What will the Infrastructure Deficit Mean to the Transportation Industry

What will the Infrastructure Deficit Mean to the Transportation Industry?

Everyone in the transportation industry knows that we need a major overall to our roads, ports and bridges.Image result for infrastructure

Even with what seems to be constant construction on the highways that everyone in the transportation industry can attest to we still know that more work needs to be done. Despite constant traffic jams and detours there is still a huge deficit in our infrastructure budget.

The U.S. Chamber of Commerce President and CEO, Thomas J. Donohue, said that we face a $2 trillion dollar debt that needs to be addressed. Currently the Trump administration has offered to up to $200 billion toward the deficit with the states expected to pick up the difference.

The transportation is currently experiencing an upsurge in revenues and overall shipping volumes but this could be affected if our infrastructure problems are not addressed. In addition, both the states and the federal government is going to have to find a way to pay for the infrastructure upgrades. This normally means increased taxes that affect the transportation industry (justly or not) harder than other industries.

Although the transportation industry acknowledges it is a major user of the nation’s roadways for commercial purposes, it cannot be expected to fund the entire deficit on its own without major price increases related to the transportation of goods which will increase the overall cost of all goods sold. This could lead to inflationary pressure and slow the overall economy.

Mr. Donohue also believes that removing the U.S. from the North American Free Trade Agreement (NAFTA) will produce further negative effects on the overall economy since our annual trade with Canada and Mexico is more than $1.4 trillion dollars.

If this and other events start to take hold then the overall economy could start to stall which would lead to lower freight volumes and possibly increased costs to the transportation industry due toImage result for nafta attempts to fund the infrastructure deficit. Lower revenue coming in and increased cost could potentially be on the horizon for the transportation industry if we continue with the NAFTA withdraw and government decides to increase the tax burden of the transportation industry to fund its infrastructure needs.

So, what are transportation companies to do? We are already seeing reduced productivity due to E-Logs. We are struggling to bring in qualified drivers even as the Department of Transportation (DOT) considers more (or stricter) requirement for drivers.

We are struggling to get our hands around sleep apnea which could reduce the overall driver pool substantially and seeing insurance rates going up each year due to both justified and frivolous lawsuits. You cannot even drive down the interstate without seeing a billboard offering to sue a trucking company.

Ultimately, as the transportation industry sees more increased costs and productivity and capacity continue to fall we are going to have to change the way we do business.

We will continue to work through the construction delays because we need to upgrade the infrastructure. We can only hope that the government does not decide to increase our overall burden by adding increased taxes to pay for the deficit. Perhaps we will have to pay a share but the entire amount should not have to be shouldered by our industry.

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