Report Calls For More Waterways Investment

A new study of the advantages of investing in waterways infrastructure, released April 9, has a message familiar from other recent studies, but it differs in significant ways. Titled “An Economic Analysis of Spending on Marine Transportation System (MTS) Infrastructure,” its argument that “For relatively little additional expenditure on [marine transportation system] infrastructure as a share of GDP, as is illustrated in this study, the U.S. economy not only can become larger but can become substantially more robust” carries unrivaled authority and heft.

One reason is the experience of the researcher, Inforum, founded in 1967 at the University of Maryland by economist Clopper Almon, now professor emeritus of the university. Inforum was a pioneer in large-scale economic modeling, and it has its own proprietary method it calls the LIFT model. Inforum has a long history of using its models to support waterways infrastructure investment. Another reason is who commissioned the study: The U.S. Committee on the Marine Transportation System, an interagency group made up of more than 25 federal departments, agencies and bureaus.

Finally, the study goes much deeper into the history of investment in maritime infrastructure than other studies, showing convincingly that investment in waterways infrastructure has steadily fallen in recent years compared to investment in other modes of transportation.

The report contemplates three alternative potential efforts to improve MTS infrastructure spending. These scenarios range between $12 billion and $87 billion in additional capital spending from 2020 through 2030, with increases in operations and maintenance budgets ranging between $37 billion and $255 billion over the same period.

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The analysis uses the Inforum LIFT model, a dynamic general equilibrium representation of the U.S. national economy. It combines an inter-industry input-output formulation with extensive use of regression analysis to employ a “bottom-up” approach to funding levels for MTS infrastructure during the 26-year period spanning 2020 to 2045, including an 11-year capital investment program stretching from 2020 through 2030.

The report concludes that its model “shows how infrastructure expenditure above current funding levels will help to recover from the long pattern of underspending in infrastructure, thus enabling higher growth, improved trade performance, expanded employment opportunities and enhanced value of household incomes. By reigniting public and private investment in infrastructure, education and innovation, countries not only would enhance productivity growth but also would foster additional employment and strengthen aggregate demand for goods and services.”

Reversing ‘Dramatic Decline’

A number of graphs and charts illustrating various trends in infrastructure investment show that “[s]pending for some privately-owned infrastructure, such as freight rail and electric utilities, has been steady and relatively strong. On the other hand, spending for roads, maritime infrastructure, and many other types of public infrastructure has lagged, and with slower economic growth a likely consequence.”

The report notes, “Between 1956 and 2001, investment in water transportation infrastructure (waterways, ports, vessels, and navigational systems) also increased, with growth exceeding 4 percent annually from 1985 to 2001. Spending on water resources infrastructure (dams, levees, reservoirs, and other assets) also surged in the 1980s and 1990s. However, real spending for both water transportation and water resources infrastructure has declined since 2001, with water transportation falling 1.4 percent per year and water resources contracting approximately 0.8 percent per year. ,,, In contrast to most of the preceding 46 years, the volume of investment in the water transportation and water resources infrastructure categories contracted significantly from 2001 through 2017—with real spending on water transportation infrastructure contracting 1.4 percent annually.”

“The level of real expenditure for ports and inland waterways was 20.4 percent lower in 2017 than in 2001, with a dramatic decline in capital spending weighing heavily. Real expenditure for water resources was 11.7 percent lower in 2017 than in 2001. By 2017, capital spending for water resources, including dredging, plummeted 44.7 percent from 2001 levels.”

The report is available at