Supply Chain Infrastructure
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President Trump pledged in his election night victory speech to rebuild highways, bridges, tunnels and airports, promising to give the nation a transportation infrastructure that is “second to none” and to “put millions of people to work as we rebuild it.”
Trump has promised to spend as much as $1 trillion on infrastructure improvements over the next decade. While details have yet to be released, he has argued in favor of public-private partnerships he says could do the work less expensively than the government, and has proposed $137 billion in federal tax credits for companies that finance transportation projects. In January, he signed an executive order expediting environmental reviews for high-priority infrastructure projects.
During her confirmation hearing, Transportation Secretary Elaine Chao called the nation’s transportation system “the underpinning of our world-class economy” but said it has been “jeopardized” by aging infrastructure that she pledged to “rebuild, refurbish and revitalize.” She said she hopes to “unleash the potential” of private investors to improvements.
Trump’s proposals come at a time where the U.S. transportation infrastructure has suffered from decades of underinvestment that has turned the transportation system into a drag on the economy. Growing inefficiencies and bottlenecks in the system increase costs and make it increasingly harder for American companies to expand their businesses. Ultimately, the lack of infrastructure investment is reducing U.S. competitiveness in the global economy. Congress needs to improve and expand infrastructure, improve system efficiency in order to handle increasing freight needs, and provide long-term funding.
Why it Matters to Retailers
Retailers are among the nation’s largest shippers, moving hundreds of billions of dollars worth of merchandise via the nation’s ports, railroads and highways each year. The condition of the transportation system and its ability to move freight quickly and efficiently are vital to retailers’ businesses. Regulations impacting the movement of goods for security, safety and other matters also impact the ability of the nation’s retailers to get their goods to market.
NRF Advocates for Improved Supply Chain Infrastructure
With background as a former deputy secretary of transportation, deputy administrator of the U.S. Maritime Administration and chairwoman of the Federal Maritime Commission, NRF welcomed Chao as “perfectly suited” to head the Transportation Department. NRF urged her to “address ongoing issues of infrastructure funding while ensuring that our transportation systems are truly state-of-the-art and able to handle expected increases in freight flows.”
NRF has been a long-time advocate of improved infrastructure and the funding required to make improvements possible. NRF has particularly sought a national freight policy covering trucks, railroads and ships, which was included in the Fixing America’s Surface Transportation Act five-year transportation funding measure signed into law in December 2015. After a series of funding extensions that lasted as little as a few weeks, FAST was the first long-term authorization in a decade. The measure was intended to make it easier for major projects that would ease transportation bottlenecks to move forward, and NRF praised it for bringing “long-term stability to our nation’s surface transportation programs.”
Congestion at ports has become a major supply chain concern, and NRF played a key role in pushing for resolution of the labor dispute that contributed to prolonged slowdowns and extensive cargo backups at West Coast ports in 2014 and early 2015. A joint study conducted for NRF and the National Association of Manufacturers estimated the economic impact that could have come if the slowdown had escalated into an actual shutdown at up to $2.5 billion a day. In addition, NRF successfully called on the White House to intervene and bring the months-long contract talks to an end. Afterward, NRF helped win provisions in the FAST Act requiring the Transportation Department to gather statistics on port performance.
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NRF and the National Association of Manufacturers commissioned a study to determine the impact on the U.S. economy if West Coast ports were shut down due to a failure to reach a new agreement.