Supply Chain Panelists Call for More Infrastructure Investment
At the 6th annual Global Supply Chain Summit hosted by the U.S. Chamber of Commerce on May 22, a variety of speakers – from a city mayor to a construction company and a railroad executive – highlighted the need for better transportation infrastructure and funding in order to improve U.S. supply chain operations, which would in time bolster U.S. economic competitiveness.
"We have to look to the future as to how we fund our infrastructure – and I don't think it will be via the highway trust fund," said Darrell Wilson, assistant vice president for government relations at Norfolk Southern. "We need to modernize our infrastructure for next-day delivery, to keep enjoying the things freight can do for you. The largest economy on the planet needs these things."
He noted that Norfolk Southern spends $4 billion a year maintaining, upgrading, and expanding its rail infrastructure – including 12 main train depots, 60 intermodal facilities, 19,500 miles of track, and 12,000 bridges – but that a variety of issues are impeding its upkeep efforts, particularly when it comes to project permitting; a sore spot familiar to many state DOTs.
For example, Wilson said one particular rail bridge in Pennsylvania took 90 days to replace in 1875. When that same bridge came up for replacement in 2005, it required 7.5 years of permitting and 29 months of actual construction work.
David Blaisdell, vice president of P3 and financial services for global construction firm Bechtel Corp., echoed a similar complaint regarding the lengthy U.S. transportation project permit process.
"In Germany and Canada it takes no more than two years for project approval – but you can't do it for less than four years in U.S.," he explained. "We also need to be able to 'fast-track' projects with the most economic impact. And when it comes to funding, what is not working is the gas [fuel] tax; what we spend now is not enough."
Blaisdell also stressed the need for a "bolder, more visionary pipeline" of transportation projects – and that he's seeing more of them coming from states and municipalities now. "We're seeing a focus on 'high value' projects versus lowest cost projects in terms of roads, rail, bridges, and some airports," he said. "We're seeing a lot of new passenger rail upgrades in certain areas and new terminals at airports around the country."
Yet Belinda Constant, Mayor of the City of Gretna, La., and former co-chair of the Mississippi River Cities and Towns Initiative, emphasized that not enough is being done when it comes to surface transportation needs in the U.S.
"The bottom line is we don't want to be at a point 10 years from now where we didn't do what we needed to do," she explained. "It's about the money – we all need the money for rail, port, and waterway improvements, etc., and we need to get Washington to do it in a holistic way. The public expects an answer. The time is now to do that. I'm an elected official so I feel I can say that."
She added that the MRCTI – comprised of 85 mayors of cities and towns along the Mississippi River – is one of many "ground level" efforts being made by state and local governments to try and get more federal attention paid to transportation infrastructure needs.
"We've banded together for one common purpose – transportation, or a lack thereof, for getting commodities to our people and to the global supply chain," Constant said. "There is an important federal role as we look to modernize infrastructure, for the sum of our parts is greater than individual efforts. Some $1.7 trillion worth of goods moved through U.S. ports last year but many [ports] are congested; they are struggling to meet demand."
And Thomas Donohue, president and CEO for the U.S. Chamber of Commerce (seen above), suggested that such "struggling" needs to end if the U.S. is to retain its "competitive edge" in the global market.
"Infrastructure links businesses and is the backbone of the global supply chain. If it is in bad shape, like it is in our country, the supply chain suffers," he said. "We need to take better steps here at home if we want to stay competitive in the global economy. We need more investment in our infrastructure. It's time to invest in a 21st century infrastructure system to support and grow a 21st century economy; no more kicking the can down the road. The supply chain may be the most important thing impacting our standard of living in this country, yet we rarely think about it. But it's essential to U.S. competitiveness."