title I of ISTEA designated

MPOs “for each urbanized area of more than 50,000 population by agreement among the Governor and

units of general purpose local government which together represent at least 75 percent of the affected

population (including the central city or cities as defined by the Bureau of the Census) or in

accordance with procedures established by applicable State or local law.”

Page 2 GAO/NSIAD-96-159 Intermodal Freight Transportation
B-260658 

intermodal freight issues with a wide range of other transportation needs.

MPOs are required to consider 15 planning factors when prioritizing

projects to include in state transportation plans, only 2 of which relate to

intermodal freight transportation. Furthermore, the public sector’s

transition from a modal planning environment to an intermodal planning

approach is taking time to institutionalize. One reason for this delay is that

while much intermodal freight expertise resides in the private sector,

public sector officials are just beginning to develop appropriate planning

tools for this work. These tools include local planning to identify and

overcome intermodal freight bottlenecks and regional planning to address

interstate freight issues.

Public and private transportation officials experienced several

impediments to improving intermodal freight transportation. Two issues

identified as particularly problematic involved: (1) obtaining necessary

information on freight movement that private firms may consider

proprietary and (2) coordinating the different planning time lines between

the public and private sectors for meeting immediate versus long-term

intermodal needs. However, efforts are under way by some groups to bring

both public and private interests together at the MPO and the national level.

DOT Has Not

Developed Statutorily

Required Data Base

on Intermodal

Investments

Title V of ISTEA established within DOT an Office of Intermodalism and

required that the Director of this office, through the Bureau of

Transportation Statistics (BTS), develop, maintain, and make publicly

available a data base that includes “information on public and private

investment in intermodal transportation facilities and services.”2

 To date,

the data base on investment in intermodal facilities and services has not

been developed, and comprehensive data on investment in public and

private investment in intermodal transportation facilities and services do

not exist. Moreover, DOT does not track ISTEA expenditures on intermodal

facilities. DOT officials gave us the following reasons why they have not

developed the data base: (1) DOT has a limited role in managing how funds

are allocated because states are given primary responsibility for allocating

funds according to broad program categories; (2) the term “intermodal” is

subject to interpretation, and projects may not be identified consistently

among states; and (3) intermodal projects may be financed from multiple

2

The two other elements of the data base are (1) “information on the volume of goods and number of

people carried in intermodal transportation by relevant classification” and (2) “information on patterns

of movement of goods and people carried in intermodal transportation by relevant classification in

terms of origin and destination.” DOT officials stated that their initial work in addressing the

intermodal data base has focused on freight and passenger movement data rather than investment

data. DOT efforts to address these two elements of the data base are included in the agency comments

section of this report.

Page 3 GAO/NSIAD-96-159 Intermodal Freight Transportation
B-260658 

sources, including federal, state, and local funds, and it may be difficult to

identify ISTEA funds used for this purpose. Nonetheless, DOT has not sought

legislative relief from this ISTEA requirement.

States have provided DOT with detailed information about the use of ISTEA

funds on a project-by-project basis; this information has been entered into

DOT’s computer information system. In an attempt to identify the extent to

which states used ISTEA funds for projects that facilitated intermodal

freight movement, we reviewed thousands of pages of DOT data and

interviewed public sector officials.3

 Our review was based on identifying

the use of the term intermodal in project descriptors. We verified with DOT

officials that each project we identified involved the movement of freight.

We found that only 10 states4

 used ISTEA funds for intermodal freight

projects. A total of 23 projects obligated $35.6 million from two ISTEA

funding categories.

We also reviewed the status of ISTEA-designated “priority intermodal”

projects (of the 51 projects designated in legislation, 20 were freight

related, according to DOT). DOT officials said that $191.8 million was

provided for these 20 freight-related projects in 9 states.5

 As of

December 31, 1995, $68.4 million, or 36 percent, had been obligated by the

states for these projects.

Our review of available information in the CMAQ, STP, and “priority

intermodal” funding categories found that federal intermodal freight

project funding obligated in roughly the first 4 of ISTEA’s 6 fiscal years

totaled $104 million.6

 Because most intermodal freight movement is done

by private companies, it is likely that the private sector would be

responsible for a large portion of investment in intermodal freight

facilities.

While some limited information on funding for intermodal projects can be

discerned from available information within DOT, DOT has not collected in a

3

The two categories of ISTEA funding we reviewed were Congestion Mitigation and Air Quality

(CMAQ) and Surface Transportation Program (STP). According to DOT, states were most likely to use

these categories to fund intermodal freight projects. Other ISTEA funding categories include National

Highway System, Surface Transportation Enhancements, and Bridge Replacement and Rehabilitation.

