November 18, 2013
The nation’s network of highways, roads and bridges isn’t equipped to
handle the huge growth in traffic that’s expected in coming years, said
Bill Logue, president and chief executive officer of FedEx Freight.
Speaking in Houston at the annual conference of the National Industrial Transportation League,
Logue said the U.S. transportation infrastructure isn’t even sufficient
to handle today’s needs, let alone those of the future. “We must begin
to address aging infrastructure across every mode of transportation,” he
Logue cited a prediction by the U.S. Federal Highway Administration
that traffic volume on roads and highways will more than double between
2010 and 2040. Most of the growth will take place in urban areas,which
are already under stress. Improvements in the system are “vital to
economic growth, the creation of jobs and access to goods and services,”
Repairs, upgrades and new construction are needed across the board, Logue said. On the aviation side, the Air Traffic Control System is built on design elements “that have not changed since the 1950s.”
FedEx supports the Federal Aviation Administration’s Next Generation Air Transportation System,
or NextGen, which will rely on satellite-based technology and is being
implemented in stages through 2025. It will allow pilots to choose their
own flight paths, leading to an estimated fuel savings of $23 billion
by 2018, according to FAA.
Changes are also needed among airfreight service providers. The top
20 airports in the U.S. will all experience severe congestion over the
next decade, and most are in need of new runways to handle the
additional demand, Logue said.
Paperwork continues to be a major headache. An international air shipment can generate more than 30 documents. An electronic-freight initiative spearheaded by the International Air Transport Association could
save shippers and carriers $12 billion, while preventing up to 80
percent of paperwork-caused delays. “We cannot solve tomorrow’s
challenges with yesterday’s approaches,” Logue said.
Seaports are in dire need of berth expansion and dredging, to
accommodate the new generation of larger containerships. Even without
the arrival of those mega-vessels, “many of the nation’s ports are
already experiencing congestion and delay,” Logue said. Like
surface-transportation interests, they don’t have the money to do the
job. The U.S. Senate recently passed the Water Resources Development Act of 2013, which promotes harbor-development projects, but doesn’t specify how they would be funded.
Elsewhere in the world, transportation systems are in a similarly
poor state, according to Logue. China’s total investment in
infrastructure over the years equals 76 percent of its gross domestic
product, he said, but spending has not been distributed equally among
all modes. In India, meanwhile, most highways are of two lanes or less.
And Brazil, one of the world’s most promising developing economies,
ranks near the bottom in the quality of its roads, railroads and ports.
The coming transportation crisis is more than a question of
inadequate physical assets. Logue also blamed government regulation for
hampering carriers. The new Hours of Service restrictions for truckers are expected to cut driver productivity by 2% to 10%, he said. According to a new survey by the American Transportation Research Institute, more than 80 percent of motor carriers say they’ve been negatively affected by the rules.
Logue also criticized the Compliance, Safety, Accountability (CSA) program of the Federal Motor Carrier Safety Administration. While the agency’s goal of promoting safety is commendable, the regulatory burden imposed by CSA is expected to worsen the driver shortage,
raise costs and reduce service choices for shippers, he said. “Fedex is
committed to safety most of all,” he said. “But we need to educate [the
public] about the real-world impact of these changes.”
European regulators are erecting many barriers to trade, he said. A report by the European Commission
identified 700 protectionist measures since 2008, including 150 in the
last year alone. They include complex license requirements, border fees,
duty increases and bans on certain imports and exports. A rise in
customs inspections has increased the cost of goods and services.
“We must address these barriers to trade,” said Logue. He called for
expedited customs procedures and more liberal standards for duty-free
treatment of imports.