SCDigest’s targeted electronic magazine
Oct. July 15, 2013
Are the infrastructure problems in the United States finally starting to show? Running circuitous routes in Pennsylvania
We participated in the ongoing debate about the real quality – or not – of the American logistics infrastructure.
For one thing, the American Society of Civil Engineers (ASCE) continues to roll out “report cards” saying that American logistics and other infrastructure are in a horrible state.
In its 2013 report last spring, the United States received a D+ grade overall, and the ASCE indicates that $3.6 trillion beyond what we are currently spending will be needed to close the gaps over the course of the year. of the next decade. This level of funding, of course, is a pipe dream.
The ASCE’s overall near-failing rating includes some categories that aren’t related to logistics, such as clean water and parks and recreation, but in general the results are similar across all categories, except except for solid waste infrastructure, which received a B+.
For logistics-related areas, the scores were: Roads: D, Railways: C+, Ports: C, Inland waterways: D, Bridges: C+.
That last note was a bit of a surprise, since we’ve been hearing about the poor condition of America’s bridges for years, accentuated by the 2007 collapse of the I-35W Mississippi River Bridge in St. Paul that killed 13 people and injured others. 145.
This caused a lot of angst about other dangerous bridges, but the worry quickly dissipated. With the recession the following year and relatively modest budgets for transportation in the highway bill finally approved in 2012, little progress was made in upgrading America’s roads and bridges, across which trucks still haul about 68% of total U.S. freight tonnage, according to analysis by the American Trucking Associations. (See interesting predictions on how the US freight market will evolve over the next 12 years.)
The ATA actually expects trucking’s share of freight transportation to increase in the coming years.
On September 25, a section of the Leo Frigo Memorial Bridge near Green Bay buckled and the bridge still remains closed to traffic.
On the other hand, in the World Bank’s biannual Logistics Performance Index ranking, US logistics infrastructure actually ranks fourth out of some 150 countries assessed in the study.
That doesn’t sound like the ASCE report, does it? And SCDigest will note that to date, supply chain and logistics managers have rarely, if ever, cited infrastructure issues as anywhere near the top of their list of challenges.
So, who is right ? Is it possible that both perspectives are correct?
The answer to that last question may well be yes, because thousands of miles of highways and thousands of American bridges could manage in the short term, but are on the cusp of major problems that could seriously affect shippers and carriers not too far down the road.
The main issues would be: (1) Even if funds are available to upgrade or replace existing bridges, the process will usually take many years; (2) Aging capacities of US bridges could be downgraded so that heavy truck crossings are prohibited or restricted.
Even in the best-case scenario 1, this could still mean detours that could add significant time and cost to the usual routes until the work is finally complete, usually years later.
Let’s take a small example from tile manufacturer Armstrong Industries. A company executive told the Wall Street Journal this week that trucks entering or leaving its plant in Marietta, Pa., will soon have to detour 25 miles to avoid a bridge on the way that will no longer be rated for carry fully loaded truck weights. This change will actually add up to $300,000 to Armstrong’s annual freight expenses.
The ASCE report indicates that one in nine of the more than 600,000 bridges in the United States are defective. Could a wave of lower ratings on these bridges cause major headaches and costs for shippers and carriers, as infrastructure issues finally start to have a real impact?
“Having a transportation system that becomes less efficient hurts our ability to be competitive,” David Ellis, of Texas A&M’s Transportation Institute, told The Wall Street Journal.
But as always, the question is money. The federal fuel tax has been stable for 20 years, and cars and trucks get better mileage. Many groups, including the American Trucking Associations, are calling for an increase in these taxes to support road and bridge improvements.
There was discussion this summer in the House Transportation and Infrastructure Committee about raising the federal gas tax from 18.4 cents per gallon (that’s 24.4 cents for diesel). This was linked to a $20 billion shortfall between what the tax brings in and the level of commitment for infrastructure spending. But no action has been taken to really push forward a potential increase.
The ASCE says hundreds of billions more dollars are needed, which could require huge increases in federal and state fuel taxes, a change that seems unlikely.
An emerging problem is that most roads and bridges are actually “owned” and managed at the state level, where funding is even more questionable. For example, it is estimated that one in four bridges in Pennsylvania are defective – the highest ratio in the country. The state recently reduced weight limits on an incredible 1,000 bridges, including the one impacting the Armstrong factory.
It worries manufacturers and others that trucks will soon have to take expensive, circuitous routes to get from point A to point B.
Small trucking owner Bob Wilson told the Wall Street Journal he estimates the new ratings would add 10% to the cost of a haul from Pittsburgh to Boston.
And that can lead to a whole new competitive factor, as certain manufacturers and distributors in each market could be impacted differently by bridge issues and growing traffic congestion, putting some companies behind an economic problem than others.
Most states are in the same boat. Iowa is expected to release a report soon that will recommend alternatives to raising the state’s gas tax to generate additional funds to repair the state’s highway system. The Iowa DOT estimates it faces an annual shortfall of $215 million in needed funds.
How bad is America’s logistics infrastructure really? Do you see bridge deficiencies as a growing problem? And federal gasoline and diesel taxes should be raised to… Let us know your thoughts in the Comments button or in the section below.