The American Society of Civil Engineers (ASCE) today issued the nation's infrastructure a "D+" grade for the second time in four years, meaning the massive network encompassing everything from highways, rails, and ports to the water supply and the energy grid remains in fair to poor condition, but with capacity deteriorating near the point of failure.
The nation's roads, one of 16 infrastructure categories, but perhaps the most visible because virtually every American uses and relies on them, received a "D" grade. The nation's inland waterways also received a "D," while bridges and ports each received "C+" grades. The U.S. rail network, which encompasses the freight rail system and the Amtrak passenger rail operation, was the only category to receive a "B" grade, largely on the back of the significant annual investments made by freight railroads, which rely primarily on their own revenues and borrowing to maintain and improve their facilities.
ASCE called for a ramp-up of annual investment to an equivalent of 3.5 percent of U.S. GDP, compared with current levels of 2.5 percent. With US GDP coming in at $18.5 trillion in 2016, this would translate into an increase to $647.5 billion from $462.5 billion. The Trump administration is fast-tracking efforts to develop an infrastructure spending plan that is likely to approach $1 trillion a year. Late last month, the White House appointed DJ Gribbin, former general counsel of the Department of Transportation (DOT) under President George W. Bush, as special assistant to the president for infrastructure policy.
The group repeated its call for increases in federal taxes on diesel fuel and gasoline, levies that have not been changed since 1993. It also urged that policymakers take a closer look at the merits of a tax imposed on the number of miles a vehicle travels, noting that such a tax would capture consumption from electric-powered cars and trucks, and would take into account the enhanced per-mile fuel-efficiencies found in later-model vehicles.
The 2017 report card represents the first time that ASCE has embedded a discussion about funding in its broad conclusions. The group issued its first report card in 1998, and since 2001 has published its findings every four years. The 2017 report card was drafted by a team of 28 civil engineers, who grade each infrastructure category using eight criteria.
Among the findings:
The average delay per lock on the nation's inland waterway system nearly doubled to 121 minutes from 64 minutes between 2000 and 2014. Nearly half of all vessels experienced some form of delay in 2014, the last period for which full-year data was available. The report lauded the U.S. Army Corps of Engineers, which maintains the 25,000-mile network, for utilizing increased funding levels from government and users to expedite the completion of various lock and dam rehabilitation projects.
About 9 percent of the country's 614,387 bridges were in such poor condition last year as to be classified structurally deficient, according to the report. On average, there were 188 million trips per day across structurally deficient bridges, ASCE said. The number of bridges declared structurally deficient has been decreasing, the report found. However, the age of the typical span continues to rise, with 40 percent of bridges 50 years old or more, according to the report.
Port productivity declined by 25 percent or more over the past 10 years due to an increasingly congested landside network connecting ports, railroads, and highways ASCE said, citing port-industry data. Under the five-year federal transport-funding bill signed into law in late 2015, landside connections are scheduled to receive $11 billion in new funding. However, those intermodal connections are expected to require $29 billion in funding over that time, according to the report.
More than two out of every five miles of America's interstate highways near urban areas are congested, and traffic congestion costs the U.S. about $160 billion a year in delays and wasted fuel, according to ASCE. One out of every five miles of highway pavement is in poor condition, the report found. There is currently a $420 million capital backlog to pay for highway repair, the report found.
Capital allocated to fixing road infrastructure would be money well spent, according to the report. Citing data from DOT's Federal Highway Administration, ASCE said that each dollar spent on road, highway, and bridge improvements returns $5.20 in the form of lower vehicle maintenance costs; reduced traffic delays and fuel consumption; improved safety; lower road and bridge maintenance costs; and carbon emission cuts due to improved traffic flow.
Statements from trade groups reflected the sobering realities facing the millions of infrastructure stakeholders. The grades "provide yet another example of what occurs when a nation underinvests in the critical infrastructure systems that support economic development and quality of life," said Bud Wright, executive director of the American Association of State Highway and Transportation Officials (AASHTO). Wright said long-term, structural funding changes that go beyond even the five-year intervals mandated under the 2015 funding law are needed.
