asce-failure to act final

8/6/2019 ASCE-Failure to Act Final

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FAiluRE to ACt

The economic impacTof current Investment trends Insurface TransporTaTioninfrasTrucTure


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This report was prepared for the AmericanSociety of Civil Engineers by EconomicDevelopment Research Group, Inc.

American Society of Civil Engineers1801 Alexander Bell DriveReston, Virginia, 20191-4400World Headquarters

101 Constitution Avenue, NWSuite 375 EastWashington, DC 20001Washington Of ce

[email protected] www.asce.org/reportcard

Economic Development Research Group, Inc.2 Oliver Street, 9th FloorBoston, MA 02109

www.edrgroup.com

Copyright 2011 by the American Society of Civil Engineers.All Rights Reserved.


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2 American Society of Civil Engineers

This report seeks to provide an objectiveanalysis of the economic implications of the

United States continued underinvestment ininfrastructure. The Report Card for Americas Infrastructure , published every four years bythe American Society of Civil Engineers, gradesthe current state of 15 national infrastructurecategories on a scale from A through D forgradations of excellent to poor, and F for failing.This report answers the question So what? Interms of economic performance, what does a Dmean? What does an F mean?

This report is part of a project that isstructured around four reports to assessimplications for the productivity of industries,national competitiveness, and effects on house-holds given the present trends of infrastructureinvestment. Together, these reports cover 9 ofthe 15 categories addressed by the ASCE ReportCard for Americas Infrastructure .

This report on surface transportationencompasses highways, bridges, rail, and tran-sit. Subsequent reports will address water andwastewater delivery and treatment, energytransmission, and airports and marine ports.Thus, when reading this report, it is importantto bear in mind that the impacts it discussesexclude any economic impacts from continuingcurrent investment trends for water, waste-water, energy, and airport and marine portinfrastructure.

| figures and tables

| Preface

Fig es1 National Funding Gap by Mode

2 Car and Truck Reliability Costs: Highway

3 Change in U.S. Jobs in 2040 Attributableto Transportation Infrastructure De ciencies

4 Pattern of Reassignments from CongestedInterstates, 20102040

5 Development of De ciencies by Mode

Ta es

1 The Mounting Cumulative Cost of De cientand Deteriorating Surface InfrastructureImposed on Americans

2 Summary of Impacts on EconomicPerformance Over Time

3 Pavement De ciencies for Cars and Trucksby Facility Type, 2010

4 Cumulative Travel Time and ReliabilityCosts Due to Congestion, 20102040

5 Top 20 Countries and EconomiesRanked by the Quality of Roads and Railroads

6 U.S. Commodity Export Reductions in Dollars,2020 & 2040

7 U.S. Commodity Export Reductions byPercentage, 2020 & 2040

8 Congestion and PavementDe ciency by Region, 2010

9 Passenger Mode Reliance by Region, 2010

10 Development of De ciencies by Mode

11 Transit Mode Breakdown of Percent VMT Operating on De ciencies Over TimeGiven Current Funding Levels

12 Total Costs Due to De cient andDeteriorating Infrastructure

13 Maintenance Needs in Billions of Constant2010 Dollars

14 U.S. Demographic Change, 20102040


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Failure to Act: The Economic Impact of Current Investment Trends in Surface Transportation 3

eXecutiVe suMMarYThe nations surface transportation infrastruc-ture includes the critical highways, bridges,railroads, and transit systems that enable peopleand goods to access the markets, services, andinputs of production essential to Americaseconomic vitality. For many years, the nationssurface transportation infrastructure has beendeteriorating. Yet because this deterioration hasbeen diffused throughout the nation, and hasoccurred gradually over time, its true costs andeconomic impacts are not always immediately

apparent. In practice, the transportation fund-ing that is appropriated is spent on a mixtureof system expansion and preservation projects.Although these allocations have often been suf-

cient to avoid the imminent failure of keyfacilities, the continued deterioration leaves asigni cant and mounting burden on the U.S.economy. This burden will be explored furtherin this report.

Deteriorating conditions and performanceimpose costs on American households and busi-nesses in a number of ways. Facilities in poorcondition lead to increases in operating costs fortrucks, cars, and rail vehicles. Additional costsinclude damage to vehicles from deterioratedroadway surfaces, imposition of both additionalmiles traveled, time expended to avoid unus-able or heavily congested roadways or due to thebreakdown of transit vehicles, and the added costof repairing facilities after they have deterioratedas opposed to preserving them in good condi-tion. In addition, increased congestion decreasesthe reliability of transportation facilities, mean-ing that travelers are forced to allot more time fortrips to assure on-time arrivals (and for freightvehicles, on-time delivery). Moreover, it increasesenvironmental and safety costs by exposing moretravelers to substandard travel conditions andrequiring vehicles to operate at less ef cient lev-els. As conditions continue to deteriorate over

time, they will increasingly detract from the abil-ity of American households and businesses to beproductive and prosperous at work and at home.

This report is about the effect thatsurfacetransportation de ciencies have, and willcontinue to have, on U.S. economic performance.For the purpose of this report, the term de -ciency is de ned as the extent to which roads,bridges, and transit services fall below standardsde ned by the U.S. Department of Transpor-tation as minimum tolerable conditions (for

roads and bridges) and state of good repair fortransit 1. These standards are substantially lowerthan ideal conditions, such as free- ow 2, thatare used by some researchers as the basis forhighway analysis. This report is about the effectthese de ciencies have, and will continue tohave, on U.S. economic performance.

In 2010, it was estimated that de cienciesin Americas surface transportation systemscost households and businesses nearly $130billion. This included approximately $97 billionin vehicle operating costs, $32 billion in traveltime delays, $1.2 billion in safety costs and $590million in environmental costs.

In 2040, Americas projected infrastructurede ciencies in a trends extended scenario areexpected to cost the national economy more than400,000 jobs. Approximately 1.3 million more jobs could exist in key knowledge-based andtechnology-related economic sectors if suf cienttransportation infrastructure were main-tained. These losses are balanced against almost900,000 additional jobs projected in tradition-ally lower-paying service sectors of the economythat would bene t by de cient transportation(such as auto repair services) or by decliningproductivity in domestic service related sectors(such as truck driving and retail trade).

If present trends continue, by 2020 theannual costs imposed on the U.S. economy by


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deteriorating infrastructure will increase by 82%to $210 billion, and by 2040 the costs will haveincreased by 351% to $520 billion (with cumulativecosts mounting to $912 billion and $2.9 trillion by2020 and 2040, respectively). Table 1 summarizes

the economic and societal costs of todays de cien-cies, and how the present values of these costs areexpected to accumulate by 2040. Table 2 providesa summary of impacts these costs have on eco-nomic performance today, and how these impactsare expected to increase over time.

C st f DefiCienCiesPerformance area in 2010 by 2020 by 2040

Pavement and Bridge Conditions $10 $58 $651

Highway Congestion $27 $276 $1,272

Rail Transit Conditions $41 $171 $370

Bus Transit Conditions $49 $398 $659

Inter-City Rail Conditions $2 $10 $20

t tAL C st t sYsteM UseRs $130 $912 $2,972

* Present value of cost stream in billions of constant 2010 Dollars

SOURCE EDR Group analysis using Transportation Economic Impact System (TREDIS), 2011 NOTE Totals may not add due to rounding.

table 2 summary o impac o eco om c P r orma c v r t m (billions of 2010 dollars)cumulative cumulative

imPact of Deficiencies imPact by 2020 imPact by 2040

Personal Income $930 $3,135

US Value Added (Impact on GDP) $897 $2,662

SOURCELIFT/INFORUM model, University of Maryland. Calculations by University of Maryland using the personal consumptionexpenditure de ator. Income loss exceeds GDP because the deterioration of infrastructure has a disproportionatelynegative effect on high-wage industry sectors.

