Will an ailing transportation network hobble trade traffic?
With collapsing overpasses, thousands of unsafe bridges, unfunded port repairs, poor roads, harsh winters, freak storms and governments refusing to pass infrastructure bills, can NAFTA and pending new trade agreements get a fair shake?
Statistics Canada reports that in 2014, Canada’s exports to the US were valued at $400 billion, and imports from the US $350B, up 11.6% and 12% over 2013, respectively. And according to the Bureau of Transportation Statistics, trucks carried 59.7% of US – NAFTA trade in 2013.
Since trade agreements can only be as good as the transportation networks that enable the trade, dire warnings about the deteriorating infrastructure in North America should be of concern.
“Two things bother me: one, infrastructure decay and the lack of maintenance. Two, my concern is that if any money is allocated to highways, it will go totally to potholes and shovel-ready jobs. It won’t go to things that will bite our asses, like climate change,” says Stephen Blank, Special Advisor, Collaboratory on Energy Research and Policy, University of Ottawa.
“North-south transportation between Canada and Mexico is almost all by truck. If more manufacturing is brought back to North America from China, that is good. But if our roads are decayed, how will that work,” Blank asks.
Concerns about crumbling infrastructure in the US and Canada are widespread. In 2013 the American Society of Civil Engineers (ASCE) issued its quadrennial “Report Card for America’s Infrastructure,” in which is assigns letter grades to each type of infrastructure, nation-wide. It gives bridges a C+, noting that of the country’s 607,380 bridges, one of every nine (67,487) is structurally deficient. To fix this, the Federal Highway Administration (FHA) estimates that it would take an annual investment of US$20.5B, versus the US$12.8B being spent in the run up to the 2013 Report Card.
Ports earned a C. While noting that port authorities and private partners made US$46B in capital improvements to 2016, federal funding had declined for waterways and landside freight connections used to move goods in and out of ports.
The ASCE gave roads a D, noting that 42% of the country’s major urban highways were congested, at a cost to the economy of $101B. The FHA puts the cost of significantly improving road conditions and performance at $170B.
The ASCE concludes, “… our infrastructure systems are failing to keep pace with the current and expanding needs, and investment in infrastructure is faltering.” So is the infrastructure itself.
Between 1989 and 2012 nearly 600 US bridges failed, according to a 2012 CBS News interview with Barry LePatner, author of “Too Big to Fall: America’s Failing Infrastructure and the Way Forward.”
Recent examples: In July a bridge collapsed on the I-10 in California, which carries 54,000 vehicles a day. Listed as functionally obsolete in the FHA’s 2014 National Bridge Inventory, the collapse was blamed on an extreme weather event. A bridge closure on the I-65 in Indiana this August forced a 60-mile detour for 25,000 northbound travelers a day, including 8,000 trucks.
Sixty percent of truck drivers surveyed by 3PL company National Retail Systems said roads are getting worse. One conclusion of the survey, posted this June, is that bad roads and the related operating costs and delays are aggravating driver shortages.
Despite this infrastructure deficit, Senate Republicans defeated an amendment to the 2016 budget to add US$478B in new infrastructure spending.
Canada has its own infrastructure debt hole. A Canadian Infrastructure Report Card issued in 2012 calculated that city and community traffic gridlock costs Canada’s economy C$5B. Pooled responses from 118 municipalities put 26% of all road types in fair to very poor condition, and only 43% in very good condition; i.e., with no operational problems and demand corresponding well to design capacity.
Last year Canada2020 issued a report, which includes summaries of other infrastructure reports. It notes that congestion costs Canada C$15B a year, that the transportation portion of the country’s municipal infrastructure deficit is C$21.7B and that it would take C$66B between 2013 and 2023 to repair urban roads and bridges.
Zeroing in on one province, New Brunswick, a 2013 Auditor General’s Report on the state of the province’s 2,608 bridge structures stated that 293 have a “poor” rating, defined as requiring significant work in the near term to keep them in service.
Climate change is an emerging infrastructure migraine. The Summer 2015 issue of Asset Management Newsletter BC, for example, discusses engineering vulnerability as a function of climate change. The damage to infrastructure is illustrated by insurance payouts, including a first-ever “two-billion” event – the Southern Alberta flood of 2013.
Freak weather and unusually severe storms, with the attendant impact on transportation systems, have become practical commonplace across the continent.
What are some of the faces of Canada’s infrastructure deficit? In 2006 a Laval, Quebec overpass collapsed, affecting 3,000 trucks a day. Weight restrictions on several classes of trucks on 135 overpasses followed, affecting 12,000 trucks a day. The following year, carriers threatened to sue over lost revenues and additional expenses.
The Champlain Bridge is a critical part of a C$20B trade corridor between the US and Canada. It carries 58 million vehicles a year. Thanks to a lowest-bid design and structural components that cannot be effectively repaired, the bridge, only 53 years old, is on costly life support.
A 2011 assessment of the bridge by Delcan reports that, “… there is risk of partial collapse of the bridge …” and “… this bridge can be expected to collapse partially or altogether in a significant seismic event.”
Coincidentally, but happily, the A-30 ring road around Montreal was completed in 2012. Should something happen to the bridge before its replacement is ready in 2018, the ring road will serve as a ready detour.
Then there is the crumbling, critical 18-kilometre Gardiner Expressway in Toronto. This June Toronto council voted to rebuild the Expressway, with work to begin around 2020.
According to the Canadian Centre for Policy Alternatives, underinvestment in infrastructure is a chronic problem, with Canada short C$145B worth of infrastructure. The report points to a large offloading by federal governments of infrastructure responsibilities onto local government.
Its report warns that continued low levels of investment, “…will leave our infrastructure stuck at a crisis level indefinitely, and is clearly a recipe for disaster.”
In a ray of hope for untold numbers of shippers, it seems that construction of a new, six-lane bridge will finally begin and, by 2020, ease pressure on the slow-rolling transportation nightmare that is the Ambassador International Bridge connecting Windsor and Detroit. It handles 25% of all merchandise trade between US and Canada and millions of trucks creepy crawl across it every year. Faced with mind-numbing congestion and no luck getting a deal with the US to co-fund a new bridge, Ottawa finally decided that Canadians would pay for the $1B construction tab.
As trade increases, Canadian ports will be asked to process ever more cargo. Wendy Zatylny, president, Association of Canadian Port Authorities (ACPA), comments that Canadian ports will likely have to handle another billion tonnes at Canadian ports by 2030. “This means we would have to double our capacity – about five CPAs the size of Port Metro Vancouver. The question is how do we prepare?”
But ports underfunding is also today’s boat anchor. To cite just one dimension of the issue, a Transport Canada/ACPA study identified $5.8 in investment needs for the 18 CPAs, including $1.9B in rehabilitation work, the dirt-poor third cousin of capex projects, from the point of view of locating funding.
What about the railways? CN and CP spend billions annually on maintenance and upgrades, but short line railways struggle to fund infrastructure improvements. This summer the Coalition of Rail Shippers included into their submission to the Canada Transportation Act Review requests that railways increase capacity to meet demand.
It is time to start spending.