Professional Documents
Culture Documents
ASCE Failure To Act Ports Report FINAL
ASCE Failure To Act Ports Report FINAL
ASCE Failure To Act Ports Report FINAL
reportcard@asce.org
www.asce.org/failuretoact
www.edrgroup.com
★| 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
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 Airports and ports cannot function without
spans the United States and the globe. These effective connections to the nation’s roads and
facilities are critical to the health of the U.S. rail systems. Virtually all cargo shipped by air
economy, enabling the importing and exporting arrives at and departs from airports by truck.2
of goods, as well as global business travel: Passenger transportation to and from airports is
primarily by car, but also includes an increasing
★★ The U.S. aviation system includes almost proportion of transit options (e.g., fixed rail and
20,000 civilian airports, although just 5,200 buses).3 Inland and marine ports rely on high-
are open to the public. Of these, more than ways and railroads to transport cargo to ports
3,300 are designated by the Federal Aviation for shipment and to distribute goods to market.
Administration (FAA) as part of the National
Plan of Integrated Airport Systems, including The Role of Airports, Inland Waterways
all 500 commercial service airports and and Marine Ports in the U.S. Economy
2,800 general aviation airports. Both air Airport services facilitate the transfer of pas-
passenger and air freight services are concen- sengers and goods and function as gateways to
trated in a relatively small number of airports economic globalization. Passenger and freight
in major metropolitan areas. Roughly 80% movements are concentrated in a handful of the
of U.S. origin and destination traffic is in 15 thousands of airports in the national aviation
metropolitan markets, and 70% of air freight system. Among the 3,300 airports that are des-
tonnage originates at 15 metropolitan areas ignated by the FAA as important to the national
(nine metropolitan areas are included among aviation system, 35 airports in the nation’s top
the top 15 passenger and freight markets). 15 markets account for 80% of U.S. domestic
★★ The U.S. inland port system consists of more passenger origin and destination movements,
than 12,000 miles of inland and intracoastal totaling 343 million trips. The FAA forecasts that
waterways, with about 240 lock chambers. enplanements in these 15 markets will increase
More than 566 million tons move through 30% by 2020 and 121% by 2040.4 These projec-
the inland transportation system annually, tions exceed enplanement forecasts at other
more than half of which is coal and petroleum commercial airports, which are predicted to
products. More than 70 million metric tons increase 25% by 2020 and 93% by 2040. More
of grain, soybeans, and food are transported important from the perspective of air traffic
within the U.S. each year by way of the inland projections, commercial aircraft operations are
transportation system.1 projected to grow 17% through 2020 and 62%
★★ The U.S. has more than 300 commercial by 2040, including increases in the 15 major
marine ports, through which pass 2.3 billion markets of 23% by 2020 and 86% by 2040.
short tons of cargo a year, and more than 600 As with passenger travel, freight shipments
smaller harbors. In 2010, 51% of the potential are concentrated in major metropolitan areas. By
capacity of container yards in U.S. ports was tonnage, 92% of international air freight tonnage
fully utilized. The system accommodated is imported or exported through the 15 leading
more than 16,800 annual vessel arrivals. U.S. customs districts, and 70% of domestic
air tonnage originates in 15 key metro markets
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 In many cases, private and public investment
these sources shows an annual capital gap of by port authorities and non-port entities enables
about $2 billion through 2020 (roughly $13 billion the ports simply to maintain existing conditions
in need and $11 billion in expenditures per year) to fulfill customer needs and requirements.
and $1 billion annually from 2021 to 2040 ($12 However, many commercial ports are also
billion in need to $11 billion in expenditures, planning improvements. Port authorities are
assuming spending through 2020 does not fall planning on spending a combined $18 billion
lower than recent trends). through 2016 on infrastructure improvements
In addition to construction needs, congestion for water terminals, while their private-sector
relief is being proposed through the Next Gen- terminal partners anticipate spending a
eration Air Transportation System (NextGen), combined $27.6 billion for a total of nearly $46
which is expected to transform the management billion. This is more than $9 billion per year, of
and operation of the air transportation system which more than one-third would be spending
in the United States, moving from the current by the port authorities themselves.9 Although
ground-based radar system to a satellite-based this investment would make up the majority of
system. NextGen is designed to minimize delays funding for ports, the maintenance of existing
by reducing the time aircraft sit on the ground. navigable channels and waterways and the abil-
Multiple uncertainties may affect the timing and ity to accommodate the increasing size of cargo
ultimate costs of NextGen, including constantly vessels requires dredging, a portion of which
changing technologies. At present, the most must be funded by the public sector through
widely accepted projected cost for NextGen is Congressional appropriations to the U.S. Army
$31 billion, in addition to the approximately Corps of Engineers. A key challenge for marine
$9 billion that has already been invested between ports in the United States, particularly on the
2003 and 2011.8 East Coast, will be their ability to handle the
large “new-Panamax” cargo ships that will
Inland Waterways and Marine Ports start service with planned expansions of the
The greatest threats to the performance of the Panama and Suez Canals.
inland waterway system are the scheduled and To accommodate anticipated growth in trade
unscheduled delays caused by insufficient fund- and domestic waterborne traffic, total public
ing for operation and maintenance needs of locks investment needs are expected to exceed $30
governing the traffic flow on the nation’s inland billion by 2020. This includes both navigational
system. A total of 90% of locks and dams on the dredging and operation and maintenance needs
U.S. inland waterway system experienced some for both marine dredging and inland waterways
type of unscheduled delay in 2009. According to and marine ports. It does not include private
the U.S. Army Corps of Engineers, maintaining sector investments to improve the port facilities
existing levels of unscheduled delays on inland themselves or improving connections to
waterways, and not further exacerbating delays, surrounding roads and rail systems to reduce
will require almost $13 billion in cumulative congestion experienced by trucks entering and
investment needs by 2020, and an additional $28 exiting port facilities. By 2040, these needs are
billion by 2040. Current funding levels can sup- expected to reach $92 billion.10 The U.S. will be
port only $7 billion by 2020, and an additional left with a funding gap of nearly $46 billion if
$16 billion by 2040. Roughly 27% of these needs current investment trends continue, based on
entail the construction of new lock and dam facil- the annual budgets for navigational purposes
ities, and 73% are estimated for the rehabilitation
of current facilities.
