Failure to Act
The economic impact
Of current Investment Trends in
Airports, Inland Waterways, and Marine Ports
Infrastructure
This report was prepared for the
American Society of Civil Engineers by
Economic Development Research Group, Inc.
The report was funded by a generous
grant from the ASCE Foundation.
American Society of Civil Engineers
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Copyright © 2012 by the American Society of Civil Engineers.
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Airports, Inland Waterways, and Marine Ports
★| Contents
2|List of Figures and Tables
3 | Preface
4 | Executive Summary
9| Section 1 Introduction
11|Section 2 Overview of Airports, Inland Waterways,
and Marine Ports
17|Section 3 The Potential Investment Gap
26|Section 4 Costs Incurred Due to a Failure to Invest
32|Section 5 Economic Impacts
| Section 6 Conclusion
39
42 | About the Study
43|Endnotes
45|Acknowledgments
45|About EDR Group
A technical appendix is separately available at
www.asce.org/failuretoact
★| Figures and tables
Figures
1 U.S. Navigation System, Marine and Inland Ports
2 Nearly 80% of Domestic Air Trips Are Taken
to or From the 15 Largest U.S. Metro Markets
3 Projected Growth Forecasts for America’s Trade
Volume, 2011– 2041
4 Long-term U.S. Container Trade Forecast,
2011 – 2037
10 Costs by Commodity of Using Under-Sized Vessels
to Accommodate Shallow Harbors or Narrow
Channels at U.S. Marine Ports
11 Land-Side Congestion Costs Accruing to Freight
and Business Travel Using Airports, 2010
12 Land-Side Congestion Costs Accruing to Freight
Using U.S. Marine Ports, 2010
Tables
13 Effects on U.S. Business Sales, GDP and Jobs
from Congestion at Major Airports, 2012 – 2040
1 U.S. Waterborne Freight through Marine
Ports — Imports and Exports
14 Lost Trade Due to the Gap in Airport Investments
2 Effects of Failure to Invest in Airports, Inland
Waterways, and Marine Ports, 2012 – 2040
3 Leading International and Domestic Air
Freight Centers, 2011
15 Sectors Most Affected by Decline of Air Service
in Jobs and Business Sales, 2012 – 2020
16 Lost Trade Due to the Gap in Inland Waterways
and Marine Ports Investments
5 Investment Gap Totals, Airports
17 Effects of Failure to Invest in Inland Waterways
and Marine Ports on U.S. Business Sales, GDP
and Jobs, 2012 – 2040
6 Estimated Public Capital Investment Gap, Inland
Waterways and Marine Ports
18 Top Ten Sectors Most Affected by Decline
of Waterborne Trade, 2020
7 Hours of Scheduled and Unscheduled Delay
on US Inland Waterways, 2009
19 Sectors Most Affected by Decline of Waterborne
Trade in Jobs and Business Sales
4 Capital Expenditures by Airport, 2001 – 2010
8 Total Containerized Trade for U.S. Ports,
1980 – 2010
9 Net Impact of Airport Congestion on the
U.S. Economy
2
American Society of Civil Engineers
★| Preface
The purpose of the Failure to Act report series
is to provide an analysis of the economic implications for the United States of continuing its
current investment trends in infrastructure.
The reports in this series assess the implications
of present trends in infrastructure investment
for the productivity of industries, for national
competitiveness, and for households’ costs.
The Failure to Act series analyzes two types
of infrastructure needs:
★★ Building new infrastructure to service
increasing populations and expanded
economic activity; and
★★ Maintaining or rebuilding existing infrastructure that needs repair or replacement.
Every four years, the American Society of Civil
Engineers (ASCE) publishes The Report Card
for America’s Infrastructure, which grades the
current state of 15 national infrastructure
categories on a scale of A through F. ASCE’s
2009 Report Card gave the nation’s aviation
infrastructure a D and gave its inland waterway
infrastructure a D–. The infrastructure of
marine ports was not graded in 2009, but will
be part of the 2013 assessment. This report
answers the question of how the condition of the
United States’ airports, inland waterways and
ports, and marine ports affect the nation’s economic performance. In other words, how does
a D or D– affect America’s economic future?
This report focuses on airports, as well as
inland waterways and marine ports. Elements
of airports include the surrounding runways
and facilities, as well as the terminals. Elements
of ports include the port channel depth, terminals, and equipment, including cranes and
warehouses. For airports and ports, efficient
access to and from port areas are important
considerations.
This is the fourth report in ASCE’s Failure
to Act series. The first report, Failure to Act: The
Economic Impact of Current Investment Trends
in Surface Transportation Infrastructure,
encompasses highways, bridges, rail, and transit.
The second report, Failure to Act: The Economic
Impact of Current Investment Trends in Water
and Wastewater Treatment Infrastructure,
addresses the delivery of potable water and
wastewater treatment. The most recent report,
Failure to Act: The Economic Impact of Current
Investment Trends in Electricity Infrastructure,
addresses electricity generation, transmission,
and delivery. The final report will summarize
the potential consequences of failing to invest
in all of these critical infrastructure systems.
Failure to Act: The Economic Impact of Current Investment Trends in Airports, Inland Waterways, and Marine Ports
3
EXECUTIVE SUMMARY
Air and waterborne transportation infrastructure
spans the United States and the globe. These
facilities are critical to the health of the U.S.
economy, enabling the importing and exporting
of goods, as well as global business travel:
★★ The U.S. aviation system includes almost
20,000 civilian airports, although just 5,200
are open to the public. Of these, more than
3,300 are designated by the Federal Aviation
Administration (FAA) as part of the National
Plan of Integrated Airport Systems, including
all 500 commercial service airports and
2,800 general aviation airports. Both air
passenger and air freight services are concentrated in a relatively small number of airports
in major metropolitan areas. Roughly 80%
of U.S. origin and destination traffic is in 15
metropolitan markets, and 70% of air freight
tonnage originates at 15 metropolitan areas
(nine metropolitan areas are included among
the top 15 passenger and freight markets).
★★ The U.S. inland port system consists of more
than 12,000 miles of inland and intracoastal
waterways, with about 240 lock chambers.
More than 566 million tons move through
the inland transportation system annually,
more than half of which is coal and petroleum
products. More than 70 million metric tons
of grain, soybeans, and food are transported
within the U.S. each year by way of the inland
transportation system.1
★★ The U.S. has more than 300 commercial
marine ports, through which pass 2.3 billion
short tons of cargo a year, and more than 600
smaller harbors. In 2010, 51% of the potential
capacity of container yards in U.S. ports was
fully utilized. The system accommodated
more than 16,800 annual vessel arrivals.
4
Airports and ports cannot function without
effective connections to the nation’s roads and
rail systems. Virtually all cargo shipped by air
arrives at and departs from airports by truck.2
Passenger transportation to and from airports is
primarily by car, but also includes an increasing
proportion of transit options (e.g., fixed rail and
buses).3 Inland and marine ports rely on highways and railroads to transport cargo to ports
for shipment and to distribute goods to market.
The Role of Airports, Inland Waterways
and Marine Ports in the U.S. Economy
Airport services facilitate the transfer of passengers and goods and function as gateways to
economic globalization. Passenger and freight
movements are concentrated in a handful of the
thousands of airports in the national aviation
system. Among the 3,300 airports that are designated by the FAA as important to the national
aviation system, 35 airports in the nation’s top
15 markets account for 80% of U.S. domestic
passenger origin and destination movements,
totaling 343 million trips. The FAA forecasts that
enplanements in these 15 markets will increase
30% by 2020 and 121% by 2040.4 These projections exceed enplanement forecasts at other
commercial airports, which are predicted to
increase 25% by 2020 and 93% by 2040. More
important from the perspective of air traffic
projections, commercial aircraft operations are
projected to grow 17% through 2020 and 62%
by 2040, including increases in the 15 major
markets of 23% by 2020 and 86% by 2040.
As with passenger travel, freight shipments
are concentrated in major metropolitan areas. By
tonnage, 92% of international air freight tonnage
is imported or exported through the 15 leading
U.S. customs districts, and 70% of domestic
air tonnage originates in 15 key metro markets
American Society of Civil Engineers
included 86% of America’s crude petroleum
imports as well as the majority of 28 other commodities imported to the U.S. The U.S. depends
heavily on waterborne trade for its growing
export markets, especially agricultural products,
manufactured goods, and, increasingly, the
exporting of energy and refined petroleum products. In 2010, more than 76% of U.S. exports (by
tonnage), valued at $469 billion (approximately
35% of total exports by value), were transported
by water for foreign markets.5
Trade volume for marine ports is expected
to double by 2021, and double again shortly
after 2030. Even if global growth slows due to
economic problems in Europe, our major trading
partners are a diverse set of countries in Asia
and Latin America, and the growth forecasts
are indicative of long term trends that will
require major investments in our marine ports.6
(nine metro areas are among the top 15 for both
air passenger and freight markets).
In the United States, the system of inland
waterways and marine ports play a vital role in
both the domestic and international transportation systems. In 2010, the cargo transported
on these waterways was valued at $152 billion.
For the inland waterway system, this includes
approximately 56% of all crude petroleum, 15%
of all coal, and 24% of other fuel oils, which alone
affect the efficiency of all economic sectors that
rely on energy. Other commodities with significant shares moving by water include 22% of basic
chemicals, 18% of agricultural products, and 19%
of nonmetallic minerals.
By 2020, traffic on inland waterways is
expected to increase by 51 million tons of freight
from 2012, an overall 11% increase. By 2040,
this increase is expected to exceed 118 million
tons above 2012 levels, an overall increase
of 25 percent.
The marine ports system is especially important for America’s international trade, with
nearly 800 million tons (70% of U.S. imports in
2010), valued at more than $944 billion (approximately 50% of all imports by value), arriving in
the U.S. by water (see Table 1). These imports
Table
The Investment Gap
Airports
For commercial airports, the Airports Council
International-North America (ACI-NA) and the
FAA publish projections of five-year spending
needs, and the FAA tracks both private and public
actual expenditures in its Form 127 reports.7
1 ★ U.S. Waterborne Freight through Marine Ports — Imports and Exports
Tonnage (millions)
Imports
Value (trillions of 2010 dollars)
7980.94
Percent of total imports68.8
Exports
5800.47
Percent of total exports76.5
TOTAL
49.2
35.4
1,3781.41
Percent of total trade71.9 42.2
Source Freight Analysis Framework (version 3), Data Tabulation Tool, July 2012 (http://faf.ornl.gov/fafweb/Extraction4.aspx).
Failure to Act: The Economic Impact of Current Investment Trends in Airports, Inland Waterways, and Marine Ports
5
Extending the trends of needs and spending from
these sources shows an annual capital gap of
about $2 billion through 2020 (roughly $13 billion
in need and $11 billion in expenditures per year)
and $1 billion annually from 2021 to 2040 ($12
billion in need to $11 billion in expenditures,
assuming spending through 2020 does not fall
lower than recent trends).
In addition to construction needs, congestion
relief is being proposed through the Next Generation Air Transportation System (NextGen),
which is expected to transform the management
and operation of the air transportation system
in the United States, moving from the current
ground-based radar system to a satellite-based
system. NextGen is designed to minimize delays
by reducing the time aircraft sit on the ground.
Multiple uncertainties may affect the timing and
ultimate costs of NextGen, including constantly
changing technologies. At present, the most
widely accepted projected cost for NextGen is
$31 billion, in addition to the approximately
$9 billion that has already been invested between
2003 and 2011.8
Inland Waterways and Marine Ports
The greatest threats to the performance of the
inland waterway system are the scheduled and
unscheduled delays caused by insufficient funding for operation and maintenance needs of locks
governing the traffic flow on the nation’s inland
system. A total of 90% of locks and dams on the
U.S. inland waterway system experienced some
type of unscheduled delay in 2009. According to
the U.S. Army Corps of Engineers, maintaining
existing levels of unscheduled delays on inland
waterways, and not further exacerbating delays,
will require almost $13 billion in cumulative
investment needs by 2020, and an additional $28
billion by 2040. Current funding levels can support only $7 billion by 2020, and an additional
$16 billion by 2040. Roughly 27% of these needs
entail the construction of new lock and dam facilities, and 73% are estimated for the rehabilitation
of current facilities.
6
In many cases, private and public investment
by port authorities and non-port entities enables
the ports simply to maintain existing conditions
to fulfill customer needs and requirements.
However, many commercial ports are also
planning improvements. Port authorities are
planning on spending a combined $18 billion
through 2016 on infrastructure improvements
for water terminals, while their private-sector
terminal partners anticipate spending a
combined $27.6 billion for a total of nearly $46
billion. This is more than $9 billion per year, of
which more than one-third would be spending
by the port authorities themselves.9 Although
this investment would make up the majority of
funding for ports, the maintenance of existing
navigable channels and waterways and the ability to accommodate the increasing size of cargo
vessels requires dredging, a portion of which
must be funded by the public sector through
Congressional appropriations to the U.S. Army
Corps of Engineers. A key challenge for marine
ports in the United States, particularly on the
East Coast, will be their ability to handle the
large “new-Panamax” cargo ships that will
start service with planned expansions of the
Panama and Suez Canals.
To accommodate anticipated growth in trade
and domestic waterborne traffic, total public
investment needs are expected to exceed $30
billion by 2020. This includes both navigational
dredging and operation and maintenance needs
for both marine dredging and inland waterways
and marine ports. It does not include private
sector investments to improve the port facilities
themselves or improving connections to
surrounding roads and rail systems to reduce
congestion experienced by trucks entering and
exiting port facilities. By 2040, these needs are
expected to reach $92 billion.10 The U.S. will be
left with a funding gap of nearly $46 billion if
current investment trends continue, based on
the annual budgets for navigational purposes
American Society of Civil Engineers
that have historically been appropriated to the
U.S. Army Corps of Engineers by Congress.11
About $16 billion of the funding gap is expected
to accumulate by 2020, with the additional
$30 billion projected to accumulate from 2021 to
2040.12 More than 61% of the identified need and
funding gap are intended for marine navigation
and operations and maintenance, and about
39% for inland waterways.13
Economic Impacts
The U.S. economy relies on low transportation
costs for its exports to offset higher wage levels
and costs of production when compared with
its competitors. Greater costs to export goods
will affect the nation’s ability to compete in
global markets for goods produced in the U.S.
