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Supply Chain News: A Strategic Plan for US Freight Transportation


 

New DOT Report Sets Objectives, but Getting there Won't be Easy

Sept. 16, 2020
SCDigest Editorial Staff
     

The US Dept. of Transportation and Secretary Elaine Chou unveiled a new freight transportation strategic plan on Sept. 4, with a goal of laying out a vision for the US to have the most efficient and effective transportation system in the world, creating many benefits for US companies and citizens.

Supply Chain Digest Says...

 

Of course, there are many barriers to achieving these goals, from a lack of funding for infrastructure to local optimization.


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The report notes the role of transportation in overall US global competiveness, noting that "Our robust national multimodal freight system supports our economy by lowering costs to businesses and consumers and boosting the competitiveness of American goods abroad."

The strategy document was made mandatory by the Fixing America's Surface Transportation (FAST) Act of 2015. The DOT notes that "the Plan also defines a clear Federal role for leading efforts to improve the performance of the Nation's multimodal freight system."

Early in the report the DOT provides a wealth of data on the current state of US freight. That includes the chart below, which breaks down the value of goods moved by various modes of transportation.

It's no surprise that trucking dominates, carrying 73% of the total value of shipped goods in 2017, the last year for which data is available. It may more of a surprise that rail carried just 1.4% of the value of goods, just half the value of air shipments.

 

Key Freight Trends

The report also identifies key trends impacting freight, as shown below:

Growing Population and Economy: The population and economy of the United States are growing at a steady pace contributing to increased demand for freight. The fastest growing regions of the country are primarily in southern and western States.

Diversifying Global Supply Chains:
International trade is growing and supply chains are becoming increasingly global, increasing congestion at ports, border crossings, and on the infrastructure that connects these trade gateways to the broader transportation system.

 

 

Rising Domestic Fuel Production: Rapidly increasing domestic fuel production requires new and expanded infrastructure to safely and efficiently move fuel from production areas to refineries and export terminals.

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Changing Urban-Rural Dynamics: Furthering a long-term trend, the population of the United States is becoming more concentrated in increasingly congested metropolitan areas, creating challenges for delivery of goods. Declining rural populations must support critical freight corridors, while providing essential goods to sustain urban markets.

Increasing E-Commerce: Online shopping is rapidly increasing as a share of retail sales, creating new demands for faster and cheaper delivery of goods straight to consumers. This trend is changing land use patterns and contributing to increased truck traffic and competition for curb space in residential areas.


Advancing Technology:
Emerging technologies from automation to delivery drones to the Internet of Things have the potential to transform the freight industry, disrupting old business models and changing the nature of freight jobs.

Evolving Workforce: Changing technologies and workforce expectations, coupled with low unemployment, are making it difficult for some freight companies and government agencies to attract and retain qualified employees.

Each of these trends is explored in detail in the report, especially the Advancing Technology trends, where numerous technologies and their impact of freight are discussed. As just one example, the report notes how the rise of 3D printing could actually significantly reduce the amount of freight moved in the US, as parts and products are made locally, not shipped from distant factories or warehouses.

Goals and Objectives for US Freight

The plan identifies three key strategic goals:

Safety: Improve the safety, security, and resilience of the national freight system.

Infrastructure: Modernize freight infrastructure and operations to grow the economy, increase competitiveness, and improve quality of life.

Innovation: Prepare for the future by supporting the development of data, technologies, and workforce capabilities that improve freight system performance.

The chart below from the report maps those three overarching goals with the DOT's strategic objectives for national freight policy:

 

The full report provides details behind what DOT is doing to achieve these objectives.

Of course, there are many barriers to achieving these goals, from a lack of funding for infrastructure to local optimization. Government spending in real dollars on infrastructure is down 8% from 2003, to cite just one example.

Nevertheless, the report not surprisingly ends on a positive note, stating that “Working together, we can build a freight system that strengthens our Nation's economic competitiveness and ensures the continued well-being of our citizens.”

We all wish we have good luck with that.

The full report is available here.


Any reaction to the DOT's strategic freight plan? Let us know your thoughts at the Feedback section below.


 
 
   

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