Infrastructure

Ask an Expert: What’s next after WRRDA?

The recent passage of the Water Resources Reform and Development Act (WRRDA) of 2013 (H.R. 3080) marked a significant victory for manufacturers. The long-overdue reauthorization invested in our nation’s 12,000 miles of inland and coastal waterways, which are responsible for transporting products and commodities valued at $185 billion per year. With WRRDA completed, our attention is focused on what is poised to be a significant year ahead for transportation policy.

Federal funding for highway and transit programs is set to expire Sept. 30, 2014. Congress passed the current authorization—the two-year, $105 billion Moving Ahead for Progress in the 21st Century Act (MAP-21)—after three years and ten short-term extensions of the previous funding bill. The NAM is working to ensure a robust, multi-year surface transportation reauthorization that builds on the bipartisan success of WRRDA. Manufacturers cannot afford the uncertainty that results from patchwork legislation.

Any transportation funding bill must, of course, address imminent Highway Trust Fund shortfalls. This could prove to be the biggest challenge in the reauthorization. Current predictions place the Highway Trust Fund on a path to insolvency sometime in 2015. The vast amount of investment needed for functional highway and transit programs is not something that states can shoulder on their own. If funding ceases, the entire manufacturing supply chain would be at risk. The Highway Trust Fund operates on user fees, and the NAM urges members of Congress to maintain that model as they negotiate a long-term fix.

Manufacturers are in agreement that their competitiveness hinges on sound infrastructure. A majority of manufacturers participating in a joint NAM/Building America’s Future survey said that U.S. infrastructure is in fair or poor shape, while roads in particular are getting even worse. U.S. infrastructure is not positioned to respond to the competitive demands of a growing economy. The NAM is hoping to change that through the next transportation bill. An investment in infrastructure is an investment in manufacturing.

Robyn Boerstling is the director of transportation and infrastructure policy at the National Association of Manufacturers.

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An Opportunity for Manufacturers and Exporters in the Pacific Northwest

A big debate on energy exports is playing out in the Pacific Northwest. Passions are running high on both sides, no doubt fueled in part by meticulously brewed cups of java.

NAM President and CEO Jay Timmons recently waded into the debate. In remarks to business community leaders in Portland and later in Seattle, he made a strong case in support of building the infrastructure necessary to move goods and commodities, such as coal and natural gas, to markets abroad. He said:

Building, modernizing and expanding export terminals makes sense. In a still sluggish economy, expansion will create over 10,000 jobs in the Pacific Northwest and throughout the entire manufacturing economy in America. Expansion means more private investment in export infrastructure—not just for commodities like coal and liquefied natural gas—but for agriculture and manufactured products. It’s a winning proposition.

Currently, plans to modernize export terminals in Washington and Oregon are  effectively on hold. Approval of these projects takes the consent of seemingly every level of government, giving opponents plenty of opportunities to stall. All the while, the Pacific Northwest is missing out on the increased economic activity the export terminals would make possible.

The debate over energy exports isn’t isolated to the Pacific Northwest. Similar debates are taking place across the country, particularly on the issue of natural gas exports. The United States has abundant supplies of natural gas, which are now being developed thanks to advancements in hydraulic fracturing. By exporting energy, whether coal or natural gas, the United States can enhance its global economic leadership, boost economic growth and create high-wage jobs.

“Other growing global economies need energy,” Timmons remarked during his trip to the Pacific Northwest. “Why shouldn’t it be from America?”

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It’s All Connected: Inland Waterways Critical to Affordable and Reliable Energy

Headquartered at the confluence of the Ohio and Tennessee Rivers, Paducah, Kentucky is home to a vibrant barge and towboat industry. In 1948 George Crounse had the vision to build his first towboat with borrowed money from an aunt. Fast-forward 65-years, 35 towboats, 1100 barges and 350 employees later – Crounse Corporation is a leader in the pack and one of Paducah’s oldest and most prominent employers -  moving over  30 million tons of cargo throughout the U.S. river system, serving electric utilities and manufacturers throughout the Midwest region.

Coal is the lifeblood of Crounse – keeping utilities well supplied with coal from Pennsylvania, the Illinois basin, Appalachia and even the Powder River Basin.  And thanks to an abundant supply and growing overseas demand, coal is also finding its way on Crounse barges headed to export. Threats to eliminate coal power plants create economic uncertainty for manufacturers who rely on low cost electricity to remain competitive. Crounse towboat pilots, many of whom are third- and fourth-generation operators on the inland waterway system, also face the same uncertainty because their jobs are dependent on the transport of coal.

