Friday, July 31, 2015

US Transport Infrastructure Debacle Continues as Global Road Haulage and Freight Interests Look On

Seemingly Never Ending Lack of Political Will and a Paucity of Funds for Highways
Shipping News Feature

US – American politicians have for generations often been accused of being self-absorbed and ignoring the world at large, but currently the majority seem oblivious to the fact that they are often viewed as ridiculous by overseas observers, obviously by some who concentrate on the gun laws issue, but many operators of global freight and road haulage businesses are staggered by the intransigence and political polarisation which the funding for the nations transport infrastructure via the Highway Trust Fund has engendered.

This week saw the 34th ‘patch’, a three month stay of execution, granted to keep funds flowing to some degree which simply avoided the entire government system shutting down on Saturday August 1, when payments to staff and subcontractors would have ceased. The senators even managed to argue over whether a three or five month stay of execution was preferable before granting a further $8 billion to keep the beast afloat up to 29 October 2015.

As we reported previously what was achieved was the passing of a bill which would see a longer term solution if passed in the Autumn when a motion by Democrat Californian senator Barbara Boxer, Republican Jim Inhofe from Oklahoma and Senate Majority Leader Mitch McConnell succeeded in scheduling a six year plan which senators passed by 65 to 34 this week (the 3 month patch was passed easily 91 to 4). Unfortunately this has been criticised by many as the funding plans are considered somewhat tenuous by many. Funds for just three years are identified and plans to reinvigorate the expired Export-Import Bank charter, which caused it to cease business on 1 July, is likely to be stoutly resisted.

The complexities of funding US infrastructure lie at the root of the problem, other first world nations ensure the tax return from road fuel makes up a substantial part of their revenue to go toward transport infrastructure but, like their dogged determination to allow guns to all and sundry despite the President’s common sense warnings, the American consumer, and his lobby representatives in congress, believe cheap fuel is a right not a privilege.

With an already crowded fall schedule for the politicians, the new attempt to produce a medium term solution to a problem which it is estimated will cause a $13 billion shortfall in funding this year alone, is liable to get hung up, yet again as the lawmakers seek funds from different options, rather than tax the cause of the problem at source.

Meanwhile the Department of Transportation has patted itself on the back this week over the continued funding available via its TIGER grant system. In the past six years the programme has issued a combined $4.1 billion to 342 projects in all 50 states, the District of Columbia, and Puerto Rico. This however reveals that funding here too is much in demand, since 2009 that the Department received more than 6,000 applications requesting more than $124 billion. As the DoT points out that means that for every project selected, 17 projects that communities across the country need go unfunded. And for every dollar requested, it has only actually been able to provide a meagre 3 cents.

The problem continues as the Department wades through this year’s grant applications, doubtless searching for both the most deserving and politically expedient. With half a billion in funds made available by Congress this year that means around 95% of the 625 applicants asking for a total of $9.8 billion are going to be disappointed.