Is there any possible good that can come out of an unemployment rate over 9%, with more than 14 million people unemployed? Maybe, if you consider the idea of keeping those people at home rather than commuting every day a good thing.
According to the Texas Transportation Institute's Urban Mobility Report, in 2010 the average commuter spent 34 hours stuck in traffic, more than double the 14 hours of gridlock commuters suffered through in 1982. The “cost of congestion” in 2010 was $101 billion, the same as it was in 2009, though down from $108 billion in 2005, when more people were employed and, presumably, on the road.
A collateral study conducted by the University of Wisconsin focuses on the impact of motor carriers on the roads, and reportedly truck congestion cost $23 billion in driver time and diesel fuel in 2010. The absolute worst place to drive a truck these days is through Chicago, where truck delays led to 31.4 million hours and $2.3 billion in wasted time and fuel. Given that Chicago is the nation’s leading freight hub, it’s not surprising that the worst traffic snarls go through the Windy City. Los Angeles and New York City aren’t too far behind, ranking second and third on the list of cities with the longest truck delays.
The inevitable conclusion of these reports is that the government needs to get serious about investing in infrastructure upgrades to our roads and bridges. “Without immediate action, we will continue to see a rise in congestion, negatively impacting our economic vitality and global competitiveness,” warns Leslie Blakey, executive director of the Coalition for America’s Gateways and Trade Corridors (CAGTC), a group that represents many of the nation’s biggest ports. The CAGTC has recommended the establishment of a new Office of Multimodal Freight within the U.S. Department of Transportation which would collect user fees to pay for infrastructure projects. The coalition supports the idea of a national infrastructure bank, similar to that proposed by President Obama in his recent jobs speech.
However, Bill Graves, president and CEO of the American Trucking Associations, is leery of user fees and vaguely- defined infrastructure initiatives, saying these amount to nothing more than another tax “with no benefits to users.” The most likely result, Graves states, is that the money collected for an infrastructure bank would end up being “put into portfolios rather than pavement.”
The ATA is also concerned about the Federal Motor Carrier Safety Administration’s proposed changes to the Hours of Service regulations that would, if passed, reduce the amount of time truck drivers can be behind the wheel. These changes, according to the ATA, “would result in reduced wages for hundreds of thousands of drivers, significant administrative and efficiency costs for trucking companies, and billions of dollars in lost productivity.” It’s already extremely difficult to recruit and retain over-the-road drivers, what with congestion and quality of life issues, so reducing their hours—and their income—is not likely to make it any easier to attract drivers. In the second quarter of 2011, the turnover rate for long-haul drivers was 79%, according to the ATA. That’s an employee churn rate that seems more typical of the fast-food industry than a vital component of the nation’s supply chain, but it is what it is.
So to sum up the situation: The nation’s highways are congested to the point that they’re doing harm to our economy. If we don’t invest in our infrastructure immediately, it will do even more harm to our economy. However, taxing the users of the highway system to pay for the infrastructure will damage our economy. And measures to reduce the number of truck drivers on the road could—you guessed it—end up wrecking our economy.
Meanwhile, a casual glance at the financial news of the day—decline in factory goods orders, decline in housing starts, increase in unemployment claims—indicates that plenty of harm has already been done to the economy. Whether our elected officials wake up to this fact and start focusing on actual solutions, rather than jockeying for position in the next election (which is more than a year away), remains to be seen. In the absence of any kind of political leadership, supply chain managers will have to continue doing what they do best: identifying and solving problems as they occur, in real-time, rather than waiting for somebody to bail them out. Is it too late to promote a “Supply Chain Party” candidate for President?
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