Editor's Note: Logistics: Key to Company and National Competitiveness
Geraldine Gambale, Editor, Area Development Magazine (September 2010)
The latest figures from the Commerce Department show that the U.S. trade deficit narrowed significantly as July exports climbed to their highest level in almost two years. This improvement was a result of increased sales of U.S.-made planes as well as industrial machinery, computers, and telecommunications equipment. Exports actually rose 1.8 percent for the month to $153.3 billion.
Meanwhile, imports - which had been growing - dropped 2.1 percent to $196.1 billion. The fact that unemployment is still high (remaining at 9.6 percent as of August) contributed to weakened consumer demand. Imports of autos alone dropped $713 million, and demand for business machinery and other capital goods fell off as well. So while the economic outlook looks bleak if one considers the number of people still out of work, the outlook takes on a rosier glow if rising U.S. exports are painted into the picture.
Needless to say, the ability to move all of these exports is critical to the continued growth of this sector and the economy as a whole. This is the focus of this issue. Both Bill Luttrell of Werner Enterprises and Adam Wasserman of PortCentric Logistics Partners discuss the importance of the nation's transportation infrastructure.
Interestingly, the latest Obama administration plan attempts to tackle U.S. unemployment woes by making badly needed improvements to its infrastructure. The six-year plan to make major upgrades to the nation's roads, rail lines, and runways would cost tens of billions of dollars and create a government-run bank to finance the projects, which has been the focus of some serious debate. Nonetheless, President Obama wants to rebuild 150,000 miles of road, lay and maintain 4,000 miles of railroad track, restore 150 miles of runways, and develop a next-generation air-traffic control system.
The infrastructure bank would be part of the U.S. Treasury. It would attract money from institutional investors and then channel it to projects selected by a panel. Many believe that such projects have the potential to transform entire regions - and possibly the entire national economy - in much the same way the interstate highway system and the first transcontinental railroad once did.
Whatever plan for infrastructure improvements is finally put into motion, we cannot lose sight of the urgency of this issue. Having the proper infrastructure in place is key for an efficient, cost-effective logistics network. Such a network translates not only into a company's economic competitiveness but our nation's as well.