The avoidable transportation costs that hinderthe nations economy are imposed primarily bypavement and bridge conditions, highway con-gestion, and transit and train vehicle conditionsthat are operating well below minimum tolerable

levels for the level of traf c they carry. If thenations infrastructure were free of de cientconditions in pavement, bridges, transit vehi-cles, and track and transit facilities, Americanswould earn more personal income and industrywould be more productive, as demonstrated bythe gross domestic product (value added) that

table 1 th Mou g Cumula v Co o D c a d D r ora g sur aci ra ruc ur impo d o Am r ca *


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will be lost if surface transportation infrastruc-ture is not brought up to a standard of minimumtolerable conditions. As of 2010, the loss of GDPapproached $125 billion due to de cient surfacetransportation infrastructure. The expected losses

in GDP and personal income through 2040 are dis-played in Table 2.

Across the U.S., regions are affecteddifferentlyby de cient and deteriorating infrastructure. Themost affected regions are those with thelargestconcentrations of urban areas, because urban high-ways, bridges and transit systems are in worsecondition today than rural facilities. Peak commut-ing patterns also place largerburdens on urbancapacities. However, because the nation is so depen-dent on the Interstate Highway System, impacts

on interstate performance in some regions or areatypes are felt throughout the nation. Nationally,for highways and transit, 630 million vehicle hourstraveled were lost due to congestion in 2010. Thistotal is expected to triple to 1.8 billion hours by 2020and further increase to 6.2 billion hours in 2040.3

These vehicle hours understate person hours andunderscore the severity of the loss in productivity.

The speci c economic implications of thefurther deterioration of the U.S. national surfacetransportation system are as follows:

De cient surface transportation infrastruc-ture will cost Americans nearly $3 trillionby 2040 , as shown in Table 1, which repre-sents more than $1.1 trillion in added businessexpenses and nearly $1.9 trillion from house-hold budgets.

This cost to business will reduce theproductivity and competitiveness of American rms relative to global competitors.Increased cumulative cost to businesses willreach $430 billion by 2020. Businesses will haveto divert increasing portions of earned incometo pay for transportation delays and vehiclerepairs, draining money that would otherwisebe invested in innovation and expansion.

Households will be forced to forgo discre-tionary purchases such as vacations, cultural

events, educational opportunities, and restau-rant meals, reduce health related purchasesalong with other expenditures that affect qualityof life, in order to pay transportation costs thatcould be avoided if infrastructure were built to

suf cient levels. Increased cumulative costs tohouseholds will be $482 billion in 2020.

The U.S. will lose jobs in high value, high-pay-ing services and manufacturing industries.Overall, this will result in employee income in2040 that is $252 billion less than would be thecase in a transportation-suf cient economy.

In general three distinct forces are projected toaffect employment:

n First, a negative impact is due to larger costsof transportation services in terms of timeexpended and vehicle costs. These costs absorbmoney from businesses and households thatwould otherwise be directed to investment,innovation and quality of life purchases.Thus, not only will business and personalincome be lower, but more of that income willneed to be diverted to transportation relatedcosts. This dynamic will create lower demandin key economic sectors associated with busi-

ness investments for expansion and researchand development, and in consumer sectors.

n Second, the impact of decliningbusinessproductivity, due to inef cient surfacetransportation, tends to push up employ-ment, even if income is declining. Productivitydeteriorates with infrastructure degradation,so more resources are wasted in each sector. Inother words, it may take two jobs to completethe tasks that one job could handle withoutdelays due to worsening surface transportationinfrastructure.

n Third, related to productivity effects, degrad-ing surface transportation conditions willgenerate jobs to address problems createdby worsening conditions in sectors such astransportation services and automobile repairservices.


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Overall job losses are mitigated by morepeople working for less money and lessproductively due to the diminished effec-tiveness of the U.S. surface transportationsystem. Recasting the 2020 and 2040 initial

job impacts based on income and productivitylost reduces worker effectiveness by an addi-tional 27% (another 234,000 jobs). By 2040,this drain on wages and productivity impliesan additional 115% effect if income and pro-ductivity were stable (another 470,000 jobs).

By 2040 the cost of infrastructure de cien-cies are expected to result in the U.S. losingmore than $72 billion in foreign exports incomparison with the level of exports from

a transportation-suf cient U.S. economy.These exports are lost due to lost productivityand the higher costs of American goods andservices, relative to competing product pricesfrom around the globe.

a a d met d gIn the research for this report, establishingfuture transportation conditions under presenttrends were models used by the Federal High-way Administration (FHWA) and the FederalTransit Administration (FTA) to determinetransportation suf ciency, costs, conditions andperformance, and were buttressed by a literaturereview. For the details of the methods used, seethe appendix.

The overall needs and de ciencies foundwere compared against the investment trendsreported in federal highway statistics, the U.S.Department of Transportation (USDOT) 2008Conditions and Performance Report, and the2007 National Surface Transportation Pol-icy and Revenue Study Commission report forconsistency and reasonableness, allowing fordifferent data years and sources. The analysispresented in this report is intended to describethe implications of unmet needs in nationaleconomic terms, and is not offered as a substitutefor more speci c national, state, or metropoli-tan-level analysis of needs and de ciencies forplanning and programming purposes.

o je ti e a d li its f T is t dThe purpose of this study is limited to present-ing the economic consequences of continuinginvestment in Americas surface transportationinfrastructure on a trends-extended basis. It is

not intended to propose or imply prescriptivepolicy changes. In recent years, many solutionshave been offered to address the deterioratingcondition and performance of Americas surfacetransportation infrastructure. Examples includechanging the mix of investment between xed-rail transit and roadways, expanding rubbertire transit (e.g., bus and/or van), implementingvariable time tolling policies to limit peak hourhighway traf c, demand management strate-gies to shift the time of travel or otherwise limit

demand for the transportation system, leveragingbroadband technology to expand telecommut-ing and reduce commuting traf c, changing landuse regulations to generate densities and mixes ofland uses that reduce transportation demand, andexpanding the nations highway network. Thisanalysis is intended to explain the relationshipbetween the failing surface transportationinfrastructure and its effect on the U.S. economy.It is clear that some combination of these or othersolutions is necessary on multistate, regional, andnational levels to address the well-documentedneeds.

Moreover, because this studys purpose is toaddress the consequences of current investmenttrends, it does not include the potential economicimpacts of construction that would be required to,at least in part, address identi ed surface transpor-tation infrastructure de ciencies. Recent studieshave asserted that every $1 billion invested in high-way construction generates approximately 30,000temporary jobs in the national economy, andspending for transit projects generates 24,00041,000 temporary jobs, depending on geographyand blend of spending between new construc-tion, maintenance, and vehicle replacement. 4 Ananalysis that includes the economic impacts ofconstruction and how new investment will affecteconomic performance will vary depending on themix of solutions that are implemented.


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introduction1th a a y p d h p u a h w d yp

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The main sections of this report cover sixkey topics:

he short o i r str t re i vest e t; he i i tio s o this short or tioe o o i er or e; e io tr s ort tio e o o i i i tio s; I i tio s o ower s ee s o i terst te hi hw ys; f i s y o e; I i tio s o i te e i short s.

The nal sections include conclusions anda discussion of future research needs. An appen-dix explains the sources and methodology used

in detail.o je ti e a d li its f T is t dThe purpose of this study is limited to present-ing the economic consequences of continuinginvestment in Americas surface transportationinfrastructure on a trends-extended basis. It isnot intended to propose or imply prescriptivepolicy changes. In recent years, many solutionshave been proposed to address the perceivedworsening of Americas infrastructure. Solutions

put forward have included changing the mixof investment between xed-rail transit androadways, expanding rubber tire transit (e.g.,bus and/or van), implanting variable time toll-ing policies to limit peak hour highway traf c,

leveraging broadband technology to expandtelecommuting and reduce commuting traf-

c, changing land use regulations and therebygenerating densities and transit-oriented devel-opment, and prudently expanding our highwaynetwork. This analysis demonstrates that thenations surface transportation infrastructure isfailing to sustain the economy and a combina-tion of these or other solutions are necessary onmultistate, regional and national levels.

