Logistics Infrastructure Measurement and Prioritization Protocol: Ensuring Trade Drives Economic Growth
The United States
is experimenting anew with trade protectionism, despite the clear cautionary
tales from our own history. The rapid emergence of China as a manufacturing
powerhouse combined with China’s neo-mercantilist policy approach has significantly
impacted American workers in certain sectors and regions.
reason this is true is that transportation infrastructure has not kept up with
the development of supply chains and the pressures of the market. Chinese goods, which are comprise of only 4%
U.S. content, arrive by ship at highly efficient ports and are rapidly
processed and sent on their way – a few hours from shipboard to flatcar.
Meanwhile, inputs to the U.S. manufacturing sector arrive by truck at land ports
of entry from Canada or Mexico, carrying 25% and 40% U.S. content,
respectively, and face chaotic and unpredictable processing delays,
particularly on the U.S.-Mexico border, of up to ten or more hours before they
are allowed to enter the United States despite the existence of dedicated Free
and Secure Trade (FAST) lanes. The costs
of these frictions reduce the price-competitiveness of U.S. goods, inhibit job
creation and productivity growth, and feed anger at trade-related disruptions.
Fundamental to this challenge is that the supporting and developing logistics
infrastructure is not effective or efficient.
The process by
which port of entry infrastructure is planned, designed, financed and executed
at land borders is complicated by the presence of numerous federal,
state/provincial and local jurisdictions, a significant mismatch in how funds
are mobilized between the U.S. and its neighbors, and the overarching
counter-narcotics and national security objectives pursued. In addition, the
U.S. subjects proposed border infrastructure projects to a highly politicized
Presidential Permit analysis, which further impedes the market from ensuring
that border infrastructure dollars produce their optimal return on investment.
A method of objectively measuring the
efficiency of border infrastructure is required, thereby facilitating stakeholders
in the prioritization of investments in new ports of entry, improvements to
existing ports of entry, assessing the efficiency and effectiveness of
logistics infrastructure, and, enabling approach to prioritizing investments.
Some estimates put the cost of border friction as high as $30 billion per year along the U.S.-Canada border alone. Similar studies estimate that the economic cost of delays at the U.S.-Mexico border are nearly $8 billion per year. Most estimates place the price tag for needed border infrastructure in the $6-10 billion range, such that those investments are likely to generate a significant net return on investment for the economy as a whole.
By taking a holistic approach to the North American transportation network, the measurement and prioritization protocols could enable governments, bond markets, developers, ports of entry and bridge operators to ensure that both public and private dollars generate the maximum return in terms of efficiency, lowering the cost of manufacturing in the U.S. and our neighbors and strengthening our ability to compete with China and others.
The existing knowledge base on this topic is
characterized by regional fragmentation:
the governments delegate the long-term planning process to
public-private consultative groups that focus on discrete segments of the
border. These in turn are focused on border communities, with the result that
there is little analysis of the broader costs and benefits in areas that are
geographically removed from the border but nonetheless “use” it. Measurement
and prioritization protocols would take a broader view from the outset,
ensuring that analysis of border infrastructure investment is clearly
understood as a contribution to the global competitiveness of North American manufacturing.
The measurement and prioritization
protocol would create an objective tool for measuring the efficiency of border
infrastructure that would through the following tasks:
feasibility, concepts of operation, requirements, and identify potential and
additional needs of a logistic infrastructure measurement and prioritization
an initial baseline compatibility with strategic and operational objectives for
measurement and prioritization protocol, supporting databases, and library in
enough detail to establish an initial baseline capable of meeting objectives. Develop
structure of end product (and enabling product) requirements and generate a
the detailed design of the measurement and prioritization protocol, database
and supporting library and its associated subsystems, including its operations
and integrate the products to create the measurement and prioritization
protocol, database, and library. Perform system end product implementation,
integration and test, and transition to use.
The topic has ongoing relevance, especially given the focus on international trade with Canada and Mexico via the new USMCA agreement.
|Sponsoring Committee:||AT020, International Trade and Transportation
|RNS Developer:||Daniel Hackett|
|Source Info:||This would make an excellent research paper for the Standing Committee on International Trade and Transportation|
|Index Terms:||International trade, Logistics, Competition, Freight transportation, Economic growth, |
Planning and Forecasting