Market Update: $3+ Trillion to Keep Up with Infrastructure Repairs

transportation.jpgPorts and surface transportation must be able to accommodate the country’s growing population and freight volumes. The US DOT predicts that by 2045, freight volume will increase by 45% and America’s population will grow by 70 million people. America’s infrastructure has an average rating of a D+, ranking 12th worldwide in its health of infrastructure.

  • 65% of America’s major roads are rated “less than good condition”
  • In Pennsylvania, nearly 1 in 4 bridges are considered structurally deficient
  • Motorists spend $5.7 billion a year from driving on roads that need repair in Texas

As economic trends and federal policies change, so will the US freight market and infrastructure project prioritization. “Tax reform, trade, infrastructure: we have a role to play in all of those issues,” said Chris Spear, president, and CEO of the American Trucking Association (ATA).

Under 2015’s Fixing America’s Surface Transportation (FAST) Act, states have a key role in how the US plans for freight moves and what infrastructure projects will be completed. While freight and shipping have always been a part of our national infrastructure, until the FAST Act, it hadn’t been a national policy priority. The goal of the FAST Act is to ensure adequate freight mobility.

  • 6 months after the FAST Act was passed, 57% of the states identified a total of 6,202 freight projects and 71% of the states have state freight plans that they’re actively working on.
  • The State of Freight II report shows nearly 80% of US port members reported a minimum of $10 million investment being needed in their port’s intermodal connectors through 2025, while 30% anticipated at least $100 million would be needed.

In his first press conference as president-elect, Trump talked about his priority to restore highways, bridges, tunnels, and airports. Trump said, “We’re going to rebuild our infrastructure, which will become, by the way, second to none. And we will put millions of our people to work as we rebuild it.”

President-elect Trump has expressed a concept of a 10-year, $1 trillion infrastructure proposal, which could yield positive effects for the trucking industry. “Infrastructure is our industry’s lifeblood: we need good infrastructure,” says Spear. Wired.com states that putting $18 billion a year into roads, bridges, and waterways could create a $29 billion jump in GDP and more than 200,000 jobs.

The American Society of Civil Engineers estimates that it’ll cost more than $3 trillion to keep up with repairs and replacements of our country’s infrastructure.

Trump has publicly stated his stand on lowering corporate taxes, which will have an effect on all the transportation sector. “Lower corporate taxes would likely result in businesses considering either establishing or reshoring US operations,” said Sandeep Kar of Frost & Sullivan. He continues, “While this would appear to be great news for the US trucking industry, it may not be as great for the US or global truck manufacturers and suppliers. Lower corporate taxes will most likely drive service-based businesses to the US, which would be of less benefit to freight movement than a move of manufacturing operations.”

Since freight tonnage and freight transportation will continue to grow, it’s important to not neglect the nation’s roads, bridges, and waterways. To improve the nation’s infrastructure, we need to focus on sustainability, resiliency, and maintenance.

Continue Reading:

 

 

Sources: Fleet Owner, Infrastructure Report Card