Inland waterways
Airports and Marine Ports
Annual Impacts 2020 2040 2020 2040
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 rise to almost $2 trillion by 2040. Roughly $1.3
the cumulative impacts expected during the trillion in business sales will be lost by 2020,
periods 2012 – 20 and 2021 – 40. Total impacts rising to $7.8 trillion by 2040. The cumulative
through 2020 and 2040 are discussed below. loss in national GDP will be about $700 billion by
2020 and reach $4 trillion by 2040. Disposable
Airports personal income will be lost, with losses pro-
The economic impact of congestion at major air- jected at almost $872 billion through 2020 and
ports will have significant effects on the national $4.5 trillion through 2040. With this reduction
economy due to delays in cargo movement and in production, income, and spending, there
business travel, assuming that capital spending are projected to be 738,000 fewer jobs in 2020.
remains consistent through 2040, as it has been By 2040, the job losses will grow to almost 1.4
since 2001 (about $10 billion annually in 2010 million — jobs that will be lost due to the lack of
dollars). The broad impacts on the U.S. economy U.S. competitiveness in global trade and because
would represent cumulative losses from the the nation’s households and businesses will be
national economy of $54 billion in export value spending more for commodities that arrive by
and $580 billion in overall business sales by 2020, marine ports and are transported to market via
rising to $762 billion and $3.3 trillion by 2040; inland waterways.
lower levels of gross domestic product (GDP) are
expected to amount to $313 billion by 2020 and Conclusion
$1.21 trillion by 2040; and losses in disposable America’s airports, inland waterways, and
personal income will total $361 billion by 2020 marine ports link the nation directly to the
and $1.49 trillion by 2040 (all in $2010). Overall, global economy, and link regions of the United
the U.S. economy will end up with 350,000 fewer States together. These three infrastructure
jobs than it otherwise would have by 2020. systems support the nation’s ability to export,
Over time, domestic freight movement and to efficiently move goods internally and to
business travel will likely shift from relying on expand our high-end service sector through
air to surface transportation modes to partially widespread business travel. These functions are
adjust for the declining efficiencies and higher critical to the U.S. economy, and depend on the
costs of air transportation.14 However, this will efficient and cost effective operation of these
lead to higher costs for those commodities that networks. Each of these systems require that
are shipped by air, both in terms of out-of-pocket the investments needed to sustain competitive
expenses and time,15 which will mean particularly transportation costs are well coordinated among
hard times for all industries that require same-day the many interdependent modes of transporta-
freight delivery. As a consequence of congestion, tion needed to keep the entire U.S. supply chain
the direct cost of air transportation is projected to operating efficiently, and to ensure that our
be 6% higher in 2020 and 9% higher in 2040 than strong service sectors can efficiently and cost-
would be the case with the initial investment.16 effectively make use of international and long
distance business travel. However, as has been
Inland Waterways and Marine Ports demonstrated in this report, inadequate and
Similar effects are felt within the inland water- unbalanced investments in essential commercial
ways and marine ports sectors. If America only transportation infrastructure have become an
maintains its current level of investment in enormous drag on the productivity and competi-
these systems, the losses to its economy will tiveness of the U.S. economy.
increase shipping costs annually. By 2020, lost
value of exports will be $270 billion and will
America’s networks of airports, inland that can absorb longer transportation times
waterways, and marine ports share several are shipped in bulk or bundled into containers
characteristics. Airports and marine ports and shipped across oceans, while high-value,
function as international gateways that enable lower-weight cargo or goods that require
U.S. industries to export and import goods fast delivery are sent via air freight. Both
from abroad. In addition, airports and inland systems also move passengers, although
waterways provide alternative modes to inland and ocean passenger transportation
surface transportation for transporting goods is not part of this study.
throughout the country, relieving some of the This report’s economic analysis is based
congestion burden on our highways. primarily on documentation of freight and
Air transportation is more often used for air passenger movement from the Freight
high-value and low-weight goods or commod- Analysis Framework (U.S. Federal Highway
ities that require just-in-time delivery. This Administration), the Foreign Trade Division
mode of real-time delivery is employed for of the U.S. Census Bureau, the U.S. Bureau
goods required for manufacturing processes of Transportation Statistics, and the FAA.
(e.g., parts for an automobile assembly plant) Data on the needs of airports and waterborne
or for perishable food for same-day sales. ports were developed from data provided by
Inland and intracoastal waterways are often the FAA, the Airports Council International-
better suited for bulk commodities that can North America (ACI-NA), the U.S. Army
be transported at lower costs than if placed Corps of Engineers, and the American
on trucks or railcars. Certain commodities 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 As part of the Failure to Act series, this report
The purpose of this study is to survey the focuses on the economic consequences of not
economic effects of current investment trends making needed investments in airports, inland
in America’s airports, inland waterways, and waterways, and marine ports as they affect
marine ports. productivity throughout the United States,
Throughout the report, infrastructure invest- global competitiveness, and hence the nation’s
ment needs and investment trends are projected, long-term job and income growth. This analysis
and potential gaps are identified where needs are does not consider the short-term impacts of
likely to exceed investment levels. It is difficult to those money flows associated with spending
predict future levels of capital spending because on the construction, installation, and operation
a wide range of factors will exert an influence of additional infrastructure, though they also
during the coming decades. The analysis given affect patterns of jobs and incomes for workers.
here focuses on a “trends scenario,” which This report, along with other studies in this
assumes that the investments needed and made series does not give special attention to jobs
for airports, inland waterways, and marine ports required to operate infrastructure systems,
will continue in the next decades at essentially which is especially important when discussing
the same levels as in recent years. The data airports. Typical jobs in airports include airport
given for airports are based on data collected management, airline employment and airplane
by the FAA and ACI-NA. The data given for services, on-airport freight handling, terminal
inland waterways and marine ports are primarily retail and services, security, and ground trans-
from the U.S. Army Corps of Engineers. In addi- portation. Economic impact studies are routinely
tion to public sources from combinations of conducted on behalf of airport authorities, state
federal, state, and local jurisdictions, investments departments of transportation and national
come from a mix of private-sector sources and organizations for airports and airport systems.
user fees, including airlines, airline passengers, Recent studies conducted at different airports
and shippers. across the country by different consulting firms,
The capital gap is the difference between the using similar but not identical methodologies
level of dollars invested in infrastructure under show that 20,000 to 60,000 jobs are located on
a trends scenario and the level of investment major airport grounds. These studies also docu-
required to replace, expand, or improve infra- ment the extent that air travel supports tourism
structure as demand grows and facilities age by analyzing visitor spending. In addition,
or require modernizations and new capacity. multiple national studies of impacts have been
Failure to carry out needed investments can published over recent years. For example, a
result in higher costs in moving saleable goods study sponsored by the ACI-NA estimates the
to markets, higher costs for goods required for impacts of commercial aviation to be more than
production processes by U.S. manufacturers, and 1.2 million jobs, including those generated by
higher costs for business travel for all economic visitor spending.17 Other studies sponsored by
sectors (airports). In turn, these impacts will NASAO and FAA estimate overall impacts of
make U.S. goods and services more expensive general aviation and civil aviation, including
and less competitive internationally, driving up aircraft manufacture and parts.
the costs of consumer items for U.S. households, Finally, this study discusses regions and
as well as cutting GDP and eliminating jobs. metropolitan areas, but it does not name or
rank specific airports or inland or marine ports.
