Tuesday, 8 April 2008

Strong Transportation Infrastructure Equals a Strong Economy

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If you’re like me and have been hearing a lot about how awful the economy is right now, but not hearing any real solutions to fixing it, then good news comes in the form of a study released today by the U.S. Chamber of Commerce and the Americans for Transportation Mobility Coalition . The findings of the study, The Transportation Challenge: Moving the U.S. Economy,  reports that increased investment in transportation infrastructure will have a positive effect on our economy. While that conclusion may seem apparent, the extent to which inadequate transportation infrastructure negatively impacts our economy is not widely recognized.

We all complain about spending extra hours in our car or on the train as we commute to work everyday, but do we really take the time to think about the larger impacts of that traffic congestion? Since workers won’t make the long treks to central locations, congestion forces employers to open more and more job locations farther away from city centers, thereby contributing to sprawl. Additionally, drivers are waylaid on the way to shops, medical facilities, and schools. The study even mentions that Little League games in the suburbs regularly start late since parents can’t get home in time.

Now all that is pretty inconvenient, but what about when it starts hitting your pocket? The study cites increased traffic congestion and inadequate capacity on the rails, inland waterways, and ports which keep businesses from getting their goods to market quickly and cheaply. In fact, after a decades long dip in logistics costs, based primarily on improvements to the transportation system, in 2006 the cost of logistics rose to 9.9% of GDP – up from an all time low of 8.3% in 2003. The study estimates that demand for freight transportation will nearly double by 2035, further straining the already overused infrastructure. Faced with these rising costs of doing business, firms will have no choice but to turn those costs over to consumers in the form of higher price levels.

So how can we begin to improve our transportation infrastructure so we begin to see those positive economic impacts? Primarily, we need a surface transportation system that is built to the specifications of our modern economy. The current surface transportation system was designed fifty years ago to service our manufacturing-heavy economy and move cars and trucks over long distances. Today, the growth of the service industry sector has been exponential and efficiency improvements mean that businesses run on a “just in time” schedule to bring goods to market and keep inventories low. The new system must be a holistic approach based on moving goods and services through the entire process from manufacture to retail, improving transition from one mode of transport to the other, and must include significant investment increases from higher user fees.

As a start, The National Surface Transportation Policy and Revenue Study Commission  sums up the needs and suggested improvements for our surface transportation system over the coming years. As citizens and advocates for improving the nation’s infrastructure it’s up to us to educate our policymakers and members of our communities of the tremendous impact transportation has on the economy. ASCE is a member of the Americans for Transportation Mobility and will continue to work with the Chamber to accomplish these important goals. Hopefully, you too will make a commitment and help spread the word in your area.

Posted by Allison D at 3:46 PM in transportation/