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• Position: ROUND TABLE TRANSPORTATION & LOGISTICS

North Carolina's nicknames include The Good Roads State. That moniker was bestowed in the early 1900s when major efforts were made to improve the state's mostly dirt roads. It's still earning that title today, wherever one is driving from Murphy to Manteo. The transportation industry, including air, water and rail, plays an essential role in economic development, helping determine the state's future. Business North Carolina recently gathered a group of industry experts to discuss the state of transportation and what needs to be addressed for continued vitality.

GTCC and PTI sponsored the discussion, which was moderated by Business North Carolina Publisher Ben Kinney. It was edited for brevity and clarity.

HOW HASTHE PANDEMIC CHANGED THE TRANSPORTATION INDUSTRY?

FOX: It's an exciting but dramatically different time. We've survived two years of pandemic, which kept every--one at home for about three months. That took a big bite--about $350 million--out of the state Department of Transportation's vehicle-fuel tax revenue. It created cash-flow issues for DOT. But the good news is society has adapted to living with COVID. Vehicle traffic has returned to about 95% of its pre-pandemic level, though it doesn't move in the same way. People gained flexibility to work from home, for example, so rush hours are no longer only in the morning and evening.

While DOT's overall financial health is strong, it would like to spend more money on projects than it is right now. But capacity, workforce and raw material issues in the market mean fewer projects can be undertaken. DOT is working with its partners and contractors, avoiding those projects that can't be completed because of a lack of workforce or raw materials, at least for the time being. It's a balancing act. Project costs are at a level that hasn't been seen in a long time.

I remember 2009 and 2010, the height of the Great Recession. Every project would attract six or eight bids, and the low bid was at least 25%below the engineers' cost estimate. That was a great environment for DOT. Money went further. Projects cost 10% to 15% more today than they did two or three years ago.

SAIDI: Most transportation funding comes from vehicle-fuel taxes. With driving changes spurred by COVID and more electric vehicles, it's easy to connect the dots and see that source will become less and less reliable. And the state's population is growing, so it needs more revenue. Transportation is vital to residents' livelihood. You want your child to get on a safe bus and arrive at school. We need secure bridges, roads and infrastructure. My engineering firm is affected by transportation funding. We're excited to see DOT'S revenue return. That helps my company and others in the industry plan for hiring and project delivery. We want more projects and have capacity for preconstruction design and project administration. The construction supply chain is under stress and will continue to be impacted down the road.

MILAZZO: The pandemic has had many effects on transportation, such as increases in work from home or work from anywhere. I was recently asked if those will continue. I sure hope so. They have brought many benefits--better quality of life, more flexibility, less environmental impact. They relieve the burden on the state's highway system, too. Traffic is spread over the course of the day, for example, which makes better use of it. The pandemic was horrible, but it offers lessons.

WHAT IS THE FUTURE OF N.C. TRANSPORTATION FUNDING?

FOX: Defining DOT's future funding is a long-term challenge. It needs to be...