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Thousands of U.S. Bridges Deemed Deficient

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More than 54,000 bridges along the Interstate Highway System in the United States were rated as “structurally deficient,” according to new analysis conducted by the American Road & Transportation Builders Association’s (ARTBA). This was just one of many of the concerning statistics detailed by ARTBA in its 2018 Deficient Bridge Report on Jan. 29.

Other critical details include:

  • The average age of a structurally deficient bridge is 67 years, compared to 40 years for non-deficient bridges.
  • Repair needs are identified among one in three U.S. bridges (226,837 total) and one in three bridges (17,726) along the Interstate Highway System (IHS).
  • There is the equivalent of one “structurally deficient” bridge for every 27 miles of the 48,000-mile IHS, which carries 75% of the nation’s heavy truck traffic.

The ARTBA report echoes the results of the American Society of Civil Engineers’ Report Card for 2017, wherein the U.S. received a performance of D+ based on the physical condition and needed investments for improvement. As reported by Risk Management magazine in 2017, the U.S. spends only 2.5% of its gross domestic product on infrastructure. The American Society of Civil Engineers estimated that, over the next 10 years, the gap between planned investments in infrastructure and investment needs could exceed $2.1 trillion, with the largest investment gap in the transportation sector, followed by schools, electric utilities and water/wastewater systems.

With Americans crossing these deficient bridges 174 million times daily, there is reason for concern among private citizens and companies. At the current pace of repair or replacement, it would take 37 years to remedy all of them, said Alison Premo Black, PhD, ARTBA chief economist, who conducted ARTBA’s analysis.

“An infrastructure package aimed at modernizing the Interstate System would have both short- and long-term positive effects on the U.S. economy,” she said, noting that traffic bottlenecks cost the trucking industry more than $60 billion per year in lost productivity and fuel.

The report was issued just ahead of President Trump’s first State of the Union address on Jan. 30, in which he identified a struggling infrastructure and requested legislation aimed at capital improvements:

Tonight, I am calling on the Congress to produce a bill that generates at least $1.5 trillion for the new infrastructure investment we need. Every federal dollar should be leveraged by partnering with state and local governments and, where appropriate, tapping into private sector investment—to permanently fix the infrastructure deficit.

Any bill must also streamline the permitting and approval process—getting it down to no more than two years, and perhaps even one.

National Public Radio reported that the White House initially called for a $1 trillion rebuilding plan but raised the stakes during the address, and specifically called out certain phrasing.

“That word ‘generates’ is important,” wrote NPR contributors in an analysis of the speech, “because this would not mean the U.S. government is spending $1 trillion.” President Trump has allocated $200 billion in federal spending on infrastructure. “The bulk of the $200 billion would go toward leveraging state and local money and private investment,” NPR’s David Schaper reported.

Massive Wildfires Ravage Alberta, Canada

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oil sands, Canada
Wildfires have shut down tar sand operations north of Fort McMurray, Alberta, Canada

Drought conditions in 2015 left Alberta, Canada, parched. Combined with recent winds and high temperatures, this has led to a massive, intense wildfire in the oil city of Fort McMurray, forcing evacuation of more than 80,000 people, and burning about 1,500 homes. Authorities said there have been no known casualties from the blaze, but that fatalities were reported in at least one vehicle crash along the evacuation route.

On Tuesday, the municipality of Wood Buffalo announced mandatory evacuations and closed all southbound routes. Residents fled to safer ground north of the of the area, where they spent Wednesday night in arenas, hockey rinks and oil work camps that often ran short of supplies, Reuters reports.

The fire is now five times its initial size and spreading south, taking it farther away from the massive tar sands area. Shell Nexen, Suncor and other oil sands operators have curtailed or shut down operations to protect pipelines and help evacuate employees and nearby residents, according to the Washington Post.

The wildfires in Canada illustrate a continuing trend of increasingly severe wildfires that in the United States caused a record 10.

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1 million acres to be burned in 2015, surpassing the previous high of 9.

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8 million acres in 2006, Mark Crawford reported in last month’s issue of Risk Management. It was the fourth year in the past decade in which more than nine million acres burned. According to the U.S. Forest Service, the 2015 wildfire season was the costliest on record, with more than billion spent fighting fires.

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Environmental scientists at the Harvard School of Engineering and Applied Sciences said in 2013 that rising temperatures could lengthen wildfire seasons, increasing burn areas and smoke from fires.