4

The 10 states are California, Florida, Maine, New Hampshire, New Mexico, New York, Ohio,

Tennessee, Texas, and Washington.

5

The nine states are California, Florida, Michigan, Mississippi, New York, Oklahoma, Oregon,

Pennsylvania, and Utah.

6

A state-by-state breakdown of information on intermodal freight projects is presented in appendix I.

Page 4 GAO/NSIAD-96-159 Intermodal Freight Transportation
B-260658 

data base public and private investment information on intermodal

facilities and services, as required. Without such data on funding for

intermodal freight projects, decisionmakers can not ascertain if progress is

being made toward ISTEA’s goal of improving intermodal connections.

Intermodal Freight

Transportation

Planning

In our review of how several local and regional areas are attempting to

address intermodal freight transportation needs, we found that MPOs have

been given considerable responsibility for a wide range of transportation

concerns. ISTEA not only requires that MPOs increase public involvement in

the planning process but also that MPO officials prioritize projects and

determine their financial feasibility before submitting them to state

transportation officials for inclusion in the statewide transportation

improvement plan. In addition to these broader concerns about

transportation planning, ISTEA specified 15 factors that MPOs were to

consider in preparing local plans, two of which relate to intermodal

freight: (1) “methods to enhance the efficient movement of freight” and

(2) “access to ports, airports, intermodal transportation facilities, major

freight distribution routes . . . .”

A broader perspective on the extent to which MPOs consider freight issues

in their planning activities is provided in a survey that the National

Association of Regional Councils (NARC) conducted in 1993 with the

nation’s 342 MPOs. Of the 259 MPOs that responded to that survey, 78

(30 percent) reported conducting freight-related planning activities. MPOs

reported that they took into account the following specific aspects of

freight-related planning (which have implications for intermodal freight

movement) in performing their activities: truck (65 MPOs); rail (56 MPOs);

air (40 MPOs); maritime/port facilities (27 MPOs); and border crossings (17

MPOs). In 1995, a survey of how MPOs deal with freight issues was

conducted by the Freight Stakeholders National Network (a group of

industry associations). According to that survey, 90 percent of the nation’s

largest MPOs responding to the survey reported that they lacked sufficient

data to conduct adequate freight planning.

While survey results indicate that intermodal freight-related planning is

not widespread among MPOs responding to the NARC survey, it does show

that freight issues are being considered. According to public and private

officials we interviewed, the transition to an intermodal planning

environment is a new way of thinking that is taking time to percolate

through the public sector. One reason for this is that planning has

traditionally been done by a single mode of transportation (e.g.,

Page 5 GAO/NSIAD-96-159 Intermodal Freight Transportation
B-260658 

highways), and planning has been structured in that manner. Another is

that intermodal freight innovations have often originated in the private

sector. Consequently, much of the intermodal expertise resides with

private officials. Several public sector officials mentioned that ISTEA

planning requirements spurred them to develop intermodal planning tools.7

These same officials found that developing these tools had required time

and money. For example, California’s DOT officials stated that their

intermodal management system took 2.5 years to complete and cost

$1.9 million in outside contracts. Of the 259 MPOs responding to the

National Association of Regional Councils survey, 39 percent reported

having an ISTEA intermodal management system.

Local Planning to Address

Intermodal Freight

Bottlenecks

In our visits to states that have local and regional areas that handle large

volumes of freight—California, Illinois, New York, and Texas—public and

private officials told us how intermodal freight bottlenecks near ports and

rail yards can affect traffic and freight movement. In part, our discussions

with these officials focused on the implications of such bottlenecks for

goods movement at the local, regional, and national levels as well as

specific projects proposed to address such problems. However, in these

visits we did not evaluate intermodal freight projects.

Besides handling large volumes of passenger and intermodal freight traffic,

Chicago and Los Angeles are also crucial links in what has been termed

the nation’s “land bridge” between Asia and the northeastern United

States.8

 The following examples outline the intermodal problems each city

faces and the short- and longer-term solutions proposed to address them.

• Chicago is a major hub for national and international freight movement

because it is where the nation’s eastern and western rail carriers meet.

Nearly half of the nation’s intermodal rail shipments originate, terminate,

or connect there. The Chicago Area Transportation Study, the local MPO,

7

ISTEA required that the Secretary of Transportation issue regulations for state development,

establishment, and implementation of six transportation management systems, including one for

intermodal facilities and systems. It authorized the Secretary to withhold up to 10 percent of a state’s

federal funds beginning in fiscal year 1996 if the state was not implementing the management systems.

