The stretch of Interstate 81 running through western Virginia passes some of the East Coast's most beautiful landscape-rolling hills, broad valleys, mist-shrouded mountains. But these days, drivers along I-81 won't have time to look at the scenery. That's because even this rural strip of highway is fast becoming congested with tens of thousands of trucks, already some 20 percent more than it was designed to carry and more than a 300 percent since 1985. According to a study by the Virginia Department of Transportation, by 2035 more than 90 percent of the highway will be congested.

Perhaps the most surprising part of I-81's surge in traffic volume is that this Virginia segment is decidedly rural; the only sizeable city it passes is Roanoke, population 94,000. But transportation experts say that rural congestion is just one more sign that America's highways are fast reaching capacity-and that unless something is done soon, the system that once facilitated the country's economic growth will begin to strangle it.

"It's dismal. Just dismal," said Sarah Catz, director of the Center for Urban Infrastructure at the University of California-Irvine. "We're expecting growth of trade and at ports to more than double. Without building capacity, we're building ourselves out of a good economy."

On July 28, Congress finally approved the $286 billion highway bill, which had been delayed for two years and at one point was so large-nearly $300 billion-that it faced an almost certain veto from a cost-conscious President Bush. After seven extensions and lengthy negotiations, the House and Senate agreed on a compromise bill that met Bush's expectations.

While industry experts are happy to see the bill finalized-after a two-year standoff-they are also uniformly critical of its contents, most notably its enormous pork barrel and non-highway earmarks. "We're looking at a highway bill that's very expensive, but it mandates about 20 percent of highway-use revenues be diverted to non-highway uses," says Tom Vandenberg, general counsel for trucking outfit Schneider National.

What's more, while the bill includes such painful planks as a costly fuel surcharge, Congress excluded many of the trucking industry's highest priorities, such as raising weight limits and expanding hours of service, steps which are simple to implement and could result in enormous efficiency gains.

Yet another beef with the bill is that, despite tensions between the White House and Congress over the final price tag, the bill simply doesn't have enough money to meet America's highway needs. "It basically does not do the job that it needs to do in terms of getting roads built," says Mike Regan, CEO of TranzAct, a third-party logistics (3PL) provider. "The Bush administration has said it's so much bigger than the original bill, but if you take a look at it, inflation-adjusted, it doesn't keep up. That said, looking especially at what the House version has done, there is too much pork, something like $12 [billion] to $14 billion in pork."

Adds Darrin Roth, director of operations for the American Trucking Associations: "What Congress needs to do is reprioritize. States have a lot of flexibility to do whatever they want with the funds, whether it's spending on local roads, transit programs, bike paths, or other projects that may not be in the national interest. To us the primary goal for the federal government should be an efficient national highway system."

Administration officials defend the bill as a prudent expenditure of funds in a time of tight fiscal resources-a point even its critics concede. But, says John Varda, a transportation lawyer with the Central Corridors Freight Committee, a Madison, Wisconsin-based organization. "It's the reality of what's available, and what the administration will accept."

Indeed, the bill's final structure makes obvious the impending crisis on America's highways, and underlines the fact that even simply maintaining the current system is beginning to look less like a reasonable goal. "We're just waiting for entire nation's highway system to come to a standstill," says Jake Jacoby, executive director for Americans for Safe and Efficient Transportation. "Then we're going to ask, "Why didn't anyone do anything about it?'"

Things weren't always this bad

Even into the 1990s, the United States actually experienced an infrastructure surplus-so much so that railroads spent much of the 1980s and 1990s reducing their underutilized miles of rail. That infrastructure surplus, in turn, made possible the dramatic shift to just-in-time delivery strategies-which replace costly inventories with a constant stream of deliveries-by broad swaths of the business sector, saving the economy billions.

But the surplus began to disappear with the sudden surge in imports, particularly from East Asia, over the last 20 years. Worldwide, container trade has grown by an annual 9.5 percent since 1980, with a predicted 13 percent increase in 2005 and between 6 and 7 percent in 2006. Without sufficient investments in infrastructure capacity, what was once a surplus quickly turned into a deficit.

All of this has put enormous pressure on ports and terminals, many of which-especially on the West Coast-are operating at 65 to 80 percent capacity. Because that capacity is very hard to expand, shippers fear that American ports could reach a meltdown point within the decade, especially in the wake of recent massive dockworker strikes on the West Coast.

Port capacity might be less of an issue, though, if the means existed to move freight in and out of them more efficiently. But in many cases, they don't. Not only has rail capacity shrunk in recent years, but because so many ports are located in high-density areas, it's hard to expand beyond the number of existing tracks. "Many Southern California rail lines are still single track," says UC-Irvine's Catz, "and often you have housing developments that have been built next to them."