The U.S. airport system accommodates connect ports from Boston to Brownsville,
almost 735 million passenger enplanements Texas. In 2010, an estimated 566 million
and moves $1.1 trillion in cargo. The FAA pre- tons of goods were moved on the U.S. inland
dicts that the U.S. airport system will carry waterways and 2.3 billion tons of freight were
more than 1 billion passengers by 2024, and moved through U.S. marine ports.20 Interna-
the Federal Highway Administration predicts tional trade underscores the importance of
that the value of air freight will grow to $4.5 U.S. waterborne transportation; more than
trillion by 2040 (in 2010 dollars).19 70% of traded commodities by weight are and
An intricate system of waterways ties imported or exported through marine ports.
inland ports to marine ports and provides Airports, inland waterways, and marine
one of the most cost-effective ways of mov- ports cannot function without effective con-
ing a wide variety of freight within the lower nections to roads and rail systems. Virtually
48 states and between the U.S. and all of its all cargo shipped by air arrives at and departs
major trading partners (see Figure 1). Inter- from airports by truck, and passengers’ access
connecting rivers form a marine highway and egress are also by surface transportation.
network in the heart of the nation, from the Passenger transportation to and from airports
Gulf ports to the Great Lakes. For example, is primarily by private automobiles and taxi-
the Mississippi River connects inland ports cabs, but also includes a variety and increasing
as far away as Pittsburgh and Saint Paul to proportion of transit options.21 Inland and
the ports on the Gulf of Mexico. Intracoastal marine ports rely on highways (for trucks) and
waterways provide a system of navigable railroads to transport cargo to ports for ship-
canals, lagoons, rivers, sounds, and bays that ment 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 Milwaukee
Lewiston Chicago
Indiana Harbor
Clarkston
Cincinnati
Umatilla St. Paul
Pittsburgh
Portland Boston
La Crosse Albany
Failure to Act: The Economic Impact of Current Investment Trends in Airports, Inland Waterways, and Marine Ports 13
Figure 2 ★ Nearly 80% of Domestic Air Trips Are Taken
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
Orlando
Metro- area
Airports, if more than Miami
one airport is in a
particular metro-area
Metro Markets Air Trips (in millions) Metro Markets Air Trips (in millions)
New York (LGA, JFK, EWR, ISP, SWF) 39.1 Denver (DEN) 18.8
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
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.
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 interna- Shipping
tional exports reach global markets though marine Commodities transported over water are shipped
ports. Nearly 585 million tons of freight leave the as bulk commodities, specialized cargoes, or in
nation’s shores by water, valued at $469 billion containers (measured in twenty-foot equivalent
(or 35% of America’s exports by value). Effectively, units, TEUs).30 Goods shipped on inland water-
all of America’s exports in commodities such as ways are primarily bulk, while cargo shipped
coal, fuel oils, gasoline, and crude petroleum are through marine ports is a mix of dry and liquid
shipped by water. Including these fuels, maritime bulk, containers, and other cargoes (e.g., roll-on/
is the primary mode of export for 25 of America’s roll-off cargoes, like automobiles, and general
export commodities. In addition, roughly 71% of or project cargo, like steel and heavy equipment).
bulk imports by tonnage arrive in the U.S. by water, Inland shipping is primarily dry bulk com-
valued at more than $944 billion (approximately modities (agricultural products, coal, iron ore,
50% of all imports by value). These imports include coal, grain, and other minor commodities).
86% of America’s crude petroleum imports, 100% Tanker shipping, also considered bulk, involves
of its fuel oil and coal imports, and the majority of the transportation of crude oil petroleum, and
28 other commodities that it imports.28 other petrochemical products. Specialized
By container weight in total trade (exports and ships designed to carry liquefied natural gas are
imports), the leading marine ports in 2011 were becoming more prevalent as markets for this fuel
Los Angeles/Long Beach, New York /New Jersey, expand. Roll-on/roll-off vessels carry automo-
Savannah, Houston and Oakland. However, if all biles, trucks, and increasingly more specialized
commodities are considered, bulk oil shipments in self-propelled vehicles, agricultural equipment,
particular are more commonly handled by ports and military vehicles. Finally, the containerized
along the Gulf of Mexico. The leading ports cargo shipping industry primarily involves the
for all total weights (volume of trade) are Houston, transportation of consumer goods and inter-
Los Angeles/Long Beach, New Orleans, New mediate or finished industrial goods, and is
York/New Jersey and Corpus Christi.29 generally higher in value per ton shipped than
The inland waterways and marine ports sys- bulk commodities.
tems mutually support the trade of commodities The U.S. Army Corps of Engineers plans
among global markets, with the marine ports construction investments for inland waterways
serving as gateways and transfer points to high- and tracks commodity shipments for 17 districts
way, rail, and inland water systems. The inland that operate and maintain assets. A total of 51%
systems transport goods within the U.S. (espe- of the bulk tonnage on the marine ports system
cially agricultural commodities from America’s moves through ports in the Gulf Coast region.
Midwestern states), as well as provide access to Nearly a quarter (23%) moves through ports
the marine ports. It is estimated that 346 million in the North Atlantic region, and 12% moves
tons of goods were transferred from inland through the South Pacific region (which includes
waterways to marine ports in 2010, primarily California). The South Atlantic and Great Lakes
for export. When a commodity goes from the regions combined account for less than 10% of
inland system to the marine system, a transfer marine trade in the United States. Nearly half
must be made from one vessel to another at the (46%) of the tonnage on the marine system is
marine port. For this reason, delays on inland petroleum and petroleum products. Other sig-
systems can affect the ability to move freight effi- nificant bulk commodities moved on the marine
ciently through marine ports. Similarly, using port system include food and farm products
smaller vessels at marine ports can impose costs (16%) and crude materials (other than fuels). All
on goods moved through the inland waterway the other commodity groups collectively account
systems. Figure 1 illustrates these two systems. for approximately 26% of marine tonnage.