Table
Although this is already happening in a limited
number of industrial sectors today, these effects
could magnify in the future. If current needs
and investment trends for U.S. airports, inland
waterways, and marine ports continue over time,
the nation’s competitiveness will erode, affecting
its ability to sustain well-paying jobs, especially
in export sectors. In addition higher costs will be
incurred for imports, which will increase costs
of materials to businesses, thereby increasing
cost of production, and for consumer products
sold to households, which eventually will erode
their disposable income. These effects are
reflected in significantly lower projected levels of
U.S. exports, business sales, GDP and disposable
personal income throughout the economy,
culminating in a loss of jobs. Table 2 summarizes
of Failure to Invest in Airports, Inland Waterways,
2 ★ Effects
and Marine Ports, 2012 – 2040
(in billions of 2010 dollars, unless otherwise indicated)
Inland waterways
Airportsand Marine Ports
Annual Impacts
2020
2040
2020
2040
GDP
– $47
– $70
– $95
– $255
Jobs
– 350,000
– 358,000
– 738,000
– 1,384,000
Business Sales
– $87
– $179
– $183
– $517
Disposable Personal Income
– $53
– $53
– $117
– $269
Exports
– $11
– $62
– $43
– $142
2012 – 2020
2021 – 2040
2012 – 2020
2021 – 2040
GDP
– $313
– $1.21 trillion
– $697
– $3.3 trillion
Business Sales
– $580
– $2.7 trillion
– $1.3 trillion
– $6.5 trillion
Disposable Personal Income
– $361
– $1.1 trillion
– $872
– $3.7 trillion
– $54
– $708
– $270
– $1.7 trillion
Cumulative Losses
Exports
Note Losses in business sales and GDP reflect impacts in a given year against total national business sales and GDP in that year.
These measures do not indicate declines from 2010 levels.
Sources EDR Group and LIFT model, University of Maryland, INFORUM Group, 2012.
Failure to Act: The Economic Impact of Current Investment Trends in Airports, Inland Waterways, and Marine Ports
7
the economic impacts for 2020 and 2040, and
the cumulative impacts expected during the
periods 2012 – 20 and 2021 – 40. Total impacts
through 2020 and 2040 are discussed below.
Airports
The economic impact of congestion at major airports will have significant effects on the national
economy due to delays in cargo movement and
business travel, assuming that capital spending
remains consistent through 2040, as it has been
since 2001 (about $10 billion annually in 2010
dollars). The broad impacts on the U.S. economy
would represent cumulative losses from the
national economy of $54 billion in export value
and $580 billion in overall business sales by 2020,
rising to $762 billion and $3.3 trillion by 2040;
lower levels of gross domestic product (GDP) are
expected to amount to $313 billion by 2020 and
$1.21 trillion by 2040; and losses in disposable
personal income will total $361 billion by 2020
and $1.49 trillion by 2040 (all in $2010). Overall,
the U.S. economy will end up with 350,000 fewer
jobs than it otherwise would have by 2020.
Over time, domestic freight movement and
business travel will likely shift from relying on
air to surface transportation modes to partially
adjust for the declining efficiencies and higher
costs of air transportation.14 However, this will
lead to higher costs for those commodities that
are shipped by air, both in terms of out-of-pocket
expenses and time,15 which will mean particularly
hard times for all industries that require same-day
freight delivery. As a consequence of congestion,
the direct cost of air transportation is projected to
be 6% higher in 2020 and 9% higher in 2040 than
would be the case with the initial investment.16
Inland Waterways and Marine Ports
Similar effects are felt within the inland waterways and marine ports sectors. If America only
maintains its current level of investment in
these systems, the losses to its economy will
increase shipping costs annually. By 2020, lost
value of exports will be $270 billion and will
8
rise to almost $2 trillion by 2040. Roughly $1.3
trillion in business sales will be lost by 2020,
rising to $7.8 trillion by 2040. The cumulative
loss in national GDP will be about $700 billion by
2020 and reach $4 trillion by 2040. Disposable
personal income will be lost, with losses projected at almost $872 billion through 2020 and
$4.5 trillion through 2040. With this reduction
in production, income, and spending, there
are projected to be 738,000 fewer jobs in 2020.
By 2040, the job losses will grow to almost 1.4
million — jobs that will be lost due to the lack of
U.S. competitiveness in global trade and because
the nation’s households and businesses will be
spending more for commodities that arrive by
marine ports and are transported to market via
inland waterways.
Conclusion
America’s airports, inland waterways, and
marine ports link the nation directly to the
global economy, and link regions of the United
States together. These three infrastructure
systems support the nation’s ability to export,
to efficiently move goods internally and to
expand our high-end service sector through
widespread business travel. These functions are
critical to the U.S. economy, and depend on the
efficient and cost effective operation of these
networks. Each of these systems require that
the investments needed to sustain competitive
transportation costs are well coordinated among
the many interdependent modes of transportation needed to keep the entire U.S. supply chain
operating efficiently, and to ensure that our
strong service sectors can efficiently and costeffectively make use of international and long
distance business travel. However, as has been
demonstrated in this report, inadequate and
unbalanced investments in essential commercial
transportation infrastructure have become an
enormous drag on the productivity and competitiveness of the U.S. economy.
American Society of Civil Engineers
1 INTRODUCTION
This report illustrates the continuing importance of airports,
inland waterways, and marine ports for efficient cargo
movement within the United States and for the importing and
exporting of goods. In addition, this analysis also highlights
the importance of aviation for business travel.
America’s networks of airports, inland
waterways, and marine ports share several
characteristics. Airports and marine ports
function as international gateways that enable
U.S. industries to export and import goods
from abroad. In addition, airports and inland
waterways provide alternative modes to
surface transportation for transporting goods
throughout the country, relieving some of the
congestion burden on our highways.
Air transportation is more often used for
high-value and low-weight goods or commodities that require just-in-time delivery. This
mode of real-time delivery is employed for
goods required for manufacturing processes
(e.g., parts for an automobile assembly plant)
or for perishable food for same-day sales.
Inland and intracoastal waterways are often
better suited for bulk commodities that can
be transported at lower costs than if placed
on trucks or railcars. Certain commodities
that can absorb longer transportation times
are shipped in bulk or bundled into containers
and shipped across oceans, while high-value,
lower-weight cargo or goods that require
fast delivery are sent via air freight. Both
systems also move passengers, although
inland and ocean passenger transportation
is not part of this study.
This report’s economic analysis is based
primarily on documentation of freight and
air passenger movement from the Freight
Analysis Framework (U.S. Federal Highway
Administration), the Foreign Trade Division
of the U.S. Census Bureau, the U.S. Bureau
of Transportation Statistics, and the FAA.
Data on the needs of airports and waterborne
ports were developed from data provided by
the FAA, the Airports Council InternationalNorth America (ACI-NA), the U.S. Army
Corps of Engineers, and the American
Association of Port Authorities.
Failure to Act: The Economic Impact of Current Investment Trends in Airports, Inland Waterways, and Marine Ports
9
Study Objectives and Limitations
The purpose of this study is to survey the
economic effects of current investment trends
in America’s airports, inland waterways, and
marine ports.
Throughout the report, infrastructure investment needs and investment trends are projected,
and potential gaps are identified where needs are
likely to exceed investment levels. It is difficult to
predict future levels of capital spending because
a wide range of factors will exert an influence
during the coming decades. The analysis given
here focuses on a “trends scenario,” which
assumes that the investments needed and made
for airports, inland waterways, and marine ports
will continue in the next decades at essentially
the same levels as in recent years. The data
given for airports are based on data collected
by the FAA and ACI-NA. The data given for
inland waterways and marine ports are primarily
from the U.S. Army Corps of Engineers. In addition to public sources from combinations of
federal, state, and local jurisdictions, investments
come from a mix of private-sector sources and
user fees, including airlines, airline passengers,
and shippers.
The capital gap is the difference between the
level of dollars invested in infrastructure under
a trends scenario and the level of investment
required to replace, expand, or improve infrastructure as demand grows and facilities age
or require modernizations and new capacity.
Failure to carry out needed investments can
result in higher costs in moving saleable goods
to markets, higher costs for goods required for
production processes by U.S. manufacturers, and
higher costs for business travel for all economic
sectors (airports). In turn, these impacts will
make U.S. goods and services more expensive
and less competitive internationally, driving up
the costs of consumer items for U.S. households,
as well as cutting GDP and eliminating jobs.
10
As part of the Failure to Act series, this report
focuses on the economic consequences of not
making needed investments in airports, inland
waterways, and marine ports as they affect
productivity throughout the United States,
global competitiveness, and hence the nation’s
long-term job and income growth. This analysis
does not consider the short-term impacts of
those money flows associated with spending
on the construction, installation, and operation
of additional infrastructure, though they also
affect patterns of jobs and incomes for workers.
This report, along with other studies in this
series does not give special attention to jobs
required to operate infrastructure systems,
which is especially important when discussing
airports. Typical jobs in airports include airport
management, airline employment and airplane
services, on-airport freight handling, terminal
retail and services, security, and ground transportation. Economic impact studies are routinely
conducted on behalf of airport authorities, state
departments of transportation and national
organizations for airports and airport systems.
Recent studies conducted at different airports
across the country by different consulting firms,
using similar but not identical methodologies
show that 20,000 to 60,000 jobs are located on
major airport grounds. These studies also document the extent that air travel supports tourism
by analyzing visitor spending. In addition,
multiple national studies of impacts have been
published over recent years. For example, a
study sponsored by the ACI-NA estimates the
impacts of commercial aviation to be more than
1.2 million jobs, including those generated by
visitor spending.17 Other studies sponsored by
NASAO and FAA estimate overall impacts of
general aviation and civil aviation, including
aircraft manufacture and parts.
Finally, this study discusses regions and
metropolitan areas, but it does not name or
rank specific airports or inland or marine ports.
American Society of Civil Engineers
2
OVERVIEW OF AIRPORTS, INLAND WATERWAYS & MARINE PORTS
Airports and waterborne transportation are the critical piece of
the national transportation system that enables overseas trade and,
for airports, fast long-distance travel. The contribution of these
systems to international trade is critical for the national economy.
Exports alone supported approximately 9.7 million jobs in 2011,
as every billion dollars of exports supported 5,080 jobs in the U.S.18
The U.S. airport system accommodates
almost 735 million passenger enplanements
and moves $1.1 trillion in cargo. The FAA predicts that the U.S. airport system will carry
more than 1 billion passengers by 2024, and
the Federal Highway Administration predicts
that the value of air freight will grow to $4.5
trillion by 2040 (in 2010 dollars).19
An intricate system of waterways ties
inland ports to marine ports and provides
one of the most cost-effective ways of moving a wide variety of freight within the lower
48 states and between the U.S. and all of its
major trading partners (see Figure 1). Interconnecting rivers form a marine highway
network in the heart of the nation, from the
Gulf ports to the Great Lakes. For example,
the Mississippi River connects inland ports
as far away as Pittsburgh and Saint Paul to
the ports on the Gulf of Mexico. Intracoastal
waterways provide a system of navigable
canals, lagoons, rivers, sounds, and bays that
connect ports from Boston to Brownsville,
Texas. In 2010, an estimated 566 million
tons of goods were moved on the U.S. inland
waterways and 2.3 billion tons of freight were
moved through U.S. marine ports.20 International trade underscores the importance of
U.S. waterborne transportation; more than
70% of traded commodities by weight are and
imported or exported through marine ports.
Airports, inland waterways, and marine
ports cannot function without effective connections to roads and rail systems. Virtually
all cargo shipped by air arrives at and departs
from airports by truck, and passengers’ access
and egress are also by surface transportation.
Passenger transportation to and from airports
is primarily by private automobiles and taxicabs, but also includes a variety and increasing
proportion of transit options.21 Inland and
marine ports rely on highways (for trucks) and
railroads to transport cargo to ports for shipment and to distribute landed freight.
Failure to Act: The Economic Impact of Current Investment Trends in Airports, Inland Waterways, and Marine Ports
11
Figure
1 ★ U.S. Navigation System, Marine and Inland Ports
Kalama
Vancouver
Seattle
Pasco
Lewiston
Clarkston
Umatilla
Portland
Oakland
Sacramento
Los Angeles
Long Beach
Marine Port
Inland Port
Source Institute for Water Resources,
US Army Corps of Engineers,
“U.S. Port and Inland Waterways
Modernization: Preparing for PostPanamax Vessels,” June 20, 2012.
St. Paul
La Crosse
Boston
New York/
New Jersey
Dubuque
Quad Cities
Omaha St. Louis
Parkersburg
Huntington
Kansas City
Norfolk
Mt. Vernon
Louisville
Knoxville
Paducah
Nashville
Tulsa
Chattanooga Wilmington
Memphis
Decatur
Little Rock
Birmingham Charleston
Vicksburg
Savannah
Shreveport
Pascagoula
Texas City Gulfport
Jacksonville
Houston
Freeport
Tampa
Matagorda
Corpus Christi
Beaumont
Port Arthur
Lake Charles
Airports
The FAA designates public use airports that are
important to the national system as the National
Plan of Integrated Airport Systems (NPIAS), and
these airports are eligible to receive grant money
under the FAA’s Airport Improvement Program.
The NPIAS airports include all commercial
service airports. Noncommercial service airports
are known as nonprimary and include general aviation (GA) and reliever airports. Noncommercial
GA airports account for more than three-quarters
of the NPIAS airports, and in 2010 accounted for
less than 1% of total system passengers.
