Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
A leading freight advocacy group Wednesday praised a proposal introduced in the Senate to fund the nation's transportation programs, saying the proposal gives freight a place at the table. The group, the Coalition for America's Gateways and Trade Corridors, had slammed a version unveiled in the House of Representatives two weeks ago for its failure to address freight-related issues and to provide adequate funding.
The Senate proposal, jointly introduced by Sen. Barbara Boxer (D-Calif.), chair of the Senate Environment and Public Works Committee, and Sen. James Inhofe (R-Okla.), the committee's ranking minority member, calls for a two-year reauthorization of the nation's surface transportation program at current funding levels, which are about $42 billion a year. The last multiyear reauthorization bill was signed into law in 2005. It expires on Sept. 30.
By contrast, a proposal announced July 7 by Rep. John L. Mica (R-Fla.), chairman of the House Transportation and Infrastructure Committee, calls for $230 billion in funding over six years, a figure that represents a 35-percent reduction from current funding levels and which has been criticized by various groups, including the U.S. Chamber of Commerce, as inadequate to support the nation's future infrastructure needs.
Boxer said in a statement that her approach is a "clear rejection" of the funding levels in the House proposal, which she warned would result in the loss of 630,000 jobs in the highway and mass transit sectors in 2012.
More significant for the freight sector is that the Boxer-Inhofe proposal creates a National Freight Program that establishes a funding formula to states for freight-dedicated highway projects, including the development of freight intermodal connectors. The proposal did not go into details on the program.
Push for a multimodal approach
Leslie Blakey, executive director of the Coalition for America's Gateways and Trade Corridors, called the Senate proposal an "essential starting point toward a comprehensive multimodal approach to our national network for moving goods." Blakey's group has argued that the total funding amount of the Mica initiative is insufficient, and criticized the plan for being virtually silent on freight-related issues or funding.
Blakey said Congress needs to appropriate between $7 billion and $10 billion a year just for dedicated freight initiatives, should identify freight projects of "national significance" that would ensure an adequate funding stream, and should create an Office of Multimodal Freight within the Department of Transportation that would coordinate with the various modal agencies on freight issues and funding efforts.
The U.S. Chamber of Commerce, which had labeled as "unacceptable" the funding levels in the Mica proposal, was unavailable to comment on the Senate version. The Chamber, which represents 3 million business members, said the Mica proposal fails to provide sufficient investment to repair and maintain the nation's crumbling infrastructure, and would devastate employment in the already-battered construction industry and damage related industries like basic materials, engineering, and design.
Cap on spending
Mica said his committee's proposal would force the federal government to spend only as much money on transportation programs as it collects, and ends the practice of spending overruns that has forced Congress to repeatedly borrow from the general treasury to fund programs that couldn't be paid for from Highway Trust Fund revenues.
The Mica initiative would also ensure that the Harbor Maintenance Trust Fund, a program paid for by user fees to fund maintenance and improvement of the nation's harbors, "be invested as intended" and not be ensnared in a "federal budgetary shell game." In addition, it encourages greater use of so-called short-sea shipping using the nation's inland waterways system by eliminating a double-taxation levy on vessels moving freight between domestic ports.
Neither House nor Senate proposals call for an increase in gasoline and diesel fuel taxes to help fund infrastructure improvements. Fuel taxes at the federal level have not been raised since 1993. The nation's trucker and shipper groups, as well as the U.S. Chamber, support a graduated fuel tax hike as long as the proceeds are earmarked exclusively for transport infrastructure improvements. However, Congress and the Obama administration, mindful of the potential voter backlash triggered by any tax increase in a fragile economy, have not considered it.
Before Boxer unveiled the Senate plan, Mica argued that a two-year reauthorization period was too short a duration, and would deprive states of the funding stability and predictability they need to plan for long-term projects.
James H. Burnley IV, who served as DOT Secretary under President Reagan and now heads the transport practice at Washington law firm Venable LLP, declined comment on the Senate plan. However, Burnley said the Mica proposal is a solid effort to get Washington to live within its means without the need to raise fuel taxes.
"Mica has crafted a package which is sized to the revenue flow," Burnley said. "It's the only possible path toward passage of a multiyear bill."
Both plans have yet to be turned into proposed legislation.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The U.S. manufacturing sector has become an engine of new job creation over the past four years, thanks to a combination of federal incentives and mega-trends like nearshoring and the clean energy boom, according to the industrial real estate firm Savills.
While those manufacturing announcements have softened slightly from their 2022 high point, they remain historically elevated. And the sector’s growth outlook remains strong, regardless of the results of the November U.S. presidential election, the company said in its September “Savills Manufacturing Report.”
From 2021 to 2024, over 995,000 new U.S. manufacturing jobs were announced, with two thirds in advanced sectors like electric vehicles (EVs) and batteries, semiconductors, clean energy, and biomanufacturing. After peaking at 350,000 news jobs in 2022, the growth pace has slowed, with 2024 expected to see just over half that number.
But the ingredients are in place to sustain the hot temperature of American manufacturing expansion in 2025 and beyond, the company said. According to Savills, that’s because the U.S. manufacturing revival is fueled by $910 billion in federal incentives—including the Inflation Reduction Act, CHIPS and Science Act, and Infrastructure Investment and Jobs Act—much of which has not yet been spent. Domestic production is also expected to be boosted by new tariffs, including a planned rise in semiconductor tariffs to 50% in 2025 and an increase in tariffs on Chinese EVs from 25% to 100%.
Certain geographical regions will see greater manufacturing growth than others, since just eight states account for 47% of new manufacturing jobs and over 6.3 billion square feet of industrial space, with 197 million more square feet under development. They are: Arizona, Georgia, Michigan, Ohio, North Carolina, South Carolina, Texas, and Tennessee.
Across the border, Mexico’s manufacturing sector has also seen “revolutionary” growth driven by nearshoring strategies targeting U.S. markets and offering lower-cost labor, with a workforce that is now even cheaper than in China. Over the past four years, that country has launched 27 new plants, each creating over 500 jobs. Unlike the U.S. focus on tech manufacturing, Mexico focuses on traditional sectors such as automative parts, appliances, and consumer goods.
Looking at the future, the U.S. manufacturing sector’s growth outlook remains strong, regardless of the results of November’s presidential election, Savills said. That’s because both candidates favor protectionist trade policies, and since significant change to federal incentives would require a single party to control both the legislative and executive branches. Rather than relying on changes in political leadership, future growth of U.S. manufacturing now hinges on finding affordable, reliable power amid increasing competition between manufacturing sites and data centers, Savills said.
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.