Tuesday, February 26, 2008

Going With the Flow

Transportation fluidity was the topic of today’s roundtable at the National Defense Transportation Association (NDTA) Puget Sound Chapter meeting.

The overall theme was how will we keep freight moving. These viewpoints dominated the conversation:

  1. that the driver workforce is becoming the biggest challenge for the trucking industry,
  2. that technological and operational responses to the challenges of freight movement will also change the local industry, and
  3. that our regional infrastructure has the potential to meet the needs of the future.

Moderated by Lt. Col. Lydia Reeves, Commander, 833d Transportation Battalion, Surface Deployment and Distribution Command (SDDC), observed in conversation that the commercial and military freight share the same ground. She added that national responses to priority objectives can result in hardships to either of these sectors. And, that it is relevant for the military to be involved in regional transportation issues.

The panelists themselves provided much of the insight into the challenges of moving freight, as they were charged to do. Dennis Hedlund, General Freight Services, representing transportation services, Dan Gatchet, Washington Trucking Assn. representing the trucking firms and Eric Nowak, Performance Team, for warehousing and distribution centers.

Gatchet early on identified the Transportation Worker Identification Credential (TWIC) requirement by the Transportation Security Administration (TSA) as precipitating a crisis in qualified, certified drivers. In the LA area, many drivers are eastern Europeans, using English as a second language. Along with other criteria for the TWIC, as many as 15-20% of all LA's drivers are forecast to fail to qualify. This result will itself put upward pressure on wages as companies strive to attract, qualify and train drivers.

Also, Gatchet spoke to the clean air initiatives being implemented in the LA basin. The recently imposed container tax will drive up costs. The application of the revenues from the container tax back to the industry is being encouraged to mitigate fleet requirements imposed on these independent drivers and rigs. The goal is to have all or newer 2007 engines by 2012.

Together these impacts may have the unintended consequences of shifting freight to the Pacific Northwest. However, the size of the local LA market will command the large volume of containers be delivered there.

Speakers expressed concerns that the PNW can handle any freight shift. In round numbers, the Ports of Seattle and Tacoma throughput 4 million TEUs (twenty-foot equivalent units) each year. Concern was expressed that the physical limits of port gates and operational standards would allow an increase of 1 million TEUs. Those operational standards reflect the hours of operation; warehouses are open 24x7 and ports are daylight operations only, they said.

The forecast was made for operational changes that will have workforce impacts. As companies respond to incentives to move freight during off-peak hours, as is being done in LA now, workers must be found to work those hours and supportive industries must also shift to accommodate the new routine. Already mini-economies are developing in LA as independents will rent their trucks to drivers during their off hours.

When asked what logistics innovations are proving good, speakers replied:

  1. TWIC cards will prove beneficial in the long run because it will lead to operational efficiencies.
  2. The usefulness of GPS, to know where loads and equipment are, even down to the location in the yard will become a big improvement.

As for Canadian port competition, speakers believe they are very close to becoming competitive and are now mainly bargaining chips in negotiations involving U.S. ports. However, as the needed infrastructure is built-out and Canadian regulatory initiatives gain more value, they will be competitive.

Finally, for an observation about the PNW surface network, speakers offered:

Eric Nowak: The potential is there. There is a need for industry attention to interface with the community to solve or avoid issues like in LA.

Dennis Hedlund: We need to maximize the physical infrastructure and the technology that is available.

Dan Gatchet: The trucking industry needs to engage with the community and embrace training for its drivers.

For those who wish to learn more about NDTA and its Puget Sound Chapter, contact Susan Pearson