How fast will the economy grow? Where are the infrastructure dollars? Fundamental questions confront Connections 2019 attendees
Authored by SMC³ on June 28, 2019
On the second and third day of SMC³’s Connections 2019 supply chain and logistics conference, attendees spent their time learning about the ins and outs of the economy and discussing transportation infrastructure and regulations. The consensus from Dr. Jeffrey Rosensweig, an economics professor at Emory University, and FreightWaves’ Dr. Ibrahiim Bayaan is the economy could be worse, but it could also be a lot better.
“Unlike most people, I don’t think we are going to fall into a recession,” Rosensweig told the audience when surveying the domestic economy. He quickly added that a “growth recession” is more likely, saying he sees on the horizon a period of time where growth simply grinds to a halt.
But while there might not be a full-blown recession in the U.S., the economy is certainly slowing, echoing what’s been seen around the world.
“The world economy is in a slowdown,” he said.
Tariff concerns are holding back orders and shipments from manufacturers. There’s a delay in business investment because they don’t know where the trade policy is heading.
“So in summary,” Bayann told the crowd. “I wish I could be cheerier.”
Trucking safety starts with supply chain stakeholders
On the closing day of Connections 2019, Raymond Martinez, administrator of the Federal Motor Carrier Safety Administration, said the trucking industry is “always changing to meet the growing needs of the economy and the changing face of commerce.” His job at FMCSA, he said, is to support this growth. He added that while his agency is in charge of transportation safety, industry stakeholders are making strides each and every day on this issue outside of what the agency is doing with regulations and new rules.
“There is no special knowledge that flows from within the Beltway, or from the halls of state capitals around this country, on how best to move that safety needle in the right direction without negatively impacting the efficiency of the industry that we regulate,” he said.
Martinez then made a plea for engagement with the agency, adding that supply chain companies should have a stake in the rules and regulations promulgated by the FMCSA. Martinez said the last two years have seen the economy “reach new heights,” and that this period of growth has made for an exciting time in the trucking industry. After touting economic and jobs figures, he recognized that this growth is helped along by Connections 2019 attendees – owners of businesses that fuel the supply chain.
“It is imperative that the trucking industry, and transportation in general, runs as efficiently and as safely as possible in order to service an economy that we all hope will continue to grow,” Martinez said.
Transportation infrastructure funding needed
Randy Guillot, first vice chairman of the American Trucking Associations, spent his time on the Connections stage talking infrastructure funding issues, which center on the Highway Trust Fund, a funding mechanism that he said was “on the road to insolvency.” Guillot said the fund is meant to cover the $60 billion spent annually on infrastructure projects, but is currently only funding $40 billion worth of work.
“We’ve got to find new ways to get more infrastructure dollars,” he said.
The ATA’s proposal to generating more infrastructure dollars is rather straightforward. The agency is calling for an additional sales tax of .20 per gallon on fuel. The tax wouldn’t hit immediately and would only be fully instituted after four years.
“If we’re buying less fuel for the miles traveled, we’ve got to find a way to keep going,” he said.
The ATA proposal has been widely discussed since last year. Though there may be some challenges, Guillot is convinced that the ATA’s policy is the way to go.
“There is a cost of doing nothing,” he said. “We need to do something as a country, and the trucking industry needs to be at the table.”
Here’s a roundup of media coverage from the conference:
Journal of Commerce
FreightWaves
Logistics Management
The three-day Connections 2019 supply chain conference facilitates meaningful knowledge transfer and collaboration between logistics and transportation professionals from carrier, shipper, logistics service provider and technology verticals. To learn more about SMC³ supply chain conferences, visit http://www.smc3.com/supply-chain-education.htm.