What the White House Infrastructure Plan Means for Logistics
The White House released its proposal for a sweeping infrastructure plan with broad implications for American supply chains and logistics.
Announced March 31, the “American Jobs Plan” outlines $2 trillion in funding for improvements and repairs to roads, ports, bridges, broadband internet, public transit, and much more. The Biden administration sites the need to kickstart the post-pandemic economy and ramp up competition with China as its primary goals for the plan.
If approved by congress, such a plan would drastically impact domestic logistics.
Roads and Bridges
President Biden’s plan proposes a $115 billion funding boost for improvements to roads and bridges. According to the White House announcement, the plan targets 20,000 miles of roadways in states of severe disrepair.
Bridges are slated for much-needed repairs, too. The American Jobs Plan proposes major updates and reconstructions for ten of the nation’s most economically significant bridges as well as budgeting for repairs to the 10,000 bridges in the worst condition.
Notably, a Georgetown University study predicts that the plan would create or save millions of commercial trucking and transportation jobs.
“Long-term investments in infrastructure have the potential to revitalize, at least temporarily, the blue-collar economy by creating jobs for welders, electricians, technicians, and truck drivers, among other occupations,” the study states. “This revival would be a marked shift in the recent trajectory of the workforce.”
Ports, Waterways, and Airports
Crucially, the proposed plan asks for tens of billions of dollars for upgrades to maritime and air facilities.
- $25 Billion for Improvements to Airports
- $17 Billion for Improvements to Waterways and Ports
The proposed funding comes at a time of upheaval for both maritime and air freight. The coronavirus pandemic has caused innumerable delays and unending congestion at global ports. Consequently, air freighters are shouldering more and more of the load despite shrinking capacity.
Biden’s proposal suggests $80 billion for rail enhancements and construction – though most of that funding would support passenger projects instead of freight. While the plan primarily focuses on building up Amtrak and other passenger services, many in the industry are showing cautious optimism about the potential benefits for freight railroads.
Pandemic Priority, Political Hurdles
The Biden administration has framed its infrastructure plan as an opportunity for sustained economic and jobs growth following pandemic volatility. But it faces a hard battle to get legislation passed into law without major changes.
Lawmakers on both sides of the aisle are already debating the details. Republicans are contesting the plan’s proposal to gain funding from a corporate tax increase up to 28 percent (the Trump administration tax cuts had dropped corporate rates to 21 percent). Meanwhile, various segments of the Democratic caucus are debating whether the plan proposes too much or too little for infrastructure. Considerable changes may occur before negotiations are complete.
The Scarbrough Group will keep tabs on this story as it develops further and share any updates with implications for our supply chain partners.