Economist: U.S. can't handle a major increase in exports
Without further investments in freight infrastructure, the country will choke on its economic growth, warns Moffatt & Nichol economist.
By Toby Gooley
The current state of U.S. infrastructure is not adequate to support President Obama's push to double export volumes over the next five years, according to a leading industry economist.
Speaking May 5 at the Virginia Maritime Association's annual International Trade Symposium, Walter Kemmsies, chief economist for Moffatt & Nichol, an engineering firm specializing in transport and infrastructure issues, said the country lacks the "infrastructure to support increased exports" and that without significant changes to the transport system, the United States "will choke on our economic growth."
One problem, according to Kemmsies, is that an infrastructure built around moving containerized import traffic from the West Coast to inland population centers may no longer fit shifting trade and transportation patterns. Inbound containers currently travel to urban areas with large consumer markets. However, most export traffic originates in rural areas where containers are not readily available, Kemmsies said. The often-prohibitive costs of repositioning empty containers or bringing exports to the existing infrastructure have forced some U.S. exporters to shift from containers to bulk shipping methods, said Kemmsies.
"We need more infrastructure to support containerized exports... including building more [bulk-to-container] transfer facilities at ports and more intermodal systems in agricultural areas," Kemmsies said.
Kemmsies told the group that ocean carriers' use of slow steaming to minimize fuel usage is a major reason for West Coast ports' recent gains in market share. It has become faster to drop containers on the West Coast and ship them by intermodal rail to the East Coast than to slow steam to the East Coast, he said. As transportation costs continue to rise, companies with time constraints are finding it more advantageous to ship through the West Coast again, he said.
About the Author
Before joining DC VELOCITY and its sister publication, CSCMP's Supply Chain Quarterly, where she serves as Editor, Toby Gooley spent 20 years at Logistics Management covering international trade and transportation as Senior Editor and Managing Editor. Prior to that she was an export traffic manager for 10 years. She holds a B.A. in Asian Studies from Cornell University.
More articles by Toby Gooley
Resources Mentioned In This Article
- Hunt launches load-matching, e-commerce platform
- Feds begin long and (hopefully not) strange trip to regulate driverless trucks
- U.S.-Mexico trade relations to survive Trump's anti-trade rhetoric, Mexican official says
- Teamsters, YRC Freight and two units agree to mid-course change in contract
- Next round of port contracts likely to be settled without strife, expert forecasts
Join the Discussion
After you comment, click Post. If you're not already logged in, you will be asked to log in or register.
Feedback: What did you think of this article? We'd like to hear from you. DC VELOCITY is committed to accuracy and clarity in the delivery of important and useful logistics and supply chain news and information. If you find anything in DC VELOCITY you feel is inaccurate or warrants further explanation, please ?Subject=Feedback - : Economist: U.S. can't handle a major increase in exports">contact Chief Editor David Maloney. All comments are eligible for publication in the letters section of DC VELOCITY magazine. Please include you name and the name of the company or organization your work for.