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 for general aviation airports, however, center
estimates, which include projects ineligible for on needs to meet FAA design standards, as well
AIP funding and otherwise eligible projects not as reconstruction.34
submitted for funding.32 The first step in estimating the capital spend-
Capital needs include access, airfield capacity, ing gap for commercial airports is to look at the
airfield standards, new airports, airfield recon- difference between the needs documented by
struction, safety, terminals, and security. the ACI-NA studies for the years 2005–15 and
The five-year capital need is assumed to be the capital spending trends reported by the FAA.
$76 billion, or averaging about $15 billion a year Capital gaps average about $2 billion a year when
(in 2010 dollars). Nearly half the total need is these needs and investment trends are projected
required by the 29 large hub airports. In all, through 2040, not including the additional
the 138 hub airports will require about 71% of investments that will be required for NextGen
capital financing in the next five years, while technologies (see Table 5). These projections
the 3,194 other NPIAS airports will require the include the construction and maintenance needs
remaining 29%.33 Larger airport hubs foresee of airports, projects to improve airfields, and
significant needs for terminals first, followed addressing congestion and travelers’ comfort with
by improvements to airfield capacity, and then air-side and land-side investments. In addition to
for the reconstruction of facilities. Investments construction, NextGen will increase the air traffic
Hub Designation
Year Large Medium Small Non-hub Total
Cumulative Totals
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 navigation and for operations and maintenance,
has been the inability to establish a clear, detailed with about 39% for inland waterways.41 It is
estimate of the cost of the system from planning important to note that this table does not include
through implementation, including components improvements to port facilities that are funded
of the project to be implemented after 2018.37 The by the private sector, which is generally held as
best estimates to date of the investment required confidential and proprietary information.
from the public and private sectors for NextGen
is the very large range of $40 billion to $160 Inland Waterways
billion, with $40 billion through 2025 being an The greatest threats to the performance of the
estimate with which most analysts would agree nation’s inland waterway system are delays
(made up of $20 billion from the public sector and caused by insufficient operation and maintenance
$20 billion from the private sector).38 The $40 of the facilities. When a lock or dam reaches
billion includes about $9 billion already invested a state of poor repair, waterborne traffic must
between 2003 and 2011. stop more often to allow for more frequently
Spending for NextGen is estimated to require scheduled maintenance. Although this delay
at least $31 billion between 2012 and 2025 (in imposes some level of cost on industries that rely
2010 dollars), which amounts to about $2.2 on waterborne commodities, the greatest cost
billion a year if allocated evenly within this time is imposed when an unscheduled delay (due to
frame. In addition, about $600 million, roughly equipment failure or a deficiency beyond routine
2% of the initial cost, is assumed to be needed maintenance) occurs. Unscheduled delays inter-
each year from 2026 through 2040, for mainte- rupt business operations in entire supply chains
nance and software upgrades. Table 5 illustrates dependent on waterborne shipments. With
the total gap between anticipated funding, the adequate investment, these delays are prevent-
capital needs projected by airports, and Next- able. A total of 90% of locks and dams on the
Gen. Annual additional needs are about $4.3 U.S. inland waterway system experienced some
billion from 2012 to 2020 and fall to less than type of unscheduled delay in 2009.42
$3 billion from 2021 to 2040, based on the Table 7 shows the scheduled and unscheduled
assumption that the capital development for delays imposed by deficiencies on the U.S. inland
NextGen will be completed by 2025. waterway lock and dam infrastructure in 2009.
Note that the over 19,000 hours of scheduled
Inland Waterways and Marine Ports and unscheduled service interruptions on inland
To accommodate anticipated growth in water- waterways averages 52 a day, and that of the
borne traffic, future spending needs that have nearly 156,000 total hours of delays due to
been traditionally public sector are estimated to these interruptions, nearly half are unscheduled.
total approximately $30 billion by 2020 and $92 Unscheduled delays are especially costly because
billion by 2040. This includes navigational and vessel operators are unable to anticipate and
operations/maintenance needs for both marine offset the costs of these incidents.
dredging and inland waterways. Funding gaps Based on trends in data from the U.S. Army
of almost $16 billion by 2020 and $46 billion by Corps of Engineers, maintaining existing con-
2040 are expected to result from the difference ditions and levels of unscheduled delay on the
between these estimated requirements and the nation’s inland waterways will already require
annual budgets for navigational purposes that almost $13 billion by 2020 and an additional
have historically been appropriated to the U.S. $28 billion by 2040. Current funding levels can
Army Corps of Engineers by Congress.39,40 As support only $7 billion through 2020 and an addi-
shown in Table 6, more than 61% of the identified tional $16 billion through 2040. A total of 27% of
need and funding gap are intended for marine these needs entail the construction of new lock
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.
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 the top 10 U.S. trading partners are South Korea
rehabilitation of current facilities. The needs are and Saudi Arabia. Altogether, the top 10 trading
not expected to increase sharply or exponentially, partners account for more than $925 billion in
but will peak after 2020, when critical age and trade through waterborne commerce, or 54% of
capacity thresholds are likely to be reached. total U.S. maritime trade.43
The deterioration of America’s inland waterway America’s trade volume is expected to double
infrastructure is well documented. Key factors by 2021, and to double again shortly after 2030
presented by Inland Waterway Users’ Board (see Figure 3). In the next decade, total U.S.
of the U.S. Army Corps of Engineers, include: exports are expected to surpass imports for the
first time in a generation. Even if global growth
★★ While the design life of our locks and dams slows due to economic problems in Europe, the
is generally 50 years, the majority of our locks major U.S. trading partners are a diverse set of
have exceeded that — many are more than countries in Asia and Latin America, and the
70 years old. growth forecasts for trade with them are indica-
★★ The United States Maritime Administration tive of long-term trends that will require major
projects dramatic growth of domestic freight investments in U.S. marine ports.
volumes, which will compound the congestion Thus, the demands of the nation’s growing
problems on the nation’s already overcrowded trade volume will exceed the capacity of its cur-
highway system, driving industries to our rent port infrastructure. From 2012 to 2020, it
inland waterways system to find competitive is estimated that 25% of the capital investment
alternatives for moving their goods. needs of U.S. ports will be for port expansion,
★★ Enormous project cost overruns and delays and 75% for the rehabilitation of existing assets.44
in project schedules have greatly strained By 2040, the cumulative total for maintenance
the Inland Waterways Trust Fund balance. and rehabilitation of assets is estimated to
Meanwhile, the billions of dollars in benefits account for 83% of all needs.