Meanwhile, current weather reports for Alberta have raised hopes, as the forecast calls for cooler temperatures and possible rain.

Alberta hotspots

California and New York Agree to $15 Minimum Wage

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Yesterday, the governors of California and New York reached agreements with state lawmakers to become the highest-paid minimum wage states in the country with an increase to $15 an hour. A minimum wage bill passed the California legislature on Thursday, and Gov. Jerry Brown said he will sign the measure on Monday. Late that night across the country, Gov. Andrew Cuomo reached a tentative agreement with New York’s top legislators to do the same with the state’s base wage.

According to the AP, President Barack Obama, who first proposed an increase to the $7.25 federal minimum wage in 2013, applauded the states’ actions and called on the Republican-controlled Congress to “keep up with the rest of the country.”

Currently, California and Massachusetts are tied for the highest state minimum wages at $10 an hour, while New York’s current rate is $9. Only Washington, D.C., at $10.50 per hour, is higher.

From the Department of Labor, here’s a look at how your state measures up:state minimum wage laws

Both California and New York plan to phase in the new rates, which will impact about 2 million employees in each state. In California, the increases would start with a boost from $10 to $10.50 on Jan. 1, and businesses with 25 or fewer employees would have an extra year to comply. Increases of $1 an hour would come every January until 2022, although the governor could delay these increases in the event of significant budgetary or economic downturns.

Cuomo originally proposed a simpler adjustment in New York: three years in New York City and six years in the rest of the state. Negotiations with local lawmakers who expressed concern the sharp increases would “devastate” business owners produced a more gradual approach. The AP reported, “In New York City, the wage would increase to $15 by the end of 2018, although businesses with fewer than 10 employees would get an extra year. In the suburbs of Long Island and Westchester County, the wage would rise to $15 by the end of 2022. The increases are even more drawn out upstate, where the wage would hit $12.50 in 2021, then increase to $15 based on an undetermined schedule.”

These changes come as considerable progress for the “Fight for 15” movement to raise minimum wages across the country. As Will Kramer reported in Risk Management magazine, debates over income inequality in the United States and the “Fight for 15” movement have gathered strength over the past five years. Many credit the Occupy Wall Street movement that began in New York City’s Zuccotti Park in September 2011 with spurring the increased focus on wealth and economic inequality, particularly the divide between the 99% and the 1%.

The impacts have been gaining further momentum recently. Kramer explained, “As of mid-2015, Seattle, San Francisco and Los Angeles have begun phasing in a $15 minimum wage. Democratic presidential candidate Sen. Bernie Sanders introduced Congressional legislation to raise the federal minimum wage to $15 per hour. What was once considered inconceivable has become more and more commonly accepted as a necessary and even moral imperative for many American businesses.”

Check out more from Kramer’s article on the growing debate over income inequality and its implications for businesses in Risk Management.

 

U.S. Sues VW

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The U.S. Justice Department on Monday sued Volkswagen in federal court in Michigan for illegally installing faulty emission control devices in about 600,000 vehicles. The lawsuit, filed on behalf of the U.S. Environmental Protection Agency (EPA), accuses VW of four counts of violating the U.S. Clean Air Act, including tampering with the emissions control system and failing to report violations.

According to a Reuters review of the U.S. complaint, VW could face fines of up to $37,500 per vehicle for each of two violations of the law, up to $3,750 per “defeat device,” and another $37,500 for each day of violation.

Risk Management magazine reported in December 2015 that the affected EA 189 diesel engines were installed in more than 11 million Volkswagen and Audi vehicles manufactured between 2009 and 2014. The company announced on Oct. 22 that it was also looking into whether the software might be in earlier versions of its latest EA 288 diesel engine, potentially adding millions more to the total.

Regulators across the globe, including in India, South Korea and Germany, are conducting their own investigations, as are attorneys general in all 50 U.S. states. The Justice Department has been seen as the only agency that might hold executives personally accountable, according to The New York Times.

The government is seeking a number of penalties against the company, including fines and further actions to mitigate the emission of harmful pollutants. A federal court will determine what actions the company must take to reduce emissions and a dollar figure for the penalty.

VW (VOWG_p.DE) shares fell as much as 6% to a six-week low on Jan. 5, the biggest drop yet on Germany’s blue-chip DAX index, Reuters said.