Update on the Infrastructure Investment and Jobs Act

Update on the Infrastructure Investment and Jobs Act

After being passed by both the House and the Senate, the Infrastructure Investment and Jobs Act (commonly referred to as the bipartisan infrastructure bill) was signed into law by President Biden on November 15, 2021. At the time, the ACERTUS team broke down major components of the legislation and assessed what the various pieces could mean for vehicle logistics and different automotive industry players.  

From the onset, it was known that the bill allocated $110 billion for building and fixing roads, bridges and highways, while $7.5 billion was set aside to fund and promote electric vehicle (EV) ownership and EV-supporting infrastructure. Beyond those major priorities, the bill contains language designed to address the shortage of available drivers and carriers, as well as a priority to build out broadband-internet infrastructure across the country. 

Now, just over four months since the legislation passed, about $100 billion in funds has already become available through a number of different programs, and new plans are being released. Here’s a breakdown of what the ACERTUS team has seen so far, as well as what the team sees as being the most impactful for the auto industry and the vehicle-logistics space. 
 

Movement So Far 

Of the $100 billion in funds that has gone out so far, some of it has been distributed through formula programs, which ensures funds can be delivered directly to states. Other funds have been made available through competitive grant programs where state and local agencies apply. Because one of the Biden administration’s biggest priorities has been to strengthen supply chains and lessen delays, they announced $241 billion in grants for 25 port-related projects early on – and then, they made another $450 million in grants available for additional port improvements in February. 

Also in February 2022, the Biden administration, the Department of Energy (DOE) and the Department of Transportation announced a formula funding program to help states create an EV-charging network, with $615 million set to become available across this fiscal year and $5 billion to be released across five years. 

However, the federal government only sets guidelines and outlines recommendations for the vast majority of the legislation’s funds, whereas it’s actually up to states and localities to determine how and when to spend the money allocated to them. For example, the Federal Highway Administration (FHWA) has been encouraging states to invest formula-program funds into repairs and improvements before building out new highways, yet the FHWA has few regulatory tools to ensure states are compliant with its recommendations. 

Already, many states and localities are moving forward with plans for their highways, roads and bridges. Pennsylvania Department of Transportation (PennDOT) Acting Deputy Secretary for Highway Administration, Mike Keiser, recently announced that $266 million will be allocated just for highway and bridge improvements in the state, across the next five years. Meanwhile, Rhode Island Department of Transportation (RIDOT) has already broken ground on a $9 million project that will resurface portions of Aquidneck Avenue in Middletown, R.I., make safety improvements for pedestrians and bicyclists and rebuild the deteriorated road base.  

Movement is beginning to happen when it comes to the supply-chain, as well. The Alabama State Port Authority is set to receive more than $300 million in funding to improve infrastructure and intermodal access for the Port of Mobile and the Montgomery inland intermodal transfer facility. The critical port of Long Beach, Calif., has been awarded a $52.3 million grant, just to support the Pier B rail project alone. This project aims to create capacity, so the area can handle 17 daily intermodal departures from the pier, with the first phase of the project slated to be ready by 2025.  

And while the US hasn’t invested as heavily in inland ports in recent decades, the recently passed bill makes it a priority to not only fund coastal infrastructure, but also inland waterway improvements and port infrastructure, including inland ports. This could significantly improve supply-chain issues with congestion and backlogged ports. The Midwest region and “Corn Belt Ports” are expected to receive more than $1 billion in upgrades and $829 million for improvements to locks and dams along the upper Mississippi River 

Certainly, pushing EV adoption and building out EV infrastructure across the US is a large priority of the recently passed infrastructure bill and the Biden administration writ large. In February, the US Department of Energy (DOE) issued two different notices of intent to provide $2.91 billion to boost production of advanced batteries, which are used in EVs and energy storage. This DOE funding will fund battery material refining and production grants, battery cell and pack-manufacturing facilities and battery recycling facilities. The DOE, along with the US Department of Labor and the AFL-CIO, recently announced they’d be launching a national workforce development strategy to advance partnerships between industry and labor, as well as to help manufacture more lithium batteries. Additionally, in late March, the Biden administration invoked the Defense Production Act to secure American supplies of critical materials needed to build EV batteries domestically. 