Kurt Nagle, president and CEO of the American Association of Port Authorities (AAPA), said the slight improvement in port grades (to C+ from a C in 2013) indicates that while some progress has been made, much work still needs to be done. Nagle acknowledged the poor condition of landside connections, contending that the federal government isn't adequately investing in those links to keep freight moving efficiently. The mediocre grade "reinforces our view that the federal government is still underinvesting in the landside and waterside connections to ports," Nagle said.
Economic activity in the logistics industry continued its expansion streak in October, growing for the 11th straight month and reaching its highest level in two years, according to the most recent Logistics Managers’ Index report (LMI), released this week.
The LMI registered 58.9, up from 58.6 in September, and continued a run of moderate growth that began late in 2023. The LMI is a monthly measure of business activity across warehousing and transportation markets. A reading above 50 indicates expansion, and a reading below 50 indicates contraction.
October’s reading showed the fastest rate of expansion in the overall index since September of 2022, when the index hit 61.4. The results show that the industry is continuing its steady recovery from the volatility and sluggish freight market conditions that plagued the sector just after the Covid-19 pandemic, according to the LMI researchers.
“The big takeaway is that we’re continuing the slow, steady recovery,” said LMI researcher Zac Rogers, associate professor of supply chain management at Colorado State University. “I think, ultimately, it’s better to have the slow and steady recovery because it is more sustainable.”
All eight of the LMI’s indices grew during the month, with the Transportation Prices index showing the most growth, at nearly 6 points higher than September, reflecting increased activity across transportation markets. Transportation capacity expanded slightly during the month, remaining just above the 50-point threshold. Rogers said more capacity will enter the market if prices continue to rise, citing idle capacity across the market due to overbuilding during the pandemic years.
“Normally we don’t have this much slack in the market,” he said. “We overbuilt in 2021, so there’s more slack available to soak up this additional demand.”
The LMI is a monthly survey of logistics managers from across the country. It tracks industry growth overall and across eight areas: inventory levels and costs; warehousing capacity, utilization, and prices; and transportation capacity, utilization, and prices. The report is released monthly by researchers from Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals (CSCMP).
The port worker strike that began yesterday on Canada’s west coast could cost that country $765 million a day in lost trade, according to the ALPS Marine analysis by Russell Group, a British data and analytics company.
Specifically, the labor strike at the ports of Vancouver, Prince Rupert, and Fraser-Surrey will hurt the commodities of furniture, metal products, meat products, aluminum, and clothing. But since the strike action is focused on stopping containers and general cargo, it will not slow operations in grain vessels or cruise ships, the firm said.
“The Canadian port strike is a microcosm of many of the issues that are impacting Western economies today; protection against automation, better work-life balance, and a cost-of-living crisis,” Russell Group Managing Director Suki Basi said in a release. “Taken together, these pressures are creating a cocktail of connected risk for countries, business, individuals and entire sectors such as marine insurance, which help to mitigate cargo exposures.”
The strike is also sending ripples through neighboring U.S. ports, which are hustling to absorb the diverted cargo, according to David Kamran, assistant vice president for Moody’s Ratings.
“The recurrence of strikes at Canadian seaports is positive for U.S. ports that may gain cargo throughput, depending on the strike duration,” Kamran said in a statement. “The current dispute at Vancouver is another example of the resistance of port unions to automation and the social risk involved with implementing these technologies. Persistent disruption in Canadian port access would strengthen the competitive position of US West Coast ports over the medium-term, as shippers seek to diversify cargo away from unreliable gateways.”
The strike is also affected rail movements, according to ocean cargo carrier Maersk. CN has stopped all international intermodal shipments bound for the west coast ports of Prince Rupert, Robbank, Centerm, Vanterm, and Fraser Surrey Docks. And CPKC has stopped acceptance of all export loads and pre-billed empties destined for Vancouver ports.
