As alert DC Velocity readers already know, one of the things that distinguishes our magazine from the others in the logistics space is our coverage of the U.S. Department of Defense's (DOD) logistics operations. We chose to report on this sector for two reasons. First, if you are a commercial sector logistics executive, you are no doubt fascinated by the complexity, scope, and "mission critical" nature of defense logistics.
Second, the DOD's logistics operation is huge. It represents over $25 billion a year in transportation spending, much of it doled out to commercial freight service providers. Let's just say it's big business, really big business, and accounts for a significant portion of the freight transportation landscape in America.
An important source of DOD-related story ideas for DC Velocity are the annual conferences of the two leading defense trade associations, the National Defense Industry Association (NDIA) and the National Defense Transportation Association (NDTA). The events bring together the world's leading subject-matter experts from both the defense community and the commercial logistics community. Last year, the keynote speaker was Chairman of the Joint Chiefs of Staff Martin Dempsey. (See our report on his 2012 NDIA presentation here.)
This year, though, there will be no conferences. No NDIA. No NDTA. Both events have fallen victim to sequestration cuts.
The cancellations didn't really come as a surprise. For the last several months, mainstream media outlets have been full of news about the budget battles in Washington. Last summer, we lived through the game of chicken over the borrowing limit, leading to something called sequestration, a dead man's switch that would kick in if a budget agreement was not reached.
The can got kicked down the road.
At the end of 2012, we faced the fiscal cliff. Somehow we escaped that one, and life went on. And, of course, the can was bounced a little farther down the road.
Now, we're back to sequestration. The dead man's switch tripped March 1, budget cuts happened, and mostly, America yawned. The Dow hit an all-time high, and so far, at least, teachers haven't been laid off, police are still on the streets, and the sun continues to rise each day.
But if you're in the defense logistics business, your can got stomped.
As soon as sequestration went into effect, Gen. Dempsey issued a statement. "What I don't know is how long this will last," he said. "Our elected officials have options, and they will exercise those options. They can exercise them over the next few weeks, or they could exercise them over the next few months. So we're going to live with uncertainty for a little while."
And so will the rest of us. But as hard as it's going to be in the defense logistics business, think of the impact sequestration will have on those in uniform.
In an NPR interview, Dempsey described that impact: "Two words: time and casualties," he said. "The way this plays out, when you hollow out readiness, it means that when the force is needed, when an option is needed to deal with a specific threat, it would take us longer to react to those. So time is the issue. Some people would say, 'So what?' Well, time generally translates into casualties in my line of work.
"We will weather this. The military is never going to fail to answer the call when the nation is threatened. So we will weather this, but shame on us all if we weather it at the expense of those who choose to serve in uniform."
Your P&Ls may be splattered in red ink, but our troops may really bleed. Say a prayer for those who are standing in "the weather."