12
Milwaukee
Chicago
Indiana Harbor
Cincinnati
Pittsburgh
Albany
Panama City
Mobile
Plaquemines
New Orleans
South Louisiana
Baton Rouge
Port Everglades
America’s 2,800 noncommercial airports play
an important role in the national airport system
by accommodating pilots in small aircraft separately from large commercial airline aircraft at
congested commercial facilities. GA airports are
included in the NPIAS if they have sufficient
activity and are at least 20 miles from the nearest
NPIAS airport. The 269 reliever airports in the
NPIAS provide pilots with attractive alternatives
to using congested hub airports and also provide
access to the surrounding area. GA airports are
particularly important for rural areas, given that
American Society of Civil Engineers
they are the closest sources of air transportation
for approximately 19% of the population.22
The FAA forecasts that enplanements (individual trips) will increase by 28% by 2020 from 2010
totals and 110%, more than double at all commercial airports, by 2040 from 2010. However, growth
in the 15 largest passenger markets is expected to
increase by 30% by 2020 and 121% by 2040, while
enplanements at other commercial airports are
cumulatively are predicted to increase by 25% by
2020 and 93% by 2040. More important from the
perspective of air traffic congestion, commercial
aircraft operations are projected to grow 17%
by 2020 and 62% by 2040, including 23% by 2020
and 86% by 2040 at the 15 major markets.23
In other words, it is expected that more passenger trips will be taken and more airplanes will
be in the air, although given the higher trends
for passengers than for commercial operations, it
appears that more people will fly per aircraft than
is now the case. Moreover, though this growth
will be national, it will be especially pronounced
in the current major market areas that are already
saturated. Even with an increase in on-time performance, this means that capital investments
will be needed to update and expand terminal
facilities, enhance ground circulation within
airports, provide for vehicle and transit access and
egress to airports, and increase runway sizes to
allow for heavier fully loaded takeoffs, in addition
to maintaining current facilities.
Similar to passenger travel, freight shipments
are concentrated in major metro areas. By tonnage,
Table 3 shows the 15 most heavily used customs
districts in terms of air freight, as well as the 15
largest metro areas for origins of domestic air
cargo. Note that air cargo activity is more concentrated for international shipments than domestic
ones, with 92% of international air freight tonnage
being imported or exported through the 15 leading
U.S. customs districts and 70% of domestic air tonnage originating in the key metro markets. These
customs districts and metro cargo markets include
Alaska and Hawaii due to the long shipping distances required for domestic cargo, as well as the
location of these two states as refueling stopovers
Inland Waterways and Marine Ports Key Facts
★★ The U.S. inland port system consists of more than
12,000 miles of inland and intracoastal waterways with
about 240 lock chambers. More than 566 million tons
annually move in the inland transportation system, more
than half of which is coal and petroleum. More than 70
million metric tons (12.6%) of grain, soybeans, and food
are transported within the U.S. each year by way of the
inland waterway system.24
★★ The U.S. Army Corps of Engineers dredges 300 commercial harbors, through which pass 2.3 billion short tons of cargo a year, and it also dredges more than 600
smaller harbors. In 2010, 51% of the potential capacity
of container yards in U.S. ports was fully utilized. The
system accommodated more than 16,800 annual vessel
calls, with a reserve vessel call capacity of 23,994 calls.
and interim destinations for transporting goods
internationally to Asia.
Projections indicate that air freight tonnage
will increase nationally by 54% from 2010 through
2020 and by an additional 94% from 2020 through
2040, for a total growth rate of nearly 200% from
2010.25 These projections indicate that more cargo
flights will be needed, which will add to congested
conditions; passenger and cargo-only planes may
be heavier, requiring longer runways for takeoffs, and more truck traffic will be required to
transport goods to airports for loading and from
airports for deliveries.
Inland Waterways and Marine Ports
In the United States, the system of inland waterways and marine ports play a vital role in both
the domestic and international transportation
systems. In 2010, nearly 1.9 billion tons of bulk
freight and almost 43 million TEUs moved on
the U.S. water transportation system.26 Notably,
approximately 56% of all crude petroleum, 15%
of all coal, and 24% of other fuel oils are transported over the nation’s inland waterways,
which affect the efficiency of all economic sectors that rely on energy. Other commodities with
significant shares moving by water include 22%
Failure to Act: The Economic Impact of Current Investment Trends in Airports, Inland Waterways, and Marine Ports
13
Figure
80% of Domestic Air Trips Are Taken
2 ★ Nearly
To or From the 15 Largest U.S. Metro Markets
Seattle
Boston
Denver
New York
Chicago
San Francisco Bay Area
Washington, DC
Las Vegas
Los Angeles
Atlanta
Phoenix
Dallas/ft. Worth
Houston
Metro- area
Airports, if more than
one airport is in a particular metro-area
Metro Markets
Orlando
Miami
Air Trips (in millions)
Metro Markets
Air Trips (in millions)
Boston (BOS, MHT, PVD)20.2
Dallas (DFW, DAL)19.3
New York (LGA, JFK, EWR, ISP, SWF)39.1
Denver (DEN)18.8
Washington (DCA, BWI, IAD)27.7
Las Vegas (LAS)22.2
Atlanta (ATL)18
Phoenix (PHX)16.4
Orlando (MCO, SFB)21.9
Los Angeles (LAX, ONT, SNA, BUR, LGB)35.5
Miami (FLL, MIA, PBI)22.4
San Francisco (SFO, SJC, OAK)26.5
Chicago (MDW, ORD)26.4
Seattle (SEA)15
Houston (HOU, IAH)13.8
Note Includes 2011 outbound + inbound domestic o&d passengers excluding duplication between the top 15 markets.
Sources U.S. Department of Transportation, O&D Database, Database Products Inc., CY 2011. Graphic and calculations
courtesy of ICF SH&E.
14
American Society of Civil Engineers
of basic chemicals, 18% of agricultural products,
and 19% of nonmetallic minerals.
Overall domestic water transportation transported freight valued at almost $152 billion in
2010 (in 2010 dollars). By 2020, freight value
Table
of domestic shipments on inland waterways is
expected to increase by $18 billion, an overall
12% increase. By 2040, this increase is expected
to be $26 billion above 2010, an overall 17%
increase in constant value. 27
3 ★ Leading International and Domestic Air Freight Centers, 2011
International
Customs District
New York City
Domestic
Air Tons
Metro Markets
Air Tons
1,298,000
Memphis1,763,000
Chicago1,110,000
Louisville-Cincinnati1,184,000
Miami1,002,000
Los Angeles
Los Angeles
968,000
Anchorage537,000
Cleveland611,000
Indianapolis424,000
New Orleans
New York
351,000
Savannah412,000
San Francisco
316,000
Dallas/Fort Worth
341,000
Washington187,000
San Francisco
331,000
Chicago155,000
Houston/Galveston234,000
Dallas145,000
San Juan
210,000
Philadelphia143,000
Great Falls
194,000
Miami133,000
Anchorage167,000
Atlanta131,000
Philadelphia.139,000
Honolulu129,000
Seattle119,000
Phoenix104,000
Subtotal7,580,000
Subtotal6,277,000
Other Districts
Other Metro Areas
446,000
645,000
577,000
2,680,000
TOTAL8,226,000
TOTAL8,957,000
Percent of 15 Leading Districts
Percent of 15 Leading Metro Areas
92%
70%
Note International and domestic data cannot be added due to double counting if shipments between domestic points lead to,
or result from, international cargo flights. Metro markets and customs districts may include multiple airports.
Sources U.S. Census Bureau, Foreign Trade Division, aggregated by WISERTrade and the Bureau of Transportation Statistics,
T-100 Domestic Cargo Database.
Failure to Act: The Economic Impact of Current Investment Trends in Airports, Inland Waterways, and Marine Ports
15
In 2010, more than 76% of America’s international exports reach global markets though marine
ports. Nearly 585 million tons of freight leave the
nation’s shores by water, valued at $469 billion
(or 35% of America’s exports by value). Effectively,
all of America’s exports in commodities such as
coal, fuel oils, gasoline, and crude petroleum are
shipped by water. Including these fuels, maritime
is the primary mode of export for 25 of America’s
export commodities. In addition, roughly 71% of
bulk imports by tonnage arrive in the U.S. by water,
valued at more than $944 billion (approximately
50% of all imports by value). These imports include
86% of America’s crude petroleum imports, 100%
of its fuel oil and coal imports, and the majority of
28 other commodities that it imports.28
By container weight in total trade (exports and
imports), the leading marine ports in 2011 were
Los Angeles/Long Beach, New York /New Jersey,
Savannah, Houston and Oakland. However, if all
commodities are considered, bulk oil shipments in
particular are more commonly handled by ports
along the Gulf of Mexico. The leading ports
for all total weights (volume of trade) are Houston,
Los Angeles/Long Beach, New Orleans, New
York/New Jersey and Corpus Christi.29
The inland waterways and marine ports systems mutually support the trade of commodities
among global markets, with the marine ports
serving as gateways and transfer points to highway, rail, and inland water systems. The inland
systems transport goods within the U.S. (especially agricultural commodities from America’s
Midwestern states), as well as provide access to
the marine ports. It is estimated that 346 million
tons of goods were transferred from inland
waterways to marine ports in 2010, primarily
for export. When a commodity goes from the
inland system to the marine system, a transfer
must be made from one vessel to another at the
marine port. For this reason, delays on inland
systems can affect the ability to move freight efficiently through marine ports. Similarly, using
smaller vessels at marine ports can impose costs
on goods moved through the inland waterway
systems. Figure 1 illustrates these two systems.
16
Shipping
Commodities transported over water are shipped
as bulk commodities, specialized cargoes, or in
containers (measured in twenty-foot equivalent
units, TEUs).30 Goods shipped on inland waterways are primarily bulk, while cargo shipped
through marine ports is a mix of dry and liquid
bulk, containers, and other cargoes (e.g., roll-on/
roll-off cargoes, like automobiles, and general
or project cargo, like steel and heavy equipment).
Inland shipping is primarily dry bulk commodities (agricultural products, coal, iron ore,
coal, grain, and other minor commodities).
Tanker shipping, also considered bulk, involves
the transportation of crude oil petroleum, and
other petrochemical products. Specialized
ships designed to carry liquefied natural gas are
becoming more prevalent as markets for this fuel
expand. Roll-on/roll-off vessels carry automobiles, trucks, and increasingly more specialized
self-propelled vehicles, agricultural equipment,
and military vehicles. Finally, the containerized
cargo shipping industry primarily involves the
transportation of consumer goods and intermediate or finished industrial goods, and is
generally higher in value per ton shipped than
bulk commodities.
The U.S. Army Corps of Engineers plans
construction investments for inland waterways
and tracks commodity shipments for 17 districts
that operate and maintain assets. A total of 51%
of the bulk tonnage on the marine ports system
moves through ports in the Gulf Coast region.
Nearly a quarter (23%) moves through ports
in the North Atlantic region, and 12% moves
through the South Pacific region (which includes
California). The South Atlantic and Great Lakes
regions combined account for less than 10% of
marine trade in the United States. Nearly half
(46%) of the tonnage on the marine system is
petroleum and petroleum products. Other significant bulk commodities moved on the marine
port system include food and farm products
(16%) and crude materials (other than fuels). All
the other commodity groups collectively account
for approximately 26% of marine tonnage.
American Society of Civil Engineers
3 THE POTENTIAL INVESTMENT GAP
Based on identified needs, annual spending patterns
projected by agencies, and trends extended from recent years,
cumulative funding gaps for airports, inland waterways,
and marine port infrastructure were identified:
★★For airports, the gap is estimated at a little over
$39 billion through 2020 (including NextGen), and
grows to $95 billion through 2040.
★★For inland waterways and marine ports, the gap is
estimated at almost $16 billion through 2020, and grows
to $46 billion through 2040.
Airports
As shown in Table 4, expenditures at commercial airports have been relatively constant during
the past decade, at about $10 billion nationally.
These expenditures represent revenues drawn
from all sources — including federal, state, and
local governments, passenger facility charges,
airport revenues, and capital bonds.
The recent history of the grants given by
the FAA’s Airport Improvement Program (AIP)
documents that total annual grants to reliever
and other GA airports ranged from $790 million
to just above $1.6 billion (in 2010 dollars) during
fiscal years 2005 – 11. Within this period, grants
to commercial airports averaged about $3.2
billion annually, which is less than one-third of
the capital spending levels reported by airports
to the FAA on Form 127, as noted above.31
Capital Investment Needs
The FAA forecasts capital investment needs for
NPIAS airports in five-year increments based
on AIP-eligible projects. Additionally, ACI-NA
augments the FAA’s capital needs projections
for large, medium-sized, and small hub airports by incorporating investment needs other
than AIP projects. ACI-NA accepts the FAA’s
estimates for non-hub commercial, reliever,
and other GA airports that are part of the
NPIAS. Capital aviation needs in this report
Failure to Act: The Economic Impact of Current Investment Trends in Airports, Inland Waterways, and Marine Ports
17
are based on the more comprehensive ACI-NA
estimates, which include projects ineligible for
AIP funding and otherwise eligible projects not
submitted for funding.32
Capital needs include access, airfield capacity,
airfield standards, new airports, airfield reconstruction, safety, terminals, and security.
The five-year capital need is assumed to be
$76 billion, or averaging about $15 billion a year
(in 2010 dollars). Nearly half the total need is
required by the 29 large hub airports. In all,
the 138 hub airports will require about 71% of
capital financing in the next five years, while
the 3,194 other NPIAS airports will require the
remaining 29%.33 Larger airport hubs foresee
significant needs for terminals first, followed
by improvements to airfield capacity, and then
for the reconstruction of facilities. Investments
Table
for general aviation airports, however, center
on needs to meet FAA design standards, as well
as reconstruction.34
The first step in estimating the capital spending gap for commercial airports is to look at the
difference between the needs documented by
the ACI-NA studies for the years 2005–15 and
the capital spending trends reported by the FAA.