A provision in the National Highway System Designation Act of 1995 (P.L. 104-59) allows states to elect

not to implement one or more of the management systems without jeopardizing any funding. The act

prohibits the Secretary from imposing any sanction on, or withholding benefit from, a state based on a

decision not to implement a management system.

8

“Land bridge” service over U.S. rail tracks is used for Asian-manufactured goods shipped to West

Coast ports and on to the northeastern United States because shipments usually arrive on the East

Coast 6 days to 2 weeks faster than goods shipped directly to the East Coast by water. G. Muller,

Intermodal Freight Transportation, 3rd ed. (Lansdowne, VA: Eno Transportation Foundation, 1995), 

p. 106.

Page 6 GAO/NSIAD-96-159 Intermodal Freight Transportation
B-260658 

has identified 23 major intermodal (rail/truck) yards plus 2 lumber transfer

points, 3 automobile transloaders, and 5 clusters of freight facilities that

serve ships in the Chicago metropolitan region. The “typical” truck-rail

intermodal freight facility generates considerable activity, with over

200,000 container transfers from rail to truck or vice versa per year; the

largest facility has 670,000 transfers, which represents a reported average

1,000 to 1,400 trucks entering and leaving the facility a day. It is a

year-round, around the clock industry. According to the MPO, the resulting

traffic contributes substantially to local and regional traffic congestion and

is concentrated on a small number of routes between the rail yards. Such

congestion can impede national and international freight movement,

according to industry officials.

To address these problems in the short term, Chicago’s MPO officials are

seeking funds to permit improved connections between intermodal

facilities and nearby highways that are part of the recently designated

National Highway System. The MPO has not yet developed intermodal

freight projects with ISTEA funds with the exception of one CMAQ project

approved in 1995 to make improvements at a major rail yard.9

 However,

according to a MPO official, a call for projects in February 1996 resulted 47

new project proposals. In 1992 we reported that the intermodal freight

traffic problems facing Chicago may require a longer-term solution such as

a multiuser intermodal terminal located near or in the city that would

permit rail-to-rail connections, thus eliminating crosstown drayage.10

• The Southern California Association of Governments, the Los Angeles

regional MPO, faces what it termed a problem of “national significance.”

This region has the nation’s largest concentration of intermodal freight

container movements, with 20,000 truck trips and 29 train trips per day

from the port area to Los Angeles intermodal facilities (25 percent of all

trade entering the United States by sea passes through the Los Angeles and

Long Beach ports). As a result, the region experiences traffic congestion

that is linked to air quality problems and passenger and freight delays.

The proposed intermodal solution to these problems is called the

“Alameda Corridor” project. This project involves consolidating 90 miles

of rail track owned by 3 different rail companies into one 18-mile rail

corridor to transport intermodal freight from the Los Angeles and Long

9

This project was not included in the DOT projects previously discussed because it fell outside the

period covered by our analysis.

10Intermodal Freight Transportation: Combined Rail-Truck Service Offers Public Benefits, but

Challenges Remain (GAO/RCED-93-16, Dec. 18, 1992).

Page 7 GAO/NSIAD-96-159 Intermodal Freight Transportation
B-260658 

Beach ports to distribution centers in Los Angeles. This is expected to

ease traffic congestion by taking trucks off the road and eliminating delays

at rail crossings. The project, expected to be completed in 2001, is

budgeted at $1.8 billion (ISTEA-authorized “priority intermodal” funds:

$55.4 million). Shippers we met with supported the project, noting that

these ports are significant links with Pacific Rim nations as well as with

emerging Latin American markets. They indicated that their companies are

experiencing 4 to 7 percent annual growth in shipping volume through

these ports.

To meet the growth in shipping, planners at the Southern California

Association of Governments are already thinking beyond the Alameda

Corridor. Specifically, they are examining options to consolidate three rail

freight lines operating between downtown Los Angeles intermodal

facilities, where the corridor will terminate, and the eastern end of the

Southern California Basin (the San Bernardino area). According to a 1995

MPO-commissioned report, this consolidation is motivated by two broad

public policy objectives: to (1) enhance the region’s ability to manage the

flow of international trade goods and (2) reduce emissions resulting from

idling vehicles at railroad grade crossings. However, from the perspective

of the rail and shipping companies whose operations would be influenced

by consolidation, these public policy objectives must be balanced against

the potential loss of control over shipping schedules.