foregone by virtue of not having the use
of completed projects continue to escalate. Trend Towards Larger Vessels
The performance of today’s U.S. marine ports is
Marine Ports most likely to be affected by the increasing sizes of
Navigable channels serving U.S. marine ports vessels, which may outpace the funding available
require significant investments that are likely to for operations and maintenance requirements to
increase over time as vessels involved in interna- sustain even the current state of good repair, and
tional trade double or triple in size. The effects of a the necessary deepening of navigable channels.
failure to invest in these vital links to America’s This is particularly true for container ships — those
global trading partners could jeopardize these that transport the fastest-growing segment of
key trading relationships. In 2011, China and Japan international shipping, as measured by both the
accounted for nearly 20% and 7% of U.S. maritime size of the vessels involved and the value and
trade, respectively, and they are this nation’s two volume of the cargoes they transport. Although
largest waterborne trading partners in value of containerization has been a factor in international
goods. America’s leading Latin American trading trade since the early 1970s, growth in contain-
partners are Mexico, Brazil, and Venezuela, which erized traffic accelerated after 1980. Trends
together account for 10% of total U.S. maritime in international container trade that emerged
trade. Germany, the United Kingdom, and Russia between 1990 and 2000 are shown in Table 8.
are this country’s largest European maritime Many factors are likely to require increased
partners, accounting for a combined 9% of the investment in the nation’s marine ports infra-
value of U.S. trade. The two other nations among structure. Global trade patterns continue to
16,000
Impor
14,000
Expor
12,000
10,000
8,000
6,000
4,000
2,000
0 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 (millions of TEUs)
change, with new centers of production emerging ports, and by the expansion of the capacity of
as the economies of international trading part- waterways that are strategically important to
ners evolve and mature. Future trade patterns U.S. trade, like the Suez and Panama Canals.
and the operational changes required by larger Although the largest of the newer classes of
vessels will alter vessel deployments and ship- vessels will not call on all U.S. ports, the aver-
ping patterns. Decisions about routing will be age size of vessels — especially those involved in
influenced by changing demand for shipping ser- transporting containerized cargoes — will likely
vices, development of major new transshipment 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 13,000 TEUs. Even larger container vessel sizes
currently handle containerized cargoes. All of will also have an impact on the U.S. West Coast
these factors will require that U.S. ports invest ports — especially those in the South Pacific.
in the capacity required to support changes Since 1970, vessel sizes have increased, affect-
in global trade patterns emerging in the 21st ing the requirements for both channel width
Century. These trading patterns will be supported and harbor depth in U.S. ports, and this trend is
by ever-larger container vessels. expected to continue with the introduction of
Today, the U.S. ports in southern California — new-Panamax vessel dimensions. Container ves-
primarily the San Pedro ports of Los Angeles sels that can pass through the expanded Panama
and Long Beach — and the South Atlantic ports — Canal will be limited to approximately 13,000
dominated by Savannah, Hampton Roads, and TEUs, with fully laden drafts of about 50 feet
Charleston — transport the majority of containers (their current draft limits are about 39.5 feet).
that move through U.S. ports. Similar geographic However, container vessels of up to 18,000 TEUs
trends are expected to persist even when the are expected to begin calling at the U.S. West
expansion of the Panama Canal is completed Coast ports, where draft restrictions due to the
in 2015. Panama Canal are not a factor. Also, westbound
The expansion of the Panama Canal is likely trade between Southwest Asia — a growing source
to influence the size and port call patterns of con- of U.S. imports — and the U.S. East Coast ports
tainer vessels serving the U.S. East Coast ports. will likely use the Suez Canal, which already
For some ports on the U.S. marine system, the accommodates vessels in the 14,000 – 15,000
canal’s anticipated widening is expected to lead TEU range between Asia and Europe.45
to even larger ships, with post–Panama Canal Although vessels this large are expected to
expansion (new-Panamax) vessels exceeding call at only a limited number of U.S. ports, the
Figure 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 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037
Source U.S. Army Corps of Engineers, U.S. Port and Inland Waterways Modernization, June 2012.
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
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 (in billions of 2010 dollars)
2020 2040
Total Total
Commodity Imports Exports Trade Imports Exports Trade
Coal, Lignite and Coal Coke – 274 – 879 – 1,153 – 459 – 1,096 – 1,555
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
Failure to Act: The Economic Impact of Current Investment Trends in Airports, Inland Waterways, and Marine Ports 29
Table 11 ★ Land-Side Congestion Costs Accruing to Freight and
Business Travel Using Airports, 2010 (in millions of 2010 dollars)
Miami 172
Chicago 168
Atlanta 40
Dallas/Fort Worth 32
Boston 25
Seattle 20
Houston/Galveston 18
Phoenix 15
Denver 14
Orlando 8
Washington DC 4
Las Vegas 2
Philadelphia 35
New Orleans 17
Memphis 14
Cleveland 6
Louisville - Cincinnati 6
Congestion Congestion
Costs Accruing Costs Accruing
Port Metropolitan Areas to U.S. Imports to U.S. Exports Total
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
Delaware 8 7 15
Mobile, AL CSA 5 1 6
Jacksonville, FL MSA 2 1 3
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 rep-
resent 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 dispos- Table 13, would represent a cumulative loss
able personal income will total $361 billion of GDP totaling $313 billion by 2020 and $1.52
attributed to airport needs and $872 bil- trillion by 2040. Overall, the U.S. economy
lion attributed to inland waterways and will end up with an average of 350,000 fewer
marine ports. In the face of these dollars lost jobs than it would otherwise have had by
to the national economy, there is expected 2020. And even with economic adjustments
to 350,000 fewer jobs in 2020 due to unmet occurring in later years, the result would still
airport needs and 738,000 fewer jobs due to be 358,000 fewer jobs in 2040.
inland and marine port needs.56 Over time, domestic freight movement and
business travel will likely shift from a reliance
Airports on air to surface transportation, such as trucks
The economic impact of congestion at major and trains, to partially adjust for the declining
airports will have significant effects on the efficiencies and higher costs of air transporta-
national economy due to impacts on cargo tion.57 However, this will mean higher costs
movement and business travel, assuming that for those commodities that are shipped by
capital spending remains consistent through air, both in terms of out-of-pocket expenses
2040, as it has been from 2001 (about $10 and time, which will affect all industries that
billion annually in 2010 dollars). The broad rely on same-day freight delivery. As a conse-
impacts on the U.S. economy, shown in quence of air-side congestion, the direct cost
Table 13 ★ Effects on U.S. Business Sales, GDP and Jobs from Congestion
at Major Airports, 2012 – 2040 (in billions of 2010 dollars)
Average Year
Annual Impacts 2020 2040 2012 – 2040
Table 14 ★ Lost Trade Due to the Gap in Airport Investments (in billions of 2010 dollars)
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 exports affects the demand for — and therefore
is roughly even between exports and imports the production of — American-made products to a
through 2020, and then becomes significantly greater extent than goods that are imported.