The nation’s river system is not only a livelihood for Crounse but its viability and health is deeply ingrained in Crounse culture. Employees participate annually in a river clean-up operation sponsored by the East Moline, IL-based Living Lands & Waters conservation group. Known for its “industrial strength” river cleanups around the nation, Living Lands & Waters brings the Paducah inland waterway community together and Crounse employees are proud to participate in these clean-up efforts.

Passing H.R. 3080, the Water Resources Reform and Development Act  of 2013(WRRDA) is a priority for Crounse CEO Stephen Little not just because it is several years overdue but unreliability on the river system is a growing threat to efficiently serve Crounse customers. “Many locks and dams have exceeded their capabilities and are operating well-beyond their intended design life,” Little said.

Steve sees big challenges ahead  – additional revenue is going to be needed for the Inland Waterway Trust Fund  in order to modernize and keep up with the demands of a 21st century economy. “One-hundred years ago inland navigation stopped for parts of the year. Lock and dam construction has transformed inland navigation and the regional economy in Paducah.”

Little says, “Crounse is just one small link in the economic chain” but for manufacturers, it’s a link that cannot be broken.

It’s All Connected is a blog series by manufacturers focused on the need for authorization of the Water Resources Development Act.

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It’s All Connected: Reform Essential Compenent of House Legislation

Reform is an essential component of H.R. 3080, the Water Resources Reform and Development Act (WRRDA) of 2013. Changing the way the Army Corps of Engineers delivers its civil works projects at the ports and along the inland waterways is critical to successfully expanding the nation’s economic potential. It’s also good stewardship to ensure taxpayer resources are used efficiently on important infrastructure projects.

As a nation, we need to be making investments in infrastructure because manufacturers are depending on highways, rails, inland waterways, ports and airports to receive raw materials and deliver finished products. According to a recent survey of NAM members, 65% do not believe that infrastructure, especially in their region, is positioned to respond to the competitive demands of a growing economy over the next 10-15 years and we need to address that gap now.

The bipartisan government funding bill, which passed Congress last week, contained a provision that prevented the shuttering of a key Army Corps waterway project known as the Olmsted Lock and Dam.  That project is in its second decade of construction. While not well understood, the provision kept an ongoing project on track and does not increase its funding. If the Olmsted Project were to have shut down this month, it could have cost the federal government additional millions of dollars in unrelated construction costs due to an unnecessary work stoppage.

While the Olmsted Project in Illinois has a long and complicated history, it is one of the reasons why the reforms contained in WRRDA are so important to those who depend on the inland waterways. Further, Olmsted should serve as a reminder that inland waterway users who pay millions every year into the Inland Waterway Trust Fund should not be expected to bear the financial burdens of over $2 billion in federal agency cost overruns.  Poor execution of this project has come at the expense of other inland waterway modernization efforts that are needed to keep manufacturers and other industries globally competitive.

In addition to measures that will improve project management and seek to prevent another Olmsted situation, new deadlines, concurrent reviews and streamlined environmental reviews will support a new process that that cuts red tape and saves time – taking years off a process that today can amount to 15 years or more for a water resource project.

The merits of infrastructure project review under the National Environmental Policy Act (NEPA) are not in question. What is in question is the lack of discipline and lack of consistency in the federal government’s approach to administering NEPA requirements.

H.R. 3080 seeks to address the government’s self-inflicted needless delays in reviewing critical water resource projects. Republicans and Democrats, especially House Transportation and Infrastructure Ranking Member Nick Rahall (D-WV) and Senate Environment and Public Works Chairman Barbara Boxer (D-CA) are to be commended for their leadership and support for improving a broken environmental review process that has become unpredictable and wasteful.

Environmental streamlining is a proven federal practice with roots in the 1998 transportation authorization which called for better coordination of the federal environmental review process under NEPA for highway and transit projects. More importantly, it works. The Federal Highway Administration (FHWA) recently found that environmental streamlining has cut the time to permit a highway project in half, from 73 months down to 37 months.

The most recent surface transportation authorization, MAP-21, institutionalized the successful practice of concurrent federal agency review with deadlines and best practices learned over the years to prevent endless bureaucratic delays without sacrificing the environment. WRRDA environmental streamlining language is modeled after provisions in MAP-21 and manufacturers appreciate this common-sense approach to modernizing our nation’s infrastructure.

It’s All Connected is a blog series by manufacturers focused on the need for authorization of the Water Resources Development Act.