Regional Intermodal

Freight Planning Efforts

In addition to the planning done by MPOs, public and private sector officials

are also identifying and addressing intermodal freight movement issues

that transcend state boundaries. For instance, at a roundtable discussion

we had with 12 public and private officials at the Port Authority of New

York and New Jersey headquarters, an official from the New Jersey DOT

suggested that while ISTEA was good at delegating authority to local

planning officials, for some transportation problems it might be better to

view the nation as a series of regions. We identified several initiatives

where states are attempting to incorporate a regional perspective into the

planning process by identifying freight concerns that cross state lines.

• The recently formed Western Transportation Trade Network, comprised of

16 western states, is identifying high-priority freight (air, land, rail, and

marine) corridors and intermodal facilities throughout the western United

States based on input from officials from state DOTs, MPOs, and the private

sector. This information will be used to assess the performance of the

Page 8 GAO/NSIAD-96-159 Intermodal Freight Transportation
B-260658 

region’s freight corridors and intermodal facilities as well as coordinate a

regional approach in addressing emerging intermodal freight needs.

• The New England Transportation Initiative (NETI), made up of six

northeastern states, has been cited by DOT as an example of how regional

intermodal planning can function. NETI’s goals include improving the

region’s mobility of persons and goods and promoting its economic

competitiveness.

Impediments to

Improving Intermodal

Transportation

In visits to several local and regional areas that handle a large volume of

freight, officials emphasized two impediments that hinder intermodal

freight transportation planning. One concerns whether public sector

officials should have access to data on freight movement that may be

considered proprietary. Another impediment concerns differing planning

horizons—the private sector’s tend to be more short term while the public

sector’s often require longer time lines to initiate projects. We also found

examples of efforts to bring together public and private officials to identify

and address specific problems concerning intermodal freight

transportation. Two DOT publications11 discuss other intermodal freight

impediments not discussed in this report. These include operational

problems at intermodal facilities (compatibility among freight tracking

systems); regulatory and institutional barriers (the lack of standardized

transportation regulations); and financial constraints (inadequate funding

for intermodal improvements).

Access to Data That

Companies Consider

Proprietary

Some transportation companies may consider specific data on private

freight movement to be proprietary. However, public planners can use

these data to identify heavily traveled highways or intersections in order to

mitigate intermodal freight bottlenecks. A representative from an ocean

shipping company we met with in southern California explained why he

believes industry officials are sometimes reluctant to disclose data. He

said that when public officials ask for “everything” on a subject (such as

port use by a particular shipper), rather than specific information,

company officials are unsure how the information may be used. He

suggested that public sector requests for such information should be more

focused; this might allay private sector doubts about how it would be

used.

11Intermodal Freight Transportation (Washington, D.C.: U.S. DOT/FHWA, Dec. 1995) and Landside

Access to U.S. Ports (Washington, D.C.: U.S. DOT/MARAD, Jan. 1993).

Page 9 GAO/NSIAD-96-159 Intermodal Freight Transportation
B-260658 

In some cases, public sector officials compile data on intermodal freight

activity from a combination of inputs. For example, in Chicago, the MPO

developed figures on transfers at key intermodal yards through various

means, including traffic counts, direct observations, and informal

interviews with workers and gate guards to present information to

company executives for verification. This information was used to

understand how intermodal freight shipments can affect local traffic

patterns.

Differing Planning

Horizons

A second impediment to improving intermodal freight transportation

concerns differing public and private sector planning horizons. According

to several MPO officials, their planning horizon extends over longer-term

periods, such as 25 years. Such a planning time frame is necessary to

conduct impact studies or obtain funding. Private officials we met with in

visits to California, New York, and Texas, on the other hand, spoke of the

difficulty of thinking long term when short-term needs are pressing. The

freight industry is also subject to fluctuations in demand for its services

because of economic conditions. Likewise, ongoing business mergers

sometimes make it difficult for private officials to predict their company’s

infrastructure needs in 15 to 20 years because they are unsure whether

their company will be active at that time in a particular market.

An example that highlights the problem involves Chicago. There, MPO

officials commented that when a major shipping company relocated from

the downtown area to a nearby suburb where rail service would be more

convenient, they were concerned about how the move would potentially

influence regional traffic patterns. In light of the volume of goods that is

expected to move through the company’s new facility and its likely impact

on future traffic patterns, the MPO’s longer-term planning task was

affected. In this case, the shipping company’s move was prompted by its

current business situation, while MPO officials had to plan for how the

company’s move would influence the region’s long-term intermodal freight

needs.