higher for exports by 2040, which is a primary Table 15 compares the impacts of job losses
reason that national loss of GDP will increase and business sales through 2020 by sector. Note
from an annual average of $35 billion from 2012 that while job losses are heaviest in retailing,
to 2020 to $60 billion from 2021 through 2040 (in the cumulative loss of business sales falls most
constant 2010 dollars). This is because the loss of intensely on those business and professional
SUBTOTAL SUBTOTAL
Leading 10 Sectors – 329,000 94 Leading 10 Sectors – 424 73
Other Sectors – 21,000 6 Other Sectors – 156 27
Note Jobs have been rounded to thousands.
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 17 ★ Effects of Failure to Invest in Inland Waterways and Marine Ports
on U.S. Business Sales, GDP and Jobs, 2012 – 2040 (in billions of 2010 dollars)
Average Year
Annual Impacts 2020 2040 2012 – 2040
they import and the commodities they move billion. By 2040, U.S. households will have lost
within the U.S. on its inland waterways. more than $4.5 trillion in disposable income.
Over time, America’s lack of competitiveness The U.S. standard of living will also be
will affect its ability to create well-paying jobs, affected as the cost of its imports rises. The rising
especially in the export sectors that will increas- costs of imports will affect more than just the
ingly depend on its ability to capture its share consumer goods in retail and grocery stores.
of the growing global marketplace. Higher costs Most of the manufactured goods produced in
for the imports consumed at the household this country depend on manufactured compo-
level, greater costs to transport the wide array nents that are imported — often on the same large
of imported intermediate goods that supply container ships that bring in imported consumer
domestic manufacturers, and the nation’s ability goods. Manufacturers depend on these low-cost
to provide low transportation costs for exports components to hold down the prices for their
that support jobs with significantly higher aver- products — products that are sold in a global
age wages than in countries that compete with market. Substituting components means either
the U.S. for new and growing markets will even- raising costs to cover higher U.S. wages and
tually erode the nation’s wages and disposable passing them along to their customers, or
income. Although one can already see this absorbing all or a portion of these higher costs.
happening in a limited number of industrial For the consumer, higher import costs may
sectors, these effects will magnify rapidly in the mean shifting purchases to more expensive U.S.-
future. By 2020, cumulative losses in disposable produced products, but consuming less overall
personal income will reach more than $872 due to higher prices paid for necessities. Under
any of these circumstances, the prices paid by
Table 18 ★ Top Ten Sectors Most Affected by Decline of Waterborne Trade, 2020
(in constant billions of 2010 dollars)
Exports Imports
Sector Dollar Value Sector Dollar Value
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 of reduced export trade and the costs for imported
or seasonal price changes, high transportation goods that will affect the entire economy — both
costs can threaten participation in export mar- the traded and untraded sectors. Because so much
kets for these goods if these costs eat up too much of the impact of the reduced global competitive-
of the delivered price. ness will be felt in reduced disposable income, the
As U.S. economic growth is impeded by under- overall effects on the U.S. economy will show up
investment in infrastructure, the effects will in sectors that one does not usually associate with
ripple through the nation’s entire economy — not trade — areas like retail, with a loss of 110,000 jobs
just those sectors directly affected by the lack of by 2020, and a loss in cumulative sales of $71 bil-
competitiveness. Table 18 shows how the effects lion between 2012 and 2020, as shown in Table 19.
Cumulative Business
Job Impacts in 2020 Sales Impacts, 2012 – 2020
Percent Loss of Percent
Loss of Total Business of Total
Industry of Jobs Loss Industry sales Loss
All Other Industries – 247,000 33.5 All Other Industries – 709 53.1
Note Jobs have been rounded to thousands.
Sources EDR Group and LIFT model, University of Maryland, INFORUM Group, 2012.
Preserving the advantages of low-cost pro- among the many interdependent modes of
duction of the goods that U.S. citizens and transportation needed to keep the entire
businesses need to enjoy a high quality of U.S. supply chain operating efficiently, effec-
life and keep the costs of intermediate goods tively, and equitably. However, as has been
low depends on the same basic requirement: demonstrated in this report, inadequate and
that the costs of transporting the nation’s unbalanced investments in essential com-
imports and internally produced commodities mercial transportation infrastructure have
to export markets are kept as low as possible. become an enormous drag on the productivity
Each of these linkages requires that the and competitiveness of the U.S. economy.
investments needed to sustain competitive U.S. airports and water ports are the pri-
transportation costs are well coordinated mary 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 The nation’s port system is in danger of being
consumers and businesses, as well as meeting non-competitive at several key ports in the
the requirements for a technologically advanced Southeast and Gulf port ranges due to the slow
service economy — and thus they are vital to the and complex process of project delivery for
nation’s economic well-being and standard of critical dredging projects — especially those that
living. The nation’s investments in its inland will allow key ports to participate in offering
waterways and marine port systems are also services that depend on serving larger bulk and
vital to its ability to compete effectively in global container vessels that will call on U.S. ports
markets as the demand for U.S.-produced goods, once the expanded Panama Canal opens in 2015.
commodities, and services grows. Other ports on the West Coast and Northeast
Through a combination of federal support will need to increase navigational capacity as
from the Airport Improvement Program, state operating economics dictates the introduction
and local funding, passenger fees, and private of larger vessels on global trade routes.
investments, the U.S. airport system is main- Moving goods to and from inland markets and
taining a sufficient level of safety and security. airports continues to pose a significant challenge
However, air-side congestion is worsening, and in some of the more congested U.S. metropolitan
the long-scheduled NextGen improvements have regions — t ypically those where the largest
been delayed. For the calculations contained in airports and marine ports are located. Freight
this report, a $40 billion cost of public and private bottlenecks associated with highway access are
investment has been assumed, which is the frequently within metropolitan areas or at key
primary factor in the capital investment gap and choke points like major river or rail crossings.