Moreover, because our purpose in this study

is to address the consequences of current invest-ment trends, this study does not include thepotential economic impacts of construction thatwould be required to, at least in part, addressidenti ed surface infrastructure de ciencies.Recent studies, for example, have asserted thatevery $1 billion invested in highway construc-tion generates approximately 30,000 temporary jobs in the national economy, and spendingfor transit projects generates 24,00041,000temporary jobs, depending on geography andthe blend of spending between new construc-tion, maintenance and vehicle replacement. 5

The focus of this study on current trendsmeans that spending for surface transporta-tion infrastructure above or different than thesetrends is effectively zero. This statement is notintended to disregard the economic impactsof constructing new surface transportationinfrastructure. An analysis that includes theeconomic impacts of construction and how newinvestment will affect economic performancewill vary depending on the mix of solutions thatare implemented.

T is a a sis de st ates t at t e ati ss fa e t a s tati i f ast t e is fai i g ts stai t e e a d a i ati f t ese

t e s ti s a e e essa tistate,egi a a d ati a e e s.


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i v m ugh y $220 b a ua y (2010 d a )

d d m 2010 2040, ba d u , m mum ab

d ,6 a d da a u w h u app a

d a h ghway, b dg , a d a v m m d . th

b ak d w a av ag v m app x ma y $196

b p y a h ghway pav m a d b dg , ud g $161

b g m ga 7 a d $35 b p va

x g a . i add , $25 b p y a a

ap a a u u v m ( ud g g k a w

a a kag , m a , a d adway a ) d d.

pp x ma y 37% h h ghway a d b dg v m a d

25% h a v m w b d d mp y vx g d f a m $74 b ha a a ady a g

h .s. my. th ma d d d p v d f

m u g g g w v m . F gu 1 h w h

u d g gap by h ghway, b dg a d a p g am day,

2020 a d 2040. 8 u a d F gu 1, h u d g gap

h ghway a d a a xp d a h ugh 2040, a d

h a h a gap w b m p u d ha h

h ghway gap. i p d u , h u d g gap a

a d bu a , a 41% 2010, xp d a 55%

by 2040. th xp d gap h ghway u d g, 48% 2010,

xp d a 54% by 2040 (s F gu 1 da a u .)

tHe infrastructure sHortfall2


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F ur 1 na a Fu d g Gap by M d

sourcesEDR Group analysis using 2010 USDOT Highway Economic Requirements System for States (HERS-ST) and 2008Highway Performance Monitoring System (HPMS) data, USDOT Transit Economic Requirements Model (TERM), and 2010National Transit Database.

noteDollars and percentages represent cumulative capital funding and expected gaps based on present trends ($billions 2010).

0%10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Highway 2040

Highway 2020

Highway 2010

Transit 2040

Transit 2020

Transit 2010

n % Funded n % Unfunded

The costs of deteriorating infrastructureare measured in terms of vehicle miles traveled(VMT) subject to de cient pavement and bridgeconditions, the percentage of vehicle milesand hours experiencing congestion, and thepercentage of transit revenue miles traveled oninfrastructure (including tracks and structures,systems stations and vehicles) that are known tobe in less than a state of good repair (consideredmarginal or poor ratings in the TransitEconomic Requirements, TERM, model).

De cient pavement imposes signi cant costson the U.S. economy and will continue to do sounless the U.S. is able to fully clear its backlog ofunmet pavement preservation needs. Unfundedneeds are passed on to Americas businesses

and households. Overall, 31% of the nationsvehicle miles of travel use de cient pavement,resulting in higher vehicle operating costs andlower safe travel speeds for all vehicles, andcreating the potential for damaged goods movedby truck, or longer routings for trucks in caseswhere trucks must be detoured due to pavementweight restrictions. Pavement de ciencies affect38% of vehicle miles traveled on interstates and30% VMT on non-interstate functional classes(arterials, collectors, etc). De cient pavementis more of a problem in urban than rural areas,with 47% of urban interstate VMT experiencingde cient pavement and 15% of rural interstates.Table 3 presents a snapshot of current conditions,showing the degree to which cars and trucks on

$11 billion

$123 billion

$344 billion

$70 billion

$754 billion

$2,743 billion

$8 billion

$90 billion

$416 billion

$63 billion

$756 billion

$3,248 billion


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% vmT onF c l Ty Typ D F c nT p v m nT

Urban Freeway 46%

Urban Non-Freeway 37%

Rural Freeway 14%

Rural Non-Freeway 10%

sourceEDR Group Analysis using 2010 USDOT Highway Economic Requirements System for States (HERS-ST) and 2008 HighwayPerformance Monitoring System (HPMS) data

T bl 4 cumu a v t av t m & r ab y c Du c g , 2010-2040(billions of 2010 dollars)

v h cl Typ 2010 2020 2040

Cars $4.1 $39.4 $175

Trucks $7.5 $69.6 $165

sourceEDR Group analysis using Transportation Regional Economic Impact System (TREDIS), 2011

T bl 3 Pav m D f ca a d t u k by Fa y typ , 2010(percent of VMT on de cient pavement or bridges)


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Wages, Value added, industriaoutPut, and Jobs3

By 2040, m a d a g u a a p a

a u u xp d h a my m ha

400,000 j b . h ugh a u u d f y a j b

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v a d pa pu ha d du h d f a d d a d

p du v y p w k , a j b pp u a h gh y

k d a d w - mp a d a p a h ugh u

h my. th g h m mp ym ud

h gh-va u p a , bu a d m d a , a w a

u h a au a , a m a d h am ,

wh h mu b g by h u h d wh a a g hah h u h d budg mu g wa d a p a . F gu 3

h w h du wh h j b w b ga d a d h

.s. my 2040 du d f a u u mpa d

w h 2040 d h u a a p a y m wa

ma a d m mum ab d / a g d pa .


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1,000,000 800,000 600,000 400,000 200,000 0 200,000 400,000 600,0

KnowledgeBased Industries

Whoelsale Trade

Entertainment

Other DurableManufacturing

Non-DurableManufacturing

Other Services

Construction& Utilities

Durable Materials

& Products

NaturalReasources

Retail Trade

AutomobileRepairs

TransportationService Providers

SOURCELIFT/Inforum model, University of Maryland, 2011; and Transportation EconomicImpact System (TREDIS) used by EDR Group.

NOtE:Natural resources include mining, agriculture, forestry and shing. Other durablemanufacturing includes electrical and nonelectrical machinery, instruments, and transportationequipment. Nondurable manufacturing includes chemicals, drugs, plastics and synthetics, rubberand leather products, food processing, textiles, apparel, and miscellaneous manufacturing.Entertainment includes restaurants, bars, amusements, and movies. Knowledge-based servicesinclude computer and data-processing services, educational services, nance, insurance and realestate, professional services and other business services, and medical services.

Figure 3 Change in U.S. Jobs in 2040 Attributable toTransportation In rastructure Defciencies


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The effect of infrastructure de ciencieson Americas job composition has a profoundimpact on the everyday lives of households andfamilies. The total annual income for employ-ees in the knowledge-based industries sector

(which loses the most jobs) is $2.8 trillion,compared with annual income for employees inthe transportation sector of $471 billion. Over-all, industry sectors gaining jobs as a result ofinfrastructure de ciencies in 2040 have anaverage annual income level of 28% less thanthe income level of those sectors losing jobs.

By requiring Americans to take lower-paying jobs to support the needs of de cientinfrastructure, transportation shortfalls havea signi cant effect on personal income for

all Americans. By 2040, it is estimated thatAmericans will be earning a total of $252 bil-lion less than would have been possible if allinfrastructure had been suf cient. AlthoughAmerican households earn less because ofinfrastructure de ciencies, the same house-holds have to spend more of what they do haveon transportation, instead of other householdexpenditures. By 2040, American householdswill be not only earning less in income; theywill also be spending $54 billion more on trans-portation costs than they would with a fullysuf cient system.

