7.7 Transportation Challenges

Throughout the last 50 years of the 20th century, the U.S. transportation infrastructure was the envy of the world. It reduced the cost of doing business and spurred economic growth. Today, however, much of the U.S. infrastructure is aging—badly. Consider the following:

• Highways: The need for improved maintenance was never more evident than when the Interstate 35-West bridge in Minneapolis, Minnesota collapsed into the Mississippi River on August 1, 2007. Sadly, 79,000 (12%) public road bridges on the National Bridge Inventory are classified as "structurally deficient."

• Waterways: The locks and dams that support river navigation were built as public works projects during and soon after the Great Depression. Their expected lifespan was 50 years. These structures are now entering their 9th decade of use, negatively impacting the efficiency of marine (river) transportation.

Historically, federal, state, and local governments took on the cost of infrastructure investment. Future financing, however, may need to come from public-private partnerships, taking the form of pay-for-use (toll) infrastructure. Why do we need a state-of-the art infrastructure? Answer: Countries from China to the United Arab Emirates are investing in technologically sophisticated airports, seaports, high-speed trains, and smart highways. They know that infrastructure attracts foreign direct investment (FDI) and drives global competitiveness.

Depending on where you live, you may have noticed an increase in traffic congestion in recent years. Today, most of the world's population, especially young people, lives in cities. The result: Clogged roadways take longer to cover short distances. Simply put, urban living increases the so-called "friction of distance," making it difficult to move about. In the U.S., congestion cost $121 billion of wasted time in 2011. That's $818 per commuter. 1 On average, commuters in Los Angeles lose 58 hours per year to traffic congestion. In Sao Paolo, Brazil, one traffic jam stretched nearly 165 miles. If you were stuck in that backup, your on-time performance suffered.

What's the coolest advertising you've seen on the back of a truck? If you like logistics, maybe the picture Figure 7-12 resonates with you. The clever caption—"The only thing not delivered by truck"—highlights how dependent we are on trucking. At one point or another, almost every product you own was moved by truck. In the U.S., over 1.3 million people are truck drivers. Yet, like infrastructure, truckers are aging. And, fewer young people want to enter the profession. The result: We are facing a major driver shortage, especially for long-haul drivers who must be away from home for long stretches at a time. Despite raising wages, trucking companies find it difficult to entice conscientious people—remember, safety is at a premium—to take the wheel of an 80,000-lb. tractor-trailer and drive it on the road all day long.