From the crossroads of America, Indiana Ports and the American Association of Port Authorities (AAPA) hosted an important session with manufacturers, truckers, engineering firms and thought leaders as well as state and local officials about maximizing infrastructure investments and strategically positioning and advocating infrastructure in ongoing national debates.
Indiana is a top manufacturing state in the nation representing the highest manufacturing employment in the United States—17 percent of the Hoosier workforce. With manufacturing well represented in Indiana’s economic footprint, investment in roads, rails, Burns Harbor on Lake Michigan and two inland ports on the Ohio River could not be more important. Fifty-seven percent of the state’s border is water.
Due to complex supply chains of manufacturers and just-in-time inventory principles, leading manufacturers like ArcelorMittal and Subaru of Indiana need Indiana infrastructure to perform and to perform second to none. The good news is that the state has made significant investments, raised revenues and supported projects that the business community needs to keep competitive. It has a vibrant supply of rail, trucking and waterway services. But these sectors do not operate in isolation.
The challenge, however, remains projects of regional and national significance that make a system-wide impact on the movement of critical materials and goods throughout the country and world. In Indianapolis, roundtable participants raised the genuine concern about the long-term condition of the Soo Lock System and especially the Poe Lock in Michigan. The current Poe Lock was built in 1969 and is at risk of failure. It handles more than 90 percent of U.S.-flag vessel cargo passing between Lake Superior and the lower Great Lakes, including more than 40 million tons of iron ore and coal destined for steel mills.
The status quo of the Poe Lock and the aging locks on the inland waterway system is a threat to manufacturing because a catastrophic failure will harm the economy and jobs. According to a 2015 U.S. Department of Homeland Security report, an unanticipated six-month closure of the Poe Lock would likely result in widespread bankruptcies and dislocations throughout the economy. More than 10 million people in the United States and 2 million to 5 million more in Canada and Mexico would lose their jobs. North American economies would enter a severe recession. The U.S. recession impacts would be concentrated in the Great Lakes region, though California and Texas would experience some of the largest job losses. Entire manufacturing industries would be debilitated, including automobiles; appliances; construction, farming and mining equipment; and railcars and locomotives.
Indiana and others states are competing against industrial behemoths like China, Japan and Germany. Competition between states will always be around, but the focus on edging out the international competition is even more acute. These competitors do not even think twice about robustly investing in infrastructure to support industry. Productivity growth in the United States is central to expanding the U.S. economy, and while it’s bigger than one industry or one state, more efficient transportation and infrastructure systems are necessary to create an environment that fosters increased productivity. The Infrastructure Week message to the president, House of Representatives and the Senate: #TimeToBuild is vital now. The NAM has produced an infrastructure toolkit to provide manufacturers the resources to amplify this Infrastructure Week message.
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