Capital gaps average about $2 billion a year when
these needs and investment trends are projected
through 2040, not including the additional
investments that will be required for NextGen
technologies (see Table 5). These projections
include the construction and maintenance needs
of airports, projects to improve airfields, and
addressing congestion and travelers’ comfort with
air-side and land-side investments. In addition to
construction, NextGen will increase the air traffic
4 ★ Capital Expenditures by Airport, 2001– 2010
Year
(in billions of 2010 dollars)
Hub Designation
Large
Medium
Small
Non-hub
Total
2001
7.6 1.8 0.8 0.710.8
2002
7.0 2.2 0.9 1.011.1
2003
6.4 2.0 0.9 0.710.1
2004
6.11.91.00.89.8
2005
6.11.80.90.99.6
2006
6.01.91.01.19.9
2007
6.8 2.2 1.0 1.111.1
2008
6.0 2.2 1.0 1.110.3
2009
6.3 2.3 1.1 1.511.2
2010
6.3 2.2 0.9 1.410.9
Annual average
6.5
2.1
0.9
1.0
10.5
Note Actual expenditure trends are available only for commercial airports. Data sets of aggregate capital spending, such as the
FAA Form 127 reports, are not assembled for reliever or GA airports.
Source FAA Form 5100-127, Annual Operating and Financial Summary; calculations by the EDR Group.
18
American Society of Civil Engineers
capacity of congested metropolitan areas while
minimizing needs for new runways and airports.
NextGen is expected to transform the management and operation of the air transportation
system in the United States, moving from the
current ground-based radar system to a satellitebased system. The new system will use more
accurate Global Positioning System technology
to replace the existing ground-based radar air
traffic control (ATC) system. Among the anticipated benefits of NextGen are:
★★ Air travel will be more predictable, because
the system will reduce delays by cutting the
time aircraft sit on the ground or are held
in the air. Delays will also be reduced because
the system will better monitor weather
conditions around the country in real time,
allowing for more flexibility in rerouting
aircraft around weather problems.
★★ The system will allow ATC and pilots
to better identify risks, assess alternatives,
and avoid hazards.
Table
The current FAA implementation plan calls for
implementation to be completed by 2025. By
2020, NextGen is also expected to reduce delays
by 35% over what will occur if nothing is done.35
Implementing NextGen will require investments
by both the public and private sectors.
Multiple uncertainties affect the timing and
ultimate costs of NextGen. First, technologies
keep improving and costs keep changing. Second,
the degree to which the benefits of the NextGen
will be realized will depend on when aircraft
operators decide to install NextGen-related equipment and the technologies that are available when
it is installed. Third, the decision of private-sector
carriers to install this equipment will depend on
(1) the projected return on investment, which will
be affected by the unknown costs of equipage,
installation, training, and operation; (2) the lack of
information about an incentive plan to help defray
costs or help with installation and training; and
(3) uncertainties concerning timelines for implementation of the ground infrastructure needed for
NextGen and confidence in the true benefits that
will accrue to carriers.36
5 ★ Investment Gap Totals, Airports
(in billions of 2010 dollars)
“Traditional” Capital Investment
Year
Projected
Capital
Spending
Needs
Projected
Gap
NextGen
Investment
Needs
Total
Needs Above
Anticipated
Funding
2020
10.7
13.0
– 2.3
– 2.2
– 4.5
2040
10.8
12.3
– 1.5
– 0.6
– 2.1
2012 – 20
95.1
114.0
– 18.9
– 20.2
– 39.1
2021 – 40
213.7
249.6
– 35.9
– 20.2
– 56.1
2012 – 40
308.8
363.6
– 54.8
– 40.4
– 95.2
Cumulative Totals
Sources FAA Form 127, FAA NPIAS Report to Congress, ACI capital needs surveys, U.S. Government Accountability Office,
and NextGen Institute, FAA. Extended trends projected by EDR Group.
Failure to Act: The Economic Impact of Current Investment Trends in Airports, Inland Waterways, and Marine Ports
19
A major challenge for the NextGen program
has been the inability to establish a clear, detailed
estimate of the cost of the system from planning
through implementation, including components
of the project to be implemented after 2018.37 The
best estimates to date of the investment required
from the public and private sectors for NextGen
is the very large range of $40 billion to $160
billion, with $40 billion through 2025 being an
estimate with which most analysts would agree
(made up of $20 billion from the public sector and
$20 billion from the private sector).38 The $40
billion includes about $9 billion already invested
between 2003 and 2011.
Spending for NextGen is estimated to require
at least $31 billion between 2012 and 2025 (in
2010 dollars), which amounts to about $2.2
billion a year if allocated evenly within this time
frame. In addition, about $600 million, roughly
2% of the initial cost, is assumed to be needed
each year from 2026 through 2040, for maintenance and software upgrades. Table 5 illustrates
the total gap between anticipated funding, the
capital needs projected by airports, and NextGen. Annual additional needs are about $4.3
billion from 2012 to 2020 and fall to less than
$3 billion from 2021 to 2040, based on the
assumption that the capital development for
NextGen will be completed by 2025.
Inland Waterways and Marine Ports
To accommodate anticipated growth in waterborne traffic, future spending needs that have
been traditionally public sector are estimated to
total approximately $30 billion by 2020 and $92
billion by 2040. This includes navigational and
operations/maintenance needs for both marine
dredging and inland waterways. Funding gaps
of almost $16 billion by 2020 and $46 billion by
2040 are expected to result from the difference
between these estimated requirements and the
annual budgets for navigational purposes that
have historically been appropriated to the U.S.
Army Corps of Engineers by Congress.39,40 As
shown in Table 6, more than 61% of the identified
need and funding gap are intended for marine
20
navigation and for operations and maintenance,
with about 39% for inland waterways.41 It is
important to note that this table does not include
improvements to port facilities that are funded
by the private sector, which is generally held as
confidential and proprietary information.
Inland Waterways
The greatest threats to the performance of the
nation’s inland waterway system are delays
caused by insufficient operation and maintenance
of the facilities. When a lock or dam reaches
a state of poor repair, waterborne traffic must
stop more often to allow for more frequently
scheduled maintenance. Although this delay
imposes some level of cost on industries that rely
on waterborne commodities, the greatest cost
is imposed when an unscheduled delay (due to
equipment failure or a deficiency beyond routine
maintenance) occurs. Unscheduled delays interrupt business operations in entire supply chains
dependent on waterborne shipments. With
adequate investment, these delays are preventable. A total of 90% of locks and dams on the
U.S. inland waterway system experienced some
type of unscheduled delay in 2009.42
Table 7 shows the scheduled and unscheduled
delays imposed by deficiencies on the U.S. inland
waterway lock and dam infrastructure in 2009.
Note that the over 19,000 hours of scheduled
and unscheduled service interruptions on inland
waterways averages 52 a day, and that of the
nearly 156,000 total hours of delays due to
these interruptions, nearly half are unscheduled.
Unscheduled delays are especially costly because
vessel operators are unable to anticipate and
offset the costs of these incidents.
Based on trends in data from the U.S. Army
Corps of Engineers, maintaining existing conditions and levels of unscheduled delay on the
nation’s inland waterways will already require
almost $13 billion by 2020 and an additional
$28 billion by 2040. Current funding levels can
support only $7 billion through 2020 and an additional $16 billion through 2040. A total of 27% of
these needs entail the construction of new lock
American Society of Civil Engineers
Public Capital Investment Gap, Inland Waterways
6 ★ Estimated
and Marine Ports
Table
(in billions of 2010 dollars)
Estimated Need
Estimated Funding
Unfunded
Inland Waterways
12.7
7.2
– 5.5
Marine
17.6
7.2
– 10.4
TOTAL
30.2
14.4
– 15.8
Inland Waterways
28.2
16.0
– 12.2
Marine
33.5
16.0
– 17.5
TOTAL
61.7
32.0
– 29.7
TOTAL 2012 – 2040
92.0
46.4
– 45.6
2012 – 2020
2021– 2040
Sources Inland Marine Transportation Systems (IMTS) Capital Projects Business Model, Final Report, Revision 1, prepared
by IMTS Capital strategy Team, April 13, 2012; U.S. Port and Inland Waterway Modernization Strategy: Options for the Future,
presented at Marine Board Spring Meeting, May 15, 2012. Long-term trends are based on annual needs, appropriations and funding
estimates for inland waterways and marine ports over 20 years.
Note Numbers may not add due to rounding.
7 ★ Hours of Scheduled and Unscheduled Delay on US Inland Waterways, 2009
Table
Factor
Number of Scheduled Delays
CY2009
6,532
Hours Delayed Due to Scheduled Delays
81,882
Number of Unscheduled Delays
12,494
Hours Delayed Due to Unscheduled Delays
73,689
TOTAL Number of Delays
19,026
TOTAL Hours of Delay
155,571
Source U.S. Army Corps of Engineers. Calculations by EDR Group. These data reflect 184 locks with data available for an origin
and destination matrix.
Failure to Act: The Economic Impact of Current Investment Trends in Airports, Inland Waterways, and Marine Ports
21
and dam facilities, and 73% are estimated for the
rehabilitation of current facilities. The needs are
not expected to increase sharply or exponentially,
but will peak after 2020, when critical age and
capacity thresholds are likely to be reached.
The deterioration of America’s inland waterway
infrastructure is well documented. Key factors
presented by Inland Waterway Users’ Board
of the U.S. Army Corps of Engineers, include:
★★ While the design life of our locks and dams
is generally 50 years, the majority of our locks
have exceeded that — many are more than
70 years old.
★★ The United States Maritime Administration
projects dramatic growth of domestic freight
volumes, which will compound the congestion
problems on the nation’s already overcrowded
highway system, driving industries to our
inland waterways system to find competitive
alternatives for moving their goods.
★★ Enormous project cost overruns and delays
in project schedules have greatly strained
the Inland Waterways Trust Fund balance.
Meanwhile, the billions of dollars in benefits
foregone by virtue of not having the use
of completed projects continue to escalate.
Marine Ports
Navigable channels serving U.S. marine ports
require significant investments that are likely to
increase over time as vessels involved in international trade double or triple in size. The effects of a
failure to invest in these vital links to America’s
global trading partners could jeopardize these
key trading relationships. In 2011, China and Japan
accounted for nearly 20% and 7% of U.S. maritime
trade, respectively, and they are this nation’s two
largest waterborne trading partners in value of
goods. America’s leading Latin American trading
partners are Mexico, Brazil, and Venezuela, which
together account for 10% of total U.S. maritime
trade. Germany, the United Kingdom, and Russia
are this country’s largest European maritime
partners, accounting for a combined 9% of the
value of U.S. trade. The two other nations among
22
the top 10 U.S. trading partners are South Korea
and Saudi Arabia. Altogether, the top 10 trading
partners account for more than $925 billion in
trade through waterborne commerce, or 54% of
total U.S. maritime trade.43
America’s trade volume is expected to double
by 2021, and to double again shortly after 2030
(see Figure 3). In the next decade, total U.S.
exports are expected to surpass imports for the
first time in a generation. Even if global growth
slows due to economic problems in Europe, the
major U.S. trading partners are a diverse set of
countries in Asia and Latin America, and the
growth forecasts for trade with them are indicative of long-term trends that will require major
investments in U.S. marine ports.
Thus, the demands of the nation’s growing
trade volume will exceed the capacity of its current port infrastructure. From 2012 to 2020, it
is estimated that 25% of the capital investment
needs of U.S. ports will be for port expansion,
and 75% for the rehabilitation of existing assets.44
By 2040, the cumulative total for maintenance
and rehabilitation of assets is estimated to
account for 83% of all needs.
Trend Towards Larger Vessels
The performance of today’s U.S. marine ports is
most likely to be affected by the increasing sizes of
vessels, which may outpace the funding available
for operations and maintenance requirements to
sustain even the current state of good repair, and
the necessary deepening of navigable channels.
This is particularly true for container ships — those
that transport the fastest-growing segment of
international shipping, as measured by both the
size of the vessels involved and the value and
volume of the cargoes they transport. Although
containerization has been a factor in international
trade since the early 1970s, growth in containerized traffic accelerated after 1980. Trends
in international container trade that emerged
between 1990 and 2000 are shown in Table 8.
Many factors are likely to require increased
investment in the nation’s marine ports infrastructure. Global trade patterns continue to
American Society of Civil Engineers
Figure
3 ★ Projected Growth Forecasts for America’s Trade Volume, 2011– 2041
(as of the first quarter of 2012)
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
Impor
Expor
2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041
Imports
exports
Source U.S. Army Corps of Engineers, U.S. Port and Inland Waterways Modernization, June 2012.
Table
8 ★ Total Containerized Trade for U.S. Ports, 1980 – 2010
U.S. Region
(millions of TEUs)
1980
1990
2000
2010
North Atlantic
2.6
2.67
4.09
6.61
South Atlantic
1.75
3.85
8.95
10.62
Gulf Coast
0.58
0.82
1.69
2.82
North Pacific
1.02
2.41
3.59
4.23
South Pacific
2.49
5.77
12.06
17.98
TOTAL
8.4415.5330.3942.26
Source American Association of Port Authorities, July 2012. AAPA also provided 2011 data, which shows 42.7 million TEUs.
change, with new centers of production emerging
as the economies of international trading partners evolve and mature. Future trade patterns
and the operational changes required by larger
vessels will alter vessel deployments and shipping patterns. Decisions about routing will be
influenced by changing demand for shipping services, development of major new transshipment
ports, and by the expansion of the capacity of
waterways that are strategically important to
U.S. trade, like the Suez and Panama Canals.
Although the largest of the newer classes of
vessels will not call on all U.S. ports, the average size of vessels — especially those involved in
transporting containerized cargoes — will likely
increase significantly in the future and affect the
Failure to Act: The Economic Impact of Current Investment Trends in Airports, Inland Waterways, and Marine Ports
23
operations at most of the major U.S. ports that
currently handle containerized cargoes. All of
these factors will require that U.S. ports invest
in the capacity required to support changes
in global trade patterns emerging in the 21st
Century. These trading patterns will be supported
by ever-larger container vessels.
