When he took the reins of the National Industrial Transportation League last June, Bruce Carlton probably figured that his biggest challenge would be persuading lawmakers to fund urgently needed infrastructure improvements. Yet within four months, the whole game changed. The economy fell off a cliff—or as Carlton likes to say, fell through a trap door—and suddenly, nothing else seemed to matter. Right now, he says, "Job One for us and for everybody else …is a robust economic recovery."
But Carlton hasn't let the turmoil distract him from his main task as NITL's leader: advancing the freight transportation community's economic and political interests. That's been the league's core mission for 101 years, he says, and it will take more than a global economic meltdown to change that.
Before taking over as the president and CEO of NITL, Carlton worked at the U.S. Department of Transportation, where he served as the assistant administrator of the Maritime Administration. As the ranking senior executive service (SES) career official in the Maritime Administration, he was responsible for international activities, policy development and implementation, legislation, economic analysis, and strategic planning. During his tenure at MarAd, he successfully negotiated market-opening bilateral agreements with China, Russia, Brazil, Vietnam, Japan, and Ukraine.
Carlton, who has over 30 years of experience dealing with domestic and international freight transportation issues, has earned the highest honors for members of the SES: the Presidential Rank Awards of Distinguished and Meritorious Executives. He has a B.A. in economics from the University of Michigan and an M.A. in economics from Wayne State University in Detroit. He spoke recently with DC VELOCITY's group editorial director, Mitch Mac Donald, about his career to date, his objectives for NITL, and why nobody's scoffing at tree-huggers anymore.
Q: Typically, this interview would start with a question about the NITL's legislative "watch list" for 2009, but as you noted at the group's annual conference in November, all those concerns have been eclipsed by what's going on in the global economy.
A: Yes. It's on everyone's minds these days. Everyone just seems to be begging for someone to fix it. That point was driven home to me when I traveled to Beijing about a month after the annual conference. Export loadings out of Chinese ports are way, way down. It is part of the shockwave that has gone through the global trading community. I think all of us were really quite naïve at the front end of this economic decline. I think we all believed that this was a selfcontained matter in the housing industry. As for the Chinese, they had been growing so fast for so long, they really don't have a contingency for dealing with this mess. For them, it's been all about growth for many, many years.
I don't think we saw this coming. Well, we see it now.
Q: We see it now, indeed—as if we needed further evidence of how interconnected the various industrial sectors and the various national economies have become.
A: It turns out that the economics textbooks were correct: We really are linked together. You cannot segregate and firewall one business or industry off from another, or even one country's economy from another. And it turns out that the whole thing is lubricated by the credit market. When that seized up, those pistons just stopped.
The fallout from that has just been extraordinary. It is not just as if the economy fell off a cliff; it's as if a trap door opened and we all just fell through.
Q: Before assuming your current position at NITL, you spent several decades in the public sector. Could you tell us about that?
A: I found myself in the transportation business on the government side in late 1974. I had been doing some international trade and trade promotion work at the U.S. Department of Commerce when I saw an opportunity to move into the business of international shipping at the U.S. Maritime Administration, and I took it. I have never regretted doing that.
Q: When you went to the Maritime Administration, what was your initial role?
A: As an economist with the Maritime Administration, which was part of the Department of Commerce at the time. Later on, as part of a very small, but I think significant, reorganization, the Reagan administration engineered a move of the Maritime Administration to the U.S. Department of Transportation. I stayed with that and eventually ended up as, really, the acting head of the agency for almost the entire year of 2001. I was the senior career person in the agency, and we were without a political head for virtually that entire year.
As you may recall, Sept. 11, 2001, kind of reset the gyroscope for America. It greatly slowed the political appointments process, so I was in charge and dealing directly with Transportation Secretary Norm Mineta and that team.
Q: You mentioned that you started at MarAd as an economist. Was that your educational background?
A: Yes, I have both a bachelor's and a master's degree in economics. It's called the dismal science, but I never found it dismal at all. It was, I think, a good preparation for my career. That, and a bit of advice that I picked up along the way from an attorney who was a guest lecturer at my school one evening. You may recall the name: F. Lee Bailey.
