For U.S. to Get Out of Economic Slump, Simply Build Better Roads and Ports
America is losing the global economic race. While the media focuses on issues like education and immigration, crucial systems like our nation’s transportation infrastructure get the short shrift. We often see the semi-truck on the road and the cargo ship in the harbor, and occasionally we think about how both vehicles transport products worth billions from warehouses, stores, and eventually to our homes. We do not see how this system is teetering on the brink of obsolescence.
Only three years ago the American Society of Civil Engineers gave the country’s infrastructure an overall grade of “D,” requesting that the nation invest $255 billion a year to fix the problem. We currently invest only 40% of that amount, and it seldom invested well. Even though the challenge is complex, a national freight policy with a number of components – including the passage of the Realizing America’s Maritime Promise (RAMP) Act; an increase taxes or redirection of funds to transportation infrastructure; or the creation of a national infrastructure bank – would resolve many of our difficulties.
Given the need to boost exports due to the economic crisis, and the fact that 90% of all goods measured by weight or volume are transported by cargo ship, Congress has amazingly only just realized that most of our ports are too shallow. Only 35% of our nation’s ports, the majority on the West coast, will be able to handle international shipping once the Panama Canal expansion is completed in 2014 because we’ve failed to dredge their harbors deep enough for post-panamax ships. The country instituted a Harbor Maintenance Tax (HMT) in 1986 to deal with this issue, which taxes $1.25 on every $1,000 of goods that moves through ports and equals about $1.4 billion annually, but only half of this money has been spent in recent years. The problem would be quickly and cheaply resolved if Congress were to pass the RAMP Act, which requires that the Harbor Maintenance Trust Fund to spend all of the money it receives on dredging.
America’s roads and highways are also in terrible shape. The total vehicle miles traveled on our roads have grown by 100% over the last 30 years, and the total tonnage of freight has increased by 30% over the last 20 years. As a result, our roads have been worn down so much that a solid third are ranked poor or middling. These conditions cause accidents and congestion, especially around ports. Whenever money does come through, it almost never covers port areas – the “first mile” and “last mile” of a product’s journey – creating chronic bottlenecks that decrease the efficiency of our logistic system.
Financing and the changing nature of transportation are a large part of the problem. Few of the taxes and fees imposed on automotive use scale to traffic system needs, and the one that do – taxes on motor fuels and heavy truck-usage – have not been increased in decades, causing inflation to eat away at the Highway Transportation Fund’s purchasing power. Among many options, this shortfall could be made up by either redirecting customs dues from the General Fund of the Treasury to infrastructure; increasing the tax on heavy vehicles for the extra wear they put on our road systems; or by creating a National Infrastructure Bank to provide loan guarantees to attract private sector investment in infrastructure. The tax on incoming freight containers from Canada and Mexico could also be increased, as Asian exporters frequently ship goods there, only to later transport them to the U.S. by land, in order to escape the HMT.
A national freight policy that touches upon our ports and roads would resolve 90% of our international and 70% of our domestic freight transportation needs. It does not need to touch upon air transportation, which mainly carries people, or rail transportation, an issue mired in concerns over eminent domain and regional politics. Our infrastructure problem is consequently relatively easy to fix. As it stands, we cannot continue with infrastructure developed in the 1950’s and poorly maintained after that. Without these policies, the U.S. will be stuck with aging, second-rate infrastructure and will lack the resources needed to maintain America’s commercial strength in an age of growing international competition. Write to your congressmen about this problem today.