••• SPONSORED SECTION •••
North Carolina’s economy doesn’t stand still, thanks in large part to its transportation industry. It keeps commerce moving along 3,100 miles of freight railroads, through two ports, at four international airports and down the road to more than 150 million customers, all of which are within a day’s drive. Business North Carolina magazine recently gathered some of the industry’s biggest movers to discuss its status, where it’s headed and the challenges it faces, from rebuilding after Hurricane Helene to navigating tariffs. The conversation was moderated by Managing Editor Kevin Ellis. The transcript was edited for brevity
and clarity.
The discussion was sponsored by:
• Guilford Technical Community College, Greensboro
• I-77 Mobilty Partners
• N.C. Railroads
• Piedmont Triad International Airport Authority
• N.C. Ports Authority
WHAT IS THE INDUSTRY’S BIGGEST CHALLENGE?
GREENBERG: Trucking has been in a freight recession for several years. We’re seeing some green shoots, but we don’t have a pasture full of produce yet. The uncertainty surrounding the Trump administration’s tariffs is concerning, particularly their effect on trucking and the supply chain. That’s keeping my members up at night.
WARREN: The new administration has different priorities. We need to understand which ones will move forward. I think about it in the context of railroad infrastructure investments, whether that’s private companies, government funding or a combination of those. Not knowing is challenging for Class 1 railroads, including CSX Transportation and Norfolk Southern. We live in a world where no matter the economy’s condition or the prospects, partnership is key to moving forward.
CLARK: The container industry is changing significantly in real time. As I look at our future, where will North Carolina’s ports be included in vessel rotations, and how does that influence the volumes handled and the investments needed to continue growing?
FOX: N.C. Department of Transportation has two challenges: rebuilding western North Carolina after Hurricane Helene and supporting projects across the rest of the state. Infrastructure in the mountains was hit hard, about $5 billion worth of damage. The federal government will reimburse most of that, but we must repair it so folks can use it. One lane in each direction of Interstate 40 through Pigeon River Gorge reopened March 1. People, goods and services must move to every part of the state, so we continue projects statewide.
HOW HAS THE INDUSTRY CHANGED SINCE BEFORE THE PANDEMIC?
BAKER: The COVID pandemic was like throwing a bowling ball into a still pond. It made an immediate splash, but its ripples continue. Those include a pilot shortage; many took early furloughs, then airlines couldn’t get them back fast enough to fly. Demand spiked, but there weren’t enough available aircraft. Many spent the pandemic parked in the desert. Airports nationwide, including in North Carolina, need billions of dollars of improvements, but they were delayed. There’s big demand for those now. N.C. DOT and its aviation division are doing an amazing job, helping airports statewide. But there’s only so much to go around, and we need more.
GREENBERG: Some folks, who traditionally operated in certain lanes, are diversifying to prepare for the next interruption. If you’re all in on transportation for entertainment companies, for example, and that stops, you’re stuck. Many of my members are searching for that next lane, where they can be competitive.
CLARK: We started a five-year strategic plan in 2021. It calls for the ports to remain diversified, investing equally between our two ports. Morehead City handles general cargo. Wilmington handles general cargo and containers. Often when container volume is down, general cargo is up. We’ve seen peaks with the home-building goods that we handle over the last several years. That cyclic nature allows us to balance our performance and continue investing.
GARCIA: We were concerned about traffic-pattern changes and their longevity. If we compare current traffic to traffic just before the pandemic, it has increased 13%. Work from home is one uncertainty that remains. We don’t know if the same percentage of people will eventually return to the office as before the pandemic, though we’ve watched more return every year.
WHAT ARE YOUR SECTOR’S CONCERNS?
CLARK: We’re seeing changes as container carriers decide where they’ll deploy their vessels. The industry is getting larger. Ships are getting larger and cascaded to the East Coast. It has been interesting to observe labor negotiations over the last year. The Eastern and Gulf Coast union workers went on strike for the first time in almost 50 years in October. That concerned many shippers. So, a lot of volume has shifted to the West Coast, which operates under a different labor contract. It will take time for that volume
to return.
Volumes can always be better. The new administration has a different focus, which could impact cargo volumes in general. We’re monitoring it. Investments have put us, particularly the Port of Wilmington, in a great position, thanks to tremendous state support over the last several years.
GREENBERG: Trucking costs continue to increase. The American Transportation Research Institute collects annual operating cost data. It’s no longer a surprise when those costs set a record; that has been happening every year. Current rates don’t cover operating costs. The volume is there, and shippers seem ready to discuss rates, especially locking them in. They see the economy flipping and rates climbing.
We’re concerned about infrastructure investments. Reauthorization is underway in Congress, so funding freezes are a concern, including the state being underfunded after the devastation of Hurricane Helene. It’s exciting to have I-40 re-opened, because trucks were routing through congested Atlanta to get to Tennessee from North Carolina.
Congestion increases costs, which make goods more expensive for the end consumer. Three of the state’s biggest bottlenecks are in the Charlotte region. That won’t surprise anyone. The American Transportation Research Institute also studies congestion, looking at a commercial truck’s average rush hour speed. That has been decreasing, so congestion is increasing.
