Shade Lohmann Bridge – I474 Peoria Bypass – under construction for sandblasting, repair and painting … [+]
The good news about the U.S. infrastructure crisis is that help is on the way. The bad news is that it is not expected to have much impact next year.
Karen Lightman is the executive director of the Metro21 Smart Cities Institute at Carnegie Mellon University. She said that, “The American Society of Civil Engineers gives American infrastructure a C- , [and notes] that there’s a water main break every 2 minutes in the U.S. and 43% of our roadways are woefully deficient.
“So yes, we are heading towards a worsening crisis; thankfully the $1.2 trillion (recently approved by Congress) offers a lifeline for our country,” she observed.
Mike Nervick is cofounder and CEO of Sleek Technologies, a freight procurement software company. He noted that revamping the infrastructure “is a long-term process… while relief is needed now in terms of alleviating traffic congestion and quickening the supply chain, it will likely be several years before we begin to see the widespread gains of this planned infrastructure spending.”
Lightman recommended that the infrastructure funding be focused on “shovel worthy” projects, not those that are “shovel ready” in order to focus on long-term/future-proof, sustainable and equitable solutions to address the country’s infrastructure deficit.
‘Disruptions Are Expected To Continue’
Simona Stan is a professor of marketing in the business school at the University of Montana who focuses on logistics. She said that, “Disruptions are expected to continue well into 2022 and most likely into the following year. Logistics systems are expensive and designed to run at high utilization which means that backlogs explode in nonlinear ways.
She observed that “adding capacity at any step in the logistics systems (ships, port operations, trucking, warehousing, etc.) moves bottlenecks to the next step. Fixing the current infrastructure crisis requires a high level of coordination led by a central authority which is not something ingrained in the ways a free-market economy operates.”
Infrastructure Gaps Will Be Amplified
Cedric Sims is a senior vice president at Booz Allen Hamilton’s justice, homeland, security and transportation business. He predicted that, “At a higher level, in 2022, the ever-increasing speed of technological change and interdependency will amplify the gaps in our critical infrastructure.
“To address challenges to our ailing infrastructure, industry, local, state, and federal partners must focus on readiness, resilience, and modernization. First and foremost, we need to promote and encourage the growth of a workforce that is infrastructure savvy.
“Businesses need an inventory of critical systems and processes. Understanding the business impact of risk will need to be continuously evaluated with an eye toward diversifying access to mission critical capabilities. With the increasing risk of targeted cyber intrusion and ransomware, businesses need to adopt zero trust security models to protect our most vital assets and data.”
Urgent Upgrade Needed
Ramesh Mohan is a professor in economics at Bryant University and a consultant in development economics and international business/economics. He said, “The ailing infrastructure of the United States needs an urgent upgrade.
“We need leaders to develop a robust national vision not only to fix our distressed infrastructure but also to have a modern, economical, and cost-effective infrastructure to be environmentally friendly, time efficient and sustainable in the industry 4.0 era! Sadly, the infrastructure bill is lacking that vision,” he said.
Collaboration And Sustainability
Carnegie Mellon University’s Lightman said, “My hope is that the [recently approved federal funding) will also support more collaboration with private and non-profit sectors. The funding from the U.S. government is meant to be a catalyst for other private sector funding, whereby it reduces the risk and will encourage developers to make improvements on their properties, for companies to grow and expand.
“I look for infrastructure investments that are mindful of sustainability goals such as focusing on electrification and the use of renewable sources of energy (wind, solar, etc.) and also is focused on enhancing digital infrastructure such as equitable deployment of broadband— at the last mile as well as the very-important middle-mile infrastructure needed,” she recommended.
Careful Cost Management
Sims at Booz Allen Hamilton pointed out that, “The injection of $550 billion in new federal spending over five years is a historic level of investment, but the need for careful cost management remains.
“Artificial intelligence applications can use….data to provide planners and portfolio managers with prescriptive guidance and enable real-time autonomous critical infrastructure management. When applied to best practices in total cost management, we could see the rise of total cost management analytics and machine-guided analysis, which can enable agencies to do more with less,” he advised.
Advice For Business Leaders
‘The World Is A Different Place’
Alison Ashford is a partner at the Seyfarth law firm and co-chair of their infrastructure project finance practice. She noted that the “U.S. infrastructure was in dire need of an overhaul prior to the onset of the Covid-19 pandemic.
“However, the world is a different place in comparison with early 2019, particularly in the context of the labor and material supply markets. As such, businesses in the infrastructure sector should keep a close watch on the continued impact of the pandemic on supplies and labor so as to be able to take advantage of opportunities in the infrastructure sector when they arise,” she counseled.
Diversify Your Supply Chain
Gregg Healy is executive vice president and head of industrial services for Savill Industrial Services Group, a commercial real estate firm. He warned that, “Traffic congestion, which decreased during the height of the pandemic, will likely worsen while we wait for these sorely needed infrastructure projects to get underway.
“Port congestion and the global shipping crisis will continue and may not ease until 2023 or later. I predict that demand will stay strong for strategically located distribution centers for which companies will pay record rents to lock in leases for sites offering exceptional transportation access.
“My advice to business leaders is to diversify your supply chain now to build future resilience and avoid relying too heavily on one potentially vulnerable piece of infrastructure, like the chronically congested Port of Los Angeles,” he concluded.