Will the Infrastructure Bill Improve Supply Chain Reliability?
Last Updated Aug 2, 2023
H.R.3684, or better known as the Infrastructure Investment and Jobs Act, was recently passed in a bipartisan vote to boost the United States' economy and job market. This bill seeks to not only positively impact physical infrastructure but also improve the nation's digital landscape. Although the costs involved in this plan are less than those that were proposed with the earlier American Jobs Plan, which sought to obtain 2.25 trillion dollars, it is still the largest investment in infrastructure from the federal government in nearly 70 years.
Now that the 1.2 trillion dollar infrastructure bill has moved to the desk of the president, how will this impact the national and global supply chain?
To get a better idea of what that answer might be, we need to look at a few key components of the bill itself, in particular, the funds marked for road, rail, internet, and seaport improvements.
Roads and Bridges
With just shy of 200,000 miles, or 20%, of roadway in poor condition, it's no surprise that shipments are often delayed due to being rerouted to travel along longer, albeit less-obstructed, paths.
Truck drivers can find themselves stuck in traffic for hours which severely limits the distance they can logically and legally travel during any given workday. With the current shortage of truck drivers, this problem is further compounding the delay hurdles we're already experiencing across the industry.
However, the $41 billion dollars earmarked for road maintenance will bolster the funds already available, and over the next five to 10 years, should reduce the frequency and length of closures across the nation's interstate system.
Another $40 billion dollars is set aside for the repairing or replacement of the nearly 45,000 bridges that are currently in some state of disrepair or poor condition. The American Road and Transportation Builders Association states that at the current rate it would take 40 years to complete the work on just those bridges. The fact that the funds have now been made available could lead to an overall shorter time frame.
In conjunction with the road improvements, better bridges will be able to handle much more traffic and higher per load weights, which will ultimately help the flow of goods from start to finish.
Ride the Rails
Not to be forgotten, H.R.3684 is set to put $66 billion dollars toward the maintenance of existing railways and the construction of new railways for both freight and passenger services.
Expanding rail lines to previously inaccessible areas will help to continue the trend of decentralization of storage and processing locations while allowing for quicker delivery to even the most remote customers. The corresponding increase in the number of railyards will also aid in alleviating the congestion at existing railyards and seaports that almost crippled the global supply chain earlier in the year.
Funding Repairs for Seaports
Seaports around the globe were some of the first and hardest-hit places when containers began stacking up due to the massive trade disruptions that occurred in 2020 and continued to grow. Thankfully, the Infrastructure Bill allocates $17 billion dollars to the repair and modernization of those American ports.
Not only does this aim to help break up the port congestion, but it is also a massive push to reduce the amount of pollution in and around ports of entry. For those who choose air freight to sea-bound cargo, 25 billion dollars are dedicated to fixing up America's air infrastructure, as well as the aforementioned environmental improvements. In the near future, ports of both sea and air will run smoother and cleaner, not only improving the supply chain but helping the environment along the way!
The Nation's Broadband Infrastructure is About to Get an Upgrade
A staggering $65 billion dollars will be put into the nation's broadband infrastructure; upgrading hardware, running new cables, and expanding service availability further than ever before.
While this is focused mainly on helping citizens access the internet with greater ease, it will also better connect businesses to their remote storage and shipping facilities, keeping them thriving and powering the nation's supply chains.
Let us not forget that with the growing dependence on online shopping, more potential customers having access to affordable and reliable internet is going to greatly benefit online retailers. This could easily be seen in the shift from brick-and-mortar retail shopping to e-commerce in 2020 and into 2021.
A Good Step Forward
Now that we have seen what the bill intends to do, it is quite clear that yes, H.R.3684 will improve the supply chain on pretty much all accounts. This help comes at a time when it is so desperately needed and it will certainly serve as a much-needed boost to most, if not all, businesses.
This infrastructure bill is not a fix-all for all the struggles faced within the industry, but it is a step in the right direction and a great leap toward recovery.