Efforts to Use

Public-Private Partnerships

to Help Overcome

Impediments

Because intermodal facilities are a nexus where public and private

interests intersect, bringing these groups together to plan or cooperate on

a project that neither could complete independently has helped achieve

intermodal goals. In visits to four areas that handle large volumes of

freight, we found several examples of such efforts:

Page 10 GAO/NSIAD-96-159 Intermodal Freight Transportation
B-260658 

• The Alliance Facility, located north of Fort Worth, Texas, is a 7,500-acre

intermodal transportation complex that began as a partnership of city,

state, and federal governments; private businesses; and individuals (total

federal investment: $55 million). Key to this effort was federal funding for

construction of a 9,600 by 150-foot runway that serves industrial, business,

and general aviation users (private airliners) rather than commercial

airliners. The Alliance complex also has an intermodal rail terminal that

the Santa Fe railroad built. This rail facility can perform an estimated

300,000 rail-to-truck transfers per year. New highway interchanges and

access routes serving the facility and intermodal terminal have been built

and were financed by Texas DOT and private investors. The Alliance

complex opened in 1989, prior to the enactment of ISTEA. According to a

representative of Alliance Air Services, the complex has experienced

increased industrial development since 1994. Additional business is

expected in 1997 when a major shipping company is scheduled to open a

southwestern hub at Alliance.

• The Chicago Area Transportation Study’s Intermodal Advisory Task Force

convenes regular meetings between public and private officials where

major issues are discussed. One tool used to help focus members’

attention on bottlenecks in intermodal transportation is a computer-based

geographic information system designed to highlight intermodal freight

problems and then help the members establish priorities for repairing

them.

• The National Freight Partnership, coordinated by DOT, consists of public

and private representatives who work at the national level to identify

major bottlenecks in the nation’s transportation system. The Partnership

provides a forum for private sector officials concerned with freight

movements to apply their expertise to national problems and establish a

dialogue with public sector leaders.

• American Trucking Associations representatives we met with told us

about the recently formed Freight Stakeholders National Network. The

Network is made up of eight national associations that represent the

freight transportation modes and manufacturers.12 Through this effort,

they hope to identify and build support for transportation improvements,

provide policy support and technical resources to make local freight

coalitions with MPOs successful, and promote best practices for

dissemination to other cities.

12The eight members of the Freight Stakeholders National Network are the Air Freight Association, the

American Association of Port Authorities, the American Trucking Associations, the Association of

American Railroads, the Intermodal Association of North America, the National Association of

Manufacturers, the National Industrial Transportation League, and the National Private Truck Council.

Page 11 GAO/NSIAD-96-159 Intermodal Freight Transportation
B-260658 

Recommendation We recommend that the Secretary of Transportation (1) establish a

definition of freight intermodal projects and (2) ensure that the data base

on intermodal investments required by title V of ISTEA be developed and

maintained in accordance with the statute.

Agency Comments

and Our Evaluation

In commenting orally on a draft of this report, DOT officials indicated that

they (1) have collected some basic information on where and how goods

were shipped in the United States, (2) have efforts underway to collect

information on long distance passenger travel by all modes, and (3) are

currently developing information on roads that link intermodal facilities

and the National Highway System. DOT officials acknowledged that the

investment data they are collecting do not meet the requirements

established by ISTEA, emphasizing the difficulty inherent in collecting

information on private investment in intermodal facilities that is part of

the ISTEA requirement. We believe a reasonable approach toward meeting

the ISTEA requirement would be to first establish a definition of intermodal

freight projects and develop the data base on public investment, and then

incorporate data on private investment that is already available or could

be readily ascertained.

Scope and

Methodology

To obtain information for this report, we (1) reviewed ISTEA and its

legislative history; (2) interviewed DOT headquarters and regional officials;

(3) interviewed state, local, and private sector officials; (4) interviewed

representatives of major transportation organizations; (5) reviewed DOT

data from fiscal years 1992 to 1995 showing the funding status of

ISTEA-authorized priority intermodal projects; and (6) reviewed volumes of

DOT data highlighting projects funded with the two categories of ISTEA

money that DOT officials believed states would most likely use to fund

intermodal freight projects. We identified projects based on the use of the

word “intermodal” in project descriptions. We did not independently verify

DOT data, but we confirmed that these were intermodal freight projects by

interviewing DOT officials at headquarters and in selected DOT regions. Our

findings may not be comprehensive because of limitations in DOT data.

