By Sean Hackbarth
Our highways, airports, and other infrastructure have served us well for decades, allowing commerce to function and our economy to grow. Unfortunately, we have done a poor job maintaining it. That failure to act has caught up to us.
According to the American Society of Civil Engineers (ASCE), America’s infrastructure receives a dismal ‘D+’ grade. The economic costs are clear. By 2025, ASCE projects our failing infrastructure will mean $7 trillion in lost sales for businesses and 2.5 million lost jobs.
On a daily basis, businesses of all sizes feel the effects of our crumbling infrastructure, as U.S. Chamber President and CEO Tom Donohue explained at the America’s Infrastructure: Time to Invest event: We hear from farmers who can’t transport their heavy equipment across rickety rural bridges – costing them precious time during make-or-break planting and harvesting seasons.
A successful regional plumbing business recently told us how they are hit with a one-two punch. Congestion limits the number of service calls they can take a day, eating away at their productivity and profits. Meanwhile, wear and tear on their fleet drives up costs because poor roads batter their service vehicles all day, every day.
At the event, business leaders across a variety of industries explained how our deteriorating infrastructure hurts their bottom lines.
Small and mid-sized businesses are especially vulnerable.
Illinois corn and soybean farmer Don Duvall described what happened when a nearby bridge was closed for a number of years. “It created about a 17-20 mile detour,” he said. “That added probably 45 minutes to an hour to each of those truck trips…. To lose another hour per truck load is extremely costly.”
James Strange, vice president of Advanced Electrical Systems in Louisville, KY, was in a similar boat. A bridge connecting Louisville to Indiana was unexpectedly closed for three months. “We had a lot of jobs in that area that we had to drive an additional 30-45 minutes to get to that job,” Strange said.
For Jim Jalbert, president and owner of C&J Bus Lines, congestion in the Northeast is an additional cost of doing business. “We spend way in excess of $100,000 a year just to position vehicles to keep on schedule, and that’s because of traffic in and out of Boston and New York City,” Jalbert explained.
Large companies are not immune from poor infrastructure troubles.
Jason Conklin, Vice President of Global construction and Infrastructure at Caterpillar, described what his company faces because a ramp to a highway next to an Illinois factory making bulldozers can no longer handle of the weight of the heavy machines:
This requires us to take our machines, track them out of the back of our facility, load them onto a nearby rail, freight them a short five miles, unload them off of the freight, and then load them back onto a truck.
That is inefficient, time-consuming, and as Conklin noted, gives “our foreign competition a chance to get a foot in the door.”
For a shipping company like UPS, time is money, and poor infrastructure means millions of dollars lost. “If our drivers have to wait across the country for five minutes a day, every day, it’s a $114 million dollars” cost every year, said Rich McArdle, President of UPS Freight.
Last year, the U.S. Chamber laid down a four-part plan to rebuild our country’s infrastructure, which includes a modest increase in the federal fuel fee. It still supports the plan but is open to other ideas.
To get more long-term, sustainable funding ideas on the table, the U.S. Chamber held a competition with $25,000 in cash prizes. More than 80 ideas were submitted. Policy experts will examine the proposals, and winners will be announced on April 30.
This shows how serious the U.S. Chamber and the business community are about fixing our failing infrastructure, because urgency is needed. Our leaders in Washington must step up and lead. Talk and inaction will not cut it.
As President Donald Trump implored in his State of the Union address, rebuilding our infrastructure “is not an option. This is a necessity.”
James Strange summed it from the small business perspective: “The issue is not going to go away, and it’s only going to get worse and compound, so we need to act quickly.”
*Sean Hackbarth writes about public policies affecting businesses including energy, health care, and regulations.