The plan, released today, has already been battered from pillar to post. But an analyst with a reputation for level-headedness thinks it's heading down the right path.
(Editor's Note: The Trump administration today formally released its $1.5 trillion infrastructure plan, which calls for direct federal spending over 10 years of $200 billion, of which $100 billion would be used to create an "Incentives Program" to spur $1.3 billion in funding from states, localities, and the private sector. Funding would also be derived by eliminating federal programs that are either obsolete or don't pull their weight.
The immediate consensus is that the plan is dead on arrival because it is unreasonable to expect any entity outside of the federal government to absorb such a large portion of the cost. That is the thinking of House Democrats, which have already proposed an infrastructure initiative using $1 trillion of direct federal spending.
However, Robert Poole Jr., director of transportation policy for the Reason Foundation, a libertarian think tank, believes the Trump plan is on solid ground, and with some innovative thinking can be executed without tax increases or massive additional borrowing. His column appeared today on the group's website. It is reproduced here in its entirety.)
Well before the plan's February 12th release, many seemed to have made up their minds that it was a scam or a delusion. Many Democrats in Congress have called for $1 trillion of new federal spending without a thought about where that enormous sum would come from. Others were outraged that one of the programs in the bill would provide only 20 percent funding, with the rest having to come from state, local, and/or private sources. Another criticism was the plan's approach to funding the planned $200 billion federal expenditures over 10 years: Not by either raising tax rates or further borrowing but by eliminating ineffective federal programs.
Let's take the last point first. The FY 2018 budget for federal discretionary spending (excluding entitlements) is $1.2 trillion. About $200 billion over a decade averages $20 billion per year. That is 1.67 percent of the annual budget that includes national defense and all domestic programs, other than entitlements. It's absurd to imagine that somewhere in that $1.2 trillion there are not some items that are outdated, or have been shown to be ineffective, or are inherently state or local in nature, not federal. It's a basic principle of good government to periodically review all the things it is doing, assess the benefits versus cost of each, and weed out those that are not delivering value for money. The White House should be commended for proposing this, not condemned.
Secondly, some politicians and popular media have portrayed the "Incentives Initiative" as if it were reversing the historic 80/20 federal/state funding split. But as White House infrastructure maven D. J. Gribbin has explained, all the existing transportation formula programs are unchanged. The "Incentives Initiative" is in addition to those long-standing programs, and it's intended to draw on innovative financing in an effort to leverage the federal dollars. To make good on that premise, the White House plan would significantly expand the federal programs that assist such leveraging: Private activity bonds, TIFIA, RRIF, and WIFIA.
The White House's more nuanced approach is not intended as a massive "stimulus" program, which is not what America needs. What we do need is much better targeting of investment to infrastructure projects that deliver better value for money. Both the Incentives Initiative and the "Transformative Projects Program" are aimed at this kind of project. The former, in particular, is aimed at expanding the use of long-term public-private partnerships (P3s), for which hundreds of billions in private equity capital is interested and available. This money resides in for-profit infrastructure investment funds and in non-profit public employee pension funds. Both are already investing in P3 infrastructure in Europe, Latin America, and the Asia/Pacific region, but very little here in the land of free enterprise.
What (U.S. programs) lack is a "pipeline of P3 projects." To the extent that states are unwilling to provide 80 percent of the funding for major infrastructure improvements, they will be motivated to offer such projects as long-term P3s—as pioneer states such as Colorado, Florida, Indiana, Texas, and Virginia have been doing.
The White House plan also includes policy changes that will make it easier for projects to be offered as revenue-risk P3s. This includes making tax-exempt private activity bonds more widely available for such projects, removing the outdated federal ban on toll financing (of) the reconstruction and modernization of aging Interstate highways, and potentially allowing such revenue-based P3 projects to replace and modernize the aging locks and dams on the Inland Waterways System.
That plus meaningful streamlining of the permitting process should open the door for significant new investment in American infrastructure.
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 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.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.