We visited four states—California, Illinois, New York, and Texas—that

transportation officials and reports identified as having local and regional

areas that handle large volumes of intermodal freight and as having

considered projects to address such problems. Our site visits included

interviews with state and local government transportation officials and

meetings with private officials to discuss their perspectives on intermodal

Page 12 GAO/NSIAD-96-159 Intermodal Freight Transportation
B-260658 

transportation. In addition, in each state we visited intermodal rail, truck,

or port facilities to see firsthand intermodal problems, bottlenecks, and

areas targeted for specific projects to address these problems. However, in

these visits we did not evaluate existing or potential intermodal freight

projects. To obtain additional information on local planning efforts, we

analyzed data from the National Association of Regional Councils’ 1993

national MPO survey. We also reviewed state transportation plans and other

materials relevant to intermodal freight transportation planning and

attended professional meetings where intermodal freight issues were

discussed.

Our state visits were complemented by interviews in Washington, D.C.,

with a range of individuals at DOT, including officials from the following

offices: DOT’s Office of Intermodalism, the Federal Highway Administration

(FHWA), the Maritime Administration (MARAD), and the Federal Rail

Administration. We also interviewed officials representing the

Transportation Research Board, the Intermodal Association of North

America, the American Trucking Associations, and the American

Association of State Highway and Transportation Officials. Moreover, we

met with several private sector transportation consultants. In addition, we

reviewed recent literature on intermodal transportation.

We conducted our review from February 1995 to February 1996 in

accordance with generally accepted government auditing standards.

More detailed information on how states used ISTEA funds for intermodal

freight transportation is presented in appendix I. Information on trends

that influence intermodal transportation is presented in appendix II.

As arranged with your office, unless you publicly announce its contents

earlier, we plan no distribution of this report until 14 days after the date of

this letter. We will then send copies of this report to the Secretary of

Transportation as well as other interested parties. Copies will also be

made available to others on request.

Page 13 GAO/NSIAD-96-159 Intermodal Freight Transportation
B-260658 

Please contact me at (202) 512-8984 if you or your staff have any questions

concerning this report. Major contributors to this report are listed in

appendix III.

JayEtta Z. Hecker, Associate Director

International Relations and Trade Issues

Page 14 GAO/NSIAD-96-159 Intermodal Freight Transportation
Page 15 GAO/NSIAD-96-159 Intermodal Freight Transportation
Contents

Letter 1

Appendix I 

Intermodal Surface

Transportation

Efficiency Act Funds

Used for Intermodal

Freight

Transportation

18

Status of Projects Funded Under ISTEA 18

Status of Priority Intermodal Projects Authorized in ISTEA

Legislation

19

Appendix II 

Intermodal Freight

Transportation Trends

20

Appendix III 

Major Contributors to

This Report

22

Tables Table I.1: Summary of Intermodal Freight Transportation

Projects Funded With Two ISTEA Financing Funds, as of

September 30, 1995

18

Table I.2: Status of ISTEA-Designated Priority Intermodal

Projects, as of December 31, 1995

19

Abbreviations

BTS Bureau of Transportation Statistics

CMAQ Congestion Mitigation and Air Quality

DOT Department of Transportation

FHWA Federal Highway Administration

GAO General Accounting Office

MARAD Maritime Administration

ISTEA Intermodal Surface Transportation Efficiency Act

MPO Metropolitan Planning Organization

NARC National Association of Regional Councils

NETI New England Transportation Initiative

STP Surface Transportation Program

TEU Twenty-foot equivalent container units

Page 16 GAO/NSIAD-96-159 Intermodal Freight Transportation
Page 17 GAO/NSIAD-96-159 Intermodal Freight Transportation
Appendix I 

Intermodal Surface Transportation

Efficiency Act Funds Used for Intermodal

Freight Transportation

Based on our review of Department of Transportation (DOT) data and

interviews with public and private sector officials, we attempted to

identify intermodal freight projects financed with the Intermodal Surface

Transportation Efficiency Act (ISTEA) funds not specifically targeted for

priority projects (see table I.1).

Status of Projects

Funded Under ISTEA

The 23 projects in 10 states represented a range of improvements to

facilitate intermodal freight transportation. Some projects were funded

with as little as $40,000, others with as much as $11 million. For instance,

state officials in New York used $6 million in ISTEA funds to purchase a

barge and to improve operations between the Red Hook container barge

terminal in Brooklyn, New York, and Port Elizabeth, New Jersey. These

projects were expected to enhance the competitiveness of the bistate port

facilities as well as eliminate an estimated 54,000 truck trips from the

major regional highways of New York and New Jersey annually, thus

reducing traffic congestion and improving air quality.