Truck parking is an issue, too. Driving and rest hours are dictated by law, so when the clock runs out, commercial drivers must park. That’s when you see trucks lined up along exit and entrance ramps, creating safety and image concerns for the motoring public. Drivers don’t want to be there, but they don’t have a choice. Pick a law to violate: Do you park illegally or drive over your hours? Imagine what a plaintiff’s lawyer would do if a driver over their hours had an accident, especially in our litigious country.
FOX: N.C. DOT’s biggest uncertainty is federal grants. We’ve competed for many of them, and we’ve been very successful. Many are obligated, but some aren’t. We’re waiting to see what happens with those.
BAKER: We’re preparing to start a terminal project. It’ll need steel, electrical components and other materials. Many of those and the construction equipment are imported. So, we’re concerned about how tariffs could impact us. But what can you do? You just roll with the punches.
WARREN: NCRR connects with Morehead City Port, so we want more export traffic there. So, there’s uncertainty with volumes until we see where everything settles.
HAVE SUPPLY CHAIN ISSUES BEEN RESOLVED?
CLARK: Some of the most dramatic shipping-route changes that we’ve seen came from the drought at the Panama Canal a few years ago. It shifted vessels from the Far East through the Suez Canal. There’s not a lot of extra vessel capacity to serve the U.S. market. We’ve seen significant delays over the last two years. Scheduling has been inconsistent at best, and on-time reliability is near an all-time low in certain trade lanes. That has a spiraling effect throughout the supply chain for any international shipment.
GARCIA: About three years ago, we partnered with N.C. DOT on a pilot program that allowed some trucks to use Interstate 77 express lanes to improve movement of goods. The express lanes are more reliable than general purpose lanes. It was so successful, especially for small commercial trucks, that we implemented it.
GREENBERG: We don’t know how tariffs will affect the supply chain. Huge volumes of products cross the Mexican and Canadian border, sometimes multiple times. A lot of auto production, for example, comes from Mexico. There’s uncertainty about what they mean for cost inputs in an already fragile supply chain.
I’m not trying to get into the administration’s head. I see long-term value in good policy that leads to more U.S. manufacturing. We’re watching what that short-term disruption will look like in a wildly and quickly changing environment. Policy could completely change in the time it took to have this conversation. We’re buckled up, paying attention and adapting as quickly as possible.
WHAT IS TECHNOLOGY’S ROLE IN TRANSPORTATION’S FUTURE?
GARCIA: We’ll see more artificial intelligence — connected and autonomous vehicles. It will impact city and transportation infrastructure planning. As operators, we need to collaborate and make this happen. We’re excited.
WARREN: I’m excited about telematics. A group of railcar owners created RailPulse, technology that provides better information around shipments by closely tracking the location and condition of railcars. It helps make the car load rail network a viable alternative for moving freight. That could make a difference, providing choices for moving commodities over the rail system.
BAKER: Plans to restructure aircraft en route systems have been around for a long time. In the mid-1990s, the FAA declared all approaches will be GPS by 2002. That still hasn’t happened 23 years later. You’ve heard about some recent problems. There will be a push to reinvent air traffic systems. That will be good.
Watch for the growth of eVTOL — electric vertical takeoff and landing aircraft. They are proliferating and will be certified before too long. They could become an important part of air transportation in crowded corridors and over short distances. They won’t replace traditional aircraft, especially on long hauls. But they will change the last and first mile of travel.
eVTOL manufacturers are building piloted and autonomous aircraft. Those that choose pilots believe passengers will be more confident in their use, at least until autonomous technology is proven. An industry joke begins by describing the flight crew as one pilot and one dog. The pilot is there to take control if the computer malfunctions. The dog’s job is keeping the pilot awake, because there won’t be anything to do.
GREENBERG: Viable alternative fuels, including renewable diesel, are interesting. Advancements, which are pushed by free-market principles rather than government picking a technological winner that’s not viable for the industry, are, too. We look forward to seeing what innovators do.
There are driverless trucks operating in certain markets. A motor carrier in rural Arkansas, for example, partnered with an autonomous trucking company to handle specific routes. It’s not being done to replace human drivers. It’s completing a task — short routes on congested roads — that drivers don’t want. Drivers are paid by the mile, so they prefer to drive long stretches of open road.
Making autonomous trucks work requires great technology, solid infrastructure and creative thinking. Routes with only right turns, for example, are safer and preferred, because left turns create more opportunities for collisions when dealing with the general motoring public.
More specific applications for driverless trucks will be found. But I don’t think we’ll see them running down the interstate in any lane before I retire, and I’m a fairly young guy. They won’t be navigating inner cities, because needed infrastructure won’t be available. That’ll continue to be the domain of human drivers, though their work may be assisted, resembling what we see with pilots. While many aircraft can take off and land themselves, most folks are more comfortable still having a crew on the flight deck.
