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Infrastructure: U.S. Chamber rolls out Transportation Performance Index

By Jeff Berman, Group News Editor
September 24, 2010

The United States Chamber of Commerce has rolled out the inaugural edition of its Transportation Performance Index (TPI), which it said closely examines how United States transportation infrastructure is serving the needs of the country’s economy and business community.

According to the U.S. Chamber, the TPI is derived by combining 21 indicators of supply (availability), quality of service (reliability, predictability, safety), and utilization (potential for future growth) across all modes of passenger transportation and freight transportation.

U.S. Chamber of Commerce Director of Transportation Infrastructure and head of its Let’s Rebuild America campaign Janet Kavinoky told LM that her organization has had an ongoing conversation in recent years, focusing on when the economy hit the wall by not investing in the country’s transportation system.

“What we recognized on the big picture of infrastructure is sometimes you have to move the discussion from ‘stimulus and shovel ready’ and the current scattershot approach to things we have now to what is in it for long-term economic growth,” she said. “We eventually decided to do it ourselves, because nobody has ever actually quantified how well or how not well the transportation system is working for business and then trying to associate that with the role of transportation and economic growth.”

And based on the initial TPI readings, it is clear more work needs to be done in order for transportation to help ignite the country’s economic engine. The inaugural TPI is comprised of data from 1990 through 2008, the year for which most recent data is available, and the national index in 2008 was 51.24, slightly ahead of 2007’s 50.74.

While 2008 was up annually, the TPI found that the “moving average” signals a downward trend from 20003-2008, which, the U.S. Chamber said, exemplifies that the performance of the U.S. transportation system is not keeping pace with the demands on that system. The U.S. Chamber noted that the TPI increased roughly 6 percent from 1990-2008, while the U.S. population, passenger travel, and freight traffic grew 22 percent, 39 percent, and 27 percent, respectively, during that same period.

The highest ranking state was North Dakota at 85.12, with Washington D.C. at the bottom at 35.08. The TPI said that higher population growth rates and higher population densities are generally associated with lower index value based on an analysis of state results versus population data.

“While this warrants more rigorous analysis, a closer examination of the states with an index value of less than 60 reveals that these states experience significant pressure in terms of population growth, high levels of development, and limited access to or aging infrastructure,” according to the TPI.

And at a U.S. Chamber of Commerce luncheon introducing the TPI, the concern’s President and CEO Thomas J. Donohue explained in prepared remarks that if nothing are to change in terms of transportation infrastructure investment and attention the TPI will decline by 8 percentage points over the next five years. To put that into better perspective, he said that every one point increase in the index results in a 0.3% increase in GDP—or $42 billion—which means an 8 percent TPI decline is equivalent to $336 billion in lost economic growth.

“But it doesn’t have to be this way,” said Donohue. “We also extrapolated a future in which higher investment levels were targeted at improving performance and saw precisely the opposite picture—the potential to add substantially to GDP. In looking at the states, we found that if the nation as a whole had performance matching the top five states, we could add another $1 trillion to GDP.”

Both Kavinoky and Donohue said that TPI data is going to be geared towards three groups—the public, general elected officials, and policy makers, explaining that they want elected officials to recognize, acknowledge, and act on the fact that transportation infrastructure investment is a growth leader, and also want policy makers to create more effective, targeted policies and programs.

This report comes out at a time when the future long-term U.S. surface transportation reauthorization continues to be extended by continuing resolutions. Earlier this month, President Barack Obama proposed a six year, $50 billion transportation infrastructure plan, which was viewed by many as encouraging.

The U.S. Chamber and many other organizations strongly support a new surface transportation authorization be included in the Administration’s February budget, as well as a core focus for the next Congress.

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


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