Improved Transport Infrastructure a Necessity

UPS Chairman and CEO Michael Eskew recently addressed the Philadelphia World Affairs Council on the importance of transportation infrastructure to the nation’s economy. Eskew is in a good position to talk about that subject, since his company is one of the largest trucking companies in the world, runs the world’s 9th largest airline and is the nation’s largest user of freight railroads.

Eskew notes that the nation’s freight transportation system --- its highway, navigable waterway freight rail and air system --- has received poor or even failing grades in an American Society of Civil Engineers 2005 review. This is just the beginning of his concern. China, increasingly America’s most dynamic competitor, is building new seaports, expanding its rail system and is in the process of developing an interstate standard highway system more extensive than our own Eisenhower system.

There is no doubt that globalization is going to make the world a richer place. That does not mean, however, that nations, like the United States, that are on top now will continue to occupy such positions. Continued investment is required. Traffic in urban areas is frequently congested. This means that it takes longer to move freight, which means it is more costly. It also impedes productivity. Studies in Portland and Vancouver, where public officials have systematically discouraged highway expansion, demonstrate the importance of expanding urban highways and keeping the traffic moving.

A University of Paris study showed that as urban travel improves --- as people are able to access more jobs in a fixed period of time (such as 30 minutes) --- there is an increase in economic output.

Texas Transportation Institute data shows that the share of urban travel in congested conditions has risen from 20 percent to over 50 percent in just 20 years. This has occurred principally because urban highways have not been expanded sufficiently to meet the demand. As a result, the nation loses more than $60 billion in congestion costs every year. However, that will only get worse. Many urban areas intend to spend few of their resources on the highway capacity improvements that are the only hope for addressing traffic congestion.

There is an important exception, however, The state of Texas, at the direction of Governor Rick Perry, is undertaking the nation’s first serious program to reduce traffic congestion. The program, arising out of the Governor’s Business Council plan of 2003, is to reduce traffic congestion by up to one-half in the state’s metropolitan areas. Metropolitan planning organizations have developed traffic congestion reduction objectives and the necessary strategies. With Dallas-Fort Worth and Houston being among the fastest growing large metropolitan areas in the high-income world, this will not be easy. Amazingly, however, the modeling is showing that the goals are achievable and that they will not break the bank. Atlanta, the high-income world’s fastest growing metropolitan area has now followed suit, under the direction of Governor Sonny Perdue.

The Texas and Georgia programs represent a first --- transportation agencies actually implementing traffic congestion reduction objectives. It is astonishing that such objectives were not already the rule throughout the country. If the nation is to respond to the need for a sustainable, competitive transport infrastructure, no less than the Texas and Atlanta programs will be require in every metropolitan area in the nation. Such a beginning needs to be expanded to include all segments of the freight transportation system, from air cargo to navigable waterways and freight railroads.

Wendell Cox is a public policy consultant in St. Louis, a Senior Fellow at the Heartland Institute, and a visiting professor at the Conservatoire National des Arts et Metiers in Paris.

Originally posted to On the Heartland 2006.07.13