Thursday, October 31, 2013

US Future of Freight and Logistics Report Lacks Insight and Solutions

Final Document Reads Like a High School History of Transport Paper
Shipping News Feature

US – A tacit admission from John J. Duncan, Jr. the Tennessee based Republican and Chairman of the Panel on 21st Century Freight Transportation that, ‘we couldn’t do everything’, sums up the one hundred and four page report which the US House Transportation and Infrastructure Committee released this week intending to point the way forward for the shipment of all cargo types across and beyond US territory in the coming years.

A report described as a summing up of the current state of freight movement in America really dodges the issue at hand, transport at this moment in time is what it is, the point of such expensive investigations is surely to establish how things can be improved and many critics feel that this report states the obvious, proposes lots of fairly simple solutions, then falls short on practicality. The big problem with this, and previous investigations, is that it is compiled by politicians relying on expert opinion, often from vested interests.

Before discussing the positives it is worth looking at why there is a problem here, one that can be summed up in one word – funding. The last such reports five years ago by two different congressional committees required funding to emanate from highway tolls and truck mileages as opposed to the US politician’s great bête noir higher gas prices, this report stops short of recommendations, merely hinting at lots of places where the money might come from, leaving the matter in the lap of the recently appointed Secretary of Transportation.

So what does the report achieve, well apparently the bleeding obvious, it calls for a properly drafted overall freight transportation policy by Congress which should also promote projects to improve the carriage of goods – and – well that’s it. Apart from of course ensuring robust public investment across the diverse modes of carriage (that’s funding), incentivise private investment (funding from somewhere else), find some money for the extension of multimodal transport methods (sounds pretty much like funding), identify key sources of revenue to invest (that’d be funds then) and of course develop some specific funding options ‘for freight transportation projects prior to Congress’s consideration of the surface transportation reauthorization bill in 2014’.

The problem with this report is that it reads like a cross between a high school History of Transport project and an attempt to point out how dire the situation really is. Whilst recognising the impediments to developing a more suitable overall plan it appears hampered by a layman’s simple understanding of how transport works whilst never actually engaging in presenting viable solutions and how to pay for them. Sentences such as ‘goods are almost invariably transported’ by road for at least part of their journey as, ‘not every community is located adjacent to a railroad, airport, waterway or port’ do not inspire confidence but when one then reads that ‘the Highway Trust Fund, from which federal investment in highway infrastructure is disbursed, will soon be insolvent’, one can understand the lack of any in depth analyses of where the money is to come from.

The report continues, ‘this fact [the imminent demise of the Trust Fund] is especially problematic when one considers that maintenance of the Nation’s existing highway facilities alone would cost hundreds of billions of dollars, and that one of every four bridges in the US is structurally deficient or functionally obsolete’. So back once again to funding and, to be fair to the authors, there are several pages devoted to indicating where the money might be found. As well as the terrifying ‘Gas Tax’ option they mention Customs Duties and Fees, a Freight Waybill Tax, Weight-Distance Tax, Container Tax, a Highway Trust Fund, Harbor Maintenance Trust Fund, Inland Waterways Trust Fund, Airport and Airway Trust Fund and a host of other existing or proposed methods.

The Committee assures readers that everybody in the business of maintain the supply chain is willing to contribute more, from truckers to air carriers, shipping lines to ports – as long as they see improvements to justify their extra expenditure, talk of course is cheap. Unfortunately, given the recent dispute in Washington between the House and the Senate over budget allocation it will need somebody to take a grown up look at the problems facing the nations transport infrastructure and how it will be funded without driving up the price of goods to an inflationary and unacceptable level.

The remit of the Committee was also to study safety in the supply chain but this seems to have been relegated to the odd, often naïve footnote, ‘pipelines are the safest way to transport hazardous goods’ and the odd reference to ‘safety protocols in harbors’. Overall this report does little to inspire or to instil confidence, one can only hope that the facts and figures it includes can be distilled into the dire warning they represent for the future of logistics throughout North America.