the key to mitigating congested conditions, along These points require public-sector investments
with maintaining traditional streams of airport in highway system improvements that are
infrastructure investments. increasingly challenged for other public trans-
The national waterborne transportation system portation investment priorities.59
is really a “Tale of Two Systems” of inland water-
ways and marine ports. Inland waterways rely Research Implications of Federal Policy
primarily on public investment and has suffered and Private Investment Trends
from chronic underfunding, seriously affecting Currently, federal investments in highways,
the nation’s potential to participate in a highly ports, various elements of the nation’s inland
competitive global market for exportable waterways, and the rail system are not evaluated
commodities that will be in great demand in the or prioritized on a corridor basis. Public invest-
future. This failure to adequately invest in a ment decisions do not adequately take into
publicly managed inland waterway system affects consideration potential effects of the increased
the nation’s ability to export key commodities costs of transportation system inefficiencies
like grains, energy, and specialized manufactured being borne by the cargo owners, manufacturers,
goods. It also provides competing countries with or consumers. For passenger transportation,
an opening to capture market share, which in simple measures like the value of travel time are
some cases is tied to long-term contracts. used as surrogates for measuring user savings.
Investments in America’s marine ports are But in highly complex supply chains — where
dominated by public port authorities and private inventory costs, equipment investments, labor
port operating companies. These investments productivity, return on investment, and other
are being driven by the need to respond to measures of effectiveness are more common —
market forces tied to domestic economic activity assessing the effects of federal investments
and growing demand for U.S.-produced goods in improving the efficiency of transportation
by developing countries and regions.
Failure to Act: The Economic Impact of Current Investment Trends in Airports, Inland Waterways, and Marine Ports 41
★| ABOUT THE STUDY commodity portion were estimated for the port
regions by using the multimodal Freight Analysis
The following are the primary data sources and Framework data.
methods used in this study: Land Congestion. Economic costs of port-
Airports. Needs were extrapolated from related traffic congestion were calculated using
estimates for future needs developed by the the Texas Transportation Institute’s Annual
FAA and the ACI-NA through 2015. The ACI-NA Urban Mobility Report Data, USACE port data
survey was used for hub airports because it is regarding import/export tonnages, and Freight
based on a survey of all needs reported by airport Analysis Framework data to estimate cost
officials, while the FAA report is based on antici- and ton levels for estimates of dollar per ton
pated AIP funding requests. ACI-NA, however, by commodity. Future values were forecasted
accepts the FAA estimates for commercial, by using the ground transportation cumulative
non-hub, reliever, and GA facilities. The history truck congestion estimates developed from
of investment was gleaned from the FAA Form 2010 HERS-ST used for the Failure to Act surface
127 database, which reports actual investments transportation report.
made at all commercial airports. These invest- Freight. The impact of degraded infrastruc-
ment levels include public and private funding ture for each mode in this study is based on
sources. To complete estimates of capital changes in generalized shipping costs, and is
investment needs, FAA documents and interviews based on the framework of the TREDIS Freight
were used to estimate the cost and schedule of Module (Transportation Economic Develop-
NextGen. Combined, the 2010 FAA study of the ment Impact System). Generalized costs are
cost of congestion, historical data on enplane- calculated separately for bulk and containerized
ments, and origin and destination movements commodities, and they include marine shipping
and aviation forecasts is the basis for estimating costs; inland truck, rail, and barge shipping costs;
the cost of the capital gap. travel time costs for the inland moves (includ-
Inland Waterways. Data drawn from the ing delay from highway congestion and inland
Waterborne Commerce Statistics Center of the waterway deficiencies); and travel time penalties
U.S. Army Corps of Engineers (USACE) were for intermodal transfers. Highway congestion
utilized for lock performance characteristics and in metro areas surrounding ports was derived
specifics regarding through tonnages. USACE’s from, and therefore has a slight overlap with, the
public domain database was used to supply findings in Failure to Act: The Economic Impact of
O-D matrix by commodity to feed to network Current Investment Trends in Surface Transpor-
(supplied via the NTAD website, USACE web- tation Infrastructure.
site). Forecasted values were based on a two-part Economic Impacts. An economic model
function using linear extrapolation of historical of the U.S. economy is used to calculate how
network unavailability hours out to 2025, and households’ income and expenditure patterns,
then instituting a logarithmic decay to simulate as well as business productivity, are affected and
a decrease in demand as a result of steep increase lead to changes in the nation’s competitiveness
in unavailability. and economic growth. The results are provided
Marine Ports. USACE Waterborne Commerce in terms of long-term changes in jobs and income
Statistics Center data were used to break out in the U.S. This study uses the LIFT model
bulk commodity tonnages and trips by draft (Long-Term Inter-Industry Forecasting Tool),
for port regions. For container traffic, a port a national policy and impact forecasting system
database developed by the Institute for Water developed by INFORUM, a research center
Resources was utilized. Future values for bulk within the Department of Economics at the
University of Maryland, College Park.
4. An “enplanement” is a passenger boarding. The FAA 12. The projections are based on the Corps’ estimates
uses revenue passenger boardings (enplanements) and cargo of annual additional needs from 2011 to 2020.
data to calculate the apportionments that determine appor- 13. “U.S. Port and Inland Waterway Modernization
tionment formula for the Airport Improvement Program. Strategy: Options for the Future,” presented at Marine
5. Source: Freight Analysis Framework (FAF) (version 3), Board Spring Meeting, May 15, 2012.
Data Tabulation Tool, July 2012 (http://faf.ornl.gov/fafweb/ 14. This is assuming that the other modes are viable
Extraction4.aspx). For 2010, FAF reported a total value alternatives, and not functioning below “minimal
of $146 billion in 2007 dollars, which is equivalent to tolerable conditions.”
$152 billion in 2010 value.
15. Examples including rushing parts to repair broken
6. U.S. Army corps of Engineers, U.S. Port and inland (and therefore idle) equipment, incurring hourly crew
Waterways Modernization: Preparing for Post-Panamax costs over long distances, spoilage/breakage/insurance and
Vessels, June 2012. packaging costs due to moving fragile goods (or expansive
7. As reported by airports to the FAA on Form 127, drugs) overland.
these expenditures represent revenues drawn from all 16. This cost increase is in real value after inflation.
sources — including federal, state, and local governments, Source: LIFT model, University of Maryland, INFORUM
passenger facility charges, airport revenues, and capital Group, 2012.
bonds. Although ASCE and FAA project needs for all
airports, Form 127 accounts for spending only for commer- 17. CDM Smith, prepared for ACI-NA, The Economic
cial airports. Accordingly, needs and expenditures cited Impact of Commercial Airports in 2010, January 2012.
in this paragraph reflect commercial airports only, and do 18. U.S. Department of Commerce, March 12, 2012
not included reliever and other general aviation airports.
