Going back a bit, we received a number of letters on out First Thoughts piece on "US Logistics Infrastructure - Critical Issue or Not?" last year that we are just getting to now.
We print several of those below, offering a divergent set of views on the topic.
That includes our Feedback of the Week from Frad Schafer of Ingersoll Rand, who says the issue is less how much is spent but better deciding where it should be spent.
You'll see is letter and a number of others below.
Feedback of the Week - on US Logistics Infrastructure:
Although interesting for discussion, the real strategic issue for US manufacturing competiveness is not the age or condition of our US-based physical logistics infrastructure…it is how we elect to prioritize and fund renovation and repair of these assets holistically with other governmental spending….much the same way our businesses must prioritize and fund renovation and repairs of our physical assets WITHIN the financial
capabilities of our businesses.
Unfortunately (and at the detriment of US competiveness), our government has not demonstrated either the ability to prioritize or the ability to grasp the fundamental notion of debt and financial constraints in terms of spending as our businesses and we as individuals must do.
I would certainly not see our logistics infrastructure as an immediate crisis warranting an additive governmental spending initiative funded, if at all,
by added taxes.
Fred Schafer
VP Logistics & Distribution
Ingersoll Rand
More on on US Logistics Infrastructure:
Infrastructure means different things to different people, so to be more definitive in the definition of infrastructure will help keep congressional mischief at bay. I do think that there should a combined transport infrastructure capital expenditure pool – I would not call it a bank or fund since both of those words carry a connotation that there are investments with returns coming directly to those who have invested.
I think that your point of increased diesel taxes is on the mark. The population of truck drivers, or trucking company owners of investors is much smaller than the general population of “sheeple” who pay gas taxes, and no Politian will want to talk about raising taxes on the main users of the roads. Far better to tax the trucks, who pass the coat along to the people in higher costs.
There is a logic of keeping some of the pools of money divided. Every time you get on an airplane there is a ticket charge for use of the ATC and the airport. The revenue generated from this source is so microscopic compared to the debt that local, state and federal governments carry for the construction of and improvements to the physical plant of terminals and runways. The true culprit to our air congestion is the Air Traffic Control systems and the limitations to operating in low visibility conditions. A modern 737, 747, 757, 767, or 777 can land without pilot control in 300 foot visibility IF the runway is equipped with the right ground based equipment. Some airports have all of the runways set up, other only one, and some none.
Part of the reason that when summer thunderstorms hit that the air traffic system hits is safety of the ground personnel who work on the ramp to load, unload and service the aircraft. When there is lighting in the air the crews are commanded to take cover. Planes land and take off but there is no ramp activity. If that ramp inaction is too long – well, there is a delay. I have sat several times on the plane – waiting for pushback – doors shut – lighting off in the distance and not a drop at the airport.
David K. Schneider
David K Schneider & Company, LLC
What a great, even-handed, and carefully reasoned discussion of an enduring issue!
I am just back from a terrific week on the Maine coast, and that has given me one complex question to add.
How do you balance infrastructure spending between congested, busy places like the MD-DC-VA metro areas and quieter places like Maine?
On one hand, I saw many truck-trailers and trucks pulling containers on I-95 in Maine. I’m sure that Maine, a relatively poor state, relies on the manufacturing that produces what those trucks carry, and wants more of it. They truly need good infrastructure in the business sense that you described.
On the other hand, the entire East Coast chokes on I-95 around here – commuters and truckers. The inland rail terminals that Norfolk Southern and other Class I’s are building to pull loads from the ports will help some. As business re-builds after the recession, though, I expect congestion to worsen.
And another issue: I was one of those who rejected a western I-95 by-pass a few years ago because it would destroy so much open space in our region. The only compromise I can see is more and better rail service for passengers, but I don’t expect it anytime soon.
Thanks for providing such thoughtful discourse.
Karen Owsowitz
Sr. Research Analyst, GlobalTrak
System Planning Corporation
Your “U.S. Logistical Infrastructure – Critical Issue or Not?” article proposes a critical topic worthy of further discussion. Your article talks of “improvements,” however, that is a very broad concept. I spent 28 years in a federal civil engineering/infrastructure organization, and “improving the infrastructure” encompassed our whole mission. It would be helpful if you further divided that concept into more manageable categories to better frame the discussion. Maintaining serviceability of existing assets and increasing assets/capacity are really two separate issues.
The St Paul bridge failure highlights a serviceability issue and the need to insure a funding stream for adequate maintenance and repair of existing infrastructure. I believe the ASCE report card is focused mainly on serviceability and maintenance/repair of assets such as the St Paul bridge. Traffic congestion, especially in our metropolitan areas, is a capacity issue and these construction efforts require a different thought/prioritization process than the maintenance/repair projects. I believe the World Bank ranking is focused on system efficiency which is more a capacity issue. Also, often neglected is the future maintenance/repair funding stream required to support new asset added to the inventory.
The initial problem is deciding how to divide available resources between maintenance/repair and construction. I like Malcolm Berkley’s idea of a single integrated approach to our logistics infrastructure. That organization would then have to decide how to further divide available resources between road, rail and air systems to “improve” the total logistics infrastructure. It would also better address intermodal issues than the “silo-approach” now used by congress.
Therefore, I believe your “improve” discussion would benefit by being broken down into three separate topics: prioritization & funding of existing infrastructure; prioritization/funding of additional assets/capacity; and thirdly addressing all aspects of road, rail and air systems in an integrated logistics infrastructure approach.
John Shogren
Cardinal IG
I think that the biggest infrastructure drag on passenger air is the government's inability to modernize air traffic control. The history of this effort is a painful example of our government's inability to execute modern, safe, cost effective processes in under a decade.
http://www.heritage.org/Research/Reports/1982/10/Air-Traffic-Control-The-Private-Sector-Option
George Murphy, CPIM
The infrastructure problem is real, and NOW, I live in the northeast about 35 miles from NYC. The roads are beginning to deteriorate and bridges are a real issue. The move by congress to raise truck weights by about 25% will exacerbate the situation.
I agree that I’d rather see US made goods transported than those from the Pacific Rim, but it’s all commerce, all good for the overall economy. If the products aren’t there and people don’t spend, we have a problem. The transportation trust funds are bust and unless we get a realistic level of taxation on gasoline to fund the trust funds, our deterioration will continue (and gas guzzlers will dominate). I think there may even be an argument for per mile “user fees”. Electric or hybrid vehicles will escape the gas tax and not pay a fair share.
A lot of this is above my pay grade, but I think we must get the transportation system back on track.
Thanks for your thoughts.
Geoff Sisko
Senior Consultant
Jack Kuchta LLC
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