May 10, 2021

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Logistics panel finds need for additional funding to efficiently move freight around Georgia | Business

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A slate of recommendations from the Georgia Freight & Logistics Commission will go to the General Assembly when it opens its 2021 session Monday.

The state must pursue new sources of public and private funding to make the improvements needed to move an exploding volume of freight through Georgia efficiently, it said in a report released last week.

It’s proposing the General Assembly commit $1 billion to $1.5 billion a year to a dedicated fund for freight projects across the state.

In addition to that public money, the panel suggested legislation authorizing the State Road and Tollway Authority to tap into private financing to help build freight and logistics improvements such as rail projects and truck parking.

“There are some huge freight and logistics challenges ahead of us,” Brad Skinner, a board member at Denver-based freight railroad operator OmniTrax and a member of the commission, said during the panel’s final meeting last month. “(But) our traditional sources of revenue are drying up.”

An estimated 25% of the Rome-Floyd County Development Authority’s projects involve logistics companies, warehousing, distribution and fulfillment centers, said its president, Missy Kendrick.

“Moving inventory is paramount to almost every industry, whether it’s an expansion or a new location,” she noted. “They’ve got to get their product to market, (via) their distributors or their own distribution center.”

Kendrick said that completing the bypass system around Rome would be one of the biggest ways to help the movement of freight in the area. Funding for the section from U.S. 27 South to Ga. 101 is slated for FY 2024 while the section from Ga. 101 to U.S. 411 is on the books for FY 2026.

The construction budgets for those two legs of the bypass have been estimated at close to $173 million by the Georgia Department of Transportation.

Bartow County sole Commissioner Steve Taylor, a member of the Freight & Logistics Commission, said both state and local communities are going to have to look for sources of funding other than motor fuel taxes in the near future.

“That’s got to happen someday because it’s getting to be a smaller piece of the pie every day,” Taylor said.

The commissioner said he doesn’t believe increasing the tax would be a politically appropriate move. He referred to the Transportation Funding Act of 2015, which raised the gas tax and draws revenue from hotel stays, electric vehicles and other areas to pay for roads and bridges.

“That was a real hot potato for a lot of people and I don’t know that we’re ready to go down that road again for sure,” Taylor said.

The legislature created the commission two years ago to look for ways to improve the flow of freight through Georgia.

The commission’s mission gained greater urgency last year as the coronavirus pandemic forced Americans accustomed to shopping at brick-and-mortar stores to go online for goods and services. For example, online spending last May was up 77% over May of 2019, according to the report.

The commission’s final report recommended an array of options for new sources of public funding for freight projects, including broadening the uses of motor fuel taxes – currently limited by state law to roads and bridges — to rail projects.

Taylor said expanding the use of rail lines to ship freight seems like a cheaper, more cost-effective solution than building additional highways.

“When we do that we’re going to see some 10,000 foot trains out there … blocking the roads forever,” Taylor said. “There’s a consequence to every action they take, but moving more freight on rail is a better short-term answer to getting more freight off the highways.”

Taylor said use of the rail lines is much safer than putting more trucks on the highways and significantly less expensive.

“Of course speed to market on roads is better, so that’s why we still have all this traffic on the roads,” he said. “But I think you’ll start to see more funding for the railroads in the future. That’s most definitely coming.”

The panel also suggested imposing mileage-based user fees, a consumer-based tax assessment on activities such as home deliveries from e-commerce providers, or a statewide assessment on warehouse distribution facilities.

Taylor said that if there are fees placed on the logistics companies themselves, the money should be reinvested in the communities where those companies are located. The commissioner also said he doesn’t want to see the funding come from an additional tax on homeowners.

The proposed SRTA legislation would expand the state agency’s authority from the toll lanes in metro Atlanta it currently oversees to let it enter into public-private partnerships to finance and build freight projects.

“SRTA, in conjunction with GDOT, has demonstrated a strong proficiency in executing major infrastructure projects with private financing components, and their scope should be expanded to include freight and logistics projects as well,” according to the report.

The COVID-19 pandemic has exacerbated the logistics issue.

Zach Strickland, a market analyst for Freightwaves.com, wrote that, between Christmas and New Year’s Day, a wave of unexpected demand as a result of the pandemic depleted warehouses for many internationally sourced items.

“The biggest reason for the wave of consumer purchases has been driven by people spending more time at home. Demand for these items has not only increased but blown through ‘normal’ growth curves,” Strickland reported.

The commission also identified shortages of both truck parking and commercial truck drivers as major challenges hampering the smooth movement of freight. The DOT is conducting a study of the truck parking issue, looking to expand the supply of spaces beyond those found at truck stops and interstate rest areas.

The report noted that commercial truck driving schools were forced to close last year when the pandemic hit, hurting efforts to train new drivers at a time COVID-19 was increasing the demand for them.

Georgia Northwestern Technical College President Heidi Popham said the school offers a commercial truck driver training program at its Rock Springs campus in Walker County.

“It’s a very popular program we run,” Popham said. “We offer eight opportunities throughout the year for program enrollment.”

The college offers two daytime programs and one evening program during the spring and fall semesters and two daytime programs during the summer. Each eight-week program is currently limited to 10 students.

Popham said that at times it has been a challenge to meet the interest from prospective students. The program has only one full-time faculty member with several adjunct instructors.

At this point, Popham said, the school has a 100% placement rate for graduates.

The freight commission recommended creating a workforce development grant program to help the commercial trucking industry work with public high schools in recruiting potential future drivers.

Rome News-Tribune Associate Editor Doug Walker contributed to this report.

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