The Economic Engine That Could

Pre-election fuel prices had candidates chanting “Drill, baby, drill.” The tune has changed to “Build, baby, build.”

The proposed US economic stimulus focuses attention on infrastructure and is lauded as necessary but criticized as lacking clarity on how it will spend nearly $1 trillion.

Weary of large “investments” that don't spell out details on how funds are spent or how spending is monitored, the public wants to see results — especially in job creation.

There is no doubt the US desperately needs infrastructure spending. Let's make sure it is directed to areas with the most long-term promise to support commercial and economic growth. That will help ensure the job creation is not short lived. This is a place where the logistics community can (and must) weigh in together in support of the best alternatives for economic survival and growth.

I have a queasy feeling each time the term “shovel ready” comes up in some local politician's speech. What's in this inventory of unfunded projects? Do they fit the changing social and commercial landscape as it is evolving? And what's left behind on the drawing board?

In a 2003 presentation, “America's Ports: Falling Further Behind?” John Vickerman noted an increasingly dire need for investment in port infrastructure to meet not only current (2003) demand but future growth. He pointed to an intermodal system in the US that is an aggregation of multiple private and public modes with little or no true cross communication or collaboration. Too little has changed and today, this sounds like fresh commentary.

Vickerman's co-presenter, Theodore Prince, added there has been inadequate research into the national significance of port infrastructure development, including a gap on local vs. national benefits. Many of the benefits occur elsewhere, making it difficult to lobby a regional political base to invest when a disproportionate benefit occurs outside their constituency. The stimulus provides the ultimate opportunity because its focus is on linking local and regional investments to national prosperity and jobs.

But we need a concerted effort to avoid moving from crisis to crisis. When the economy recovers, we'll find less capacity, and that can constrain growth. This is an opportunity to define infrastructure development in terms of long-term commercial and economic needs and overcome some of the historical barriers that have created a disconnected (or only semi-connected) logistics network.

That shovel ready project your local politician mentioned might create construction jobs in the short term, but when completed, will it sustain job growth?

The shovel-ready comment sounds like a “build it and they will come” mentality we can't afford. We need more convincing. The logistics community must come to the table with its support. Then build. Bring them back and get and keep them using what was built. And bring more.

It's a relentless and unforgiving process, and there is no time for lengthy lobbying efforts. The logistics community — shippers, carriers and logistics service providers — are the beneficiaries and need to identify the most sustainable projects in the pipeline or described as shovel ready and push them as priorities. This is a one-time funding opportunity and a one-time marketing opportunity for logistics to be recognized as the economic engine it is. The US logistics community already signed a $1 trillion check for the services it purchased in 2007 and it will do so again in 2008. Spend wisely.

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