America’s manufacturers testified before Congress on Wednesday and asked lawmakers to spend money to beef up infrastructure, which they said would reduce cost to consumers and improve the efficiencies of organizations and their supply chains.
Vermeer, which makes agricultural and industrial equipment, presented its case, where it told lawmakers that it reduces waste so that it can deliver goods in a timely and frequent manner. It processes also depend on a robust supply chain that needs a healthy infrastructure. Raw materials are received daily as are engines and hydraulic pumps, it says, all of which have to be assembled on the shop floor — before they are shipped to customers.
“If ports are clogged, trucks are delayed, power is down, or the internet has a lapse, productivity and customer service are impacted. This is not just my story. Across the manufacturing sector, transportation logistics matter, and congestion—whether at a port or on a crowded highway—is waste that drives the consumer’s cost up like a hidden tax,” testified Mary Andringa, chair of the board for Vermeer Corp. before the US House Transportation and Infrastructure Committee.
“Higher transportation costs can, in turn, lead to higher inventory levels as organizations will minimize the number of deliveries they place and receive by ordering in larger quantities. Conversely, investments in transportation infrastructure that positively impact connectivity, capacity, performance and flexibility can help manufacturers support and fuel a growing economy,” adds Andringa, also the former chair of the National Association Manufacturers.
If a port is clogged or shut down, for example, it cost everyone money and the delivery of goods to end users is delayed. Ditto for roads and highways, and air transport systems. But it all requires a national commitment, and investment.
The American Society of Civil Engineers estimates that upgrading our surface transportation infrastructure alone will cost more than $1 trillion, the chair points out. She adds that $3.6 trillion is necessary for all infrastructure projects.
“Currently, the United States is ranked behind many of its biggest global competitors at 11th in infrastructure quality and I don’t think we should be satisfied with 11th,” says Andringa. “China,” she adds, “is spending more on infrastructure each year than North America and Western Europe combined.”
By some estimates, she continues, without significant and timely upgrading of our infrastructure, the United States will lose more than 2.5 million jobs by 2025 and more than 5.8 million by 2040.
Private financing cannot replace the role of public funding , she adds, but it should be pursued as a tool to upgrade our aging infrastructure. “One practical tool to increase private investment and public–private partnerships would be to expand the use of private activity bonds.”