Surface transportation de ciencies limitthe types of jobs available to Americans, andaffect how productive Americans can be intheir work. Overall, by 2040, it is expected thatAmerican rms will be generating $232 bil-lion less in value added than they would if allsurface transportation infrastructure weresuf cient. The loss of potential value addedattributable to deteriorating surface infrastruc-ture is most concentrated in the Mid-Atlanticregion, costing roughly $69 billion.

te ati a c etiti e essWhen de cient infrastructure makes U.S. rmsless productive, the U.S. economy overall isalso globally less competitive. The operating,reliability, travel time, safety, and environmen-

tal costs of a de cient transportation systemaffect the cost structure and competitiveness of

rms operating in the U.S. Due to costs imposedby de cient infrastructure, in 2020 the U.S.economy is expected to export $28 billion lessin goods than would have been the case withsuf cient infrastructure, and in 2040 exportsare expected to be $72 billion less.

The United States ranks 19th in the qualityof its roadways and 18th in the quality of itsrail infrastructure, according to a 200910

executive opinion survey for 139 countriesconducted by the World Economic Forum(Table 5). Maintaining, if not improving, theseconditions will be important in maintaining (orimproving) the nations overall export position.

With deteriorating surface transporta-tion infrastructure, United States exports ofproducts and services will face elevated pricepressures in two ways:

1. Exporting rms directly experience highertransportation costs with their own truck eetfor shipments to the Mexican and Canadianborders or to an airport or seaport; and

2. Exporting rms absorb price increasesrelated to transportation costs on some portionof intermediate supplies that arrive by truckand go into a nal product. Those intermediatesupplies may be domestically produced, or theymay be foreign imports that must incur a land-bridging cost from an airport or seaport, orfrom the Canadian or Mexican borders.

If the condition of surface transporta-tion does not stabilize at current levels, 79of 93tradable commodities are expected to


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experience lower export transactions in 2020and 2040. Table 6 shows the 10 commoditiesin each year that will lose the export salesexpected under current conditions.

The largest dollar export losses by com-

modity are the result of both the scaleof projected export production and theexpected impact from de cient surfacetransportation. Transportation de cienciesaffect the production process by increasingcosts of receiving goods. It also makes accessto markets more expensive, and thereforeless competitive, including market reach toCanada and Mexico, and in surface accessto airports and seaports. In addition, somelarge knowledge-based activities (such as

nance and insurance) that export servicesabroad, account for a sizable dollar loss.

The total national export value lost is $28billion in 2020 and $72 billion in 2040rela-tive to the expected base case economies inthose years. U.S. commodities that lose thelargest proportion of their exports are shownin Table 7. The table shows commoditiesirrespective of the volume of exports (thatdimension is captured in Table 6), and illus-trates the percent of impact per commodity.

In 2020, the 10 commodities that areexpected to lose the highest levels of export

dollars account for 53% of the export value lostby the aggregated 79 commodities and 52% in2040. Moreover, many exports shown on the2020 and 2040 tables, both in terms of percentdeclines and dollar losses, are key technology

sectors that drive national innovation. Theseinclude machinery, communications equipment,medical devices, transportation equipment, aero-space, other instruments and chemicals.

ati e fa e T a s tatif ast t e est e ts

This report focuses on the economic conse-quences stemming from the expected state of theU.S. surface transportation system under a pres-ent trend investment scenario and the levels of

investments required for attaining minimum tol-erable conditions for highways and bridges andthe state of good repair for transit systems. How-ever, other aspects of infrastructure investmentfall outside this framework. (For more details onthis sections topic, see the technical appendix.)These include new technologies or innovativeremixes of existing technologies.

As an example of a new technology,high-speed rail addresses the issue of howinvestments in both new infrastructure (tracksand re-rationalization of existing railroad rightsof way) and new transportation technology(advanced transportation equipment and associ-ated communications) can transform intercitypassenger transportation and the economies ofthe metropolitan areas they connect.

Most of Americas major economic com-petitors in Europe and Asiaincluding Japan,Germany, France, Spain and Great Britain,as well as rapidly developing and developedcountries such as China, Taiwan, and SouthKoreahave already invested in and are reap-ing the bene ts of improved competitivenessfrom their intermetropolitan high-speed rail sys-tems. Simply continuing to invest in the nationsexisting transportation infrastructure may notbe enough to maintain its standing in the globaleconomy in the long run.

m st f e i as aj e i etit si e a d sia a e a ead i estedi a d a e ea i g t e e efits f i ed

etiti e ess f t ei i te et itaig -s eed ai s ste s.


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Qua y r ad Qua y ra adr nK counTry/ conomy r nK counTry/ conomy

1 Singapore 1 Switzerland

2 France 2 Hong Kong

3 Switzerland 3 Japan

4 Hong Kong 4 France

5 Germany 5 Germany

6United Arab Emirates

6Singapore

7 Austria 7 Finland

8 Portugal 8 Taiwan, China

9 Denmark 9 Netherlands

10 Oman 10 South Korea

11 Luxembourg 11 Belgium

12 Chile 12 Denmark

13 Finland 13 Spain14 South Korea 14 Sweden

15 Namibia 15 Austria

16 Taiwan, China 16 Canada

17 Canada 17 Luxembourg

18 Sweden 18 d s a

19 d s a 19 United Kingdom

20 Spain 20 Malaysia

sourceWorld Economic Forum, Executive Opinion Survey, as reported in The Global Competitiveness Report 20102011 , 2010 World Economic Forum.

T bl 5 t p 20 c u a d e m ra k d by hQua y r ad a d ra ad


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table 6 U.S. Commodity Export Reductions in Dollars, 2020 & 2040 (billions of 2010 dollars)

2020 2040export export

Commodity dollars lost Commodity dollars lost

Finance & Insurance 3.2 Finance & Insurance 8.1

Wholesale Trade 2.7 Wholesale Trade 6.1

Aerospace 1.9 Aerospace 5.9

Motor Vehicle Parts 1.4 Communications Equipment 5.4

Agriculture, Forestry, Fisheries 1.3 Agriculture, Forestry, Fisheries 2.7

Air Transportation 1.0 Other Instruments 10 2.4

Other Instruments 0.9 Air Transportation 2.2

Professional Services 0.8 Professional Services 2.1

Motor Vehicles 0.8 Other Chemicals 1.4

General & Misc. Industrial Equipment 0.7 Meat Products 1.2

Other (69 Sectors) 13.9 Other (69 Sectors) 34.4

Total 28.4 billion Total 71.7 billion

Other Instruments includes photographic and photocopying equipment, automatic environmental controls, industrial process variable instruments, totalizing uid meters and counting devices, electricity and signal testing instruments, analyticallaboratory, instruments, watch, clock, and other measuring and controlling devices, and laboratory apparatus and furniture.

SOURCELIFT/INFORUM Model, University of Maryland, based on calculations by EDR Group using the TransportationEconomic Impact System (TREDIS).


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A second example of technology change isMagnetic Levitation (maglev) Systems, whichhave been under development and review inthe U.S. and abroad for many years. Both high-speed intercity and low-speed urban systems

have been developed and testedprimarily inGermany, Japan, South Korea, and China. Ahigh-speed maglev system has been built andis currently in operation between downtownShanghai and the Pudong International Air-port. Other airport connector systems havebeen planned for Munich and are under con-sideration in several Middle Eastern countries.A maglev system is currently being plannedbetween Geneva and Lausanne, and anotherbetween Berne and Zurich.

An example of applying existing tools isrethinking various forms of intercity transportand investing in things like intercity rail withairport connections (not necessarily high speed,but rail at speeds that effectively compete withautos), particularly to address the mobility andaccess requirements within and between anentire tier of small and mid-sized urban areas.There may even be express, scheduled bus ser-vice that would work.