FOX: Autonomous truck testing has been underway in North Carolina for six or seven years. I rode in one as part of a demonstration of a pilot program with Volvo Trucks that used Interstate 540 outside Raleigh. I sat behind the driver, who was there in case something happened. When the line of three or four trucks reached highway speed, the computers were activated, and the driver took his hands off the wheel and feet from the pedals. They tested the technology in a variety of ways, including ensuring the trucks slowed when a vehicle cut between them, avoiding a collision. I was as comfortable as I would be in an airplane using autopilot at 35,000 feet.
The technology isn’t close to being fully implemented. But it’s there and being developed. There are many uses for it such as runs between terminals.
Technology, such as AI and advanced computers, makes us smarter. We do ramp metering. If we want interstate traffic to move at 45 mph or faster, we time interchange signals, throttling incoming traffic so as not to slow the flow.
HOW DOES NORTH CAROLINA’S TRANSPORTATION FUNDING COMPARE WITH OTHER STATES AND REGIONS?
WARREN: I look at it from two perspectives, being at NCRR and from when I worked at CSX, where I spent 13 years. North Carolina has always eyed the future, considering how to maximize its rail network.
Over the past four years, NCRR has complemented state economic development efforts by pursuing some projects and partnering on others. One current project will improve rail capacity between Greensboro and Raleigh. It will make it easier to add passenger trains while maintaining a fluid freight network.
FOX: It’s not an apples-to-apples comparison. North Carolina has one of the fastest-growing populations. Its needs are bigger than those of states losing residents. So, while North Carolina may spend the same amount of dollars as those states, it’s falling behind on meeting its growing needs.
There are different funding pots for highways and bridges, rail, airports and others. N.C. DOT’s funding has grown during the last eight years, but I wouldn’t be truthful if I said it has kept up with inflation and construction costs.
Transportation is vital to the state’s economy and its residents, who use it to access healthcare, education, entertainment, work and family. We must continue funding it. We’re doing a good job planning for future needs, including additional capacity and technology deployment. We’ve worked with local communities to determine what’s needed.
GARCIA: We support the public private partnership model. I-77 is a successful example. It’s a great opportunity to
create infrastructure.
GREENBERG: Passenger vehicles becoming more efficient is a big piece of the underfunding picture. Trucks have become more efficient but haven’t kept pace with their four-wheel friends. The trucking industry pays about 27% of all highway taxes owed despite only traveling 7% of the miles. We get that trucks are heavy and stress the roads more than other vehicles. But a funding mechanism where everyone pays their fair share is needed to remain competitive.
If we could turn back time 10 years, we would have encouraged increasing the fuel tax and attaching it to the consumer price index. While that’s a politically tough issue and didn’t happen, it would have helped relieve some of the current underfunding. Future funding mechanisms must share the current fuel tax’s efficiency — 99 cents of every dollar going where it’s needed. Often when you discuss alternative funding from vehicles more overhead expenses appear. That needs to be resolved, otherwise you’re forced to raise additional money to cover them.
HAVE TOLL LANES AFFECTED TRAFFIC OR COMMUTE TIMES?
GARCIA: I-77 express lanes bring many benefits. When drivers see traffic in general purpose lanes, they can use the express lanes to avoid it. One of my colleagues had to urgently take his mom to the hospital. He realized the express lanes gave him the opportunity to get there quickly. Drivers in general purpose lanes benefit, too, because many drivers use the express lanes during peak commute times, dispersing traffic. Our data shows that speeds in general purpose lanes have improved despite traffic increasing. It’s a huge success.
HOW SHOULD TRANSPORTATION PLANNING REFLECT NORTH CAROLINA’S MIX OF URBAN AND RURAL COMMUNITIES?
FOX: Our elected officials would be the first to say that the state can’t be successful if only three or four of its cities are successful. The entire state must be successful. We must build and maintain a transportation network that allows all residents to live, work and play. Businesses relocating or expanding in Charlotte, Raleigh or Greensboro, for example, count residents of outlying rural counties as part of their potential workforce. So, we must plan and fund infrastructure there.
GREENBERG: Trucking offers well-paying jobs in communities that lack a traditional economy. The average over-the-road driver makes more than $75,000 annually. That’s a great wage in many rural communities.
But there are challenges with road and bridge capacity in rural communities. A recently filed bill calls for restricting truck-trailer length on stretches of U.S. Route 25/70 in Madison County. About 85% of North Carolina communities rely on trucks for their freight. Trucks are the only reason they have food, medicine, fuel or anything. People forget that when stuck in traffic or sharing a narrow mountain road with a large truck. We need to keep trucks rolling into communities that are solely reliant on them for freight.
CLARK: The ports have a clear mission — support the entire state’s economy. The ports handle a mix of cargo, including homebuilding materials, finished goods, grains and agricultural products. Our goal is reducing the first- and last-mile costs of moving goods in and out of North Carolina.
WARREN: Not everything can move by truck. Rural North Carolina depends heavily on rail for transporting heavier bulk commodities and raw materials. Shortline and Class 1 railroads are key parts of that network. NCRR has developed programs that make it easier to fund and develop rail access, especially in less prosperous Tier 1 counties. We must preserve that rail infrastructure. ■