Rail's limited capacity means that the highway system has borne much of the new import volume. But many of the roads connecting to terminals have received little investment in recent years.

"There are many areas that need capacity expansion and haven't received it," says ATA's Roth. "We're finding bottlenecks that slow deliveries down, and that adds costs in terms of fuel use, driver cost, and lost productivity."

Nationwide, industry experts say, the nation's highway system has expanded capacity by a mere 3 percent, even as volume has grown in some places by 50 percent-including 23.8 million trucks used for business purposes, a number expected to double by 2020. "The transportation system as it exists today, at least the highway system, is treading water," says Vandenberg.

The surge in truck traffic has created a wave of congestion in cities around the country, the worst, according to a study by Texas A&M's Texas Transportation Institute, being Los Angeles, Washington, D.C., San Francisco-Oakland, Miami and Chicago. And as volumes increase, congestion is growing in places once thought too out of the way for most trucks-Virginia's I-81, for example.

While the delays caused by congestion are painful-one expert puts the cost at $70 billion annually, mostly in lost productivity and fuel-even worse is the unpredictability. Sometimes congested traffic moves smoothly, if somewhat more slowly. But unlike in the case with low-volume traffic, even a minor accident can shut down a congested highway. "If there's an accident on an open road, it's not going to make a difference," says Roth. "But if there's an accident on a congested road, that can tie you up for hours."

And it's that unpredictability, more than anything, that could quickly signal an end to the just-in-time economy. Suppliers are expected to guarantee a product delivery within a narrow time window; if, because of congestion, they can't, they will have to return to keeping larger inventories. "To a degree it's happened already," says Vandenberg. "Eventually what happens is that organizations are going to have to maintain higher inventory levels because transit times will increase and become more uncertain. And that will again push up logistics costs."

Ultimately, such costs could easily ripple through the economy, driving up consumer and manufacturer prices alike and eroding the very assets that make America economically viable. "We are basically squandering our competitive advantage by not focusing on highways," says TranzAct's Regan.

What's the solution?

Industry experts emphasize that there is no single response to the problems facing the nation's highway system. At the same time, though, they say that what's needed most of all is a change of mindset, a focus on doing more with what exists rather than waiting for the federal and state governments to pump up capacity.

"We're looking at, on a regional basis, how do we squeeze additional capacity out of existing infrastructure, and how can we make good decisions about integrating the system for freight, about how to move among modes to get the best out of the system," says Varda.

Varda and others argue that the key to reducing congestion is to ease the chokepoints where rail, water and trucking come together. He says that the lack of coordination between the highway departments and railroad companies results in poor decision-making, wasted investments and unnecessary delays at already high-volume locations like Chicago and Los Angeles. "We need ways to talk to each other," he says. "We've got to get through the cultural barriers so that the rail and public policy people can talk to each other about where to make the best investments."

Related to this, says Vandenberg, is the need to look regionally, not just locally or state-by-state, in making infrastructure decisions. "There are opportunities for far more intelligent spending with a more regional perspective," Varda says. One such program is the Chicago Regional Environmental and Transportation Efficiency (CREATE) project, which studies ways for both sides to make investment decisions based on regional, "interdisciplinary" metrics. Indeed, one element of the current highway bill that gets high marks from industry leaders is a $13 billion program to encourage more efforts like CREATE around the country.

There are specific changes on the table as well. Some are coming online already, such as electronic information boards along highways to warn drivers of construction, accidents or congestion ahead, or global positioning system (GPS) devices on trucks and trains. Another is to raise the weight limit for trucks on interstates, currently at 80,000 pounds, to 97,000 pounds, with the addition of a third axle to lesson the impact of the additional weight.

Jacoby concedes that raising weight limits would not solve the entire problem, because much of what ships over America's highways is bulky, lighter-weight consumer goods rather than the sort of heavy products-steel and lumber, for example-which could benefit from the increase. Nevertheless, says TranzAct's Regan, higher weight limits means "you're talking about a $15 billion savings opportunity."

One controversial proposal is to soften hours-of-service regulations, which determine how long a driver can be on the road. Because of congestion, the trucking industry says, those regulations are starting to cut into productivity, and some have called for rules allowing truckers to exempt time they spend waiting for loads at ports and intermodal terminals.

Another solution being floated is to create truck-only lanes along interstates, funded through tolls. Both the Senate and the House versions of the highway bill include pilot programs for truck-only tolling, but they differ in the restrictions placed on whether states can toll existing roads or only new ones.