In this case, it is not so much new technol-ogy that is needed, but new thinking of how touse existing technologies to ease travel, par-ticularly for commuting and the 100500 miletrip. At the present time, the average Americancommute is worse than that in many Europeannations and a new mix of existing transporta-tion and other technologies could be part of asolution. 12

mitigatiThis report contrasts a transportation systemfunded at levels comparable to todays lev-els with a fully funded system to assess thedegree to which U.S. economic conditionsare affected by current and projected infra-structure de ciencies. Trends extended isunderstood as the cost of effectively continu-ing to fund transportation at todays levels,

with todays priorities, and not acting to makesigni cant improvements in areas that are cur-rently unfunded, or addressing future needs for

which there is no evident funding source. How-ever, the 2007 National Surface TransportationPolicy and Revenue Study Commission reportsuggests that even current levels assumed inthis reports economic analysis may not be sus-tainable. 13 The magnitude of needs found by theanalysis in this report generally concurs withthe magnitudes found by the Policy and Rev-enue Study Commission; though, this reportdoes not attempt to quantify the additional lossto the U.S. economy if funding levels were todecline because of increasing future revenueshortfalls.

For many years, federal surface transporta-tion legislation and statewide planning haveplaced an emphasis on the preservation ofexisting assets. 14 For highways, pavement andbridge preservation has been a priority, asimplemented by states with a x it rst pol-icy to protect existing assets. The funding andemphasis for bridge preservation also increasedin the wake of the I-35 bridge collapse in Min-neapolis in the summer of 2007. The priorityplaced on highway and bridge funding showsthat transportation investment can make adifference, with the Federal Highway Adminis-tration (FHWA) reporting pavement conditionsimproving from 39% with acceptable ride qual-ity in 1997 to 57% in 2006. Furthermore, the

T is e t t asts a t a s tati s stef ded at e e s a a e t t da s e e sa f f ded s ste t assess t e deg ee tw i u. . e i diti s a e affe ted

e t a d je ted i f ast t e defi ie


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table 7 U.S. Commodity Export Reductions by Percentage, 2020 & 2040 (billions of 2010 dollars)

2020 2040Percentage of exPorts Percentage of exPorts

commodity lost (by value) commodity lost (by value)

TV, VCR, radios, phonographs, etc. 11 6% Communications equipment 11%

Apparel 5% TV, VCR, radios, phonographs, etc. 5%

Motor vehicle parts 4% Ships & boats 3%

Agricultural fertilizers & chemicals 3% Ophthalmic goods 3%

Other transportation equipment 3% Agricultural fertilizers & chemicals 3%

Stone, clay & glass 3% Rubber products 2%

Ophthalmic goods 3% Motor vehicle parts 2%

Special industry machinery 2% Government enterprises 2%

Shoes & leather 2% Other transportation equipment 2%

Service industry machinery 2% Apparel 2%

SOURCELIFT/INFORUM Model, University of Maryland, based on calculations by EDR Group using the TransportationEconomic Impact System (TREDIS).

NOtETV, VCR, radios and phonographs includes household audio and video equipment.

number of structurally de cient or functionallyobsolete bridges declined from 34% in 1996 to27.6% in 2006. This progress has left the bulkof de ciency cost in the form of unmet transitneeds and rising highway congestion.

If the preservation investments describedabove had not been made, the economic burdenof de cient infrastructure would be signi -cantly greater than we have found for today andin the future. If the Highway Trust Fund and

other sources are unable to continue todaysfunding levels, then the loss of jobs, personalincome, and value added will be beyond thelosses we have quanti ed. However, if trans-portation investment levels rise in areas that

support building and maintaining minimumtolerable conditions across the system, national jobs, income, and GDP can rise to the levels wehave found and quanti ed in this study.


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regional iMPlications4

i ati s f Defi ie iesThe relative severity of different types of de -ciencies that occurred in 2010 for each regionof the United States due to de cient and dete-riorating infrastructure is shown in Table 8.

Regions of the U.S. with large cities, highdensities, and high concentrations of urbaninterstates and freeways experience the mostdirect costs of de cient transportation infra-

structure in the form of urban congestion.The New England and Far West regions todayhave congestion levels accounting for 23% and24% of VMT, respectively. Furthermore, areaswith higher densities, more transit-dependentpopulations, and older transit systems areoften more susceptible to transit de ciencies.

The de cient and deteriorating trans-portation conditions described abovetranslate into losses in the American econ-omy throughout the 50 states and everyindustrial sector of the economy. Of the jobslost due to deteriorating infrastructure, theimpact was the greatest in the Mid-Atlan-tic region, followed by the Far West region.These regions are most affected because of

their high concentration of congested, urban-ized areas, and their high dependence onurban interstates, freeways, and transit sys-tems, which are among the most de cientaccording to federal highway and transitstatistics.

ea h g h .s. a d a h du y h m a

my a d d way by h mp d

by ub a da d a d d a g a u u . th ma d g a h w h h a g a

u ba a a , g v ha u ba h ghway , b dg , a d a

y m a p d day ha a u a a .

P ak mmu g pa a p a a g bu d u ba

apa . H w v , b au m a d p d h

i a H ghway sy m, mpa a p ma

m g a a yp a h ugh u h a .

r g a u a d by h map pag 22.


24/40


25/40


T bl 9 Pa g M d r a by r g , 2010 (P cap a)

pl nuTo vmT 2,892

TrucK vmT 392p n r bu Tr p 258p n r r l Tr p 16D m nD r pon Tr p 115

rocKy mounT nuTo vmT 2,721


ouTh TuTo vmT 2,936

TrucK vmT 353p n r bu Tr p 43p n r r l Tr p 5

D m nD r pon Tr p 16

ouTh W TuTo vmT 2,812


F r W TuTo vmT 2,555


r T l KuTo vmT 2,580


m D Tl nT cuTo vmT 2,170

TrucK vmT 203p n r bu Tr p 1,036p n r r l Tr p 668D m nD r pon Tr p 182

n W n l nDuTo vmT 2,568


Diffe e t re ia e a dv e a i ities m desRegions with a larger percentage of urban-ized areas are more directly affected by thetravel time and operating impacts of de -

cient highways and transit systems. Ruralregions are affected more by the routingeffects of de cient interstates, and by fund-ing shortfalls in demand response transitsystems. Table 9 compares the reliance of dif-ferent regions of the U.S. on different typesof surface transportation infrastructure andservices (per capita). Overall, lower-densityregions like the Rocky Mountains and theGreat Plains have more vehicle miles of travel

per capita, whereas higher-density regions likeNew England and the Mid-Atlantic states haveless VMT per capita, but are subject to morecongestion due to the density of populationand traf c. Furthermore, the higher-density

regions of New England and theMid-Atlanticstates have signi cantly more transit tripsper capita, and are therefore likely to be moresensitive to the costs of de cient transit.

r a egi s a e affe ted e t e ti geffe ts f defi ie t i te states, a d f di gs tfa s i de a d es se t a sit s ste s.

sourceEDR Group analysis using 2010 USDOT Highway Economic Requirements System for States (HERS-ST) and 2008Highway Performance Monitoring System (HPMS) data,. Population projections are based on Woods and Poole data.


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diVersion of trafficdue to congestion5

ba a apa hav k p pa w h d ma d

u ba a a , a d p d .s. a u ba a a

2010 w 10 m p h u ha h y w u d b h

y m w bu m mum ab g g a da d

p j d a f v .15 i 2020 h p d d f w

g w 13 m p h u a d 16 m p h u 2040.

Because of signi cantly de teriora ting interst atespee ds through Americ as major cities, increas-ing levels of interstate traf c are relying onlower -level arter ials, inboth urban and ruralar eas to access the nations trade centers.16 Theurban and rural arterial route s absorbing the

majorit y of this traf c from a decient urbaninter state system typic ally hav e lower designspeeds and standard s than the interstates,and are subject to higher crash rates and othercosts. In 2010, it is estimated tha t 18% of urbaninterstate traf c was diverte d to lower classi-

ed systems, and 6% of rural interstate traf cwas diverted.