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It’s all connected: Inland Waterways Crucial to US Agriculture

Fertilizer plays an important role in the nation’s food supply chain because farmers depend on fertilizer to nourish the soil and their crops. For Deerfield, Illinois-based CF Industries, a global leader in fertilizer manufacturing and distribution, the inland waterways system is critical to the company and its farmer customers.  The competitiveness of manufacturing and agriculture depends on a modern and efficient inland waterway system that moves products and commodities valued at $185 billion annually.

Moving the fertilizer from the shop floor to farmers across the country is no easy task. U.S. farmers must have the fertilizer on a timely basis for the unpredictable spring and fall planting seasons. The nation’s 12,000 miles of commercially navigable inland and coastal waterways play an important role in its delivery. About half of the fertilizer needed for spring planting by U.S. farmers travels upriver on the Mississippi and its tributaries. Many of these crops, including corn and wheat, end up filling those same barges when headed downriver to market for domestic and international consumption.

Unfortunately, there was trouble on the Mississippi last year—a low-water crisis that led to restricted river access for barge shippers. In November and December, CF Industries and other companies in the fertilizer industry were forced to light-load barges to ensure safe river navigation, which in turn made it challenging to move the necessary fertilizer to Midwestern farmers in advance of the spring planting season. Thanks to a coordinated industry effort that educated Congress and the Obama Administration on measures that needed to be taken to improve conditions along the river, CF Industries was able to make the best of the situation and ensure that farmers still received fertilizer in a timely and efficient manner. However, the uncertainty over two months pointed to the need for a long-term strategy that modernizes our nation’s inland waterways, not short-term fixes.

For CF Industries, passing H.R. 3080, the Water Resources Reform and Development Act of 2013 (WRRDA) is key to improving the certainty of inland waterway transport. Adequate investment and recapitalization of inland waterways infrastructure will keep locks and dams operational for many years to come. With more than half of the locks exceeding their design life, Congress cannot afford to wait much longer. “We simply cannot sustain the status quo,” said Alicia Meads, CF Industries’ manager of legislative affairs, at a National Association of Manufacturers Shopfloor briefing for transportation lawmakers on Capitol Hill earlier this year.

Modern lock and dam infrastructure is essential to ensuring that American farmers have access to the fertilizer they need to grow their crops and feed our nation’s families. CF Industries will continue to advocate for passage of WRRDA until it becomes law because our food supply chain depends on it.

It’s All Connected is a blog series by manufacturers focused on the need for authorization of the Water Resources Development Act.

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It’s All Connected: Freight and Waterway Systems Critical to Competitiveness

As the Materials & Logistics Manager for Nucor Steel Berkeley, a division of Nucor Corporation, Rob Roberson sees the strengths and weaknesses of nearly every aspect of the nation’s freight transportation system each day he is at work.  His job puts him on the front lines of logistics management, talking to Nucor’s transportation providers – trucking companies, railroads, barge operators and shipping lines – to coordinate freight transportation to and from the Berkeley mill outside of Charleston, South Carolina.

Rob’s job is also about to get a lot busier. Nucor, a Fortune 500 company and the largest steel producer in the United States, recently announced a major upgrade for his steel mill that will enable it to produce wider and lighter gauge sheet steel.  This investment in Huger, South Carolina will help Nucor tap into the growing market for cold-rolled steel in the southeastern United States, particularly for agricultural, pipe and tube, heavy truck and high strength automotive applications.

“The freight transportation system is vitally important to Nucor’s success and waterways play a particularly important role for a number of Nucor Divisions,” Roberson said.  “We have several steel mills located on rivers and some of these mills bring in more than 90 percent of their raw materials by river.  Nucor’s scrap steel business – The David J. Joseph Company – transports approximately 3,500 scrap barges per year.”

The southeast is one of America’s growth spots and continued investment in the region’s infrastructure will be critical to its long-term success. A majority of manufacturers do not believe that infrastructure is positioned to respond to the competitive demands of a growing economy over the next 10 to 15 years, according to a recent NAM survey on vital national infrastructure.

With larger ships anticipated to call on East Coast ports following the opening of the Panama Canal expansion project in 2015 and South Carolina’s growing economy, the need to pass H.R 3080, the Water Resources Reform and Development Act of 2013, is clear. In addition, Congress must return to authorizing Army Corps of Engineers Civil Works projects every two years so that critical infrastructure initiatives, like dredging Charleston harbor, can move forward.

Roberson recently testified before the House Panel on 21st Century Freight Transportation on the importance of investing in our freight system.  “Manufacturing produces 12 percent of America’s GDP, but the U.S. is only investing about 1.7% of our GDP in infrastructure. Many of the countries we compete against are investing between 5 to 10 percent of GDP in their infrastructure,” said Roberson.  “In short, others are modernizing while we struggle to maintain a failing system that is decades old. However, with the proper investment and governance, we can give American businesses the tools they need to remain globally competitive.”