A: F. Lee Bailey was the premiere bright-lights, Hollywood type of defense counsel of that era. That night, someone asked him what single piece of advice he would give young people on how to succeed. I recall his answer as if it were yesterday. He said, "Learn the King's English." Obviously, what he was talking about was developing an ability to speak and write well—in particular, mastering the basics of written composition, where thoughts become sentences and sentences become paragraphs. He said, "I can virtually guarantee you some level of success." So I worked at that, and I worked at the dismal science, and I am pleased that for me personally, it worked out very nicely.
It would be the same advice I would give young people today. I think that developing basic, essential analytical skills, where you challenge a thesis or a proposition and test it and apply data and reasoning against it, is essential for anyone in any profession. I'm not saying that everyone should study economics or business or a hard science, but I am suggesting that it's important for students to have some exposure to those fields and their analytical methodology so that they can apply it later on in their careers.
Q: Let's go back to your tenure at MarAd and how things developed from there.
A: Beginning in the mid 1990s, my career shifted heavily toward the international arena. I had taken over as one of several associate administrators at the Maritime Administration. I began doing a lot of work in the international transportation arena.
As part of that, I had the opportunity to do face-to-face, head-tohead negotiations of market opening agreements in Russia, China, Brazil, and Vietnam, countries that were, if not closed to American business, at least creating very high barriers to entry for American companies looking to conduct shipping and logistics business in those nations. I had a good degree of success. Eventually that was, I think, recognized and rewarded and earned me a good leadership position within the department.
I should note that we had tremendous assistance from the U.S. private sector in our international negotiations. We really looked for and valued guidance, input, advice, and counsel from the U.S. business community, including in particular the NITL. My first exposure to the league was with [former ICC commissioner and then NITL president and CEO] Ed Emmett. I really valued his advice, his insights. I knew that he was representing a large cross-section of the American shipper community. While I was downloading ideas from companies like American President Lines and, back then, SeaLand and others, I was also getting some really valuable assistance from Ed and Peter Gatti on the NITL staff. Peter is still with us here today. He does a tremendous job for us.
Q: Now that you're heading up NITL, do you have a single overriding priority for yourself in leading the organization?
A: I do. It is the membership first and always and their concerns and their interests. They know the challenges, but they also know their own set of needs.
Q: What is their most important need?
A: They need a market. They need a transportation marketplace that works fluidly, and works according to an assumed set of rules that we would recognize as a free and open marketplace that is transparent, that does not engage in economic regulation but that does work cooperatively with industry and government on the regulation of safety and environmental protection. There is a value set that the membership has and has had for a very long time.
One of the things I found really attractive about the league is its long history—this is our 101st year—and its consistency over time in supporting free markets, transparency in law and regulation of those markets, and staying on message. This organization is not like watching a tennis match, where the ball is in this court and then, an instant later, in the other court, or if I play tennis, all over the court.
Q: Over the fence, in my case.
A: And over the fence. Yes. I think I've seen you play.
This is a disciplined industry. I believe it is built on a long-term perspective of an open and free marketplace even as we deal with the short-term conflicts, barriers, issues, and crises—financial and otherwise. Those are basically an unavoidable part of life in the real world, but behind it we need a stable platform. The league has always been about maintaining that stable platform. Those are foundation stones that have served the league well and served the transportation industry well.
Q: I'd guess that kind of stability is something of a rarity among industry associations?
A: Yes. Over the past 100 years, an awful lot of associations have come and gone. That's probably in part because they have a tendency to evolve around narrow bands of interest, narrow issues. Transportation is anything but narrow.
That said, I like to tell people that we are in a single lane and we try to stay within the lane markers on this road, so we are not really engaging in health-care policy issues, corporate tax law issues, and that type of stuff. We stay with transportation.
Q: Beyond what we've already discussed, what are the league's key objectives in the short term?
A: As I said at the outset, Job One for us and for everybody else right now is a robust economic recovery. I don't want to mislead you or the executives reading this. We don't hold the keys to that lockbox, but we are not naïve politically or practically. The state of the economy and the role of the federal government in relighting the pilot light cannot be overstated. It controlled the agenda in the last days of the outgoing administration, and it will control the agenda for the incoming administration and 111th Congress. Every other matter or subject or issue will take a back seat to that.
Assuming we can collectively get this machine re-lubricated and working again, the next item on our agenda would be the next surface transportation bill. Internally, we no longer—and perhaps never really did—refer to it as the "reauthorization" of the surface transportation bill. We really see this as a new start, a start-over. We think of this in terms of a truly comprehensive policy shift in Washington. We've got some great leadership in place all ready to lead that effort. Jim Oberstar [chairman of the House Transportation and Infrastructure Committee]. What can I say? He's a pro. He knows the business of transportation as well as or better than anyone in the country.