Today, the U.S. ports in southern California — primarily the San Pedro ports of Los Angeles
and Long Beach — and the South Atlantic ports — dominated by Savannah, Hampton Roads, and
Charleston — transport the majority of containers
that move through U.S. ports. Similar geographic
trends are expected to persist even when the
expansion of the Panama Canal is completed
in 2015.
The expansion of the Panama Canal is likely
to influence the size and port call patterns of container vessels serving the U.S. East Coast ports.
For some ports on the U.S. marine system, the
canal’s anticipated widening is expected to lead
to even larger ships, with post–Panama Canal
expansion (new-Panamax) vessels exceeding
Figure
13,000 TEUs. Even larger container vessel sizes
will also have an impact on the U.S. West Coast
ports — especially those in the South Pacific.
Since 1970, vessel sizes have increased, affecting the requirements for both channel width
and harbor depth in U.S. ports, and this trend is
expected to continue with the introduction of
new-Panamax vessel dimensions. Container vessels that can pass through the expanded Panama
Canal will be limited to approximately 13,000
TEUs, with fully laden drafts of about 50 feet
(their current draft limits are about 39.5 feet).
However, container vessels of up to 18,000 TEUs
are expected to begin calling at the U.S. West
Coast ports, where draft restrictions due to the
Panama Canal are not a factor. Also, westbound
trade between Southwest Asia — a growing source
of U.S. imports — and the U.S. East Coast ports
will likely use the Suez Canal, which already
accommodates vessels in the 14,000 – 15,000
TEU range between Asia and Europe.45
Although vessels this large are expected to
call at only a limited number of U.S. ports, the
4 ★ Long-Term U.S. Container Trade Forecast, 2011– 2037
(in loaded TEUs)
70
Loaded Exp
60
Loaded Imp
50
40
30
20
10
0 2011
2013
2015
2017
Loaded imports
2019
2021
2023
2025
2027
2029
2031
2033
2035
2037
loaded exports
Source U.S. Army Corps of Engineers, U.S. Port and Inland Waterways Modernization, June 2012.
24
American Society of Civil Engineers
proliferation of larger vessels as an efficient
means of global water transportation points
to the importance of port capacity for efficient
trade at all U.S. ports. Shipping costs per ton are
significantly lower when freight can be delivered
on a larger vessel, because large vessels are more
cost-effective to operate, especially in light of
rapidly increasing fuel costs. For this reason,
even U.S. ports handling vessels much smaller
than new-Panamax ones will be sensitive to their
capacity to handle ships of a size adequate to
most efficiently deliver freight to and from U.S.
markets. Orders for very large vessels — those
over 10,000 TEUs — are already being delivered
to vessel operators. Smaller, fuel-inefficient
vessels are being retired from service.
These trends are expected to continue and will
require all ports providing container services to
be equipped to handle vessels of increased size.
If ports are not equipped with appropriate channel depth, berth capacity, and gantry and crane
capacity to accommodate larger vessels, the costs
of shipping products to and from the U.S. will
increase, diminishing the competitiveness of U.S.
industry and ultimately having adverse impacts
on the national economy. This is particularly
important to U.S. ports because the larger vessels can call on ports in Canada, Mexico, Central
America and the Caribbean, that currently have
the capacity to handle these larger vessels.
Containers can then be moved to US markets
by rail (in the case of Canada and Mexico) or
by smaller ships (in the case of Caribbean ports)
to deliver goods to the United States.
The U.S. Army Corps of Engineers has
assessed the current capacity of major U.S.
and Canadian ports in terms of their maximum
estimated capacity for handling container
vessels.46 Although most U.S. West Coast ports
are able to accommodate vessels in the range
of 7,000 – 13,000 TEUs, 2010 data indicate only
five Atlantic ports and one Gulf port are able
to accommodate vessels of more than 5,000
TEUs, only two are currently able to accommodate vessels of 7,000 TEUs or larger, and none
were able to handle the maximum-sized newPanamax container vessels fully laden once the
Panama Canal is expanded. Since 2010, several
ports have been taking steps to prepare for new
ship sizes, and there have been reports of larger
ships, though probably not fully laden, entering
selected east coast ports. Other factors that are
important for ports to be able to accommodate
ships of 5,000 TEUs or larger include intermodal
freight considerations, proximity to population centers, and management that develops and
implements strategies for modernization.47
The sources of funding for ports are diverse,
with private investment by port authorities and
non-port entities contributing significantly to
enable the ports simply to maintain existing
conditions to meet customer needs and requirements. Port authorities themselves are planning
on spending a combined $18 billion through 2016
on infrastructure improvements for water terminals, while their private-sector terminal partners
are looking at spending $27.6 billion, for an
aggregate total of nearly $46 billion. This is more
than $9 billion a year in combined infrastructure
investment, of which more than one-third will
be spent by the port authorities themselves.48
Although this investment makes up the majority
of funding for ports, dredging will be required to
maintain existing navigable channels and waterways, as well as to accommodate these larger
vessels. Dredging is usually partly or completely
paid for by the U.S. Army Corps of Engineers.49
For this reason, shortfalls in the Corps’ capital
programs pose a significant threat to the performance of the marine port system.
Public funding for the marine system has been
stagnant in recent years despite the significant
local revenue sources that support the operation
of U.S. ports and given the increasing demands
on and needs for the marine ports. Funding for
marine ports declined 15% from 2010 to 2012,
and is expected to increase only briefly in 2013
because of funding from the American Recovery
and Reinvestment Act.
Failure to Act: The Economic Impact of Current Investment Trends in Airports, Inland Waterways, and Marine Ports
25
4
COSTS INCURRED DUE TO A FAILURE TO ACT
Assuming that America’s needs for air and waterborne
transportation continue to grow, and that investment trends
continue, costs for U.S. industries and households will be
approximately $34 billion due to airport congestion and $59
billion due to deficient inland waterways and marine port
infrastructure in 2020. By 2040, these costs are expected to
rise to $63 billion for air transportation and $82 billion for
inland waterways and marine ports (in 2010 dollars).
26
Airports
★★ Costs to airlines, including fuel, crew
The U.S. commercial aviation system is congested in key metropolitan areas and requires
significant capacity expansion to meet the
passenger and air cargo growth projected
through 2040. In this respect, there are
two options: to build new capacity in major
markets; or to fund NextGen, the advancedtechnology solution to increase and maximize
airport capacity. This analysis is based on the
NextGen solution, which is in the early stages
of implementation by the FAA.
Under current investment levels, congested
conditions will lead to the following impacts:
costs, extended wear and tear on aircraft,
and therefore higher maintenance costs;
★★ Cost to passengers based on delayed and
canceled flights and missed connections,
and increased investment in buffer time
to account for this decreasing reliability;
★★ Costs to passengers who do not take trips
due to increased delays and decreased
reliability; and
★★ Costs to shippers and receivers of cargo
due to delays. These costs are particularly
important to firms that rely on just-intime deliveries.
American Society of Civil Engineers
The FAA released a study on impacts that documented the national cost of airport congestion
at $32.9 billion in 2007, including $28.9 billion in
direct costs and an additional $4 billion in indirect GDP impacts.50 These costs were adjusted
to a base of $21.9 billion in 2010 (in 2010 dollars)
using the following steps:
★★ Indirect GDP was recast as direct business
costs by multiplying the 2007 ratio of total
output to GDP. This brought the total to
$36.3 billion.
★★ Dollars were adjusted to the 2010 dollar value,
which brought the total to $38 billion in 2007.
★★ Only economic transactions were counted.
Therefore, 48% of passenger costs were
included, which is the estimated proportion
of business travel.51 The value of personal
travel was not counted. Second, the cost of not
taking trips, also known as “welfare costs,”
were zeroed out under the assumption that
business travelers will not avoid trips. These
steps brought the total to $24.8 billion in 2007
(in 2010 dollars).
★★ Air travel has decreased during the recent
economic downturn. From 2007 to 2010,
operations have decreased by almost 12%.
This adjustment was made to lower the
estimated cost of air congestion on economic
transactions in the U.S. to $21.9 billion.
The cost of congestion, assuming trends
extended in investments, was adjusted to 2040
on the basis of the FAA’s Terminal Area Forecasts (TAFs). The costs between 2010 and 2040
were adjusted using two factors from TAFs to
represent the costs of airport congestion under
trends extended: the overall national increase
projected for operations; and the overall rate of
increase for the 15 largest air markets in the U.S.
(encompassing 35 airports), compared with all
other commercial airports in the nation. The
estimated costs of airport congestion, excluding
nontransactional impacts, will rise from $24
billion in 2012 to $34 billion in 2020 and is
expected to reach $63 billion by 2040 as congestion worsens under current trends (see Table 9).
Inland Waterways and Marine Ports
Failure to invest in inland waterways and marine
ports has already created a situation where vessels must wait out unscheduled delays on inland
waterways, or where undersized vessels must be
used to accommodate shallow harbors or narrow
channels at U.S. marine ports. These inefficiencies disrupt business operations and increase
costs. They also force businesses to incorporate
scheduled delays into operations attributable to
insufficient capacity for passing through locks, or
the need to run multiple loads of cargo in smaller
ships than would otherwise be preferable. For
the users of inland waterways, these effects will
be exacerbated over time if current trends are
extended. Delays are estimated to have imposed
$33 billion in costs on U.S. products in 2010, and
these costs are expected to increase to nearly
$49 billion (in constant 2010 dollars) by 2020
and to $68 billion by 2040.52 Coal and petroleum
products (including fuels) are expected to incur
the majority of these costs, adding to the already
increasing costs of those energy sources.
In addition, businesses relying on marine
ports face increased costs from importing goods
for direct sales or for use in production processes, and reduced business sales from exports
to international markets. The need to use undersized ships to accommodate shipping through
shallow harbors adds to the costs of U.S. businesses’ imports and exports, and therefore to the
costs of consumers. Additional costs for traded
products due to shallow harbors are estimated
to have been about $7 billion in 2010 ($3.8 billion
in added import costs, and $3.3 billion in export
costs),53 and are expected to increase to $9 billion by 2020 and to $14 billion by 2040 (in 2010
dollars), as shown in Table 10. Petroleum and
petroleum products are expected to account
for about one-third of these total added import
and export costs.
Failure to Act: The Economic Impact of Current Investment Trends in Airports, Inland Waterways, and Marine Ports
27
Table
9 ★ Net Impact of Airport Congestion on the U.S. Economy
Sector
(in billions of 2010 dollars)
2007
2010
2012
2020
2040
Airlines
– 8.69
– 7.67
– 8.37
– 11.86
– 22.08
Passengers
– 8.39
– 7.41
– 8.08
– 11.45
– 21.32
Industries other than
Airlines (Cargo)
– 7.75
– 6.84
– 7.46
– 10.57
– 19.68
– 24.83
– 21.91
– 23.90
– 33.87
– 63.08
TOTALS
Sources FAA, US Travel Association, calculations by EDR Group.
Table
by Commodity of Using Under-Sized Vessels to Accommodate
10 ★ Costs
Shallow Harbors or Narrow Channels at U.S. Marine Ports
(in millions of 2010 dollars)
Commodity
20202040
Imports
Exports
Total
Trade
Imports
Exports
Total
Trade
Coal, Lignite and Coal Coke­­– 274
– 879
– 1,153
– 459
– 1,096
– 1,555
Petroleum and Petroleum
Products
– 2,620
– 989
– 3,609
– 2,984
– 1,316
– 4,300
Chemicals and Related
Products
– 371
– 614
– 985
– 741
– 1,124
– 1,865
Crude Materials, Inedible
Except Fuels
– 625
– 437
– 1,062
– 1,256
– 688
– 1,944
Primary Manufactured Goods
– 308
– 81
– 389
– 676
– 161
– 837
Food and Farm Products
– 160
– 1,765
– 1,925
– 283
– 2,779
– 3,062
All Manufactured
Equipment, Machinery
– 80
– 61
– 141
– 162
– 115
– 277
Total Unknown or
Not Elsewhere Classified
– 10
– 12
– 22
– 11
– 34
– 45
– 4,448
– 4,838
– 9,286
– 6,572
– 7,313
– 13,885
TOTAL
Source EDR Group calculations, based on U.S. Army Corps of Engineers Data, 2009; and Freight Analysis Framework forecasts.
28
American Society of Civil Engineers
Landside Transportation
Needs for Air and Port Traffic
Landside transportation improvements are
also needed to ensure the efficient movement
of goods to and from both airports and marine
ports. The 2011 Failure to Act report on surface
transportation highlighted the costs that deficient highways, bridges, and other elements of
surface transportation infrastructure impose on
the U.S. economy. It needs to be noted that many
of America’s highest-volume marine ports and
most heavily trafficked airports are also located
in some of its most congested cities (e.g., Los
Angeles, Philadelphia, New York, and Baltimore–
Washington). Delays in transportation lengthen
the shipping process for moving goods to or from
airports, marine ports and the nation’s inland
waterway system, thereby increasing costs to
shippers that are passed through to other businesses or households. Tables 11 and 12 present
a snapshot of congestion costs at major airports
and marine ports in 2010.
Congestion near airports that affects the
economic performance of U.S. industries is concentrated near the nation’s major airport hubs,
and adds costs to U.S. businesses of over $1 billion in 2010, just accounting for major airports.
Table 11 shows the impact of congestion on air
cargo and business travel at the 15 largest air
passenger regions in the U.S., and it adds impacts
for five additional major airports. These impacts
incorporate the total tonnage moved to and
from airports, and 48%54 of air travelers, who
are presumed to be business travelers minus the
proportion of travelers who use transit services
to go to the airport.55 Note that value of time for
personal travel is not included, and this is why
impacts do not appear to be severe at primary
tourist destinations such as Orlando and Las
Vegas. The data shown reflect minimal tolerable
conditions and not free-flow traffic.