Table I.1: Summary of Intermodal

Freight Transportation Projects

Funded With Two ISTEA Financing

Funds, as of September 30, 1995

Dollars in millions

State

Number of

intermodal

projects

Total

intermodal

project costs

ISTEA funds

obligated to

intermodal

projects

Total ISTEA

funds

allocated to

state

California 2 $0.5 $0.3 $6,408

Florida 1 0.6 0.5 2,869

Maine 3 2.7 2.0 339

New Hampshire 2 1.1 0.9 326

New Mexico 2 4.5 3.7 721

New York 5 12.0 9.6 3,537

Ohio 2 50.2 16.3 2,525

Tennessee 2 0.2 0.2 1,418

Texas 2 0.5 0.4 4,477

Washington 2 2.0 1.7 1,311

Total 23 $74.3 $35.6 $23,931

Note: The two types of ISTEA funds were (1) Congestion Mitigation and Air Quality and

(2) Surface Transportation Program.

Source: GAO summary of data provided by DOT’s Office of Information Management and

Systems Control.

Page 18 GAO/NSIAD-96-159 Intermodal Freight Transportation
Appendix I 

Intermodal Surface Transportation

Efficiency Act Funds Used for Intermodal

Freight Transportation

Status of Priority

Intermodal Projects

Authorized in ISTEA

Legislation

Section 1108 of ISTEA authorized funds to various states for “priority

intermodal projects,” commonly referred to as “demonstration” projects.1

For projects specifically related to improving intermodal freight

transportation, ISTEA authorized $191.8 million for 20 projects in 9 states.

The projects include a variety of improvements to interchanges and other

roads in locations such as the Alameda Corridor in southern California and

improvements to airport access in such cities as Detroit, Michigan;

Pittsburgh, Pennsylvania; and Jackson, Mississippi. According to a DOT

official, the priority projects are in various stages of development. The

official told us that ISTEA authorized only enough money to start the

projects and that it is the responsibility of each state to obtain funding to

complete the projects. While some states have provided financing for

these projects, others have not.

Table I.2 contains a breakout of the total number of priority intermodal

freight projects in each state, the total contract authority for the projects,

and the amount of funds obligated, as of December 31, 1995.

Table I.2: Status of ISTEA-Designated

Priority Intermodal Projects, as of

December 31, 1995

Dollars in millions

State

Number of priority

projects

Total funds

authorized Obligated funds

California 8a $82.7 $31.0

Florida 1 6.9 0.3

Michigan 2 37.2 7.8

Mississippi 1 3.0 0.6

New York 1 15.3 3.0

Oklahoma 1 2.4 2.5

Oregon 1 2.1 0.5

Pennsylvania 4 41.2 22.7

Utah 1 1.0 0

Total 20 $191.8 $68.4

aOf the total projects authorized in California, five were associated with improvements related to

the Alameda Corridor. These five projects were authorized $55.4 million, of which $18.5 million

was obligated as of December 31, 1995.

Source: GAO summary of data provided by DOT’s Office of Information Management and

Systems Control, as of December 31, 1995.

1

“Priority intermodal projects” represent a broad subgroup of demonstration projects included in

ISTEA legislation. By way of reference, ISTEA contained over 500 specifically named demonstration

projects.

Page 19 GAO/NSIAD-96-159 Intermodal Freight Transportation
Appendix II 

Intermodal Freight Transportation Trends

Several factors have transformed the nation’s intermodal freight

transportation industry over the past 20 years; these factors are expected

to influence it in the future. Among them are (1) the need to reduce costs

and streamline production using improved inventory management, (2) the

partial deregulation of the U.S. rail and trucking industries, and (3) the use

of computer-based technologies.

Demands will continue to be placed on the nation’s transportation system

for efficient freight movement so that companies can compete in the

global marketplace. For instance, the time it takes warehouses to fill

orders is expected to decrease by 15 to 20 percent during the next 5 years,

and transit times are expected to be reduced between 5 and 10 percent.

Moreover, inventory turnover is expected to increase by about 10 percent,

and the percent of products shipped “just in time” is expected to grow

from 28 to 39 percent.1

 According to the Intermodal Association of North

America and the National Industrial Transportation League, the estimated

intermodal market share of trailerload shipments moving 500 miles or

more increased from 10 percent in 1991 to 18 percent in 1994 and is

projected to rise to 25 percent by 1997.2

 Overall, however, trucking is

currently the most frequently used freight transportation mode because

trucks provide convenient pickup and delivery of shipments.

