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You Can't Afford to Wait

Jan. 14, 2015
Taking a "wait and see" attitude in this current regulatory climate is exactly the wrong thing to do.

Seventy years ago, this publication (then known as Flow) was launched as the voice of the material handling and logistics industry, a responsibility we pursue as diligently today as we did back in 1945. Of course, a lot has changed since World War Two ended, and while technology and management philosophies have advanced, it's still just as tough today to run a successful manufacturing or distribution operation as it was 70 years ago. So it's to the credit of the editors of Flow that they chose a subject that would be as relevant in 2015 as it was in 1945.

Certainly one issue that's remained top of mind for material handling and logistics professionals for quite a few decades now is the interaction between government and industry. In our 2014 Salary Survey, respondents identified government regulations as the biggest challenge facing the industry today, and with the plethora of new and revised rules coming from the Obama Administration, that situation doesn't look to change much this year. (And by now, all MH&L subscribers should have received an invitation to participate in the 2015 Salary Survey, so please take a moment to make sure your voice is heard this year. All responses, of course, are completely anonymous.)

As David Sparkman points out in his cover story, "How to Survive in the Current Regulatory Climate," the federal government has been having its regulatory way with the material handling and logistics industry for a long time, dating back at least to the late 19th Century. Nevertheless, under President Obama's watch, "labor and employment regulation [has] burgeoned in a way never seen before," Sparkman observes.

This should hardly come as a shock to anyone, as all politicians—whether it be the President of the United States or a local alderman—push the agendas favorable to those who helped them attain their offices. So, not surprisingly, being a Democrat, many of President Obama's efforts have focused on strengthening the labor unions and regulatory agencies, often to the detriment—or at least, perceived detriment—of businesses (Republicans are just as eager to point out every instance where industry has suffered as they are reluctant to even believe, let alone mention, that sometimes there are very valid reasons for regulatory oversight of companies).

Still, Sparkman's point is spot on, as it does seem that the Obama Administration has pursued regulatory policies at a breakneck pace, wielding the threat of executive orders to blunt any attempt to slow down this apparent overhaul of how businesses operate in the U.S. In a recent Politico article, David Nather offers an overview of what we can expect from the Obama Administration in 2015, including:

  • Climate Change: A final rule of carbon dioxide emissions for coal and natural gas power plants is expected this summer.
  • Labor: A new overtime rule could come next month.
  • Tax: Rather than the tax reform that has been sorely needed for far too long, the Administration is more likely to further clamp down on tax inversions, making it more difficult for U.S. companies to shift their corporate headquarters overseas to gain a lower tax rate.
  • Transportation: The DOT is expected to issue new standards for rail tank cars early this year.

"The rules and regulations will set up more confrontation with a newly unified Republican Congress," Nather observes, "which will use all of the tools at its disposal to try to stop individual policies and blast the Obama Administration for being too rule-happy in general."

So is gridlock the best we can expect for 2015-16? Based on everything I've read and heard about to date, probably so. That being said, since many of the rules and regulations affecting the material handling and logistics industry happen at the local and state levels, your incentive to stay connected to your community's policymakers should be obvious: You can't afford not to.

This month, we officially welcome Adrienne Selko to the MH&L staff, a familiar name to those of you who follow our sister publication, IndustryWeek. Her "Lessons on Leadership" column debuts in this issue. And speaking of familiar names, Perry Trunick, one of the best-known and respected logistics reporters in the business, offers his analysis of the omni-channel revolution.

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