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What is strategic trade policy

what is strategic trade policy


Our Nation's transportation community is entering an unprecedented era of change. The Federal Highway Administration (FHWA) is, and will continue to be, a leader in shaping the future of highway transportation in our country. As we look to the future, the FHWA will approach new opportunities with the same optimism and confidence that our organization demonstrated with the successful completion of the Eisenhower Interstate System.

In this dynamic time, we see the importance of developing a clear and strategic direction for the Agency. Based on an assessment of the Strengths, Weaknesses, Opportunities, and Threats (SWOT) in our organization's operating environment, the FHWA Leadership Team met in February 2008 to develop a new strategic plan framework. The conversation continued with the extended Leadership Team including all of our senior executives and division administrators at the annual FHWA Spring Business Meeting in April 2008. Our employees were asked to comment on the proposed strategic plan framework and their feedback was considered by Goal Teams, which consisted of FHWA executives and managers.

The resulting FHWA Strategic Plan provides a flexible framework with four goals that encompass the various dimensions of our organization's role and responsibilities:

  • National Leadership
  • Program Delivery
  • System Performance
  • Corporate Capacity

As the core of FHWA's mission is to Improve Mobility on our Nation's Highways, a primary focus of the strategic plan framework is improving highway system performance—particularly its safety, reliability, effectiveness, and sustainability. To meet our legislative responsibilities, FHWA resources will be committed to developing and delivering existing and future Federal Highway Programs through successful partnerships, value-added stewardship, and risk-based oversight. FHWA must become a more central contributor and serve as a thought leader in the ongoing policy discussions that aim to address the future of the national transportation system. Underpinning this effort will be a renewed focus on enhancing organizational capacity, which translates into having a skilled workforce and supporting systems that are optimally positioned and equipped to deliver the FHWA's mission.

The FHWA Strategic Plan will be used to direct the development of the FHWA's annual Strategic Implementation Plan and influence Office-level Unit plans. The transition to the new plan framework begins in FY 2009.

FHWA's Future Operating Environment

A wide array of considerations and assumptions about current and emerging trends are strategically relevant to assessing FHWA's future operating environment over the next decade. (Note: This section was last updated in July 2012 and will be revised at a later date.)

Key Influencing Trends

Demographic Shifts. The U.S. population is expected to expand from 307 million today to 439 million by 2050, with growth concentrated in the South and West. More than 70 percent of population growth, and 80 percent of economic growth, will occur in metropolitan areas. The Nation's mega-regions will be the operative regions when competing in the future global economy. A challenge is to determine how to foster greater efficiencies in these mega-regions by creating a stronger infrastructure and technology backbone in the Nation's surface transportation system.

Globalization of Economies. The advent of a truly global economy means that goods and services are being shipped over longer distances. This is fueling strong growth in freight movement and increasing the link between transportation and economic competitiveness. Due in part to increased trade between the United States and its North American Free Trade Agreement partners for example, surface transportation use increased dramatically in the past ten years nearly 90 percent from 1997 to 2007.

Economic Competitiveness and Productivity. Marginal reductions in transportation costs for goods movement are critical to the economic vitality of our Nation. In addition to direct user benefits, highways must be recognized as an important contributor to industry productivity and competitiveness. Since the inception of the Interstate system, U.S. industries have realized production cost savings averaging 18 cents annually for every dollar invested in the road network.

Role of Trade. Trade as a percentage of U.S. Gross Domestic Product increased from 13 percent in 1990 to 31 percent in 2008, and is expected to reach 35 percent by 2020. This growth in trade will increase both shipping container volumes as well as truck freight. U.S. container traffic increased from 8 million units in 1980 to 42 million units in 2005, and is expected to hit 110 million units by 2020. The average length of haul for trucks has increased 80 percent from 263 miles in 1970 to 473 miles in 2000.

Future Funding Needs. The future cost to maintain and improve the Nation's surface transportation systems will exceed current funding at all levels of government. Current federal tax receipts will not be sufficient to sustain funding levels authorized in the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users. Between 2007 and 2026, the total annual investment needed to maintain the condition of highways and bridges over a 20-year period is estimated to be approximately $105.6 billion (in 2006 dollars). Motor fuels taxes currently fund 90 percent of the Federal Highway Trust Fund and likely will remain a critical funding source in the near term, but may become less viable as people and businesses shift to using more efficient and alternative fueled vehicles. Any substantial increases in future funding will likely come from a combination of revenue mechanisms and the use of a mileage-based user fee on miles traveled as a replacement or supplement to motor fuels taxes. The future will also bring greater use of tolling to fund new projects in a variety of ways, including the application of variable pricing (i.e. congestion pricing). In addition, some States and local governments will likely make greater use of public-private partnerships to finance and operate needed infrastructure.

Public View of Transportation. The 2005 FHWA Traveler Opinion and Perception Survey found that 69 percent of travelers are satisfied with the transportation system, up from 50 percent in 1995. Like other polls, the survey found strong support for future transportation projects. In the 2007 Growth and Transportation Survey sponsored by the National Association of Realtors and Smart Growth America, a large majority emphasized the need to improve public transportation and build pedestrian-friendly communities; and only 21 percent believe that building new roads provide the best solutions. The seemingly contradictory results from these two surveys suggests that the public perception of transportation is likely to be more volatile and driven by events such as rising gasoline prices in coming years, particularly since transportation costs are a major expense in households.

Climate Change. The transportation sector is the largest end-use producer of carbon dioxide emissions in the United States. Furthermore, carbon dioxide emissions from the transportation sector increased by 27 percent between 1990 and 2007, and will continue to increase,

though at a declining rate. There is growing recognition that new solutions to minimize the impacts of climate change will be needed in order to reduce transportation's contribution.

