This monograph describes a federal freight policy designed to address growing challenges faced by the U.S. freight network in an environment dominated by declining revenues and public resistance to increasing taxes. The strategy is based on the use of benefit-cost analysis to not only calculate the overall benefits of a project but also disaggregate project costs and benefits by location, stakeholder, and level of government.

The approach rejects the notion that the federal government should automatically pay the major cost of a freight project; instead, it advocates requiring identifiable beneficiaries to pay a share of project costs proportionate to the benefits they receive, while identifying important spillover costs and benefits.

The approach also rejects the view that the federal commitment should always be limited to costs that local and state participants cannot or will not cover; instead, the authors describe steps to determine when federal assistance may be warranted, and how much, based on a project’s scope and the benefit it provides to the nation. The authors discuss ways in which the strategy could be efficiently and sustainably funded by increasing and encouraging the use of user-based pricing.