The issues and scale of ground congestion at
marine ports is similar to airports. When cargo
is delayed due to deficient connections to roads
and railroads in port cities, supply chains and
business operations are affected throughout the
U.S., also threatening the price competitiveness
of U.S. products abroad. Table 12 shows that an
estimated $1 billion of ground congestion costs
in 2010 accrued to cargo shipments entering and
exiting the 16 largest port areas of the U.S.
Similar to the airport analysis, the congestion
impacts are based on metropolitan conditions
and the principle of minimal tolerable conditions
reflected in the Failure to Act report on surface
transportation. As indicated in Table 12, marine
ports with the highest average values of cargo
also tend to be those with the highest congestion
costs. The Los Angeles metropolitan area, with
the ports of Los Angeles and Long Beach, has
the most congested seaports in America and
shows the highest landside congestion costs. The
Los Angeles and New York port areas combined
account for 65% of the total landside congestion
costs shown for the listed ports.
In 2010, deficient or congested surface transportation conditions resulted in a $795 billion
impact on imports and $311 billion on exports.
In Houston, Miami and Norfolk, the impact of
surface transportation on exports to the ports
exceeded the estimated impacts of imports coming from these ports. For all other major marine
ports on the list the affected value on imports
exceeded that of exports, and for LA-Long Beach
and New York, the ratios of impacts by imports
to exports is more than $3-to-$1 and almost
$5-to-$1, respectively.
Failure to Act: The Economic Impact of Current Investment Trends in Airports, Inland Waterways, and Marine Ports
29
Table
Congestion Costs Accruing to Freight and
11 ★ Land-Side
Business Travel Using Airports, 2010
Airport/Region
(in millions of 2010 dollars)
2010 Ground Congestion Costs Accruing to U.S. Industry
15 Largest Aviation Metro Markets
New York City
239
Los Angeles
179
Miami172
Chicago168
San Francisco
102
Atlanta40
Dallas/Fort Worth
32
Boston25
Seattle20
Houston/Galveston18
Phoenix15
Denver14
Orlando8
Washington DC
4
Las Vegas
2
Selected other Airports/Regions
Philadelphia35
New Orleans
17
Memphis14
Cleveland6
Louisville - Cincinnati
TOTAL for 20 Airport Regions
6
1,116
Note The economic impacts of these ground delays are a portion of the Failure to Act: The Economic Impact of Current Investment
Trends in Surface Transportation Infrastructure.
Source EDR Group Calculations Based on U.S. Department of Transportation, O&D Database, Database Products Inc., CY 2011;
ACRP Report 4, Ground Access to Major Airports by Public Transportation, Transportation Research Board of the National
Academies and FAA and the above referenced Failure to Act study.
30
American Society of Civil Engineers
Marine ports with the highest average values of cargo also
tend to be those with the highest congestion costs. The Los Angeles metropolitan area, with the ports of Los Angeles
and Long Beach, has the most congested seaports in
America and shows the highest landside congestion costs.
Congestion Costs Accruing to Freight Using
12 ★ Land-Side
U.S. Marine Ports, 2010
Table
Port Metropolitan Areas
(in millions of 2010 dollars)
Congestion
Costs Accruing
to U.S. Imports
Congestion
Costs Accruing
to U.S. Exports
Total
Los Angeles, CA CSA
339
104
443
New York, NY-NJ-CT-PA CSA (NY Part)
232
51
283
San Francisco, CA CSA
39
21
60
Savannah, GA CSA
33
18
51
Seattle, WA CSA
29
7
36
Miami, FL MSA
23
38
61
Baltimore, MD MSA
22
15
37
Houston, TX CSA
18
27
45
Charleston, SC MSA
13
8
21
New Orleans, LA CSA
11
8
19
Portland, OR-WA MSA (OR Part)
10
3
13
Boston, MA-NH CSA (MA Part)
10
4
14
Delaware
8 715
Mobile, AL CSA
5
1
6
Norfolk, VA-NC MSA (VA Part)
1
3
4
Jacksonville, FL MSA
2
1
3
795
316
1,111
TOTAL of Major Ports
Note The economic impacts of these ground delays are a portion of the Failure to Act: The Economic Impact of Current Investment
Trends in Surface Transportation Infrastructure.
Source EDR Group Calculations Based on USDOT Freight Analysis Framework Data, 2010, Army Corps of Engineers Data, 2009
and the above referenced Failure to Act study.
Failure to Act: The Economic Impact of Current Investment Trends in Airports, Inland Waterways, and Marine Ports
31
5 ECONOMIC IMPACTS
By 2020, the broad impacts on the U.S. economy would represent cumulative losses from the national economy of $54
billion in export value and $580 billion in overall business
sales due to unmet airport needs, and $270 billion and
roughly $1.3 trillion in business sales due to unmeet needs
of inland waterways and marine ports. The U.S. is predicted
to lose $313 billion and $700 billion of GDP by 2020 due to
aviation, inland waterways and marine port impacts.
In the same timeframe, losses in disposable personal income will total $361 billion
attributed to airport needs and $872 billion attributed to inland waterways and
marine ports. In the face of these dollars lost
to the national economy, there is expected
to 350,000 fewer jobs in 2020 due to unmet
airport needs and 738,000 fewer jobs due to
inland and marine port needs.56
Airports
The economic impact of congestion at major
airports will have significant effects on the
national economy due to impacts on cargo
movement and business travel, assuming that
capital spending remains consistent through
2040, as it has been from 2001 (about $10
billion annually in 2010 dollars). The broad
impacts on the U.S. economy, shown in
32
Table 13, would represent a cumulative loss
of GDP totaling $313 billion by 2020 and $1.52
trillion by 2040. Overall, the U.S. economy
will end up with an average of 350,000 fewer
jobs than it would otherwise have had by
2020. And even with economic adjustments
occurring in later years, the result would still
be 358,000 fewer jobs in 2040.
Over time, domestic freight movement and
business travel will likely shift from a reliance
on air to surface transportation, such as trucks
and trains, to partially adjust for the declining
efficiencies and higher costs of air transportation.57 However, this will mean higher costs
for those commodities that are shipped by
air, both in terms of out-of-pocket expenses
and time, which will affect all industries that
rely on same-day freight delivery. As a consequence of air-side congestion, the direct cost
American Society of Civil Engineers
of air transportation is estimated to be 6% higher
in 2020 and 9% higher in 2040 than would be the
case with an initial investment.58
International cargo and will be particularly
affected by increasing costs and inefficiencies,
impairing U.S. competitiveness for businesses
that sell to overseas markets that are only
Table
reachable by air. These changes will also increase
the costs of imports, which will affect households, as well as manufacturers that rely on
imported goods in production processes. By 2020,
the failure to increase investment in airports is
expected to cost the U.S. about $114 billion in
trade, and will increase to $1 trillion by 2040 (in
on U.S. Business Sales, GDP and Jobs from Congestion
13 ★ Effects
at Major Airports, 2012 – 2040
(in billions of 2010 dollars)
Annual Impacts
2020
2040
GDP
– 47 – 70 Jobs (FTE positions)
– 350,000
– 358,000
Average Year
2012 – 2040
53
– 338,000
Business Sales
– 87 – 179 112
Disposable Personal Income
– 53 – 53 51
Cumulative Losses
2012 – 2020
2021 – 2040
2012 – 2040
GDP
– 313 – 1,209 1,523
Business Sales
– 580 – 2,682 3,262
Disposable Personal Income
– 361 – 1,128 1,489
Note GDP reflect impacts in a given year against total national business sales and GDP in that year. These measures do not indicate
declines from 2010 levels.
Sources EDR Group and LIFT model, University of Maryland, INFORUM Group, 2012.
Table
14 ★ Lost Trade Due to the Gap in Airport Investments
Year or Period
(in billions of 2010 dollars)
Exports
Imports
Total Trade
2020
– 11
– 9
– 20
2040
– 62
– 15
– 77
2012 – 20
– 54
– 59
– 114
2021– 40
– 708
– 257
– 965
2012 – 40
– 762
– 316
– 1,079
Sources EDR Group and LIFT model, University of Maryland, INFORUM Group, 2012.
Failure to Act: The Economic Impact of Current Investment Trends in Airports, Inland Waterways, and Marine Ports
33
2010 dollars). As seen in Table 14, this lost value
is roughly even between exports and imports
through 2020, and then becomes significantly
higher for exports by 2040, which is a primary
reason that national loss of GDP will increase
from an annual average of $35 billion from 2012
to 2020 to $60 billion from 2021 through 2040 (in
constant 2010 dollars). This is because the loss of
Table
exports affects the demand for — and therefore
the production of — American-made products to a
greater extent than goods that are imported.
Table 15 compares the impacts of job losses
and business sales through 2020 by sector. Note
that while job losses are heaviest in retailing,
the cumulative loss of business sales falls most
intensely on those business and professional
Most Affected by Decline of Air Service
15 ★ Sectors
in Jobs and Business Sales, 2012 – 2020
Cumulative Business Sales
Impacts, 2012 – 2020 (in billions of 2010 dollars)
Job Impacts in 2020
Sector
Percent
Loss of Total
of Jobs
Loss
Sector
Loss of Percent
Business of Total
sales
Loss
Retail trade
– 94,000
27
Finance & insurance
– 76
13
New construction
– 37,000
11
Retail trade
– 47
8
Other business services
– 28,000
8
Real estate and royalties
– 29
5
Finance & insurance
– 27,000
8
Wholesale trade
– 27
5
Wholesale trade
– 21,000
6
Trucking, highway
& passenger transit
– 26
4
Trucking, highway
& passenger transit
– 19,000
5
Owner-occupied housing
– 26
4
Restaurants and bars
– 19,000
5
Air transport
– 24
4
Air transport
– 17,000
5
Professional services
– 21
4
Professional services
– 13,000
4
Computer & data processing
– 20
3
Movies and amusements – 12,000
3
Other business services
– 19
3
– 42,000
12
Manufacturing Sectors
– 107
18
– 329,000
94
SUBTOTAL
Leading 10 Sectors
– 424
73
– 21,000
6
Other Sectors
– 156
27
– 350,000
100
TOTALS
– 580
100
Manufacturing Sectors
SUBTOTAL
Leading 10 Sectors
Other Sectors
TOTALS
Note Jobs have been rounded to thousands.
Sources EDR Group and LIFT model, University of Maryland, INFORUM Group, 2012.
34
American Society of Civil Engineers
services that rely on air passenger transportation.
Note that manufacturing is divided among 49 sectors and that the negative consequences of airport
congestion are spread among them. Cumulatively,
manufacturers are expected to lose more than
$107 billion from 2012 through 2020, resulting
in a loss of almost 42,000 jobs in that sector.
Inland Waterways and Marine Ports
By failing to invest in its inland waterways and
marine ports, the U.S. is jeopardizing its ability
to provide the low-cost transportation required
to remain competitive in a global marketplace.
The total effects on U.S. trade and national
competitiveness in the global economy will be
significant — $270 billion in exports by 2020 and
almost $2 trillion in exports between 2012 and
2040. The greatest opportunities to grow the
U.S. economy lie in gaining access to global markets for the commodities and heavy industrial
goods that the nation manufactures because
selling goods (as well as services) abroad returns
income from overseas consumers to the United
States. As shown in Table 16, the losses in the
value of export trade are nearly double the losses
in import trade.
Maintaining low transportation costs is vital if
the nation is to preserve the relatively high-wage
jobs created by its export industries. The country’s
Table
ability to offer competitively priced export
products — whether manufactured goods, agricultural products, or sources of energy for a growing
global middle class — will be affected by the conditions of nation’s ports and inland waterways.
Impacts from unmet needs in both inland
waterways and marine ports are expected to
result in an aggregate loss of business sales of $1.3
trillion by 2020 and $7.8 trillion by 2040. If the
current level of investment in the nation’s waterways persists, the losses to the U.S. economy will
affect not only the nation’s output, but will also
exacerbate a continuing loss of jobs. The toll from
these losses will be reflected in declining national
prosperity. America’s GDP losses will accumulate
every year — reaching almost $95 billion in 2020
and more than $255 billion in 2040. The cumulative loss in national GDP through 2040 will be
almost $4.0 trillion — driven by the nation’s eroding ability to keep transportation and shipping
costs low enough to compensate for our higher
wage levels and costs of production.
By 2020, there will be an estimated 738,000
fewer jobs if the U.S. maintains its current levels
of investment (Table 17). By 2040, these job
losses will be 1.4 million — jobs that will be lost
due to America’s lack of competitiveness in
global trade and because its households and
businesses will be spending more for the goods
Lost Trade Due to the Gap in Inland Waterways
16 ★ and
Marine Ports Investments
Year or Period
(in billions of 2010 dollars)
Exports
Imports
Total Trade
2020
– 42.8
– 20.5
– 63.3
2040
– 141.6
– 63.6
– 205.2
2012 – 20
– 270.1
– 157.4
– 427.5
2021– 40
– 1,711.8
– 775.6
– 2,487.4
2012 – 40
– 1,981.9
– 933.0
– 2,914.9
Sources EDR Group and LIFT model, University of Maryland, INFORUM Group, 2012.
Failure to Act: The Economic Impact of Current Investment Trends in Airports, Inland Waterways, and Marine Ports
35
Table
of Failure to Invest in Inland Waterways and Marine Ports
17 ★ Effects
on U.S. Business Sales, GDP and Jobs, 2012 – 2040
(in billions of 2010 dollars)
Annual Impacts
2020
2040
GDP
– 94 – 256 Jobs (FTE positions)
– 738,000
– 1,384,000
Average Year
2012 – 2040
– 137
– 911,000
Business Sales
– 183 – 517 – 270
Disposable Personal Income
– 117 – 269 – 156
Cumulative Losses
GDP
Business Sales
Disposable Personal Income
2012 – 2020
2021 – 2040
2012 – 2040
– 697 – 3,278 3,975
– 1,335 – 6,496 7,831
– 872 – 3,662 4,534
Note Losses in business sales and GDP reflect impacts in a given year against total national business sales and GDP in that year.