Figur e 4 shows that while congesti on andVMT growth are increasingly conc entrat ed inurban areasthe costs and perf orman ce impli-

cations of these de ciencies are affecting ruraland outlying areas as well, and often result insign i cant ly higher VMT and vehicle hours oftravel (V HT), especially for trucks and trans-cont inental mov es than would otherwise be thecase. These projecte d changes draw attentionto the suf ciency and performance of arterials,

and even nonurban arteri als (shown assma ller lines in the backgroun d in Figure 6),most ofwhich are absorbin g some share of theinter city traf c that is shown to be divertedwhen urban intersta te and freeway speedsare affecte d by congestion. T hus, the routing

effects of deciencies in the interstate syste mcan not be isolated to only urban areas wherede cien cies occur but also affect all the differ-ent regions of the U.S., both urban and rural.

Figure 4 does not show traf c growth overtime, but instead shows thechange in rout-ing that occurs due to urban bottlenecks onthe interst ate system. At current fundin g lev-els, the reassignme nt of interstate tra f c tolower classi ed systems creates an additional360 million urban V HT and 104 million rural

VHT in 2010, and will increase to 22 bil-lion urban VHT and 6 billion rural VHT in202 0, and 34 billion urban V HT and 6 billionrural V HT by 2040. Most of the routes gain-ing traf c are state arterial routes with lowercapacities, d esign speeds, and design stan-dards tha n the routes losing traf c.


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F ur 4 Pa r a g m m c g d i a , 20102040

source: Calculations by EDR Group using synthesis of three sources: HERS-ST, for the magnitude ofspeed effects de ciencies on different urban and rural functional systems; FAF3, which providesnetwork and baseline truck routing; and nally CUBE Voyager, which enables us to see how thede ciencies found by HERS affect the routings shown by FAF.

Blue: Highways that will be avoided all or in part due to extreme congestion

red: Roads that absorb traf c diverted from congested (red) highways.


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tHe national Modal funding gaP6th d s a a a ba k g $3 u u d d

u a a p a d , ud g a $2.2 ba k g

h ghway a d b dg a d $86 b u u d d a

ap a a u u d .17 th ba k g d ud h

p v d g a a h g f a umb

m a wh d u y hav a fx d u a

a d/ d ma d p a . pp x ma y 15% a

v u m u g 2010 a v h w h a a

g d pa a p . i add , 31% pa g

a v h m av u d adway w h ha

m mum ab pav m d a d 18% pa g

a p u d g d ad .18 By 2040, h p p

a v u m u g ha g d v h

w 33%, a d h 18% pa g a VMt av d

g d d w 36%. tab 10 a d F gu 5

umma z h p ag v h v u m , by m d

ubj d f day, a d h w h d f a

xp d a y h u u .19


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F ur 5 D v pm D f by M d

sourceEDR Group analysis using 2010 USDOT Highway Economic Requirements System for States (HERS-ST) and2008 HPMS data.

2010

0% 20% 40% 60% 80% 100%

Demand-Response Transit

Bus Transit (Fixed Route)

Rail Transit

Trucks (Capacity)

Passenger Cars (Capacity)

2020

0% 20% 40% 60% 80% 100%



Rail Transit

Trucks (Capacity)


0% 20% 40% 60% 80% 100%



Rail Transit

Trucks (Capacity)


n % of VMT Suf cient Infrastructure

n % of VMT De cient Infrastructure

2040


30/40


31/40


y r Tr n T Typ % uFF c nT % D F c

2010 Bus Transit ( xed route) 84% 16%

Demand Response (para-transit) 84% 16%

Light Rail 93% 7%

Other Rail 89% 11%



Light Rail 86% 14%

Other Rail 90% 10%



Light Rail 78% 22%

Other Rail 84% 16%

sourceEDR Group analysis using USDOT Transit Economic Requirements Model (TERMS) and 2010 National Transit Database.

Tr n T Typ v h cl Typ 2010 2020 2040

Bus Passenger Bus $49 $398 $659

Rail Passenger Rail $41 $171 $370

t a $90 $568 $1,029

sourceEDR Group using Transportation Economic Impact System (TREDIS), 2011. note Totals may not add due to rounding

T bl 12 t a c Du D f a d D a g i a u u(billions of 2010 dollars)

T bl 11 t a M d B akd w P VMt op a g D fov t m G v cu Fu d g l v


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Figure 5 show how the de ciencies for tran-sit modes are expected to increase from 2010

to 2040, assuming todays funding levels. Itshould be noted that the de ciency of demandresponse eets will rise disproportionately asthe aging population places increasing demandon paratransit services for the nondriving pop-ulation. This is especially important for thenations economy, as the ability of this rapidlygrowing segment of the population to partici-pate in consumer and labor markets will beadversely affected if demand-response ser-vices are not suf cient to keep pace with risingdemand.

Regardless of the type of transit, de -cient transit eets are more susceptible tointerruptions in service, costing householdsand businesses time and reliability due to

unanticipated delay when interruptions occur.In 2010, there were more than 430 interruptionsper revenue mile on passenger bus services,57 interruptions per revenue mile on demand-response services, 349 interruptions per mile

on light rail, and 123 interruptions per mileon other rail services. As transit eets becomeincreasingly de cient relative to demand, inter-ruptions and their costs are expected to imposean increasing burden on the economy, espe-cially in the growing demand-response transitsector, which serves nondriving (and oftennonurban) populations with fewer alterna-tive transportation options. In addition to morelikely interruptions, de cient transit vehicles arealso less fuel and energy ef cient, resulting in

increased operating costs per mile, placing addi-tional cost on the American economy.

Overall, de ciencies in bus transit ( xed-route and demand-response) are estimated tohave imposed $49 billion in cost on the Ameri-can economy in 2010. It is anticipated that by2020, the present value of cumulative bus tran-sit de ciency costs will near $400 billion, andwill reach nearly $680 billion by 2040. De -ciencies in rail transit vehicles are estimatedto have imposed more than $41 billion in coststo the U.S. economy in 2010, and cumulativelywill have exceeded $170 billion by 2020 andwill have reached nearly $370 billion by 2040.Table 12 shows how the overall economic costsof transit de ciencies will increase in the U.S.economy to 2040.

s t a sit f eets e e i easi g defi ie te ati e t de a d, i te ti s a d t ei sts

a e ex e ted t i se a i easi g de t e e , es e ia i t e g wi g de a d-es se t a sit se t , w i se es d i i g

(a d fte a ) ati s wit fewea te ati e t a s tati ti s.


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upporT D by curr nT y r oF n D ToT l n D FunD n l v l % FunD D

Cumulative to 2020 $68 $59 87%

Cumulative to 2040 $172 $126 73%

v ag ua $5.7 $4.2 75%

sourceEDR Group analysis using 2010 USDOT Highway Economic Requirements System for States (HERS-ST)(Fiscally Constrained) and 2008 Highway Performance Monitoring System (HPMS) data.

Maintenance needs are a critical aspectof highway investment requirements, andare expected to increase over time. Unmet

maintenance needs speed up the deteriora-tion of infrastructure and may bring aboutthe costs and adverse economic impactsgiven in this report on a faster timetable, andwith magnitudes exacerbated beyond whatis included in the formal economic analy-sis of unmet capital improvement needs.Unmet maintenance needs also often pres-ent themselves as urgent needs, and divertinvestment from more long-term invest-ments of the type that would ultimately berequired to overcome many of the costs andadverse impacts explored in this report.

When infrastructure maintenance, repairs,and improvements are not fully funded,short-term band-aid solutions are often

implemented to enable the infrastructure tocontinue functioning at less than minimumtolerable conditions. When these short-termsolutions are implemented, in addition to theuser cost of operating the de cient infrastruc-ture, the cost of operating and maintainingthe infrastructure is greater than it would beif the infrastructure were in proper condition.Table 13 gives an estimate of how mainte-nance needs may develop over time, and howunmet needs may increase if todays fundinglevels do not change.

