Outsourced Logistics Com Images Archive Perry 120

A Defining Moment for Logistics

Sept. 24, 2003
Can we have a low-cost logistics infrastructure and still achieve world-class results? The question is not rhetorical.
The Last Mile
Bringing the issue of infrastructure home

Can we have a low-cost logistics infrastructure and still achieve world-class results? The question is not rhetorical.

Trucking and rail factions recently announced they would put aside their differences on truck size and weight limits to concentrate on reauthorization of surface transportation programs. The “truce” in the size and weight battle is an indication of just how important these two groups feel current legislation is for the logistics community.

The Transportation Equity Act (TEA-21) could make serious progress in releasing Highway Trust Fund monies for highway infrastructure investment. That battle is at least as old as the size-and-weight standoff between truck and rail factions.

Given the current budgetary crises in many states, these federal funds become even more important to economic development. Many states — including Ohio, where Logistics Today is based — are donor states, sending more money to Washington for highways than they receive back in federal funding programs. TEA-21 won’t eliminate the imbalance, but it will improve the relationship between fees paid and funding received.

States like Ohio argue they have high volumes of freight that transit the state and don’t contribute to the local economy. That freight does require substantial infrastructure support. It can also contribute to the growing
congestion problem. By its own statement, the Committee on Transportation and Infrastructure notes traffic congestion has increased from 1.9 billion hours in 1982 to 4.5 billion hours in 1999. Smaller urban areas are seeing congestion increase at a substantially faster rate than large urban areas.

Improved transportation efficiency and less congestion are always good for the general economy, but they are a must in a weak economy. As transportation broker Allen Lund lamented in an interview earlier this year, “We have $125,000 trucks and drivers going four miles an hour on congested highways.” Add the value of shipments in the trailers those trucks are pulling, as well as the cost of delays at the destination, and those hours the U.S. government has quantified are raised exponentially.

These arguments are clear to logistics professionals. We don’t need to be convinced of the importance of transportation infrastructure. We know the knock-on costs associated with delays. We’ve all seen the impact of poor infrastructure in other countries. And we know the frustration of trying to work around a problem we cannot fix.

Here’s where U.S. logistics has reached a defining moment. Congress was inclined to hear and understand the needs of logistics for improvements in highway, rail, waterway and air infrastructure. But just as they left their desks with legislation pending, the nation suffered the biggest power blackout in history.

To its credit, the logistics network responded promptly and continued to keep goods flowing fairly well in spite of the adversity. But, as legislators return to Washington this fall, they’ll face some strong lobbies arguing for needed improvements to the power infrastructure. Those arguments carry weight, but we can’t afford to let Congress forget what it already agreed was important to transportation infrastructure.

It may be premature to declare a victory for transportation, but a little extra push may be all we need.

Perry A. Trunickexecutive editor
September, 2003

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