By Clifford F. Lynch
DC Velocity, January 2005
During presidential campaigns past, candidates have shouted themselves hoarse
telling voters where they stood on everything from Iraq and the economy to taxes
and stem cell research, though not logistics. Weíve heard a candidate vow to
be the "education president," but have listened in vain for a pledge
to be the "supply chain president." So itís no real surprise that
several months after his re-election, President Bush has yet to offer any clues
as to what his re-election means for the supply chain or logistics executive.
When he outlined his priorities for the next four years at a news conference
shortly after the election, President Bush ticked off a long list: Social
Security, Iraq, tax reform and the economy. But not a word about making sure no
truck was left behind.
The moreís the pity. The distribution environment is nothing if not
challenging right now. How is anyone supposed to guarantee Ė or provide for
Ė the speedy delivery of merchandise at a reasonable cost in the face of
spiking fuel prices, road congestion, port logjams, a truck capacity crunch,
soaring transportation rates and labor shortages?
Given politiciansí inclination to shift positions whenever the wind
changes, thereís no sure way of predicting what Bushís re-election means for
logistics operations. But based on the presidentís previous actions, Iíll
risk some educated guesses:
First, though some have hinted that itís time to consider
re-regulation, that wonít happen. The administration is not favorably
disposed toward regulation, and, if anything, will reduce government
intervention in business, particularly transportation.
Though weíre nowhere near the point where 100 percent (or even 10
percent) of incoming ocean containers are being inspected, itís highly
unlikely weíll see much tightening of cargo security rules and
regulations. The administration believes that its current plans are
Energy, however, matters to President Bush. A longtime proponent of
ethanol fuels, heís already committed almost $2 billion to hydrogen-fuel
research as well. Expect the legislature to pass an energy bill that will
offer significant credits for the purchase of fuel-efficient vehicles.
Perhaps it was coincidence, but it was interesting that the price of oil
dropped $2 a barrel the day after he was re-electedÖ
The truck driver hours-of-service issue no doubt will see resolution in
2005. The court that stayed the new rules last year left no doubt as to how
they should be handled in the future, however, which means there will be
very little room for the administration to manipulate them.
Perhaps the most important matter currently on the table is the highway
bill, which has languished in Congress for far too long. (The spending
program expired in 2003 but was extended through May 31.) Though various
factions are at odds over the amount of money to be spent, lawmakers will
have to deal with this plan to reduce congestion and increase spending on
the nationís highways sometime soon. Itís interesting to note that the
Transportation Department wants to include in this bill tax-exempt
"private activity bonds" that will make funds available for
private sector intermodal projects.
Meanwhile, the states and counties arenít waiting around for something to
happen. An astonishing number of projects to reduce road congestion appeared on
state ballots in November. Voters in 11 states approved 23 of 31 measures to
start or improve bus and rail lines, to the tune of over $40 billion. In
California and Missouri, voters passed measures to stop state governments from
using highway funds for other purposes. Not to be outdone, Sonoma County,
Calif., citizens voted in a sales tax increase to fund bicycle and pedestrian
paths to keep cars off the roads.
Now itís the federal governmentís turn. Our industry needs help. Letís
hope our president shares that view.