It’s coming up on six months since the Infrastructure Investment and Jobs Act was signed into law by President Joe Biden. Yet how it’s going to play out remains something of a mystery to many.
Platts Global S&A put together a webinar to explain the ins and outs of the infrastructure bill and how it will affect the supply chain. Elaine Nessle, executive director for America’s Gateways and Trade Corridor, cited the key elements of the package, starting with the decided victor.
“If I had to pick a winner in the IIJA for transportation infrastructure it would definitely be bridges. There’s $27.5 billion through the formula program and also discretionary program available for bridges,” she said.
The distinctions are meaningful. The act creates funding for both types of spending. Formula spending is money guaranteed to the states. The reliability of these monies help states plan for projects.
The IIJA also sets aside $12.5 billion in discretionary money for bridge repair and new construction. These funds can be applied where the needs are deemed the greatest, but it also is how larger projects are handled.
“Discretionary funding is really important for these big, complicated freight projects. A lot of times they cross modes, cross jurisdictions and are difficult to accomplish through a state formula-funding approach,” she said.
Those types of projects can also be addressed through a new megaprojects program, which has $5 billion in funding. Again, these are “lumpy and odd” and do not fit into a typical formula funding approach.
In addition to direct funding, there are other elements of the project that will be beneficial for those involved in moving material. That includes the creation of an Office of Multimodal, Infrastructure and Policy, a development Nessle’s group has been promoting for years.
“The way things have operated through USDOT historically have been modally siloed. You have the Federal Highway Administration, The Federal Maritime Administration, the Federal Railroad Administration,” she said. “What has been lacking is a dedicated overarching office to look at supply chain from across various modes to understand how it’s working, how it’s not working and where we can target investment in order to make it work better for the U.S. economy.”
Another development that could benefit the transportation industry, and all those who depend on it, is the new CDL apprenticeship program, which allows 18- to 20-year-olds begin truck driving careers, hopefully bringing more drivers into the pot. Of course, lowering the age limit will only go so far to addressing the issue faced by the industry. The current driver shortage is expected to triple by 2028, said fellow webinar speaker Rocky Moretti, director of policy and research for TRIP – National Transportation Research.
“The industry has struggled to find enough drivers willing to move into the field of being a truck driver. We need to make the job a little more palatable, less time on the road, more freight movement. We’re trying to find a middle ground that is going to bring more people into driving trucks,” he said.
Though the act was barely passed and the money still hasn’t been allocated, Nessle said it’s actually time for industry advocates to begin looking ahead. The funding, as historic as it is, can’t be a one-time thing followed by a return to the status quo.
“It is going to be very difficult at the expiration of the five years to go back to starvation diet for transportation infrastructure we have been on for many, many years. It is already time to begin looking at how do we maintain these levels of funding in perpetuity in order to ensure we have a supply chain that is robust, dependable, safe and supports the U.S. economy as we seek to grow,” she said.