T bl 13 Ma a n d B c a 2010 D a( um g cu cap a i v m l v )

iMPlications of Maintenancefunding (and a funding gaP)7


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conclusions and furtHer researc8The cost of continuing to fund improvementsfor Americas surface transportation system

at current levels produces a mounting bur-den of de ciency, which shifts economic coststo the next generation of American house-holds and businesses. This burden takes theform of higher costs of doing business, feweropportunities for rms to invest, and less dis-posable income for families. The burden alsocompromises Americas competitive positionin the worlds economy and leads to loweroverall pro tability for most business sectors.Although todays funding levels have been

effective in gradually improving highwaypavement and bridge conditions, the mount-

ing costs imposed by de cient transit andurban congestion will continue to accrue longinto the future. Furthermore, todays fundinglevels do not account for important demo-graphic shifts. From 2010 to 2040, the U.S.population is expected to grow by one-third,and the proportion of Americans age 75 yearsand older is expected to nearly double. Thisaging population will increasingly depend ondemand-response transit systems. Projecteddemographic shifts are shown in Table 14.

popul T on p rc nT 0F hou holD c v l n ob y r (m ll on ) popul T on 75+ (m ll on ) (m ll on )

2010 310 6% 118 1422020 341 7% 131 162

2040 406 11% 157 190

sourcesThe total number jobs is calculated from various sources, with the Bureau of Labor Statistics being the primary source.Population data were obtained from the U.S. Census, and the population projections are guided by the projections of theSocial Security Administration. Aggregated by the Inforum Research Unit of the University of Maryland.

T bl 14 .s. D m g aph cha g , 20102040


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The analysis presented in this report representsa general, sketch-level understanding of howdifferent types of surface transportation infra-structure de ciencies affect the U.S. economy,and will continue to do so in the future. Although

there is a clear adverse impact of doing nothingbeyond business as usual to address Ameri-cas substantial backlog of highway, transit, andrail transportation needs, there are opportuni-ties for signi cantly more research that can lendgreater understanding to the issues raised in thisreport. A key area for future research is devel-oping best practices for state-level planning andprogramming efforts to incorporate forward-looking asset management and performancebenchmarking tools like the FHWA Highway

Economic Requirements for States (HERS-ST,highways), National Bridge Investment AnalysisSystem (NBIAS, bridges), and the FTA TransitEconomic Requirements Model (TERM, transit)used in this report in conjunction with economicimpact and trade models of the type also used inthis analysis. This report is intended to highlightnot only how infrastructure de ciencies imposecosts on the economy, but also how these costsrelate to the productivity and competitivenessof industries as well as the prosperity of house-holds. Further research in best practices forconsistently incorporating this relationship as aregular part of transportation planning and pro-gramming is encouraged to build on the work ofthis report.

Another area for future research pertains todetermining the truly ef cient level of invest-ment in surface transportation infrastructure.Although this report establishes the degreeand manner in which de cient surface trans-portation assets weaken the national economy,more research is needed to establish break-evenfunding levels at which these adverse eco-nomic impacts outweigh the effects of incurringimprovement costs associated with transpor-tation investment. Furthermore, the analysisleading to this report suggests that research on

the ef ciency of prioritizing transportation invest-ment around projects of national or (multistate)regional signi cance may provide leverage to mini-mize the ongoing impact of unmet needs.

This report has established that transporta-

tion de ciencies, and their costs, have a signi cantimpact on exports, productivity, and the competi-tiveness of industries. The ndings on internationalcompetitiveness point to a potential emerging areaof research into the comparative economic advan-tages of infrastructure suf ciency in the globaltrade environment. Further research needs tobe conducted into how major U.S. trading part-ners and international competitors measure andbenchmark transportation performance, and thecomparative ef ciencies of foreign surface trans-

portation systems relative to the U.S. may affectindustrial competitiveness and the terms of trade.

The ndings of this study also suggest the meritof future research on the role and suf ciency of theInterstate Highway System, and speci cally in theimpact of urban capacity de ciencies on nationalintrastate traf c ows. The ndings leading to thisreport suggest that capacity de ciencies on urbaninterstates will be a leading driver of transporta-tion cost in the U.S. economy to 2040, and also canhave traf c assignment effects placing demandson urban arterial and rural facilities. Understand-ing the true national transportation performanceand economic impacts of deteriorating levels of ser-vice on urban interstates and freeways is criticalfor appropriately responding to dif cult investmentchoices for the U.S. surface transportation system.

Finally, the ndings regarding transit suf -ciency points to a need for more research into theadequacy of todays demand-response eets for agrowing nondriving population. Although consid-erable research has been done on transportationalternatives for this segment of the population,further research is needed into the system-leveleconomic impacts of different levels mobility anddemand-response transit suf ciency, as well aseconomic and performance trade-offs when invest-ment choices arise for this type of transit.


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es a d met dsAlthough there is no single model or data source

accounting for all the ndings in this report, theeconomic analysis represents a high-level syn-thesis of the University of Marylands LIFT/ INFORUM global trade and economic impactmodel, with a user cost analysis based on theTransportation Economic Development Infor-mation System (TREDIS), which was developedby EDR Group and is currently being used in 40U.S. states and Canadian provinces.

The basis for establishing future transporta-tion conditions under present trends investment

scenarios was based on widely accepted modelsof transportation suf ciency, costs, conditionsand performance, and buttressed by a literaturereview.

Highway needs and anticipated future de -ciencies (and performance levels) at differentfunding levels are based on an application of2010 HERS-ST using 2008 HPMS data fromeach of the 50 states using the default minimum

tolerable conditions, unit costs, run speci -cations, and parameters provided with theHERS-ST software. HERS-ST default param-eters were adjusted to assume system expansionneeds would not exceed a maximum of 16 lanes(represented in the fully funded or suf cientbase case), and no high-cost lanes highwaywidening would be considered as a need in caseswhere the HPMS sample had considered widen-ing infeasible. In such cases, preservation needswere assumed to accrue, but widening was not

counted as among the needs.Consequently, the analysis assumes that

some level of congestion will occur, even witha fully funded system and the fully funded basecase does not assume free- ow conditions. Inaddition, when developing the transportationanalysis for this report, we deliberately avoidedincluding costs of catastrophes similar to the I-35bridge collapse. In other words, we assumed thatinfrastructure failure results in congestions andvehicle costs, but not national-level tragedies.Overall, this approach is consistent with avoid-ing a gold-plated infrastructure investmentscenario, and is consistent with the ASCE ReportCard for Americas Infrastructure. Furthermore,the traf c growth rates in state HPMS les werecontrolled not to exceed maximum annual his-toric rates of growth or decline for any givenfunctional classi cation of road in any givenstate. Future volumes in HERS-ST were alsoadjusted by functional classi cation based on aCUBE Voyager assignment of national passen-ger car and truck traf c on the Freight AnalysisFramework (FAF) network to account for poten-tial reassignment due to congested speeds onurban facilities found by HERS-ST.

|about tHe studY

T e asis f esta is i g f t e t a s tatiditi s de ese t t e ds i est e t

s e a i s was ased wide a e tedde s f t a s tati s ffi ie , sts,

diti s a d e f a e, a d tt essed a ite at e e iew.


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Bridge needs and user costs are based on esti-mates of structurally de cient or functionallyobsolete bridges found by an analysis of the 2010national bridge inventory using the NationalBridge Investment Analysis System (NBIAS), the

latest and most comprehensive bridge model usedby the FHWA. The user costs for bridge de cien-cies are based on applying to future years therate of bridge restrictions per de cient/obsoletebridge in the 2010 national bridge inventory withthe average bridge detour by functional classi -cation from the NBIAs cost matrix.

Transit needs and user costs are based on cur-rent de ciency levels by asset type found in aninitial run of the FTAs TERM, projected for-ward in proportion to the difference between

future constrained and unconstrained futuretransit capital investment needs found byTERM, and applied to revenue miles by assettype for each BEA region. The service interrup-tions per de cient revenue mile (for each regionand asset type) are based on the 2010 nationaltransit database, and are applied to de ciencylevels associated with future transit investmentshortfalls.