Q: Not having to educate key legislators on the importance of freight transportation to our economy must make your job a lot easier?
A: It makes my job so much easier, and it makes it so much more difficult.
Q: Because of their capability to challenge your analysis and positions on certain matters?
A: Sure. The easiest job that a lobbyist has is to approach a member or staff aide and say, "This is what we would like." Well, they already know that. So the job gets a whole lot more difficult for us and, in reality, for them because the next question is, Well how are we going to do it? How are we going to pay for it? How are we going to work that into the legislative agenda for this Congress and for the new administration?
It is sort of like buying a car. You can say "I want a new automobile." Well, sure. But if you had to sit down and design the automobile and the drive train, we would all be sort of stammering. When you have individuals like Jim Oberstar dealing with your key issue, it is a good thing because, in point of fact, he is going to be designing this and doing the engineering on the drive train to take us forward.
It also helps that we are not going to have to convince this new administration that infrastructure is an urgent matter. It is in the paper every day. The Obama team is sending clear, unambiguous signals that infrastructure investment is at or near the top of their agenda for kickstarting this economy.
I would add, although it is outside of our NITL traffic lane, that my reading of the agenda going forward is that it calls for investment in America's infrastructure in its broadest sense. Yes, it is going to be about highways and intermodal connectors, and yes, it is going to be about runways and Mississippi River locks and dams, but it is also going to be in the parallel lane of infrastructure on our water and sewer systems, our electric distribution systems, and this thing we call broadband, which I am too old to understand.
Q: From NITL's viewpoint, what would a sound national freight transportation policy look like?
A: What we would hope to achieve is a rational, coherent policy that, first of all, proclaims freight transportation to be a key matter for the American economy and the American people, and second, provides sound guidelines for the distribution of monies to necessary projects. We are not naïve. We know that there will be earmarking of projects for time and eternity. What we would like is that earmarked projects go to a highest and best purpose and that a significant share of the funding be dedicated to freight projects that have been well tested. By that, I mean that have survived a rigorous analytical framework for picking and choosing among competing projects so that we get the best.
I will say that the previous administration at DOT has done a good job of setting up the question and the debate. I think that their work on identifying transportation corridors, which brings a multi-state, multi-jurisdictional approach to project selection, is a tremendous positive addition to the public policy process. They have opened their eyes to nontraditional transportation funding mechanisms. I think they're perhaps a bit too narrow in their approach, but nevertheless, they are directing the next group of decision makers to take a good, hard, honest look at private funding, publicprivate partnerships. What they have essentially concluded is that taxes alone probably cannot come up with an amount that is going to be sufficient to pay what all of us understand is going to be an enormous bill.
Q: Any closing thoughts?
A: Yes. I would like to add that this new framework in the public dialogue that we call "green" and "sustainable" is very real. It is a great opportunity going forward for American business and executive leadership. It is going to create jobs.
What I find is most fascinating, though, is how quickly and how deeply set this new imperative has become. The idea of green business was seen, I think, as sort of fringe and kooky politics only a few years ago. It is now at the heart of everything we talk about and every initiative, and transportation is right in the bulls-eye target here. We are a carbon-based industry and in several key regards, will remain so for a very long time. We are going to be talked about a lot. That means that as professional transportation industry practitioners, we are going to need to confront that head on.
New technologies and new operating systems are going to be part of this debate going forward. I can tell you that the league and its members are on board. I like to tell people that the NITL as an association is a very proud member of SmartWay [the Environmental Protection Agency's fuel conservation and environmental initiative]. I know that any number of our members are proud members of SmartWay. When there are sound initiatives coming forward, we are going to take a hard, analytical look at each of them, and we will be a flag bearer for the good ones. We are about being green, and we want people to know that we are about being green.
Q: It seems that the world has suddenly realized that what we now call green business isn't just a warm and fuzzy goodwill-building marketing ploy, that green is the color of money. As a result, it's going to be a lot less difficult to convince everyone to get on board.
A: You have put your finger on it very, very nicely. We used to laugh at those tree-huggers.
Q: Yes. The tie-dye guys up in Vermont.
A: I don't hear it anymore. This is a new main line of business, and it is part of every business.