Begin the “Begin”

Dave Blanchard, the Editor-in-chief of “Logistics Today”, wrote an article about a logistics industry function he attended a short while ago. He was part of an editors panel and the question they dwelt upon was: What transportation challenges are of most concern to shippers?

Some of the challenges mentioned by the panel were:
– freight rates
– fuel prices, shortages and surcharges
– congestion
– aging infrastructure
– lengthened supply chains from globalization efforts
– capacity and driver shortages
– port and cargo security
– government regulations
– customer service demands
– shipper/carrier relationships.

“While obviously every one of those challenges is a real concern,” writes Dave, “maybe the biggest problem of all for the logistics profession is time. It’s the one thing nobody has enough of and the one thing everybody wishes they had more of. And time is what we’re rapidly running out of.

“According to several sources,” he continues, “the number of inbound containers in the U.S. will grow by as much as 30% over the next three years, and if those trends continue (and there’s no reason to believe they won’t), within 10 years there will be twice as many containers in the country as there are now. What are we going to do with all that stuff that will need to be delivered? Many of our ports are already hopelessly congested, the railroads seem to be eliminating tracks faster than they are laying down new ones, and the only real solution we’ve heard about our clogged highways has been to add more toll roads.

“I saw an interesting quote from Tom Lynch, a high-ranking executive with the American Trucking Associations. Lynch says, ‘We must begin now thinking about how we will build and maintain our transportation system.’ That sounds good on the surface, but my problem is that word ‘begin’ – if we haven’t already started thinking about these things, we’re in more trouble than we thought.

“According to Lynch, the ATA plans to be relentless in its pursuit of gaining more federal funds for the nation’s infrastructure, which is good news; the bad news, though, is that the specific plan is three years in the future, when the next highway bill comes up for authorization. Considering that the current bill, which took forever to get through Congress, did little more than maintain the status quo as far as funding transportation projects, it’s hard to get too excited about efforts aimed at 2009, or later … The clock is ticking on an imminent transportation crisis, and yet every time the alarm starts to go off, the government merely hits the snooze button … The time to get serious about fixing these problems is now.”

Dave’s right. It’s time we got serious. But how are we supposed to go about it? Buy more waterfront property and expand the ports? Real estate folks always told us what a great acquisition land would be because “That’s what God made only so much of, y’know”. Their advice was well taken a long time ago and the ocean front parcels were the first to be gobbled up. Strike one.

But what about the 10,000 TEU, 12,000 TEU and 13,000 TEU maxi-ships that “economies-of-scale” proponents are directing our way? Shouldn’t we be laying out the red carpet for these philanthropic ship owners? Shouldn’t we be allocating billions of our taxpayer dollars for dredging projects? Bridge demolition and rebuilding? Highway and railway expansion? Well, if the ports can’t be expanded, why even think about wasting taxpayer’s money? Strike two.

Or we could extend, somehow, the PierPass initiative. Yeah, right. Strike three.

The next time Dave meets with those editors he should suggest that they take up the question of funding first, and then the question of space. Before the above-mentioned logistics industry function was convened everyone in attendance knew that neither funding nor space were available, and when the function adjourned, the funding and space problems were still there. They did accomplish two things, however. They criticized the government for “hitting the snooze button”, and of course, they did a lot of hand-wringing.

The “government” referred to is the U.S. Department of Transportation, and we know first hand that they have no more in the till than the panel of editors do. So we can forget about “government” snoozing. They’re not asleep, their hands are tied. The money they’ve requested has been directed elsewhere. Private funding is the only answer if, in fact, we can find a sensible way to spend it. It won’t be put in the hands of those who rely on stop-gap measures, however. No more band-aids. Either a guaranteed and lasting solution is shown to private financiers, or we’ll get the gridlock we deserve.

That brings us to the source of the problem. Space. Waterfront acreage. That which “God only made so much of, y’know”. So maybe we should consider recycling the outmoded operations that have consumed our available acreage. Instead of tearing down bridges and highways in a futile and illogical exercise, at the taxpayers’ expense, our primitive port operations should be dismantled and modernized with private funds.

This private funding has already been promised if our patented systems were to be retrofitted in port terminals. On the other hand, lenders will not commit funds to hard-pressed operations where officials have no positive solutions in mind. In conference after conference, terminal operators, port directors, shippers, and as Mr. Blanchard pointed out, even logisticians, have enumerated the multiple difficulties generated by outmoded port operations, but never once has a solution been proposed.

You’re right, Dave. The time to get serious about fixing these problems is now. As far back as October 14th, 2004, in our “Plus Signs” commentary, we spelled out no less than 26 advantages our patented systems have that conventionally-structured terminals do not have and could never offer. Sensible people will readily acknowledge these benefits. Insensible people won’t.