The overall needs and de ciencies found bythe various models used (HERS-ST, TERM,NBIAS, and CUBE) were compared against thetrends reported in federal highway statistics,the USDOT 2008 Conditions and Performancereport, and the 2007 Transportation Policy andRevenue Commission report for consistencyand reasonableness, allowing for different datayears and sources. The analysis presented in thisreport is intended to describe the implicationsof unmet needs in national economic terms, andis not offered as a substitute for more speci cnational, state, or metropolitan-level analysisof needs and de ciencies for planning andprogramming purposes.


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1. State of Good Repair for Transit is de ned by theFederal Transit Administration as Asset meets certainperformance levels at a certain percentage of time (e.g.,safety incidents, service reliability, and current industrystandards).

2. Free Flow Conditions are related to highway condi-tions, and is de ned as: Traf c ows at or above theposted speed limit and all motorists have complete mobil-ity between lanes. The average spacing between vehiclesis about 550 feet (167m) or 27 car lengths. Motoristshave a high level of physical and psychological comfort.The effects of incidents or point breakdowns are easilyabsorbed. American Association of State of HighwayTransportation Of cials Green Book

3. Analysis by EDR Group using TREDIS (TransportationEconomic Development Impact System), and includes both

on-the-job travel and personal travel.

4. Federal Highway Administration, 2007; and AmericanPublic Transportation Association, 2009.

5. Federal Highway Administration, 2007; and AmericanPublic Transportation Association, 2009.

6. Minimum Tolerable Conditions for highways are con-sidered as the national defaults provided by U.S. DOT asde ciency levels in the HERS-ST system, either structuralsuf ciency or a level better than functional obsolescencein the NBIAS bridge model, and transit suf ciency rat-ings better than marginal in the FTA TERM investmentmodel.

7. In this report, congestion mitigation investmentsrefer to enhancements of surface transportation systemthat address existing or expected future congestion, andthereby sustain or improve their performance. This caninclude any combination of changes in capacity, operationsor modal facilities.

8. Percentages do not include backlog or accruing needson heavy rail services that may otherwise be consideredtransit

9. Reliability is the measure of the variation of travel timebetween any two points. The Federal Highway Adminis-tration de nes reliability as consistency or dependabilityin travel times, as measured from day-to-day and/or acrossdifferent times of the day.

10. Other instruments include photographic and photo-copying equipment, automatic environmental controls,industrial process variable instruments, totalizing uidmeters and counting devices, electricity and signal test-ing instruments, analytical laboratory, instruments, watch,clock, and other measuring and controlling devices, andlaboratory apparatus and furniture.

11. Includes household audio and video equipment.

12. Based on data from the European Survey on WorkingConditions and the US Census Bureau, and reported inThe Economist, April 28, 2011, the average daily U.S., com-mute takes more time than commutes in the Netherlands,Poland, Germany, Sweden, Spain, Britain and Italy, and isshorter than Hungary and Romania.

13. SeeTransportation for Tomorrow: Report of the NationalSurface Transportation Policy and Revenue Study Commis-sion , http://transportationfortomorrow.com/. The studywas prepared to address Section 1909 of the Safe Account-able, Flexible and Ef cient Transportation Equity ActALegacy for Users (SAFETEA-LU).

14. Planning Factor #8 of SAFETEA-LU (The Safe,Accountable, Flexible, Ef cient Transportation EquityAct: A Legacy for Users) explicitly calls for an emphasison system preservation. Also, the following text from the Virginia statewide plan is pertinent: At the national level,AASHTO has recognized the importance of this issuethrough actions such as adopting transportation assetmanagement as a priority initiative, forming the AASHTOSubcommittee on Asset Management and publishing theTransportation Asset Management Guide in 2002.3 Like-wise, the Federal Highway Administration (FHWA) hasformed its Of ce of Asset

15. Suf cient interstate speeds are de ned speeds thatwould occur if interstate capacities were built to minimumtolerable conditions for predicted traf c levels (as de nedin the HERS-ST software defaults) except in cases where(1) widening is deemed infeasible in the HPMS sample or(2) when widening would result in more than eight lanesin each direction. In these cases, interstate congestioncosts are considered to be either unavoidable or repre-sented as needs accruing on other modes. This study doesnot advocate a particular method of resolving de ciencies,but merely assesses the cost and impact of not addressing

de ciencies that are not currently being addressed. Forhighways, the minimal tolerable condition is de ned by theFHWA with a combination of capacity and safety factors,including volumes, pavement conditions, curves, grades,and shoulder widths.

16. For example, an urban bottleneck on an interstate inSt. Louis affects not only traf c conditions in St. Louis,but will affect national and regional routings of inter-citytruck and car traf c through St. Louis as well as the rout-ing by which cars and trucks enter and exit the city.

17. The source for the backlog and accruing transit needsis EDR Groups synthesis of results from the TERM modelapplied the 2010 National Transit Database (NTD) withinthe context of the 2007 revenue commission analysis. Thehighway backlog is based on the application of the HERS-ST model to the 2010 HPMS database.

18. Minimum tolerable pavement conditions and congestedroads are de ned in terms of the default values of theFHWA HERS-ST economic requirements software.

19. Derived from needs analysis in USDOT publicly avail-able models: Transit Economic Requirement Model, andfrom HERS-ST, as run in May, 2011, applied to 2010 HPMSand NTD databases.

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aBoUT eDR GRoUpEconomic Development Research Group, Inc. (EDR Group) is a consulting rm focusing speci cally onapplying state-of-the-art tools and techniques forevaluating economic development performance,impacts, and opportunities. The rm was startedin 1996 by a core group of economists and plan-ners who are specialists in evaluating impacts of transportation infrastructure, services, and technol-ogy on economic development opportunities. GlenWeisbrod, president of EDR Group, was appointed bythe National Academies to chair the TRB Committee

on Transportation and Economic Development.EDR Group provides both consulting advisoryservices and full-scale research projects for publicand private agencies throughout North America aswell as in Europe, Asia and Africa. The rms workfocuses on three issues:

Economic Impact Analysis

Bene t / Cost Analysis

Market / Strategy Analysis

The transportat ion work of EDR Group includesstudies of the economic impacts of road, air, sea and

railroad modes of travel, including economic bene ts,development impacts and bene t/cost relationships.The rms work is organized into three areas: (1)general research on investment bene t and produc-tivity implications; (2) planning studies, including impact, opportunit ies, and bene t/cost assessment;and (3) evaluation, including cost-effectivenessimplications.

Senior staff at EDR Group have conducted studiesfrom coast to coast in both the U.S. and Canada, aswell as studies in Japan, England, Scotland, Finland,Netherlands, India and South Africa. EDR Groupis also nationally recognized for state-of-the-artanalysis products, including the TransportationEconomic Development Impact System (TREDIS).

Economic Development Research Group, Inc.2 Oliver Street, 9th Floor, Boston, MA 02109www.edrgroup.com / [email protected] Voice: 617-338-6775; fax: 617-338-1174

acKnoWLeDGmenTSFor the opportunity to conduct this research,EDR Group wishes to thank Brian Pallasch, JaneHowell and Caroline Macheska of ASCE; andAllison Dickert, formerly of ASCE and ASCEsCommittee on Americas Infrastructure. Wegratefully acknowledge the assistance of RonHorst, Doug Mead, and Jeffrey Werling of theUniversity of Maryland Economics Department.The transportation analysis, which is the founda-tion of projected economic impact would not havebeen possible without Christopher Chang and SteveSissell from the U.S. Department of Transportation,who provided inputs and data for the HERS andNBIAS models; Keith Gates of the Federal TransitAdministration and Richard Laver of Booz AllenHamilton, who provided results from the TERMmodel; David Hurst of Wilbur Smith Associates / CDM, for assistance in interpreting NBIAS; andColby Brown of Citilabs, Inc., for assistance inacquiring and applying the FAF network to nationaltraf c patterns.


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