Infrastructure Improvements Are Critical to the Supply Chain

Written by Jessica Chizmar | Sep 24, 2021 6:15:14 PM

President Joe Biden’s plan for infrastructure changes is slated to be one of his landmark initiatives as president. The $1 trillion bill, down from Biden’s original $2.25 trillion proposal, passed in the Senate last month after months of negotiations and is set to be brought to the House floor for a vote next week before it can head to the President’s desk.

The Senate vote was bipartisan, with 69 in favor and 30 opposed, and many senators from both parties expressed pride in being able to come together to support critical infrastructure improvements. The White House has described the framework as being the largest long-term investment in our country’s infrastructure in nearly a century.

What’s in the bill?

The bill includes allocations for improvements across many facets of infrastructure, from roads and bridges to broadband internet. Some of the largest portions of the bill include:

$110 billion for roads and bridges, including $40 billion specifically for bridge repair and rehabilitation, which is the largest investment in bridges since the construction of the interstate highway system in the 1950s, according to the White House.
$39 billion for public transit improvements and $66 billion for passenger and freight rail. Once again, according to the White House, this would be the largest federal investment in passenger rail since the creation of Amtrak in the 1950s.
$25 billion for airports and $17 billion for port infrastructure with the primary goals of addressing maintenance backlogs and reducing congestion and emissions.
$65 billion will go toward rebuilding the power grid to expand renewable energy options and $55 billion will be used to improve water lines, including replacing lead pipes to ensure safer drinking water.
$65 billion is set aside for broadband internet infrastructure improvements, which includes a program to help more low-income households access the internet.

What does this mean for the supply chain?

There is a reason this expensive bill passed in a bipartisan vote. No matter where you stand on the political spectrum, the need for updated infrastructure in the United States has been apparent for years yet has gone largely unaddressed until now.

The American Society of Civil Engineers (ASCE), which reports on the state of infrastructure every four years, gave the U.S. a grade of C- in 2021. While higher than 2017’s grade of D+, it’s still considered mediocre and in need of improvement. This low grade has to do with the poor conditions of roadways and bridges, many of which were built over 50 years ago.

More than 46,000 of our 617,000 bridges are structurally deficient and 43 percent of American roads are in poor or mediocre condition. The ASCE estimates that poor infrastructure costs American households over $3,000 a year in hidden costs, from an increase in car repairs because of crumbling roads to fuel waste from idling in congested traffic.

The pandemic-era has taught us that supply chain disruptions, be they global crises or accidents in the Suez Canal, are more costly than we can afford. The resilience of supply chain sector is critical to the United States economy as well as the global economy.

Crumbling infrastructure and traffic congestion inhibit the domestic supply chain and significantly increase costs across the board. According to the American Transportation Research Institute, these issues cost the trucking industry over $74 billion per year, equating to 1.2 billion hours of lost productivity, the equivalent of 400,000 trucks idling for a year straight.

For leaders in the transportation industry, the bill is considered a big win, but there is still much that needs to be done, especially on the digital side, if the United States is to remain competitive on a global stage.

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