Rob also leads Nucor’s Corporate Logistics efforts across 23 steelmaking division and 24 product divisions. In fact, his expertise has been tapped for the Department of Transportation’s National Freight Advisory Committee.

Nucor fosters a corporate culture focused on the art of the possible and is honored to have one of its teammates serve  on a high-level policy committee that will make recommendations to the Secretary of Transportation on improvements needed to better move freight in the United States.

Nucor’s decentralized North American presence allows efficient service to its customers while keeping freight costs in check and reducing the environmental footprint associated with transportation. However, disruptions in the freight network are a challenge that many manufacturers face in the United States and Nucor feels strongly that policymakers have an obligation to invest in infrastructure to keep manufacturing competitive.

It’s All Connected is a blog series by manufacturers focused on the need for authorization of the Water Resources Development Act.

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It’s All Connected: Ports are Critical to Manufacturers Success

The recent announcement that the House will take up H.R. 3080, the Water Resources Reform and Development Act of 2013 (WRRDA) next week is welcome news for manufacturers and businesses who need Washington to return to strong pro-growth policies. The Senate passed its version, S. 601 in May and now it’s time for the House to act.

When NAM President and CEO Jay Timmons toured the Packer Avenue Marine Terminal at the Port of Philadelphia in September to release new data that showed 70 percent of manufacturers are concerned about the poor condition of our nation’s infrastructure, the visit offered a lesson in the potential for shared economic success. The multiplying effect of manufacturing certainly helps transform other industries and sectors. For every $1.00 spent in manufacturing, another $1.48 is added to the economy, the highest multiplier effect of any economic sector.

Photo by David Bohrer/National Assoc of Manufacturers

Photo by David Bohrer/National Association of Manufacturers

Family owned and operated, Holt Logistics runs the 106-acre Packer Avenue Terminal. The facility prides itself on a highly productive operation and recognizes that its strategic location is an asset to continue its growth as niche port that handles high value cargoes. As containers unloaded from the Olivia Maersk, Todd Brown, a representative from Holt Logistics, attributed a container service between Philadelphia and Australia to a growing trade relationship between the two nations. Thanks to the U.S.-Australia Free Trade Agreement that entered into force in 2005, U.S. manufactured exports to Australia have nearly doubled, growing more than $14 billion.

Holt handles a variety of cargo, ranging from fresh produce sold on Wal-Mart shelves to raw materials that go into the assembly of Toyota vehicles here in the United States. Fiji Water even makes its way through the Packer Avenue Terminal, the main distribution point for the company’s Northeast market.

Holt has made a big investment in the Hyster Yardmaster cargo handling equipment proudly manufactured by Ohio-based NAM Member Hyster-Yale Materials Handling Inc. The equipment was ubiquitous at the Packer Avenue Terminal, dozens in operation at once, carefully moving hundreds of containers around the terminal.

Access to CSX and Norfolk Sothern’s rail networks is another strength the Port of Philadelphia and the Packer Avenue Terminal enjoy, along with quick access to both I-76 and I-95. There is no doubt that sound infrastructure drives business for Holt and the Philadelphia Regional Port Authority.

Much like we hear from our manufacturers, Holt Logistics is heavily focused on serving its customers. However, in order to take it to the next level, federal investments in the Delaware River navigation channel need to continue. The dredging of the Delaware River is about 60 percent complete and will soon increase the river’s depths from 40 feet to 45 feet to accommodate larger ships.

House passage of WRRDA will provide a number of benefits for businesses and industries that rely on our nation’s ports and inland waterways.  Timmons reminded a crowd assembled at the port that ninety-five percent of the world’s customers live outside of the United States. “Our outdated infrastructure will get in the way of economic growth if we let it deteriorate,” he said.

The NAM President’s visit to the Port of Philadelphia made it clear that Congress needs to do its part to keep Pennsylvania, Delaware, and New Jersey-based manufacturers competitive by ensuring continued access to markets beyond our shores.

It’s All Connected is a blog series by manufacturers focused on the need for authorization of the Water Resources Development Act.

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Manufacturers Support Needed Investments in Critical Transportation Infrastructure

Today’s bipartisan introduction of the House Water Resources Reform and Development Act of 2013 (WRRDA) is the right move by House Transportation and Infrastructure Chairman Bill Shuster (R-PA). With all the uncertainties facing Congress this fall, keeping WRRDA on track must remain a priority. The release of today’s proposal puts the legislative process back on track and manufacturers greatly appreciate the bipartisan approach.