These measures do not indicate declines from 2010 levels.
Sources EDR Group and LIFT model, University of Maryland, INFORUM Group, 2012.
they import and the commodities they move
within the U.S. on its inland waterways.
Over time, America’s lack of competitiveness
will affect its ability to create well-paying jobs,
especially in the export sectors that will increasingly depend on its ability to capture its share
of the growing global marketplace. Higher costs
for the imports consumed at the household
level, greater costs to transport the wide array
of imported intermediate goods that supply
domestic manufacturers, and the nation’s ability
to provide low transportation costs for exports
that support jobs with significantly higher average wages than in countries that compete with
the U.S. for new and growing markets will eventually erode the nation’s wages and disposable
income. Although one can already see this
happening in a limited number of industrial
sectors, these effects will magnify rapidly in the
future. By 2020, cumulative losses in disposable
personal income will reach more than $872
36
billion. By 2040, U.S. households will have lost
more than $4.5 trillion in disposable income.
The U.S. standard of living will also be
affected as the cost of its imports rises. The rising
costs of imports will affect more than just the
consumer goods in retail and grocery stores.
Most of the manufactured goods produced in
this country depend on manufactured components that are imported — often on the same large
container ships that bring in imported consumer
goods. Manufacturers depend on these low-cost
components to hold down the prices for their
products — products that are sold in a global
market. Substituting components means either
raising costs to cover higher U.S. wages and
passing them along to their customers, or
absorbing all or a portion of these higher costs.
For the consumer, higher import costs may
mean shifting purchases to more expensive U.S.produced products, but consuming less overall
due to higher prices paid for necessities. Under
any of these circumstances, the prices paid by
American Society of Civil Engineers
U.S. households and businesses will increase,
the range of products (or inputs into the manufacturing process) will decline, and the overall
competitiveness of the national economy, as
measured by U.S. businesses’ ability to price
their products at globally competitive prices,
will be reduced, thereby reducing overall trade.
The effects of the expected decline in trade
by sector are shown for 2020 in Table 18 for both
exports and imports. Agricultural, petrochemical,
energy, and the industrial products needed by
growing nations are competitively produced in
the U.S. and are seen as its greatest export opportunities for the future. Overseas markets for these
commodities depend on ocean transportation via
a limited number of marine ports. And for bulk
Table
commodities, most of the transportation from
the point of production to the point of export is
provided by the U.S. inland waterway system.
Many of these export opportunities depend on
long-term supply contracts, especially for energy
suppliers like coal and natural gas. Each of these
major export markets requires that U.S. trading
partners make long-term investments to
receive and process what they will import (U.S.
exports — or those of its competitors). Because
long-term supply contracts, especially for energy,
generally span a period of 10 years or longer,
America’s ability to compete today has long-term
impacts that are not recoverable with a quick-fix
sometime in the future. In addition, agricultural exports are highly price-sensitive. For
18 ★ Top Ten Sectors Most Affected by Decline of Waterborne Trade, 2020
(in constant billions of 2010 dollars)
Exports
Sector
Imports
Dollar Value
Sector
Dollar Value
Agriculture, forestry, fisheries
– 3.6
Crude petroleum
– 1.8
Wholesale trade
– 2.8
Apparel
– 1.5
Aerospace
– 2.8
Drugs
– 1.1
Other chemicals
– 2.0
Motor vehicles
– 1.0
Petroleum refining
– 1.6
Other chemicals
– 1.0
Air transport
– 1.3
Motor vehicle parts
– 0.8
Meat products
– 1.2
Primary nonferrous metals
– 0.7
Drugs
– 1.2
Metal products
– 0.7
Agriculture fertilizers & chemicals
– 1.1
Agriculture, forestry, fisheries
– 0.6
Miscellaneous plastics products
– 0.8
Miscellaneous manufacturing
– 0.5
All Other Industries
– 24.6
All Others
– 10.7
TOTAL
– 42.8
TOTAL
– 20.5
Sources EDR Group and LIFT model, University of Maryland, INFORUM Group, 2012.
Failure to Act: The Economic Impact of Current Investment Trends in Airports, Inland Waterways, and Marine Ports
37
commodities like these that are subject to annual
or seasonal price changes, high transportation
costs can threaten participation in export markets for these goods if these costs eat up too much
of the delivered price.
As U.S. economic growth is impeded by underinvestment in infrastructure, the effects will
ripple through the nation’s entire economy — not
just those sectors directly affected by the lack of
competitiveness. Table 18 shows how the effects
Table
of reduced export trade and the costs for imported
goods that will affect the entire economy — both
the traded and untraded sectors. Because so much
of the impact of the reduced global competitiveness will be felt in reduced disposable income, the
overall effects on the U.S. economy will show up
in sectors that one does not usually associate with
trade — areas like retail, with a loss of 110,000 jobs
by 2020, and a loss in cumulative sales of $71 billion between 2012 and 2020, as shown in Table 19.
Most Affected by Decline of Waterborne Trade in Jobs
19 ★ Sectors
and Business Sales
(in constant billions of 2010 dollars)
Cumulative Business
Sales Impacts, 2012 – 2020
Job Impacts in 2020
Industry
Retail trade
Percent
Loss of Total
of Jobs
Loss
– 110,000
14.9
Other business
services
– 57,000
7.7
New construction
– 53,000
Wholesale trade
Industry
Loss of Percent
Business of Total
sales
Loss
– 136
10.2
Real estate and
royalties
– 78
5.9
7.2
Wholesale trade
– 71
5.3
– 48,000
6.5
Retail trade
– 71
5.3
Finance and insurance
– 48,000
6.5
Professional services
– 53
4.0
Restaurants and bars
– 40,000
5.4
Owner– occupied
housing
– 53
3.9
Agriculture, forestry,
fisheries
– 50
3.8
Agriculture,
forestry, fisheries
– 40,000
5.4
Finance and insurance
Education, social
services, NPO
– 34,000
4.6
Other business services
– 44
3.3
Professional services
– 32,000
4.3
Petroleum refining
– 38
2.8
Other medical
services & dentists
– 31,000
4.2
Computer & data
processing
– 33
2.5
All Other Industries
– 247,000
33.5
All Other Industries
– 709
53.1
TOTAL
– 738,000
100
TOTAL
– 1,335
100
Note Jobs have been rounded to thousands.
Sources EDR Group and LIFT model, University of Maryland, INFORUM Group, 2012.
38
American Society of Civil Engineers
6 CONCLUSION
Unlike other classes of infrastructure — such as highway,
transit, water treatment, and electricity — America’s airports,
inland waterways, and marine ports link the nation directly to
the global economy. The nation’s ability to export to countries
with growing economies and thereby participate in global
growth depends on competitively providing the essential
commodities and high-value manufactured goods that growing
economies need to supply their populations and industries.
Preserving the advantages of low-cost production of the goods that U.S. citizens and
businesses need to enjoy a high quality of
life and keep the costs of intermediate goods
low depends on the same basic requirement:
that the costs of transporting the nation’s
imports and internally produced commodities
to export markets are kept as low as possible.
Each of these linkages requires that the
investments needed to sustain competitive
transportation costs are well coordinated
among the many interdependent modes of
transportation needed to keep the entire
U.S. supply chain operating efficiently, effectively, and equitably. However, as has been
demonstrated in this report, inadequate and
unbalanced investments in essential commercial transportation infrastructure have
become an enormous drag on the productivity
and competitiveness of the U.S. economy.
U.S. airports and water ports are the primary means for competitively supplying the
Failure to Act: The Economic Impact of Current Investment Trends in Airports, Inland Waterways, and Marine Ports
39
nation’s vast array of imported goods to both
consumers and businesses, as well as meeting
the requirements for a technologically advanced
service economy — and thus they are vital to the
nation’s economic well-being and standard of
living. The nation’s investments in its inland
waterways and marine port systems are also
vital to its ability to compete effectively in global
markets as the demand for U.S.-produced goods,
commodities, and services grows.
Through a combination of federal support
from the Airport Improvement Program, state
and local funding, passenger fees, and private
investments, the U.S. airport system is maintaining a sufficient level of safety and security.
However, air-side congestion is worsening, and
the long-scheduled NextGen improvements have
been delayed. For the calculations contained in
this report, a $40 billion cost of public and private
investment has been assumed, which is the
primary factor in the capital investment gap and
the key to mitigating congested conditions, along
with maintaining traditional streams of airport
infrastructure investments.
The national waterborne transportation system
is really a “Tale of Two Systems” of inland waterways and marine ports. Inland waterways rely
primarily on public investment and has suffered
from chronic underfunding, seriously affecting
the nation’s potential to participate in a highly
competitive global market for exportable
commodities that will be in great demand in the
future. This failure to adequately invest in a
publicly managed inland waterway system affects
the nation’s ability to export key commodities
like grains, energy, and specialized manufactured
goods. It also provides competing countries with
an opening to capture market share, which in
some cases is tied to long-term contracts.
Investments in America’s marine ports are
dominated by public port authorities and private
port operating companies. These investments
are being driven by the need to respond to
market forces tied to domestic economic activity
and growing demand for U.S.-produced goods
by developing countries and regions.
40
The nation’s port system is in danger of being
non-competitive at several key ports in the
Southeast and Gulf port ranges due to the slow
and complex process of project delivery for
critical dredging projects — especially those that
will allow key ports to participate in offering
services that depend on serving larger bulk and
container vessels that will call on U.S. ports
once the expanded Panama Canal opens in 2015.
Other ports on the West Coast and Northeast
will need to increase navigational capacity as
operating economics dictates the introduction
of larger vessels on global trade routes.
Moving goods to and from inland markets and
airports continues to pose a significant challenge
in some of the more congested U.S. metropolitan
regions — t ypically those where the largest
airports and marine ports are located. Freight
bottlenecks associated with highway access are
frequently within metropolitan areas or at key
choke points like major river or rail crossings.
These points require public-sector investments
in highway system improvements that are
increasingly challenged for other public transportation investment priorities.59
Research Implications of Federal Policy
and Private Investment Trends
Currently, federal investments in highways,
ports, various elements of the nation’s inland
waterways, and the rail system are not evaluated
or prioritized on a corridor basis. Public investment decisions do not adequately take into
consideration potential effects of the increased
costs of transportation system inefficiencies
being borne by the cargo owners, manufacturers,
or consumers. For passenger transportation,
simple measures like the value of travel time are
used as surrogates for measuring user savings.
But in highly complex supply chains — where
inventory costs, equipment investments, labor
productivity, return on investment, and other
measures of effectiveness are more common — assessing the effects of federal investments
in improving the efficiency of transportation
American Society of Civil Engineers
infrastructure requires a more nuanced and
detailed assessment of the returns on public
funding. To this end, several areas require
further research:
★★ Determining the sensitivity of shippers to
the increased costs of transportation and
assessing the effectiveness of investments
in airports, marine ports, and waterways in
influencing these costs.
★★ Assessing the best available technology
for NextGen with a framework for system
maintenance and upgrades. This could be
compared with how adequate future throughput at major airports can be achieved without
implementing NextGen.
Moreover, highly detailed and complex data
sources are available for examining the performance and needs of the airports, marine ports,
and inland waterways and ports operating in
the U.S. However, those that are publicly available are often out of date, too abstract, and miss
or try to fill in information about various commodity groups (especially bulk commodities).
Commodity-specific data on domestic air cargo
are not readily available. These factors make
comprehensive, data-based analyses difficult
and challenging to undertake.
Even when information about the capacity,
operations, current and future freight volumes,
and potential deficiencies of the multimodal
transportation system are developed, there will
still be insufficient understanding of the effects
of investment on improved system capacity and
operations, or the consequences of cost savings
attributable to these investments, to adequately
assess the national or regional economic effects
of such investments. Finally, there is a need to
consolidate investments patterns to analyze past
investments made for general aviation airports,
which may be best accomplished by surveying
state departments of aviation.
Moving goods to and from inland markets
and airports continues to pose a significant
challenge in some of the more congested
U.S. metropolitan regions — typically those
where the largest airports and marine ports are located.
Failure to Act: The Economic Impact of Current Investment Trends in Airports, Inland Waterways, and Marine Ports
41
★| ABOUT THE STUDY
The following are the primary data sources and
methods used in this study:
Airports. Needs were extrapolated from
estimates for future needs developed by the
FAA and the ACI-NA through 2015. The ACI-NA
survey was used for hub airports because it is
based on a survey of all needs reported by airport
officials, while the FAA report is based on anticipated AIP funding requests. ACI-NA, however,
accepts the FAA estimates for commercial,
non-hub, reliever, and GA facilities. The history
of investment was gleaned from the FAA Form
127 database, which reports actual investments
made at all commercial airports. These investment levels include public and private funding
sources. To complete estimates of capital
investment needs, FAA documents and interviews
were used to estimate the cost and schedule of
NextGen. Combined, the 2010 FAA study of the
cost of congestion, historical data on enplanements, and origin and destination movements
and aviation forecasts is the basis for estimating
the cost of the capital gap.
Inland Waterways. Data drawn from the
Waterborne Commerce Statistics Center of the
U.S. Army Corps of Engineers (USACE) were
utilized for lock performance characteristics and
specifics regarding through tonnages. USACE’s
public domain database was used to supply
O-D matrix by commodity to feed to network
(supplied via the NTAD website, USACE website). Forecasted values were based on a two-part
function using linear extrapolation of historical
network unavailability hours out to 2025, and
then instituting a logarithmic decay to simulate
a decrease in demand as a result of steep increase
in unavailability.
Marine Ports. USACE Waterborne Commerce
Statistics Center data were used to break out
bulk commodity tonnages and trips by draft
for port regions. For container traffic, a port
database developed by the Institute for Water
Resources was utilized. Future values for bulk
42
commodity portion were estimated for the port
regions by using the multimodal Freight Analysis
Framework data.