Broadband-internet projects are beginning to move, as well. Delaware recently announced that broadband construction will begin soon across the state, with three Broadband Infrastructure Grants being awarded to three major internet providers (Comcast, Verizon and Mediacom). Many other states have already established entities to ensure funding from the Infrastructure Investment and Jobs Act, as well as the earlier passed American Rescue Plan Act, can be utilized for broadband-internet expansion in underserved and rural communities. Montana recently launched the Connect MT program, Maryland has the Neighborhood Connect Broadband Funding Program and Maine has established the ConnectMaine Authority to do just that. As more funds become available across the next year, it’s expected that an increasing number of states will be ramping up their internet-expansion plans. 
 

Impacts on Vehicle Logistics 

Undoubtedly, many of the infrastructure bill’s priorities will have major impacts on both the automotive industry and the vehicle-logistics space in the months and years ahead. By and large, industry players are acutely aware of the need for improvements when it comes to the country’s roads, bridges and highway systems. Currently, 1 in 5 miles of highways and major roads and 45,000 bridges are considered to be in poor condition by the federal government – and the American Society of Civil Engineers usually issues grades no higher than a D when it comes to the US utilities and infrastructure report card every year. This has serious consequences for those involved with vehicle shipping and logistics, threatening the safety and effectiveness of transport and oftentimes creating traffic congestion. The American Trucking Associations (ATA) estimates that 1.2 billion hours of productivity is lost every year for the trucking industry, while lost time and excess fuel burn comes out to around $74.1 billion in added operational costs.  

Long-term improvements to roads, bridges and highways across the US are welcome by companies, drivers and carriers. Once these projects are complete, driving conditions will improve not just for commercial drivers but for everyone who drives on these roads, which will likely improve traffic conditions, safety and overall efficiency on the country’s roadways. Yet, the shipping industry has many valid short-term concerns on what these major construction projects will mean for additional roadblocks and delays along the US highway system in the meantime – particularly, when there’s already constrained capacity issues and supply-chain delays across the board. Industry players will be watching these developments closely, particularly in terms of how they impact their unique transport routes or operating areas. Many may ultimately require their drivers or carriers to take alternate routes in the short-term, with the goal of mitigating further delays and lessening further strains on the already-squeezed supply chain. 

Beyond these supply-chain strain concerns in the short term, many in the vehicle-logistics and shipping space are disappointed the infrastructure bill didn’t contain any funding to help address the widespread truck-parking shortages across the country. According to the FHWA, there are only about 313,000 truck-parking spaces currently available in the US, which forces carriers and drivers to have to park and stay in unsafe or out-of-the-way areas while mid-route. Logistics and transportation providers have been pushing Congress to allocate additional funds to expand truck-parking capacity in the US and improve the safety and sizing of rest areas for years now. Recently, the ATA and the Owner-Operator Independent Drivers Association (OOIDA) event sent a letter to the US Secretary of Transportation Pete Buttigieg, urging the prioritization of the country’s truck-parking capacity and requesting that some funds from the infrastructure bill be applied to this nationwide concern and calling for the DOT to support the Truck Parking Safety Improvement Act, introduced by Rep. Mike Bost (R-Illinois) in March 2021. Many in the vehicle-logistics space will be watching what comes from these efforts in the months to come, with some in the corporate arena likely reaching out to Congress themselves with the same goals. 

Similarly, the industry is anticipating many long-term benefits and some short-term delays when it comes to significant improvements to the nation’s supply chain and, particularly, at US ports. A total of $2.5 billion in grants will be disbursed by the US Maritime Administration to be used for projects that support supply-chain resilience, reducing port congestion, developing offshore-wind support infrastructure and establishing projects that reduce negative environmental impacts at ports across the country.  

While all these priorities will help establish more efficiency, speed, environmental and safety concerns once projects are completed, there is again concern around what ongoing projects could mean for additional delays in the near future. Amid compounding disruptions like labor shortages, COVID-19 pandemic shutdowns, shortages of critical parts like semiconductor chips and vehicle-seat foam, the vehicle supply chain has been critically impacted with not enough inventory to go around. Over the last year, new vehicles being imported into the country have often been further delayed at US ports, where dozens of massive container ships have floated for extended periods of time waiting to dock and unload inventory. However, one of the most promising areas for securing supply-chain relief in the short term with these funds is through the building of pop-up container yards, which expand port capacity and alleviate congestion. The Georgia Ports Authority recently announced plans to expand Savannah’s port container capacity by about 60%, thanks in large part to funding from the infrastructure bill to help expand pop-up container yards and assist with rail projects. Industry players are hopeful these funds will be released, and that projects will be completed, quickly to help build out more supply-chain resiliency and reduce the amount of backlogs impacting the logistics space. 

