Sense and Nonsense about Transportation Costs
Christopher Leonard and Catherine Tsai of the Associated Press have an article about the shipping challenges facing American farmers as they seek to meet increased world demand for U.S. exports:
It's the dark side of the booming global demand for U.S. corn, wheat and soybeans. The surge in exports is revealing inefficiencies in the country's railways, highways and rivers that carry the grain that helps feed the world. And those bottlenecks are costing farmers, shippers and ultimately consumers millions of dollars a year.
So the question is what to do about it (if anything, given costs in the millions on shipments in the billions). Let the special pleading begin:
The Association of American Railroads estimates it will cost about $148 billion to expand rail lines over the next 30 years to handle increased demand. But the group says railroad companies can only afford to fund about 70 percent of that.
The AAR and farm industry groups are backing legislation that would offer tax credits for investments in freight rail expansion.
That's absurd times two. If the need to expand is coming from increased demand, then the profits earned by the increased demand are sufficient to pay for the expansion. Otherwise, there is no "need to expand," just a desire to expand if financed by someone else. Likewise, there is no need for tax credits for investments in rail. The opportunity to transport and sell the additional product provides all the financial incentive to expand the rail as is appropriate. The U.S. taxpayers need not be asked to fund the profits of agribusiness.
Similar arguments are
Barges floating down the Mississippi have long been a cheaper shipping alternative for farmers who aren't landlocked. But the barge traffic is hampered by Depression-era locks and dams.
A modern sized barge tow is typically 1,100-feet long - but the locks they must pass through are roughly half that length. The means the barges must split in two to get through, with the back half waiting for the first half to make the passage before rejoining it on the other side.
The delays add about 50 hours of travel time along the upper stretch of the Mississippi, said Corps Manager Scott Whitney. The barges must burn fuel and pay workers as they wait, racking up an estimated $725.6 million in extra costs along the Illinois and Mississippi Rivers between 1996 and 2005.
Congress authorized the Army Corps last year to update locks and dams along the Mississippi. But Congress must approve funding for the project, which is estimated to cost $2.21 billion over more than 20 years.
So we should spend $110 million ($2210/20) a year to avoid $73 million (725.6/10) a year, even allowing an inflation adjustment on the latter? That doesn't sound like a smart use of funds. Even if the project is deemed worthwhile (due to added benefits not identified in the article), there is no reason why it cannot be funded out of additional fees on transported cargo.
Oh what fun
So . . . it's ok for the taxpayers to spend up to $500 billion to bail out the banks, but they can't invest $2 billion in infrastructure to move our food and keep the price of a loaf of bread down. OK, got it . . . ;-)
I had the pleasure of locking it down the Mississippi a few years back. As pleasure craft we were required to wait for commercial (barges) to get through a lock first, and this would take around 2 hours for a barge (to get through one lock) because they had to break apart, shove one part through and tie it up on the other side, send the tug back through and do it again with the second half. Then there was a happy reunion on the other side, after the very slow process.
And those guys working the tugs and barges . . . ladies, I recommend this trip, and taking the binocs along. Gorgeous views all along the river.
But seriously, the locks and dams are "quaint" . . . relics from another era . . . seriously needing upgrades . . . they look like something you'd expect to see in a third world country.
Small Numbers
I guess you were one of those "added benefits not identified in the article." In general, the numbers in the article, both costs and benefits, seem too low. But that doesn't change the main point -- if the congestion is both a problem and coming from an increase in demand, then there is non-taxpayer funding available to fix it.Non-taxpayer funding
Are you suggesting a toll (user fee) for traffic going through each lock, to finance the project?
That could work.
Yes to User Fees
Where they can be imposed, user fees seem like the best way to go. I don't know that they have to be collected at each lock, as opposed to something potentially more convenient.
User fee society is here
Modern technology makes it easier to collect tolls. London is collecting auto tolls using cameras to scan license plate numbers, and then the user is sent a bill.
A system has been proposed for Minnesota which would put a GPS type device in every car -- we'd be charged for mileage on roads/bridges ( varying based on road and time of day driven). This would replace the gas tax. The fee for mass transit users would be built into their ticket price.
Because it is politically not possible to raise taxes it seems the "user fee" is the only option.
Our legislature, with the backing of the state chamber of commerce and oodles of other business groups, raised the gas tax 5 cents a gallon in the last session. 6 Republican legislators crossed lines to vote for the veto override. Never mind that we hadn't raised the gas tax in 20 years and bridges are falling down -- anyone who voted for it is getting beat up by the opposition during this election cycle. So it seems that the only way to get money needed for infrastructure is the "user fee".
It would certainly be an incentive to drive less, and encourage people to live close to where they work. And that would be a good thing.
Infrastructure Entrepreneurs
There are plenty of international investment groups specializing in building highways and bridges. I presume Andrew knows Mitch Daniels, the Governor of Indiana, who can give him the names of several who bid on leasing the Indiana Toll Road. If you offer to let them build it, they will come.