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I-5 Bridge loss cuts into Profits

I-5 bridge loss cuts into profits
 

Oregonian, The (Portland, OR) - Saturday, May 25, 2013
Author: MOLLY YOUNG, The Oregonian
ECONOMY

Washington state officials say it's too soon to tally the economic impact of Thursday's Skagit River bridge collapse. But studies of past Interstate 5 shutdowns suggest the toll could easily run into the tens of millions of dollars. 

Analysts say the economic effect in Oregon, though, should be minimal: Businesses still will rely on I-5 to transport goods. 

But long-term delays along the span north of Seattle could cost jobs and cut into Washington tax revenues, and the price tag will grow as minutes and miles are added onto daily commutes and long-haul routes. 

The ultimate impact of the Skagit crossing collapse depends on many unanswered questions, said Washington Chief Economist Steve Lerch. How long will it be closed? What will the temporary solution be? And how bad will traffic congestion get? 

Washington Gov. Jay Inslee said the bridge plays a crucial economic role as a connector to Canada, a major trading partner for both Oregon and Washington. 

"It's vital to the economic recovery for our state," he said during a Friday afternoon news conference. 

Washington officials faced a similar situation in 2007, when flooding near Chehalis forced officials to close a 20-mile span of I-5. Today, it's a case study. 

That four-day shutdown cost an estimated $47.1 million in productivity, according to a 2008 Washington Transportation Department report. Truck drivers were forced to go as many as 400 miles out of the way, adding more than 8 hours of drive time and disrupting supply chains. The state lost out on about 290 jobs and $2.4 million in tax revenue as a result, according to the report. 

Area businesses counting on the I-5 traffic also take a hit, said Ken Casavant, a Washington State University economist who co-wrote a 2012 state report on the high price of congestion. If delays stretch on, transport companies could be forced to hold on to goods longer than expected, he said. 

The Port of Portland said most freight moving north doesn't go beyond the Puget Sound area, because of existing ports there. In fact, economic data showed no discernible effects in Oregon tied to the Chehalis shutdown, said Joe Cortright, an economist who runs his own consulting firm in Portland. 

There's no reason to think that would be any different over the coming weeks, said Tom Potiowsky, the chairman of Portland State University's economics department and a former state economist. 

Goods still have to be delivered and moved along I-5, he said. "Given alternative routes, I really don't see much of an impact at all." 

Molly Young: 503-412-7056; myoung@oregonian.com; twitter.com/mollykyoung
Edition: Sunrise
Section: Business
Record Number: MERLIN_22120067
Copyright (c) 2013 Oregonian Publishing Co.
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