By Clifford F. Lynch
DC Velocity, December 2007
Itís me again. No, I donít need any more toys (other than maybe a
Corvette), but you came through for me on a couple of requests last year so I
thought Iíd try again. It has been another interesting year in the supply
chain world, and we really could use your help.
Iíd like to start with a request I make last year Ė for a national
transportation policy that will ensure that the United States has the
infrastructure to keep up with its economic growth. Our system is already
creaking under the strain, and freight volumes continue to surge. The Coalition
for Americaís Gateways and Trade Corridors recently published some very
interesting statistics about what we can expect by 2020:
- The volume of freight moved via our infrastructure will be 25 billion
tons, worth $30 trillion.
- Trucks will be moving 75 percent of that over a woefully inadequate
- The rail system will be carrying 888 million tons, an increase of 44
percent from todayís levels.
- The volume of foreign trade moving through American ports will be 187
percent of todayís levels. Demand will exceed the current capacity of
many U.S. ports by 200 percent.
We need you to lean on Congress to do something about this. The carriers
cannot do this by themselves. We talk a lot about the highways, but the
railroads need some serious help as well. According to a study recently released
by the Association of American Railroads, U.S. Class I rail carriers will need
$148 billion to provide an infrastructure adequate to meet their future needs.
The railroads can supply about
70 percent of that, but they will still need another $40 billion or so from
other sources. While there is some movement under way in Congress, a strong
nudge from you could go a long way, especially if you threaten not to leave them
any Christmas gifts.
Second, can you please try to find us some $60- to $70-a-barrel oil? In
August 2006, USA Today published an article entitled, "Airlines
Tremble at Prospect of $100-a-barrel Oil." The piece described in worrisome
detail the impact $100-a-barrel oil would likely have on the airline industry,
including the bankruptcy of several major carriers. As I write this, oil prices
have reached $98 per barrel.
Rising oil prices are a threat to more than just the airlines Ė or the
transportation industry, for that matter. The reverberations will be felt
throughout the economy. As a country, we must find a way to resolve our energy
woes. Perhaps you can prevail upon our leaders to give this the attention it
needs. Our presidential candidates seem to be more concerned about their
favorite baseball teams than some of the big issues.
My last request is probably the toughest of all. We need you to dispatch some
of your senior elves to the major logistics centers around the country to try to
set up workforce development programs. We all know about the truck driver
shortage, but have you tried to hire a good forklift operator lately? I donít
know how it is in the North Pole, but weíre having a heck of a time down where
I live. Other cities are experiencing the same problems.
At the annual conference of the Council of Supply Chain Management
Professionals this fall, we heard a lot about the new breed of supply chain
executive, the importance of MBA programs, and executive education needs. What
we arenít hearing enough about, either there or other places, is the need for
programs to train warehouse workers. Show me an MBA on a fork truck, and Iíll
show you a disaster waiting to happen.
As always, I appreciate whatever help you can give us, and I hope you have a
very Merry Christmas.
Clifford F. Lynch