The trucking industry is cautiously supportive of some toll proposals, but adamantly opposes any effort to require trucks to travel in specific, tolled lanes, such as a proposal to create a mandatory truck lane along Virginia's I-81. "The big problem, other than equity, is that there would be tremendous amount that diverts to other roads," says Roth. "Some would go to parallel two-lane roads, which have higher accident rates...which are not built to handle that traffic."

Sidebar: The Politics of the Highway Bill

In September 2003, scores of transportation and construction industry lobbyists descended on Washington to make sure their pet projects were included in the enormous $375 billion highway bill then wending its way through Congress as the previous multi-year appropriation bill expired.

In fact, it took two more years, four bills, and two House-Senate conference committees before the bill-with a final price tag of $286 billion-passed as Congress adjourned at the end of July. Indeed, the story of the six-year transportation bill is an object lesson in how electoral politics, lobbying dollars, pork barrel priorities and the federal deficit can conspire to derail even front-burner legislation.

"This transportation bill shows that Congress and the administration are still not serious about taking steps needed to address the crisis in American surface transportation," says Rob Atkinson, vice president and director of the Technology and New Economy Project at the Progressive Policy Institute, a Washington think tank. "They continue to let ideology and special interests trump creating the kind of legislation that would at least begin to make in dent in ever growing levels of traffic congestion."

The initial $375 billion proposal was based on estimates by the Department of Transportation that the country would need to increase its infrastructure spending by some 40 percent during the next six years. But perhaps because so much of the bill was derided as pork barrel spending-multimillion-dollar bridges in the rural northwest, for example-the White House attacked it as fiscally irresponsible and threatened a veto of any amount over $256 billion.

The country's infrastructure needs took a back seat to electoral politics. Bush didn't want to veto a bill that would create tens of thousands of construction jobs, but he also didn't want to sign more deficit-swelling legislation, either. So he leaned on his Congressional allies to let the bill die in conference. Which it did. In the end, Congress's electoral priorities demurred to the president's.

When Congress returned in early 2005, it thus faced the daunting task of starting over. The good news was that, with the election over, the White House was willing to accept a higher ceiling, and in March the House passed a $284 billion version. But in May the Senate passed a $295 billion version-without pork barrel set-asides, making it likely that the number would grow in conference and reviving a showdown with the White House. At the same time, several legislators from "donor" states-which pay more into the federal highway coffers than they receive-were holding up negotiations by pushing for an increase in the guaranteed percentage their states would receive, from 90.5 percent to 92 percent. (The final bill put off the formula change until 2008.)

By July, the Senate and House were deep in talks over reconciling their two bills, and though few major disagreements emerged it became a race against the clock to finish before the end of the seventh funding extension, on July 27. The bill, at $286.4 billion, finally passed the House on July 29, and it won Senate approval a few hours later. Though still above the White House's limit, Bush signed it into law a few days later.

Sidebar: What Needs to Be Done?

"To me, it's about congestion and the impact that has on productivity. Time is money. If you've got a fleet of 4,000 drivers and you could reduce the amount of time they are slowed every day by traffic by even a few minutes, think how much you could improve your driver productivity. It would have quite an economic impact. We're going to have to consider more than simply adding more lanes. We need better interstate systems with better management and technology."
-Scott Wolf, Vice President, Corporate Services, Averitt Express

"Probably what's most affecting us right now is fuel. The cost of fuel has gotten to the point where it's driving companies out of business. It would be great if we had a government that would help with that, in getting the fuel cost down. Another problem is driver regulations, especially hours of service rules. They have their pros and cons, but they hinder our ability to perform. "
-Joe Perez, Director of Ground Transportation, Pilot

"Too often things are done state by states without a lot of regional planning. To the extent there is regional planning, it's focused on the mobility of people, rather than freight. But there are opportunities for far more intelligent spending with a more regional perspective. This might involve public-private partnerships, with respect to intermodal facilities."
-Tom Vandenberg, General Counsel, Schneider National

"First, we need to acknowledge that we must flow resources to where resources are most needed. I'd identify where we have the most immediate congestion issues and build highways to address them. Second, I'd take advantage of productivity enhancements and improvements. Third, I'd codify and clean up lingering questions associated with the movement of materials."
-Mike Regan, CEO of TranzAct Technologies and Chairman of the American Society of Transportation and Logistics Professionals

"The US economy is best served by easing congestion to allow freight to move smoothly and that is accomplished by ensuring that Highway Trust Funds are used explicitly for highway projects. Reliance on tolls as a funding mechanism, on the other hand, is counterproductive---they are an inefficient funding method that ultimately increases consumer costs for everything shipped by truck."
-Danny Loe, Director, Marketing and Public Relations ABF Freight System