This legislation is critical to the competitiveness of manufacturers throughout the United States and will ensure continued investment in our 12,000 miles of inland and coastal waterways. Our nation’s navigable rivers help keep transportation costs competitive and are vital for manufacturers’ supply chains to move products and commodities such as coal, petroleum, chemicals, steel, fertilizer and grain among others valued at approximately $185 billion.

The Senate passed its version, S.601 in May and Chairman Shuster is making every effort to get this legislation to the finish line. He even posted a clever YouTube video today to articulate the significance of legislation authorizing funding for ports, inland waterways and other key water resource projects.

The addition of the word “reform” is a signature mark from the T&I Chairman and manufacturers could not agree more. According to the American Society of Civil Engineers, inland waterway shippers experience – on average — 52 service interruptions a day on the entire system, meaning locks close due to either construction activity or an outright failure, with the latter increasing in frequency. With over half of the locks exceeding their design life, the need to modernize is well-documented and needless red-tape only adds to the challenge when repairs or replacements are required.

Manufacturers strongly support the measures to streamline environmental reviews. This builds off the success of coordinated reviews for federal highway and transit projects. It’s a proven process that works, saving time and money. The Federal Highway Administration recently found that environmental streamlining has cut the time to permit a highway project in half, from 73 months down to 37 months. Reducing red tape to deliver Army Corps-sponsored infrastructure projects is important progress.

Manufacturers also appreciate the Committee’s commitment to addressing the long-standing issue of under-investment in our nation’s ports and harbors. For too long, ocean shippers from nearly every sector of economy have helped finance a robust Harbor Maintenance Trust Fund (HMTF) that has not been allowed to expend funds in a manner that is commensurate with the demands our economy places on the nation’s ports and harbors. Too often, funds derived from Harbor Maintenance fees are diverted elsewhere instead of going into our ports and harbors for regular upkeep.

Manufacturers rely on our nation’s inland waterways and ports to support jobs and grow. Our nation will fall even further behind if we do not make the needed investments in critical transportation infrastructure. To read a summary of the Water Resources Reform and Development Act of 2013, click here.

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I’m Stuck

The state of U.S. infrastructure is pretty dismal. But you don’t need an expert to tell you that. You are already paying the cost of congestion in lost time and fuel every single day when your roads and bridges are clogged, or your train is late, or even if your plane has been idling on the tarmac for far too long. What if you could let your member of Congress know when you’re stuck?

Building America’s Future (BAF) wants commuters to have a say about infrastructure through a new app that connects them with members of Congress. “Usually commuters think traffic is like weather – it is something that happens to them and they have no control over it. But that isn’t the case at all,” BAF Co-chair and former Pennsylvania Governor Ed Rendell Pennsylvania Governor said. The app has been downloaded nearly 10,000 times in the few short weeks since its release and opened a necessary – and ongoing – dialogue with representatives and senators.

Earlier this year, BAF partnered with the NAM on a survey that only underscored our nation’s infrastructure deficiencies. We cannot allow this trend to continue for any longer. Manufacturers depend on sound infrastructure to keep making their products in the United States. BAF’s app is called “I’m Stuck,” but it’s time to get moving. “The truth is America is stuck until Washington takes action,” Rendell said. Download the app here.

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Technology Is Driving Manufacturing Innovation

As the manufacturing army descended upon Washington this week for the 2013 NAM Manufacturing Summit, one of the key issues discussed with policymakers is the need to improve America’s infrastructure. Additional investment in our nation’s infrastructure, in particular our communications and broadband infrastructure is necessary.

A modern and advanced infrastructure will help drive our nation’s innovation and economy forward, especially when it comes to manufacturing.

“Manufacturing is driving technology, and technology and innovation drive manufacturing,” said NAM Technology Policy Subcommittee Chair and Verizon Vice President of Entertainment and Tech Policy Eric Fitzgerald Reed. “Machine-to-machine (M2M) technology and the Internet of Things are increasingly relevant and important components of manufacturers’ operations, including global supply chains. The manufacturing community is bringing all aspects of the Internet ecosystem together from different sectors of the economy to ensure robust broadband infrastructure is in place so businesses can thrive and grow.”

Verizon has launched two innovation centers located in San Francisco, CA and Waltham, MA to help spur innovation, build collaborative partnerships with other NAM member companies and create cutting-edge technology solutions.

It’s important that members of Congress understand that everyone from manufacturers to policymakers, need to work together if we are going to build the infrastructure systems that allow manufacturers to compete and create jobs.

 

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