Highway Transportation Trends

Highway System Performance. Total vehicle miles traveled (VMT) on all U.S. public roads, which is a direct measure of demand and use of transportation facilities, increased from about 1.5 trillion miles in 1980 to nearly 3 trillion miles in 2010. During that same period, truck travel increased by 105 percent, while passenger car miles increased 95 percent. Based on historical trends, traffic congestion in metropolitan areas will continue to worsen, primarily in expanding metropolitan areas, due to population growth, urbanization, increasing freight traffic, and roadway maintenance activities.

Highway and Bridge Conditions. A comparison between road conditions in 1990 and 2008 indicates that while Interstates and other higher order systems have improved, conditions on lower-order systems have generally stayed the same or declined, particularly in urban areas. In 2009, more than 11.7 percent of the Nation's bridges were structurally deficient and 14.2 percent were functionally obsolete. If relatively similar levels of capital investment continue, road conditions will worsen by about 3 percent by 2028. At similar levels of investment, there would still be a $107.6 billion backlog of bridge improvements by 2028.

Traffic Safety. The Nation continues to suffer tremendous loss of life on our highways in spite of gains in seat belt usage, air bags, and other safety equipment in vehicles, as well as complementary improvements in roadway and roadside design. More than 33,000 people died in 2010 due to traffic related crashes with about 14 percent being attributed to cyclists and non-motorist deaths. Young drivers continue to die at higher rates than any other age group, with nearly 30 percent of these deaths being people younger than 25 years old. Our Nation expends $230 billion per year on crash related costs.

Highway Industry Trends

Construction Cost Inflation. Construction costs have escalated greatly in recent years due to the supply and demand of raw materials and shipping. Construction inputs could continue to increase on the order of 6 to 8 percent per year from 2008 to 2012. Much of this inflation is attributed to strong demand due to growth in rapidly developing countries.

Changing Construction Processes and Methodologies. New construction techniques, such as broader use of prefabricated bridges, are creating the need for changes in project development processes. These new techniques offer opportunities for minimizing traffic disruption and congestion, improving work zone safety, and lowering costs.

Project Cost and Complexity. Transportation projects continue to grow in complexity, which is requiring State transportation agencies to perform a broader range of activities than they have in the past. States will likely continue to develop new in-house capabilities, outsource more to new partners, look at new organizational structures and project management approaches, and explore options for mitigating and sharing project risk.

New Contracting Approaches and Outsourcing. The highway industry has begun to explore a wide range of alternative procurement approaches, including quality-based awards, contract incentives, design-build, best value awards, and unique forms of public-private partnerships such as design-build-manage schemes. In addition, agencies are using the private sector to perform a growing number of activities that range from non-core functions to system-wide maintenance and turnkey management of large-scale construction programs.

Program Delivery. Priority-setting practices in State transportation agencies continue to evolve and are becoming more transparent, participatory, interrelated, and complex. Performance measures are being widely used to provide greater accountability for how public funds are being spent across an ever growing number of programs, activities, and disciplines.

Workforce Attrition and Employee Shortages. Transportation agencies at all levels are continuing to lose much of their senior and experienced personnel due to retirements and job changes. Along with these retirements comes a loss in institutional knowledge, expertise, and experience. Over the next ten years, as much as 50 percent of the transportation workforce will retire. State agencies are already experiencing staffing shortages in both technical and non-technical areas.

Strategic Issues

The FHWA Leadership Team identified four primary issues that were deemed as critical challenges in the future. These deliberations, which are summarized below, had an important influence over the development of the new strategic plan framework.

Leadership — The FHWA is in a unique position to frame the discussion and define the debate on major issues that impact the transportation community nationwide. FHWA can be an agent of change by proactively identifying emerging transportation needs and issues, leading the way in developing and implementing sound national transportation policy, and advancing and promoting the use of innovative approaches to solve those problems that impact the country's mobility. This approach includes collecting meaningful data, undertaking sound analysis, developing strategic approaches with our transportation partners, and working with decision-makers to implement those approaches. National leadership includes guiding and sustaining an ethical agency focused on innovation, customer service, and business results.

Program Delivery Role — FHWA strives to improve our Nation's transportation system by continuously improving the delivery of Federal Highway Programs. In today's business environment, FHWA and our transportation partners are increasingly challenged to deliver transportation projects faster and more efficiently to meet ever increasing transportation needs. FHWA must improve the effectiveness of the delivery of the Federal Highway Programs through risk-based oversight and value-added stewardship. The foundation of this approach is successful partnerships, innovative program delivery, risk management, and performance measurement. Federal Highway Programs encompass all FHWA funded programs, including the Federal-aid and Federal Lands programs.

System Performance — FHWA is committed to improving the performance of the highway system - as part of a fully integrated, multimodal transportation system - to levels needed to help achieve national economic, security, energy, and other goals. This commitment will require us to invest more in collection, analysis, and evaluation of performance information, as well as better understand the link between highway system performance and the achievement of national goals so that appropriate targets can be set. We will also need to define and work with our partners to implement the strategies necessary to achieve national performance objectives. The primary emphasis in this goal area will be on the national priorities including reducing traffic congestion on the higher order elements of the highway system such as the National Highway System (NHS), Strategic Highway Network, and other major arterials and intermodal connectors.

Corporate Capacity — FHWA will emphasize the importance of effectively and efficiently using all resources available to meet current and future missions. The goal emphasizes strengthening our workforce, financial systems, and environmentally friendly business systems and practices. These resources serve as the agency's foundation and provide the support needed to achieve success.

Vision, Mission & Core Values

Category: Forex

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