Our transportation infrastructure is critical to our way of life—from driving the family car on holiday to delivering goods. And yet, our infrastructure isn’t being maintained. It’s not only our lifestyle that’s adversely affected by our decaying highways. The entire North American economy hinges on a reliable and well maintained highway system. Trucking is a low margin tightly budgeted industry. Logistics experts work around the clock on ways to make shipping more efficient. Every penny saved can be multiplied by the hundreds of thousands of miles driven and tonnage shipped. Conversely, every penny spent adds up. Congestion, detours, and delays add to the cost of products. For example, the auto industry is no longer country specific but international. Vehicles assembled in the USA have parts manufactured in Canada and Mexico, which rely on our infrastructure to reach manufacturing facilities—and even parts shipped from overseas will eventually be transported by truck. The added cost of our deteriorating highway system is absorbed by our shipping industry and passed along to manufacturing. This leaves us at a disadvantage in a competitive global economy by adding cost to our products, which makes them less attractive to consumers worldwide.
Breaking Down the Numbers
In 2011, the CBO (Congressional Budget office) reported (PDF), “total federal spending on highway infrastructure for 2009 amounted to $41 billion…” In the same report, the FHWA (Federal Highway Administration) said, “maintaining the highway system at its current performance would require $126 billion per year…” An Ivey Business Journal post states, “The National Chamber Foundation of the U.S. Chamber of Commerce estimates that by 2015, the cost just to maintain U.S. ‘pavements, bridges, and transit infrastructure’ would amount to $295 billion…” Whatever the system, when funds aren’t invested to maintain those systems, atrophy is the eventual outcome.
How Do We Fix Our Crumbling Infrastructure?
With a weary economy, such a continued investment seems daunting. However, a 2012 US Department of Treasury report reinforces the importance of a functional infrastructure, while outlining how infrastructure maintenance and improvement could be funded like the creation of a “National Infrastructure Bank.”
With the importance of infrastructure and the complexities of economics and funding, what other solutions could we come up with?