Transportation infrastructure crucial to manufacturing
Traffic jams are becoming commonplace throughout the country and millions of commuters are spending hours a day going to and from work or on personal errands inching along scarcely faster than they could bike or walk. Our nation’s overworked highway grid is not just an inconvenience for consumers; it is also a major impediment to our ability to compete in the global marketplace. Inadequate transportation means factories can’t get the raw materials or product components they need in a timely manner or move products to their customers when they are due.
In its most recent survey, the American Society of Civil Engineers (ASCE) gave the nation’s transportation infrastructure a grade of D. They cited a need to invest $1.6 trillion in upgrades over the next 20 years and also recommended key changes in transportation behavior, city planning and business practices %%MDASSML%% such as flexible schedules and telecommuting %%MDASSML%% to address the problem.
There is no great mystery why this is happening. The Reason Foundation reported that between 1980 and 2000, vehicle miles increased 82% while highway lane-miles increased only 4%. More vehicles and fewer miles of paved road mean congestion and more congestion.
Not only are we not building to keep pace with traffic, we’re not even taking care of what’s already in place. Repairs and operating costs associated with poor roads cost American drivers $54 billion a year. We now spend 3.5 billion hours a year stuck in traffic at a cost to the economy of $63.2 billion. Trucks carry 90% (by value) of all freight moved in America, so expanding key trucking routes is essential, yet the states lack the money needed to keep up. Meanwhile, according to the ASCE, more than 27% of the nation’s 590,750 bridges are structurally deficient. But the current federal budget for highways and public transit is $9 billion below what’s needed to maintain the status quo %%MDASSML%% much less the additional $36 billion needed to make significant improvements.
And the problem is not just with our highways and bridges. Limited rail capacity is creating chokepoints and delays for the first time since World War II. This can only get worse as freight rail tonnage is expected to increase by at least 50% by 2020. The ASCE says the freight railroad industry will need to spend $175-195 billion over the next 20 years to maintain the existing infrastructure and expand for growth. Increased demand for energy, especially corn-derived ethanol and coal, will further strain existing railroad capacity.
Our airports are similarly congested. Democratization of air travel has made it available to a larger segment of the population, but aviation infrastructure is not keeping up with demand. The Department of Transportation reports that commercial aviation delays cost airlines $3 billion a year, and everyone who flies has horror stories of protracted delays and misplaced luggage. There are some 20 congested airports each averaging more than 20,000 hours of flight delays each year. Passenger travel demand will continue to grow; we must expand our air traffic infrastructure or the congestion will only get worse.
We move a major portion of our commerce on water. Our inland navigation system %%MDASSML%% nearly 12,000 miles of commercial navigable inland and coastal waterways %%MDASSML%% plays a vital role in moving 630 million tons of freight each year. One barge can carry a load equal to 58 semis at a lower cost. But almost half of the 257 locks on our rivers are functionally obsolete, and by 2020 that will grow to 80%. The cost to replace the present system of locks is more than $125 billion. Also, key seaports lack sufficient road and rail connections to move goods out of the ports as fast as they come in.
While we need to invest substantial revenue into our infrastructure, it must be understood that this represents an investment in the future and offers immediate benefits to the economy. The U.S. Department of Transportation estimates that for every $1 billion in new transportation funding, nearly 47,000 jobs are created and an estimated $5 billion in economic activity is generated.
The NAM has formed the Alliance to Improve America’s Infrastructure to rally support for broad-based investments in upgrades, expansion and investment in our infrastructure. One of our first acts was to offer support for “Build America Bonds,” an initiative introduced by Sen. Ron Wyden (D-OR) and Sen. John Thune (R-SD), and co-sponsored by Sen. Normal Coleman (R-MN), Sen. Amy Klobuchar (D-MN) and Sen. Elizabeth Dole (R-NC) that will create a one-time $50 billion bonding program for infrastructure.
Our national commitment to improving our infrastructure must of course be long term and embrace a variety of different funding mechanisms. The manufacturing community has a compelling interest in this campaign and must make its support clear at every opportunity.