Land Congestion. Economic costs of portrelated traffic congestion were calculated using
the Texas Transportation Institute’s Annual
Urban Mobility Report Data, USACE port data
regarding import/export tonnages, and Freight
Analysis Framework data to estimate cost
and ton levels for estimates of dollar per ton
by commodity. Future values were forecasted
by using the ground transportation cumulative
truck congestion estimates developed from
2010 HERS-ST used for the Failure to Act surface
transportation report.
Freight. The impact of degraded infrastructure for each mode in this study is based on
changes in generalized shipping costs, and is
based on the framework of the TREDIS Freight
Module (Transportation Economic Development Impact System). Generalized costs are
calculated separately for bulk and containerized
commodities, and they include marine shipping
costs; inland truck, rail, and barge shipping costs;
travel time costs for the inland moves (including delay from highway congestion and inland
waterway deficiencies); and travel time penalties
for intermodal transfers. Highway congestion
in metro areas surrounding ports was derived
from, and therefore has a slight overlap with, the
findings in Failure to Act: The Economic Impact of
Current Investment Trends in Surface Transportation Infrastructure.
Economic Impacts. An economic model
of the U.S. economy is used to calculate how
households’ income and expenditure patterns,
as well as business productivity, are affected and
lead to changes in the nation’s competitiveness
and economic growth. The results are provided
in terms of long-term changes in jobs and income
in the U.S. This study uses the LIFT model
(Long-Term Inter-Industry Forecasting Tool),
a national policy and impact forecasting system
developed by INFORUM, a research center
within the Department of Economics at the
University of Maryland, College Park.
American Society of Civil Engineers
★| Endnotes
1. U.S. Waterborne Commerce Statistics Center,
“2010 Summary of Domestic and Foreign Waterborne
Commerce,” May 2012.
2. Both the 2007 U.S. Commodity Flow Survey and the 2010
(provisional) Freight Analysis Framework link air freight
to truck, and do not mention rail in the context of air cargo.
3. See Mathew Coogan et al., Ground Access to Major
Airports by Public Transportation, ACRP Report 4, Airport
Cooperative Research Program of the Transportation
Research Board.
4. An “enplanement” is a passenger boarding. The FAA
uses revenue passenger boardings (enplanements) and cargo
data to calculate the apportionments that determine apportionment formula for the Airport Improvement Program.
5. Source: Freight Analysis Framework (FAF) (version 3),
Data Tabulation Tool, July 2012 (http://faf.ornl.gov/fafweb/
Extraction4.aspx). For 2010, FAF reported a total value
of $146 billion in 2007 dollars, which is equivalent to
$152 billion in 2010 value.
6. U.S. Army corps of Engineers, U.S. Port and inland
Waterways Modernization: Preparing for Post-Panamax
Vessels, June 2012.
7. As reported by airports to the FAA on Form 127,
these expenditures represent revenues drawn from all
sources — including federal, state, and local governments,
passenger facility charges, airport revenues, and capital
bonds. Although ASCE and FAA project needs for all
airports, Form 127 accounts for spending only for commercial airports. Accordingly, needs and expenditures cited
in this paragraph reflect commercial airports only, and do
not included reliever and other general aviation airports.
8. US Government Accountability Office, Air Traffic
Control Modernization Management Challenges Associated
With Program Costs and Schedules Could Hinder NextGen
Implementation, Report to Congressional Committees,
February 2012. According to an alternate analysis, implementing the highest performance levels envisioned in the
IWP for ground and aircraft capabilities by 2025 could
increase NextGen’s costs significantly beyond the initial
cost estimate of $40 billion (e.g., in some scenarios that
require every aircraft to be equipped with extensive
avionics in a shorter time frame, estimated costs can go
as high as $160 billion). If the highest performance levels
are implemented over the longer period, by 2035, the cost
estimates would be lower, but still would be considerably
higher than $40 billion.” Gerald H. Dillingham, Ph.D.,
Director of Physical Infrastructure Issues, US Government
Accountability Office, letter to The Honorable John L. Mica
and The Honorable Thomas E. Petri, November 22, 2010,
Subject: Integration of Current Implementation Efforts
with Long-term Planning for the Next Generation Air
Transportation System.
9. American Association of Port Authorities, “U.S. Port
Infrastructure Spending Survey 2012 – 2016,” June 2012.
10. The $92 billion is projected over 30 years. This is
based on average annual needs estimated by the US Corps
of Engineers assuming that a state-of-good repair is maintained for the existing system. Given that substantial
additional navigational dredging will be required, and that
this will increase on-going operations and maintenance
requirements, these estimates are very likely to be lower
than required to maintain future improvements to the
marine navigation system.
11. See the U.S. Army Corps of Engineers’ Civil Works
budgets and five-year plans at www.usace.army.mil/
Missions/CivilWorks/Budget.aspx.
12. The projections are based on the Corps’ estimates
of annual additional needs from 2011 to 2020.
13. “U.S. Port and Inland Waterway Modernization
Strategy: Options for the Future,” presented at Marine
Board Spring Meeting, May 15, 2012.
14. This is assuming that the other modes are viable
alternatives, and not functioning below “minimal
tolerable conditions.”
15. Examples including rushing parts to repair broken
(and therefore idle) equipment, incurring hourly crew
costs over long distances, spoilage/breakage/insurance and
packaging costs due to moving fragile goods (or expansive
drugs) overland.
16. This cost increase is in real value after inflation.
Source: LIFT model, University of Maryland, INFORUM
Group, 2012.
17. CDM Smith, prepared for ACI-NA, The Economic
Impact of Commercial Airports in 2010, January 2012.
18. U.S. Department of Commerce, March 12, 2012
19. Freight Analysis Framework, developed by Developed
by the Center for Transportation Analysis in the Oak
Ridge National Laboratory under funding from the
Federal Highway Administration.
20. U.S. Army Corps of Engineers, June 20, 2012.
21. See Coogan et al., Ground Access to Major Airports;
note that both the 2007 U.S. Commodity Flow Survey
and the 2010 (provisional) Freight Analysis Framework
link air freight to truck, and do not mention rail in the
context of air cargo.
22. Source: NPIAS Report to Congress 2011-2015.
23. One takeoff and one landing equal two operations.
Sources: FAA, “APO TAF Operations and Enplanements
Data Summary, 2011-2040”; calculations by the EDR Group.
24. U.S. Waterborne Commerce Statistics Center, “2010
Summary.”
25. Freight Analysis Framework projections, Federal
Highway Administration, U.S. Department of
Transportation, last modified February 27, 2012,
scaled to data reported by the Bureau of Transportation
Statistics, 2001-11.
Failure to Act: The Economic Impact of Current Investment Trends in Airports, Inland Waterways, and Marine Ports
43
26. Weight with a TEU can vary greatly, depending on the
commodity packed and the volume filled.
43. Source: U.S. International Trade Commission, Bureau
of the Census, assembled by WiserTrade (2011 data).
27. Ibid.
44. Inland Marine Transportation Systems (IMTS) Capital
Projects Business Model, Final Report, Revision 1, prepared
by IMTS Capital Strategy Team, April 13, 2012.
28. Source: U.S. Department of Transportation Freight
Analysis Framework, 2010; calculations
29. Data from data from U.S. Census Bureau, Foreign
Trade Division and provided through WiserTrade.com
30. TEUs are twenty-foot equivalent units, a unit of
measurement equal to the space occupied by a standard
20-foot container; TEUs are used in stating the capacity
of container vessel or storage area. American Association
of Port Authorities, Glossary of Maritime Terms, available
at www.aapa-ports.org
31. FAA, Grant History Summaries. www.faa.gov/airports/
aip/grant_histories. In addition, a category “other”
averaged $472 million per year, and includes block grants
to states, grants to multiple airports, and miscellaneous.
Some of this funding may also be channeled to airports.
32. ACI-NA also assumes a “real” 2% annual construction
escalation factor, whereas the FAA’s NPIAS estimate is
based on constant dollars without assuming that construction costs will increase more than the general economy.
However, Failure to Act analyses use constant dollars.
33. Source: Airports Council International - North
America survey and FAA NPIAS, reported by Airport
Capital Development Costs 2011 – 2015, Airports Council
International-North America, February 2011.
34. Ibid.
35. Ibid., 19. Retrieved from the FAA’s Web site,
www.faa.gov/nextgen/implementation/plan.
36. Ibid., 20.
37. Email correspondence from Heather M. Krause,
assistant director, Government Accountability Office,
to Susan Jones Moses, EDR Group, May 11, 2012.
38. Email from Michael R. Garvin Jr., executive director,
NextGen Institute, FAA; May 10, 2012. The $160 billion
figure comes from risk mitigation and is the estimate
if everything goes wrong.
39. See the U.S. Army Corps of Engineers’ Civil Works
budgets and five-year plans.
40. The Corps’ Inland Waterway construction projections
are based on a yearly outlook from 2011 to 2030, but since
the gap was not addressed in 2011, this study pushes the
year to 2012-31 and holds these annual averages constant
through 2040. Deep Water costs are estimated based on
average annual expenditures for 2012 through 2020 as
presented by the Corps in May 2012. The average annual
public funding need is $3.2 billion, compared to the
planned private sector investments of approximately
$9 billion per year.
45. Source: U.S. Port and Inland Waterways Modernization:
Preparing for Post-Panamax Vessels, Institute for Water
Resources, U.S. Army Corps of Engineers, June 20, 2012.
46. Ibid.
47. Drawn from U.S. Army Corps of Engineers, U.S. Port
and Inland Waterways Modernization, June 2012, which
utilized 2010 data.
48. American Association of Port Authorities, Glossary.
49. The Army Corps of Engineers typically pays between
35 percent and 60 percent for channels dredged deeper
than 45 feet, with the local port authority paying the
balance. The local port authority pays all costs of dredging
channels that are less than 45 feet deep under the Water
Resources Development Act of 1986.
50. “Total Delay Impact Study: A Comprehensive
Assessment of the Costs and Impacts of Flight Delay in
the United States. October 2010,” sponsored by the FAA
through its National Center for Excellence for Aviation
Operations Research.
51. U.S. Travel Association, travel horizons, July 2009.
52. EDR Group calculations, based on U.S. Army Corps
of Engineers data, 2009; and Freight Analysis Framework
forecasts.
53. EDR Group calculations, based on U.S. Army Corps
of Engineers Institute for Water Resources, Container Port
Capacity Study, prepared by the Tioga Group, December,
2010 (updated, May 2012).
54. U.S. Air Travel Association.
55. Estimated in ACRP Report 4, Ground Access to Major
Airports by Public Transportation, Transportation Research
Board of the National Academies
56. Due to the overlap if impacts caused by ground
congestion effects, the impacts of air and waterborne
infrastructure are not added together.
57. This is assuming that the other modes are viable
alternatives, and not functioning below “minimal
tolerable conditions.”
58. The cost increase is in real value after inflation.
Source: LIFT model, University of Maryland, INFORUM
Group, 2012.
59. These issues were explored in an earlier report
in the Failure to Act series on surface transportation
(www.asce.org/failuretoact).
41. “U.S. Port and Inland Waterway Modernization
Strategy.”
42. See www.ndc.iwr.usace.army.mil/lpms/
lock2011webunavail.htm.
44
American Society of Civil Engineers
ABOUT EDR GROUP
Economic Development Research Group, Inc. (EDR
Group), is a consulting firm focusing specifically on
applying state-of-the-art tools and techniques for evaluating economic development performance, impacts, and
opportunities. The firm was started in 1996 by a core
group of economists and planners who are specialists
in evaluating the impacts of transportation infrastructure, services, and technology on economic development
opportunities. Glen Weisbrod, the president of EDR
Group, was appointed by the National Academies to
chair the Transportation Research Board’s Committee
on Transportation and Economic Development.
The transportation work of EDR Group includes studies
of the economic impacts of road, air, sea, and railroad
modes of travel, including economic benefits, development impacts, and benefit/cost relationships. The firm’s
work is organized into three areas: (1) general research
on investment benefit and productivity implications;
(2) planning studies, including impact, opportunities,
and benefit/ cost assessment; and (3) evaluation,
including cost-effectiveness implications.
EDR Group is a national leader in evaluating the
economic development consequences of transportation
projects and policies. The firm has undertaken several
national-level research studies for the Transportation
Research Board’s Cooperative Research Program,
including NCFRP, that have investigated the relationship between freight infrastructure and economic
development, including an assessment of the extent to
which rail freight policies may help stem the deterioration of existing highways, NCHRP Project 8-42, Rail
Freight Solutions to Roadway Congestion: A Guidebook
for Assessing Rail Freight Solutions to Roadway
Congestion; Improving Return on Investment Evaluation for Transportation Projects, NCHRP Project 8-36
(62); and a study of methods for the monetary valuation
of performance measures, NCHRP Project 8-42(61),
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Senior staff at EDR Group have conducted studies from
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transportation and infrastructure investments in aviation,
marine, and surface modes, as well as the study of intermodal impacts and opportunities.
ACKNOWLEDGMENTS
EDR Group wishes to thank Brian Pallasch and Emily
Fishkin, as well as ASCE’s Committee on America’s
Infrastructure, for the opportunity to conduct this
research. We gratefully acknowledge the assistance
of Jeffrey Werling, Ron Horst, and Doug Mead of the
University of Maryland Economics Department. In
addition, we wish to thank to thank Eliot Black and
Robert Samis of the FAA, who pointed us to core
aviation data sets, as well as Jane Calderwood and
Liying Gu of the Airports Council International
and Jeffrey Gilley of the National Business Aviation
Association, who generously provided data gathered
by their organizations. Research on NextGen was
greatly assisted by Michael Garvin of the FAA’s
NextGen Institute and Heather Krause of the U.S.
Government Accountability Office. EDR Group would
also like to thank Aaron Ellis, Scott Brotemarkle and
David Sanford of the American Association of Port
Authorities for sharing data and advanced materials.
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