While much automotive-industry attention is on these supply-chain improvements at the moment, there are also many players that are closely monitoring progress when it comes to EVs and EV-related infrastructure. The recent announcement by the DOE and the Biden administration to invest $3 billion in advanced-battery production is welcome news to US automakers looking to ramp up EV production in the near future – such as GM, which plans to deliver 400,000 EVs in North America by the year 2024 or Ford, which plans to increase its EV production to 600,000 vehicles by 2023.  

Movement is already happening when it comes to building out EV-charging infrastructure, as well. US Senator Bob Menendez (D- New Jersey) and Hoboken, N.J., Mayor Ravi S. Bhalla recently announced they had secured $250,000 to expand public EV charging infrastructure across the city. Across the state of Oklahoma, there are also major plans to bolster EV charging stations, including in more rural areas, under the direction of ChargeOK and Oklahoma Department of Transportation (ODOT).  

Expansion of EV-charging infrastructure across the US, particularly in the Midwest and more rural areas, will certainly help those in the vehicle-logistics industry who are looking to transport EVs and keep them at optimal charge for shipping or driving. The increase in EV charging stations will also benefit those companies with fleets that are converting their vehicles to electric, as they’ll have more opportunities for fast public chargers, in more areas of the country. Currently, many companies with commercial EVs, as well as those who transport EVs, are forced to rely on portable EV chargers, especially when traveling in rural areas or away from big coastal cities. 

In a similar vein, many in the automotive space are optimistic about the infrastructure bill’s prioritization of broadband-internet expansion across the US. Increasingly, drivers, carriers and vehicle shippers are dependent on high-speed internet access, as they communicate back and forth, send updates and photos or send information on claims or alternate route options. Currently, many drivers and carriers traveling through more remote areas, or Wi-Fi dead zones, are on their own in terms of communication and receiving or sending updates until they can again reach more connected areas. This can cause significant inefficiencies and delays for vehicle-shipping operations. Many drivers, carriers and vehicle-logistics providers have been closely watching recent broadband-internet project news, such as that of Ohio announcing its handing out $232 million to build out high-speed access across its state or Montana unveiling a new broadband-access map that will benefit around two-thirds of the mostly rural state. 

Beyond all the anticipation, optimism and concerns surrounding the Infrastructure Investment and Jobs Act’s prioritization of roads and bridges, supply-chain and US port support, EV initiatives and broadband-internet expansion, the bill has also allowed the FMCSA to establish the Safe Driver Apprenticeship Pilot Program (SDAP), which will help attract younger drivers (under the age of 21) to careers in truck-driving via apprenticeships. While 18- to 20-year-olds can already earn commercial driver’s licenses (CDLs) and become professional truck drivers while operating within intrastate commerce, this was previously not allowed for interstate commerce. This new program and training standard would allow those under 21 to be better trained, operate technologically advanced and safety-focused equipment, pairing them with veteran truckers who help with driving mentorship. The goal is to boost the number of drivers in the US and help offset negative impacts to the industry that stem from a shortage of about 80,000 drivers across the country. Carriers and other players in the vehicle-shipping space are hoping this new program will, over time, increase the number of drivers in the industry and alleviate stressors around the driver shortage and aging workforce. 

 

Securing an Expert Logistics Partner  

While there are many disruptions still impacting vehicle-shipping and the larger automotive industry at this time, as well as many new factors coming into play with the recent passage of the Infrastructure Investment and Jobs Act, it’s still critical for companies to secure a partnership with an expert logistics provider they trust to help navigate supply-chain difficulties both in the short-term and long-term.  

As the only full-scale, tech-enabled automotive logistics platform designed to move, store, recondition and title and register finished vehicles,ACERTUS is uniquely positioned to navigate the current supply-chain hurdles and handle all aspects of a vehicle’s journey. ACERTUS ultimately blends technology, infrastructure, people and experience to create an intelligent approach to logistics. By partnering with ACERTUS, companies have access to a technology platform that provides visibility into every aspect of the journey, a carrier fleet that provides flexible capacity, an unmatched infrastructure for storage, repair and reconditioning and a drive–away service with high-touch customization.  
 
Regardless of the many different improvements or new obstacles that stem from the implementation of the infrastructure bill in the months and years ahead, ACERTUS’ team members are well-equipped to navigate any challenges and present a full suite of vehicle services to a wide variety of automotive partners. 
 

 

Learn more about ACERTUS’ full range of vehicle-transport and logistics services at https://acertusdelivers.com. To connect with one of our team members or receive a pricing quote, contact us hereor call us at this phone number: 855-ACERTUS (855-223-7887). 

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