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How would the new infrastructure bill impact freight forwarding & trucking?

Categories: Trucking.

The Senate recently advanced a $1 trillion infrastructure bill that, if signed into law, will include major investment for the nation’s transportation, water, and power infrastructure. It also allocates funds for expanded broadband internet access, research and development for clean energy technologies, and much more.

The bill still needs to be approved by the House, but while we wait, let’s explore some of the implications of this bill for the transportation and logistics industry. 

What’s in the bill? 

This bill aims to significantly increase funding for roads and bridges, which currently face an estimated $786 billion backlog of investment needs according to the American Society of Civil Engineers. In addition, it will aim to improve physical infrastructure with a focus on climate change mitigation and fortification, and ensure the roads and bridges are able to withstand severe weather fluctuations from record heat, flooding, and major storms like hurricanes.

Current proposed spending according to the White House

Total $579 billion
Transportation $312 billion
Roads, bridges, major projects $109 billion
Safety $11 billion
Public transit $49 billion
Passenger and Freight Rail $66 billion
EV infrastructure $7.5 billion
Electric buses / transit $7.5 billion
Reconnecting communities $1 billion
Airports $25 billion
Ports & Waterways $16 billion
Infrastructure Financing $20 billion
Other Infrastructure $266 billion
Water infrastructure $55 billion
Broadband infrastructure $65 billion
Environmental remediation $21 billion
Power infrastructure incl. grid authority $73 billion
Western Water Storage $5 billion
Resilience $47 billion

*New spending + baseline (over 5 years) = $973B
*New spending + baseline (over 8 years) = $1,209B


How will the infrastructure bill improve transportation?

Around $567 billion in new federal money is earmarked for roads, bridges, rail lines, transit projects, water systems, and other physical infrastructure projects. That doesn’t include another $77 billion allocated to addressing freight systems. Where will all that money go?

Improved roads and bridges — The white house estimates that around 20% (or 20,000 miles) of the country’s highways and major roads are in poor conduction, as well as more than 45,000 bridges. This slows transportation and leads to higher repair costs for trucking companies.

Allocating money to repair and improve these roads and bridges will make long haul trucking safer, and hopefully prevent instances of structural instability issues on the major highways.

Improved safety measures — The infrastructure bill is expected to require all commercial vehicles to be equipped with automatic emergency braking (AEB) systems within two years. In addition, underride guards will be required on the back of trailers to prevent passenger cars from sliding beneath the trailer during a collision.

These technologies have been proven to prevent accidents, and make the ones that do occur less catastrophic. For trucking companies, that could translate into less vulnerability to lawsuits due to accident-related property damage, injury, or death.

More electric vehicle charging stations by 2030 — Range limitations and anxiety are among the largest inhibiting factors to widespread electric vehicle adoption, both for passenger cars and big rigs.

The bill aims to overcome this nationwide shortfall by creating 500,000 new electric vehicle chargers. As logistics firms move toward adopting more electric vehicles into their fleets, this may be a big benefit in the coming years.

Addressing the truck driver shortage — There’s a significant shortage of qualified drivers in the logistics industry (and has been for about a decade). The bill aims to boost the number of available drivers by creating a pilot apprenticeship program for drivers under 21. It also aims to close the gender gap in trucking by creating a women of trucking advisory board to encourage more women to join the field. 

How could the infrastructure bill impact logistics?

A massive buildout of vital infrastructure on our interstates and at ports across the country may be disruptive for a time, but it will eventually lead to quicker travel times in the future. What does that investment mean for the logistics industry?

Digital investment at ports — As part of the $16 billion invested in ports and waterways, logistics pros can expect a build-out of state-of-the-art drayage and intermodal infrastructure, including green-energy powered cargo systems and more. Add in advanced drayage software systems, and the global supply chain will run more efficiently.

Quicker travel times — Money for infrastructure around ports, railway junctions, and warehouse hubs will improve the way goods travel. Rather than employ a piecemeal approach to fixing highways around major hubs — many of which are in serious decline — a large investment in repairs will prevent delays associated with bridge or highway outages.

Less wear and tear on trucks — In addition, trucks won’t sustain as much damage due to poor road conditions. Over time, suspension systems will require less maintenance and replacement on a truck-by-truck basis, which at scale could lead to reduced overhead in a major cost center.

Better connectivity — Expanded broadband coverage could make IoT devices and GPS systems that thrive on 24/7 connectivity more effective. It also helps keep truckers better connected out on the open road, improving communications and making the job feel less solitary.

Conclusion

A lot may change in this bill before it finally hits the Resolute desk. In the meantime, the existing text offers a glance at what lawmakers see as a priority for investment, and allows us to plan for that future.

Infrastructure is the core of our supply chain — and a foundation that has been woefully underfunded in recent decades. Investment into roads, bridges, and ports will be necessary to keep essential goods flowing throughout the country, especially as the impacts of climate change intensify.

Equally important is investment in digital infrastructure, which is helping to transform operations at the Port of LA and Long Beach. Want to get on the cutting edge of freight forwarding technology? Partnering with a tech-savvy 3PL like Globecon can give you access to the benefits of advanced logistics and warehousing software.

Looking for a partner at the port of LA? Contact Globecon today.