The road to ruin: How US infrastructure is hurting logistics
Thursday, June 07, 2018
Infrastructure is one of the last few years' hottest talking points, politically speaking. You'd be hard-pressed to find a politician or a pundit that hasn't waxed philosophical about the deplorable state of the nation's roads and bridges, with the volume rising to a fever pitch during and directly after an infrastructure-related disaster.
Recently, the issue received a particularly unflattering spotlight when the American Society of Civil Engineers (ASCE) bestowed a "D" grade on the nation's infrastructure, pointing out that a staggering 1 in 9 bridges in the United States were structurally deficient.
From those crumbling, aging bridges that failed to pass any but the most basic of structural tests to endless waves of patch-fixing on the torn-up highways traversing them, many of the 4 million miles of roadways in the United States have seen much better days.
For everyday drivers, this amounts to an inconvenience, and perhaps a pinch of worry when ugly weather is tossed into the mix. For logistics professionals, however, the situation is much more dire.
Rubber, Meet Road
While a lot of logistics concerns veer — pun not intended — towards vehicular structural issues like worn or snapped axels, suspensions and brakes, the biggest drain to lasting budgets may be far less easy to spot: tire wear.
All those bumps, divots and potholes can take a literal chunk out of the hardiest treads, many of which can be spotted as black corkscrew casualties along shoulders and on ramps across the country.
FedEx CEO Fred Smith summed up the problem rather concisely earlier this year, when he explained to a panel at a Washington, D.C., hearing on infrastructure that his company was going through twice as many tires as they did 20 years ago, thanks to bad road conditions.
With this kind of expense throttling the budget of one of the country's biggest 3PLs, smaller carriers have every right to be nervous. While FedEx may stock warehouses full of tires and enjoy designated service centers for their fleets, the rest of the industry is feeling the road rash acutely.
The ever-present concern of driver shortages demands more money to coax in "new blood," but if that money is being siphoned off by upkeep costs to mitigate road damages, smaller carriers are facing a bleak picture indeed.
Who Will Carry the Cost?
In the unlikely event the government can come to a cohesive agreement on an infrastructure plan this year, another issue comes to the forefront: cost. All the money and manpower needed to fix infrastructure needs to come from somewhere, and taxes and tolls are a perennial standby.
While some of it will undoubtedly fall on the shoulders of the average taxpayer, those that rely on the roads more than most -- carriers and their clients -- may end up on the short list for the brunt of the financial impact.
Even an increase in road tolls can significantly chip away at profits for owner/operators, forcing those on the financial edge to step back from the wheel. This, in turn, exacerbates the shortage and causes ripples of problems throughout the entire logistics industry as service demand outweighs supply.
The manufacturing industry has an insatiable appetite for a great many things in the wake of incredible growth: warehousing space, robust supply chains, manpower, and drivers to name just a few.
If, however, a solution for infrastructure isn't found in the next 5 to 10 years in this country, little else will matter. While innovative concepts like drone delivery and hyperloop trains hold promise in a B2C sphere, the logistics community needs to keep a watchful eye on what is — and isn't — being done with the roads they need to survive.
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