Why Biden's visit to Ohio CSX terminal is a pretty big deal

Posted by LDonia on 11/06/2013

Vice President Joe Biden will travel to North Baltimore, Ohio today with U.S. Secretary of Transportation Anthony Foxx to visit the CSX Northwest Ohio Intermodal Terminal, the primary hub of the National Gateway project, a freight system supported by federal, state, and private investment connecting the Midwest and Mid-Atlantic regions.

The project will aid commuters in Virginia, Maryland, D.C., West Virginia, Pennsylvania and Ohio by keeping additional trucks from crowding already busy highways. Its first phase will eventually allow double-stacked freight trains to carry more containers from eastern ports to areas in Pennsylvania and Ohio.

But not only will the project ease traffic congestion, but investments in such rail infrastructure projects have the potential to contribute billions of dollars to the United States’ net annual gross domestic product (GDP), provide billions of dollars in additional income for working Americans, create additional annual tax revenue, and spur economic growth.

It's a big deal.

Intermodal traffic - shipping containers and truck trailers moving on railroad flatcars – has been the fastest growing rail traffic segment over the past 25 years. Most intermodal traffic is comprised of consumer goods, and more than 50 percent of rail intermodal consists of imports or exports, reflecting the vital role America’s railroads play in international trade, as well as their role in our domestic market.

So why does a project like this matter?

Freight railroads carry 40 percent of the ton-miles* of goods to market in the United States, -- more than any other mode of transportation. The freight railroads form a nearly 140,000-mile system across the U.S. and serve nearly every industrial, wholesale, retail, and resource-based sector of the economy.

In the United States 40 percent of all jobs generated through freight infrastructure investments are in manufacturing, and there are approximately 40,000 U.S. manufacturing jobs supported by existing rail, transit, and truck supply chains. Investments in transportation infrastructure offer an opportunity to support these jobs, and expansion of that infrastructure with Buy America provisions could be beneficial. While relatively small today, jobs in these supply chains are spread across all 50 states among more than 320 existing companies that could scale up to meet expanded demand.

Where does America stand?

Despite having the single largest national rail market, U.S. spending on rail and transit relative to GDP and population lags far behind that of our global competitors. Even when combined with all other public transit infrastructure investments made by the United States, public rail investment only amounts to $0.78 per $1,000 of GDP, and when private rail infrastructure is considered that number rises to only $1.40.

This level of investment pales in comparison to the levels invested by our major trading partners. Relative to the size of its economy, China's investments in rail dwarf those of the United States. The Chinese government invested $12.50 per $1,000 of GDP in rail infrastructure in 2008 alone.

Similar disparities between the United States and its competition are evident when comparing combined capital and operations spending on rail. Consider that:

  • For intercity rail purposes China spent $66 per capita in 2009, Germany $156, France $141, the United Kingdom $112, and Italy $87, while the United States spent $9;
  • For urban transit infrastructure, Germany has spent $52 per capita in recent years and France plans to spend $57 in the coming decade, compared with a 2010 figure of $40 for the United States (China spends $28 per capita on subway infrastructure alone); and
  • For transit vehicle purchases, Germany spends $36, twice as much as the United States.

From the infrastructure investments made in the Recovery Act (ARRA), manufacturers of rail (and bus) component parts saw an increase in demand for their products, allowing them to retain jobs that would have otherwise been lost. Stronger Buy America requirements will help make sure more of those manufacturing jobs remain here.

As Alliance for American Manufacturing (AAM) President Scott Paul said:

Thankfully, the vice president has been a vocal supporter of Buy America provisions. I’m hopeful that this visit to Ohio, a state that lost roughly 100,000 jobs to China in the past decade, will serve to ramp up the Obama administration’s commitment to supporting a domestic procurement policy that enjoys overwhelming voter support.

If the President wants to make good on his campaign pledge to create one million new manufacturing jobs in his second term, enforcing our Buy America laws is step one.

*A unit of freight transportation equivalent to a ton of freight moved one mile

--Post written by Brian Lombardozzi.

Photo by Flickr user John H Gray, used following Creative Commons guidelines.

1 comment

Biden visit and Buy America Provisions

History can repeat itself again if Buy American Provisions take hold. It's called protectionist tariffs and the last time the US tried this was prior to WWII and it completely alienated all our friends, supposed friends and enemies and really had a lot to do with the war between US and Japan. Become competitive in quality, operations, management and innovation and the sales then production then jobs will happen. Just ask yourself "why do jobs and products move overseas?" It's because our marketplaces are not competitive due to poor quality, excessive regulation including job requirements, government intervention (even though government thinks it's helping) and many more reasons. I enjoyed following the city of SeaTac pass the minimum wage at SeaTac airport which will include restaurants to $15 per hour. Sounds great until your airplane tickets at SeaTac go up, restaurant bill goes from $12 lunch to $20 and business's start to fail due to non competitive nature compared to neighboring cities. It all sounds great in implementation but side effects are never considered. Remember when working a minimum wage job was meant to get you through school and college? Now some believe the minimum wage should be raised to a living wage. . every time the minimum wage goes up so does product pricing, rent etc. (the side effect of this is higher tax revenue for the governments). Get back to a production based society will not happen unless competitive operations are created not protectionist policies. Do not repeat history.

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