Panama Canal Expansion Highlights Need for Highway Investment

The interconnectedness of the nation’s transportation system and the needs of that system are put into sharp focus when one considers what our shipping ports and highways may look like after 2014. That’s when the $5.2 billion expansion of the Panama Canal is expected to be complete.

New locks on the Canal will be able to accommodate larger vessels. Shipping capacity will double and much Pacific freight will be re-routed to U.S. ports on the Gulf of Mexico and the Atlantic Coast.

My CSG colleague Sujit CanagaRetna, Senior Fiscal Analyst at the Southern Legislative Conference (SLC), has put together an excellent report on how the expansion will impact SLC state ports. During the upcoming SLC annual meeting, attendees will have the opportunity to see firsthand how the Port of Charleston, SC is preparing for the increase in shipping traffic.

But even an inland state like Kentucky, the home of CSG’s national headquarters, is likely to feel the impact. I have an article in the July issue of The Lane Report, a Kentucky business magazine, that among other things looks at why the expansion is on the minds of transportation planners and the road building industry here in the Bluegrass State.

The key to understanding the potential impact is two shipping ports currently being constructed in Louisiana and Alabama.

“The main roadway that goes north-south from these two shipping ports is going to be I-65 (which passes through Kentucky), and then (trucks are) going to split off and go east and west along I-64,” Kentucky Association of Highway Contractors executive director Charles Lovorn told me.

The Kentucky Motor Transport Association predicts that state truck transport tonnage will increase 25 percent by 2021, making it imperative that state roadways be prepared to handle the additional traffic.

Indeed, a report out this month from the American Association of State Highway and Transportation Officials (AASHTO), cites the following national statistics:

  • The U.S. trucking industry by 2020 will move three billion more tons of freight than we haul today and the industry will have another 1.8 million trucks on the road to meet the demand.
  • By 2030, for every two trucks now on the road, there will be an additional one right behind it.
  • By 2050, overall freight demand will double, from 15 billion tons today to 30 billion tons. Freight carried by trucks will increase 41 percent, by rail 38 percent. The number of trucks on the road will also double.

The AASHTO report concludes that the current capacity of our nation’s roads, rails and seaports is not keeping pace with current demand, let alone what is expected in the years ahead. Among the report’s other findings:

  • Major highway bottlenecks at urban interstate interchanges cause tens of thousands of hours of delay each day, week and year for truckers, business travelers and commuters. Strings of bottlenecks are emerging along regional and transcontinental freight routes, creating corridors of congestion instead of corridors of commerce.
  • Estimates of the truck hours of delay for the worst freight-truck bottlenecks show that each of the top 10 highway interchange bottlenecks cause over a million truck-hours of delay per year, costing $19 billion overall.

Here in Kentucky, the spot where I-65, I-64 and I-71 converge in downtown Louisville—an area known as Spaghetti Junction—was recently named the 11th worst bottleneck in the country in a report by the American Transportation Research Institute and the Federal Highway Administration. A reconstruction of Spaghetti Junction is part of a larger project Kentucky is working to fund that will include two new bridges across the Ohio River.

But overall, Lovorn and others worry if the state is doing enough to prepare for the expected increase in truck traffic on Kentucky roadways. While the state has let an average of $790 million in highway construction contracts annually over the past decade, Lovorn believes the state needs to spend more like $1 billion per year. Kentucky Transportation Secretary Mike Hancock told me $1 billion annually is a figure he’d like to see as well but for now he’s just hoping to make the state highway budget predictable. It has yo-yoed from as low as $450 million to as high as $1.5 billion in recent years.

Nationally, AASHTO’s report advocates that $3 billion be apportioned annually from a proposed $375 billion highway program to the states for freight investment from the Highway Trust Fund, and another $7 billion annually from freight fees outside the Highway Trust Fund.

The clock is ticking and it’s clear that preparing for 2014 and beyond will require a significant investment at both the state and federal levels across all modes of transportation—even in a landlocked state 2,000 miles from the Panama Canal.


Additional reading: This previous article for The Lane Report details plans for Kentucky’s Ohio River bridges and other major spans.