Partial deregulation of the transportation industry in 1980 has also

influenced the intermodal freight industry.3

 One outcome of deregulation

that continues to influence the freight industry is strategic alliances among

carriers that have been made to capitalize on each mode’s strength. For

example, truckload carriers provide door-to-door access to businesses,

while rail carriers—particularly double-stacked intermodal

containers—provide low-cost, long-distance service. A 1995 study

discussed what these transport alliances portend for intermodal shipping,

taking into consideration the business environment that stresses flexibility

in suppliers and product lines, more frequent shipments of goods in

smaller lot sizes, and a more diverse mixture of commodities in each

1

See Intermodal Freight Transportation (Washington, D.C.: DOT/Federal Highway Administration,

1995), p. 1-8.

2

Intermodal freight shipments become more economical at 500 miles; shipments beyond that distance

often mean that rail transport is an option, with goods being placed on trucks for final delivery. For

distances under 500 miles, trucks usually carry the freight, although this may depend on the type and

value of goods being shipped.

3

More detailed information is provided in our report Railroad Competitiveness: Federal Laws and

Policies Affect Railroad Competitiveness (GAO/RCED-92-16, Nov. 5, 1991).

Page 20 GAO/NSIAD-96-159 Intermodal Freight Transportation
Appendix II 

Intermodal Freight Transportation Trends

shipment. The study concluded that the use of intermodal containers will

expand for both domestic and international shipments.4

Apart from noting consolidation among domestic companies, shipping

officials we interviewed in southern California mentioned ongoing

mergers among the world’s major ocean carriers. As consolidation

continues, companies are seeking greater economies of scale by

purchasing ships capable of carrying larger loads. While current ships

carry 3,000 to 4,000 20-foot equivalent container units (TEU), shippers said

that 5,000 TEU vessels are on order. The implication is that port gate

structures will have to be improved in order to accommodate the larger

vessels. Further, the loads these larger ships will carry will place increased

demands on the infrastructure surrounding ports because of the pressure

to unload ships quickly and move cargo to its destination.

Technological innovations linked to computers and satellites have also

influenced how intermodal freight shipments are handled. These

innovations include bar coding that allows shipments to be verified and

tracked, electronic data interchange that permits on-line transmission of

business data and documents, and in-vehicle navigation systems that

identify the most direct routes to avoid congestion and delays.

Improved intermodal freight transportation can result in economic

benefits such as lower transportation costs. This, in turn, can enhance the

productivity and competitiveness of U.S. businesses. According to

transportation planners, other benefits from intermodalism include

improved air quality and environmental conditions through reductions in

energy consumption and traffic congestion. Other benefits might include

increased employment from jobs associated with constructing intermodal

facilities and greater employment at intermodal facilities themselves.

4

U.S. - Mexico Trade and Transportation: Corridors, Logistics Practices, and Multimodal Partnerships

LBJ School of Public Affairs, University of Texas at Austin (Austin, TX: 1995), p. 45.

Page 21 GAO/NSIAD-96-159 Intermodal Freight Transportation
Appendix III 

Major Contributors to This Report

National Security and

International Affairs

Division, Washington,

D.C.

Susan S. Westin

Phillip R. Herr

Becky K. Kennedy

Rona Mendelsohn

Office of the General

Counsel

Richard Burkard

(280120) Page 22 GAO/NSIAD-96-159 Intermodal Freight Transportation
Ordering Information

The first copy of each GAO report and testimony is free.

Additional copies are $2 each. Orders should be sent to the

following address, accompanied by a check or money order

made out to the Superintendent of Documents, when

necessary. VISA and MasterCard credit cards are accepted, also.

Orders for 100 or more copies to be mailed to a single address

are discounted 25 percent.

Orders by mail:

U.S. General Accounting Office

P.O. Box 6015

Gaithersburg, MD 20884-6015

or visit:

Room 1100

700 4th St. NW (corner of 4th and G Sts. NW)

U.S. General Accounting Office

Washington, DC

Orders may also be placed by calling (202) 512-6000 

or by using fax number (301) 258-4066, or TDD (301) 413-0006.

Each day, GAO issues a list of newly available reports and

testimony. To receive facsimile copies of the daily list or any

list from the past 30 days, please call (202) 512-6000 using a

touchtone phone. A recorded menu will provide information on

how to obtain these lists.

For information on how to access GAO reports on the INTERNET,

send an e-mail message with "info" in the body to:

info@www.gao.gov

or visit GAO’s World Wide Web Home Page at:

http://www.gao.gov

PRINTED ON RECYCLED PAPER
United States

General Accounting Office

Washington, D.C. 20548-0001

Official Business

Penalty for Private Use $300

Address Correction Requested

Bulk Rate

Postage & Fees Paid

GAO

Permit No. G100