19. Freight Analysis Framework, developed by Developed
8. US Government Accountability Office, Air Traffic by the Center for Transportation Analysis in the Oak
Control Modernization Management Challenges Associated Ridge National Laboratory under funding from the
With Program Costs and Schedules Could Hinder NextGen Federal Highway Administration.
Implementation, Report to Congressional Committees,
20. U.S. Army Corps of Engineers, June 20, 2012.
February 2012. According to an alternate analysis, imple-
menting the highest performance levels envisioned in the 21. See Coogan et al., Ground Access to Major Airports;
IWP for ground and aircraft capabilities by 2025 could note that both the 2007 U.S. Commodity Flow Survey
increase NextGen’s costs significantly beyond the initial and the 2010 (provisional) Freight Analysis Framework
cost estimate of $40 billion (e.g., in some scenarios that link air freight to truck, and do not mention rail in the
require every aircraft to be equipped with extensive context of air cargo.
avionics in a shorter time frame, estimated costs can go
22. Source: NPIAS Report to Congress 2011-2015.
as high as $160 billion). If the highest performance levels
are implemented over the longer period, by 2035, the cost 23. One takeoff and one landing equal two operations.
estimates would be lower, but still would be considerably Sources: FAA, “APO TAF Operations and Enplanements
higher than $40 billion.” Gerald H. Dillingham, Ph.D., Data Summary, 2011-2040”; calculations by the EDR Group.
Director of Physical Infrastructure Issues, US Government 24. U.S. Waterborne Commerce Statistics Center, “2010
Accountability Office, letter to The Honorable John L. Mica Summary.”
and The Honorable Thomas E. Petri, November 22, 2010,
Subject: Integration of Current Implementation Efforts 25. Freight Analysis Framework projections, Federal
with Long-term Planning for the Next Generation Air Highway Administration, U.S. Department of
Transportation System. 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 43. Source: U.S. International Trade Commission, Bureau
commodity packed and the volume filled. 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
28. Source: U.S. Department of Transportation Freight
by IMTS Capital Strategy Team, April 13, 2012.
Analysis Framework, 2010; calculations
45. Source: U.S. Port and Inland Waterways Modernization:
29. Data from data from U.S. Census Bureau, Foreign
Preparing for Post-Panamax Vessels, Institute for Water
Trade Division and provided through WiserTrade.com
Resources, U.S. Army Corps of Engineers, June 20, 2012.
30. TEUs are twenty-foot equivalent units, a unit of
46. Ibid.
measurement equal to the space occupied by a standard
20-foot container; TEUs are used in stating the capacity 47. Drawn from U.S. Army Corps of Engineers, U.S. Port
of container vessel or storage area. American Association and Inland Waterways Modernization, June 2012, which
of Port Authorities, Glossary of Maritime Terms, available utilized 2010 data.
at www.aapa-ports.org
48. American Association of Port Authorities, Glossary.
31. FAA, Grant History Summaries. www.faa.gov/airports/
49. The Army Corps of Engineers typically pays between
aip/grant_histories. In addition, a category “other”
35 percent and 60 percent for channels dredged deeper
averaged $472 million per year, and includes block grants
than 45 feet, with the local port authority paying the
to states, grants to multiple airports, and miscellaneous.
balance. The local port authority pays all costs of dredging
Some of this funding may also be channeled to airports.
channels that are less than 45 feet deep under the Water
32. ACI-NA also assumes a “real” 2% annual construction Resources Development Act of 1986.
escalation factor, whereas the FAA’s NPIAS estimate is
50. “Total Delay Impact Study: A Comprehensive
based on constant dollars without assuming that construc-
Assessment of the Costs and Impacts of Flight Delay in
tion costs will increase more than the general economy.
the United States. October 2010,” sponsored by the FAA
However, Failure to Act analyses use constant dollars.
through its National Center for Excellence for Aviation
33. Source: Airports Council International - North Operations Research.
America survey and FAA NPIAS, reported by Airport
51. U.S. Travel Association, travel horizons, July 2009.
Capital Development Costs 2011 – 2015, Airports Council
International-North America, February 2011. 52. EDR Group calculations, based on U.S. Army Corps
of Engineers data, 2009; and Freight Analysis Framework
34. Ibid.
forecasts.
35. Ibid., 19. Retrieved from the FAA’s Web site,
53. EDR Group calculations, based on U.S. Army Corps
www.faa.gov/nextgen/implementation/plan.
of Engineers Institute for Water Resources, Container Port
36. Ibid., 20. Capacity Study, prepared by the Tioga Group, December,
2010 (updated, May 2012).
37. Email correspondence from Heather M. Krause,
assistant director, Government Accountability Office, 54. U.S. Air Travel Association.
to Susan Jones Moses, EDR Group, May 11, 2012.
55. Estimated in ACRP Report 4, Ground Access to Major
38. Email from Michael R. Garvin Jr., executive director, Airports by Public Transportation, Transportation Research
NextGen Institute, FAA; May 10, 2012. The $160 billion Board of the National Academies
figure comes from risk mitigation and is the estimate
56. Due to the overlap if impacts caused by ground
if everything goes wrong.
congestion effects, the impacts of air and waterborne
39. See the U.S. Army Corps of Engineers’ Civil Works infrastructure are not added together.
budgets and five-year plans.
57. This is assuming that the other modes are viable
40. The Corps’ Inland Waterway construction projections alternatives, and not functioning below “minimal
are based on a yearly outlook from 2011 to 2030, but since tolerable conditions.”
the gap was not addressed in 2011, this study pushes the
58. The cost increase is in real value after inflation.
year to 2012-31 and holds these annual averages constant
Source: LIFT model, University of Maryland, INFORUM
through 2040. Deep Water costs are estimated based on
Group, 2012.
average annual expenditures for 2012 through 2020 as
presented by the Corps in May 2012. The average annual 59. These issues were explored in an earlier report
public funding need is $3.2 billion, compared to the in the Failure to Act series on surface transportation
planned private sector investments of approximately (www.asce.org/failuretoact).
$9 billion per year.
41. “U.S. Port and Inland Waterway Modernization
Strategy.”
42. See www.ndc.iwr.usace.army.mil/lpms/
lock2011webunavail.htm.
Washington Office
101 Constitution Avenue, NW
Suite 375 East
Washington, DC 20001
202/789-7850
202/789-7859 FAX
reportcard@asce.org
www.asce.org/reportcard