By Paul Scott Abbott, AJOT
The $1.6 trillion task of fixing the US intermodal transportation system demands implementation of a collaborative, multifaceted action plan, according to a top UPS executive.
Kurt Kuehn, UPS’ senior vice president of worldwide sales and marketing, called for leaders of three leading trade associations meeting in Atlanta on Nov. 12 to ‘really begin sounding the alarm’ and ‘join together to get America moving again.’
Kuehn issued the challenge in his keynote address at the collocated National Industrial Transportation League 100th annual meeting, Intermodal Association of North America 25th Intermodal Expo and Transportation Intermediaries Association annual meeting.
‘Inadequate infrastructure threatens to choke the movement of freight and stall the engine of our nation’s economy,’ said Kuehn, who on Jan. 1 is to assume the role of chief financial officer at Atlanta-based UPS. ‘Even worse, it threatens to diminish America’s preeminent role in the global economy.’
Kuehn cited a slew of statistics, including the US Department of Transportation report that congestion on highways, seaports, airports and railways costs the nation $200 billion a year and the American Society of Civil Engineers estimate that infrastructure upgrades will cost a staggering $1.6 billion.
Considering that freight on US roads and rails is expected to increase 70% by 2020 and the number of ocean containers shipped nearly triple by 2025, Kuehn cautioned, ‘We ain’t seen nothing yet.
‘These statistics indeed are troubling, but we cannot afford to be hypnotized by numbers,’ he said. ‘Instead, we have to do something about it.
‘Together with government officials, we must agree on a national transportation vision and then invest the money necessary to put a real plan into action,’ Kuehn continued. ‘In short, we must take action to transform America’s transportation infrastructure.’
While recognizing that federal proposals will take decades to fully implement, Kuehn said shorter-term congestion relief can be facilitated by executing an eight-point ‘agenda for action’ developed by UPS.
The first necessary step, Kuehn said, is to ‘elevate the issue,’ with shippers and carriers alike pushing government to act. He said executive of major shippers frequently are ‘too busy running their own companies to think about macro issues,’ so they fail to think of themselves as being in the transportation business and seldom if ever discuss transportation issues with government officials.
Second, Kuehn said, public and private sectors must collaborate to create a national transportation strategy.
‘One of the primary weaknesses with the approach to our infrastructure thus far has been its piecemeal nature in planning,’ Kuehn said, noting that bottlenecks traditionally have been looked at by mode as separate problems. ‘But they’re not. Some of the biggest bottlenecks occur where two different modes of transportation interconnect. Without a holistic vision, you don’t solve capacity problems, you just move them.’
Acknowledging that the matter is controversial, Kuehn, in his third point, said public and private sectors must share in footing the bill, including through an increased federal gas tax. But he warned that the money generated must be dedicated to highway infrastructure rather than put into the general fund. He also said he favors replacing the fuel tax for commercial aviation with a $25 modernization surcharges, as well as establishment of a dedicated rail trust fund or other user-funded mechanism to specifically pay for rail capacity enhancements.
Fourth, Kuehn called for more efficient use of existing capacity through ‘smarter’ supply chain management, with more precise sales forecasting, ordering products further ahead of peak periods and securing of vessels space well in advance, as well as disaggregation of inventory so that products are moved only once.
The fifth step, according to Kuehn, entails maximizing capacity through leveraging of technology, including via tra