Connected with the turmoil, Maersk has suspended its import and export carrier demurrage and detention clock for most affected operations. The ultimate duration of the strike is unknown, but the situation is “rapidly evolving” as talks continue between the Longshore Workers Union (ILWU 514) and the British Columbia Maritime Employers Association (BCMEA), Maersk said.
Terms of the acquisition were not disclosed, but Mode Global said it will now assume Jillamy's comprehensive logistics and freight management solutions, while Jillamy's warehousing, packaging and fulfillment services remain unchanged. Under the agreement, Mode Global will gain more than 200 employees and add facilities in Pennsylvania, Arizona, Florida, Texas, Illinois, South Carolina, Maryland, and Ontario to its existing national footprint.
Chalfont, Pennsylvania-based Jillamy calls itself a 3PL provider with expertise in international freight, intermodal, less than truckload (LTL), consolidation, over the road truckload, partials, expedited, and air freight.
"We are excited to welcome the Jillamy freight team into the Mode Global family," Lance Malesh, Mode’s president and CEO, said in a release. "This acquisition represents a significant step forward in our growth strategy and aligns perfectly with Mode's strategic vision to expand our footprint, ensuring we remain at the forefront of the logistics industry. Joining forces with Jillamy enhances our service portfolio and provides our clients with more comprehensive and efficient logistics solutions."
In addition to its flagship Clorox bleach product, Oakland, California-based Clorox manages a diverse catalog of brands including Hidden Valley Ranch, Glad, Pine-Sol, Burt’s Bees, Kingsford, Scoop Away, Fresh Step, 409, Brita, Liquid Plumr, and Tilex.
British carbon emissions reduction platform provider M2030 is designed to help suppliers measure, manage and reduce carbon emissions. The new partnership aims to advance decarbonization throughout Clorox's value chain through the collection of emissions data, jointly identified and defined actions for reduction and continuous upskilling.
The program, which will record key figures on energy, will be gradually rolled out to several suppliers of the company's strategic raw materials and packaging, which collectively represents more than half of Clorox's scope 3 emissions.
M2030 enables suppliers to regularly track and share their progress with other customers using the M2030 platform. Suppliers will also be able to export relevant compatible data for submission to the Carbon Disclosure Project (CDP), a global disclosure system to manage environmental data.
"As part of Clorox's efforts to foster a cleaner world, we have a responsibility to ensure our suppliers are equipped with the capabilities necessary for forging their own sustainability journeys," said Niki King, Chief Sustainability Officer at The Clorox Company. "Climate action is a complex endeavor that requires companies to engage all parts of their supply chain in order to meaningfully reduce their environmental impact."
Supply chain risk analytics company Everstream Analytics has launched a product that can quantify the impact of leading climate indicators and project how identified risk will impact customer supply chains.
Expanding upon the weather and climate intelligence Everstream already provides, the new “Climate Risk Scores” tool enables clients to apply eight climate indicator risk projection scores to their facilities and supplier locations to forecast future climate risk and support business continuity.
The tool leverages data from the United Nations’ Intergovernmental Panel on Climate Change (IPCC) to project scores to varying locations using those eight category indicators: tropical cyclone, river flood, sea level rise, heat, fire weather, cold, drought and precipitation.
The Climate Risk Scores capability provides indicator risk projections for key natural disaster and weather risks into 2040, 2050 and 2100, offering several forecast scenarios at each juncture. The proactive planning tool can apply these insights to an organization’s systems via APIs, to directly incorporate climate projections and risk severity levels into your action systems for smarter decisions. Climate Risk scores offer insights into how these new operations may be affected, allowing organizations to make informed decisions and mitigate risks proactively.
“As temperatures and extreme weather events around the world continue to rise, businesses can no longer ignore the impact of climate change on their operations and suppliers,” Jon Davis, Chief Meteorologist at Everstream Analytics, said in a release. “We’ve consulted with the world’s largest brands on the top risk indicators impacting their operations, and we’re thrilled to bring this industry-first capability into Explore to automate access for all our clients. With pathways ranging from low to high impact, this capability further enables organizations to grasp the full spectrum of potential outcomes in real-time, make informed decisions and proactively mitigate risks.”