The high-tech industry should be alarmed at the poor state of America's crumbling infrastructure, especially since high-tech supply chains depend heavily on the nation's roads, bridges, airports, and ports to transport electronic component parts as well as finished goods such as tablets, smartphones, PCs, notebooks, and HD TVs.
Unfortunately, the American Society of Civil Engineers (ASCE) recently released a report that gives the US infrastructure system a failing grade of D+. That's hardly a score worthy of the world's most powerful economy.
Titled 2013 Report Card for America’s Infrastructure, the document provides a comprehensive assessment of the condition of America's infrastructure and found that many of the nation's bridges and roads are old, dilapidated, and in need of repair.
Reading through the report, it was particularly disheartening to find that in many cases, the inland waterway system has not been updated in more than six decades and many bridges are more than 40 years old. As high-tech companies plan to build new manufacturing plants in countries that can accommodate the movement of people and goods efficiently and cheaply from one location to another, America will have to spend more to build a first class infrastructure system that can compete globally. ASCE estimates that America needs to invest $3.6 trillion by 2020 to improve the performance of its roads, bridges and other physical systems across the nation.
Here are a few critical findings in the report that the high-tech industry should take note of, as well as recommendations that ASCE analysts think will improve America's infrastructure:
Ports received a C. The US Army Corps of Engineers estimates that more than 95 percent (by volume) of overseas trade produced or consumed by the United States moves through our ports. To support a growing economy that competes internationally, America's ports need to be maintained, modernized, and expanded. While port authorities and their private sector partners have planned over $46 billion in capital improvements from now until 2016, federal funding has declined for navigable waterways and landside freight connections needed to move goods to and from the ports.
Aviation received a D. Notwithstanding the recent recession, commercial flights were about 33 million higher in numbers in 2011 than in 2000, stretching the system's ability to meet the needs of the nation's economy. The Federal Aviation Administration (FAA) estimates that the national cost of airport congestion and delays was almost $22 billion in 2012. If the federal government maintains its current level of funding, the FAA estimates that the cost of congestion and delays to the economy will rise from $34 billion in 2020 to $63 billion by 2040.
Bridges received a C+. Over 200 million trips are taken daily across deficient bridges in the nation's 102 largest metropolitan regions. In total, one in nine of the nation's bridges are rated as structurally deficient, while the average age of the nation's 607,380 bridges is currently 42 years. The Federal Highway Administration (FHWA) estimates that an annual investment of $20.5 billion is needed to eliminate the nation's bridge backlog by 2028. Currently, only $12.8 billion is being spent on upgrading bridges.
Inland waterways received a D-. America's inland waterways and rivers are the hidden backbone of our freight network — they carry the equivalent of about 51 million truck trips each year. In many cases, the inland waterways system has not been updated since the 1950s. The report notes that barges are stopped for hours each day with unscheduled delays, preventing goods from getting to market and driving up costs. There is an average of 52 service interruptions a day throughout the system, and the report notes that the situation is getting worse because projects to repair and replace aging locks and dredge channels take decades to approve and complete.
Rail received a C+. Railroads are experiencing a competitive resurgence as both an energy-efficient freight transportation option and a viable city-to-city passenger service. In 2012, Amtrak recorded its highest year of ridership with 31.2 million passengers, almost doubling ridership since 2000, with growth anticipated to continue. Both freight and passenger rail have been investing heavily in their tracks, bridges, and tunnels as well as adding new capacity for freight and passengers. In 2010 alone, freight railroads renewed the rails on more than 3,100 miles of railroad track, equivalent to going coast to coast. Since 2009, capital investment from both freight and passenger railroads has exceeded $75 billion, actually increasing investment during the recession when materials prices were lower and trains ran less frequently.
Roads received a D. While there have been efforts to improve the nation's roads the report notes that 42 percent of America's major urban highways remain congested, costing the economy an estimated $101 billion in wasted time and fuel annually. Although current spending by federal, state, and local capital investments increased to $91 billion annually, the report said that level of investment is insufficient. Currently, the Federal Highway Administration estimates that $170 billion in capital investment would be needed on an annual basis to significantly improve conditions and performance.
If the US wants to attract high-tech investments, the country must develop a first-class infrastructure system that can move people and goods by land, water, and air. We've heard federal government officials as well as business leaders note that the revival of America's high-tech manufacturing will help the nation spur job growth and create a more stable economic foundation. If this is the case, more money will have to be spent on the country's infrastructure to support a modern high-tech manufacturing sector.
What we need now is the political will to do the right thing.