Commentary

What’s Next?

By David Bennett
Vice President, Sales & Development, Globe Express Services

On Tuesday, December 16, the Federal Reserve Bank announced another round of interest rate reductions, which essentially set the lending rates from the Fed to the banking community at a rate slightly above zero percent. The experts predict the impact of this could be mortgage rates moving toward a range of 4.5 percent fixed for thirty years.

Now, if this drastic action does not jump start the slumping housing market, then folks, nothing will! With money being extremely cheap, companies will have the ability to start expanding again and the banks, having dealt with the structural problems they created, will begin to flood the markets with loans.

Economic conditions will respond in a positive manner, but let’s not forget, we didn’t create this mess overnight — it will take some time for all the actions to have a positive impact.

Will Infrastructure Needs be Met?
The election is over, President Obama has been sworn in, and he might be wondering, “What did I get myself into?”

The economic stimulus package he is outlining centers on much-needed infrastructure projects in the United States. Obviously, this will have a positive impact on certain industries, such as the steel manufacturers and high-paying construction jobs, but I find myself wondering if this is too little too late.

The other question I have is whether any focus will be given to the ports, rail, and airport infrastructure needs. For years, they have been grossly ignored by the state governments responsible for ensuring facilities are maintained to meet industry needs. Let’s examine the Southern California situation.

Unless you were living in a cave in 2008 (not a bad alternative based on how the year developed), everyone is fully aware of the issues associated with the ports of Long Beach and Los Angeles, so I won’t harp on them this month. One area we have not addressed is the complete lack of attention state and local officials have paid to the two key bridges in the region that are in desperate need of repair and upgrades. The costs associated with expanding the 710 and 110 freeways are beyond the state of California’s ability to act, and the Federal government has turned its back on this issue for years. These projects alone will cost billions and I can’t help but ask myself, where the money is going to come from.

In 2008, I visited two airports in Asia that I had not traveled through in several years — Taipei and Seoul. Prior visits to these facilities had me dreading the trip due to the poor conditions of these airports. When I stepped off the plane, I was blown away by the expansion and modern facilities that had essentially gone up overnight. I found myself dreading the return through Tom Bradley International in Los Angeles, because when you step off the plane, you step back in time. Compared to other regions of the world, the lack of upgrades to one of the key airport gateways in the country is shameful. Obviously state, local, and federal governments have ignored the needs to continuously upgrade our facilities in this great nation.

One last area of concern is the ports along the East Coast. With the exception of Norfolk, the ports require immediate dredging to accommodate the mega ships that will come on-line once market conditions improve in the industry — and they will improve. These dredging projects should have been funded and completed years ago, but we seem to have buried our heads in the mud and ignored the benefits that would be created by these much needed projects.

We Need Money
What’s needed? Money — tons and tons of money. Our nation’s supply chain requirements are very complex, and we need a National Transportation policy that will address these needs. From a state government perspective, they are out of money and the infrastructure needs are greater than what they can afford.

In recent months, we have watched the Treasury Department and the Federal Reserve Bank offer billions of dollars to the banking and auto industries, but when are we going to see significant focus in areas such as the ones I have outlined? Our airports are out of date, our interstates and bridges in this country are in desperate need of repair, and our ports need to be preparing for the next influx of cargo that will hit them on very short notice.

This industry needs to be heard in Washington. We need to let our elected officials know that significant focus needs to be given to these concerns. (The last time this happened was before I was born during the Eisenhower administration.)
President Obama was elected by the people on the promise of “Hope and Change.” Only time will tell if we will see the Federal government fulfill their obligation to meet the needs of the people and address these major infrastructure challenges.