We need more shippers' voices in Washington

By James Aaron Cooke, Executive Editor -- Logistics Management, 3/1/2005

During the 1980s, shippers' interests were well represented in the nation's capital by a host of groups and individuals. They played a significant role in prodding Congress and the president to make transportation deregulation a part of the national agenda. Without their efforts, the country might never have realized the lower distribution costs and logistics innovations that resulted from deregulation of the transportation industry.

Two decades later, shippers no longer set the direction for the nation's transportation agenda. It appears that mounting safety concerns have made government bureaucrats the drivers of national policy, and the transportation industry now faces the prospect of "re-regulation" under the guise of protecting national security.

Need an example of re-regulation? Then take the current Transportation Security Administration requirement for fingerprint checks of all hazmat truck drivers. Those requirements could end up reducing the pool of truck drivers by punishing them for past misdeeds unrelated to driving, thus lowering the availability of truck capacity and raising freight rates. These safety-driven restrictions limit the freedom of the marketplace as much as any economic regulation of rates could.

Another proposal that could impact logistics costs is a Customs and Border Protection plan for tightening membership requirements for the Customs-Trade Partnership Against Terrorism (C-TPAT). Customs appears to be transitioning C-TPAT from a voluntary program to a mandatory one. "C-TPAT will eventually be mandatory, much like the Automated Export System, which was originally voluntary but recently became mandatory," Peter Friedmann, legal counsel to the trade advocacy group, CONECT, told me recently. If it does become mandatory, every importer will be forced to bear additional security costs if they want to bring goods into the country.

Yet another example is the current battle over the hours-of-service (HOS) rules for truck drivers. Following a court challenge by public safety advocates over the validity of those rules, the Federal Motor Carrier Safety Administration must revisit and possibly revise its rulings. The agency's decisions are likely to impact both capacity and rates. Yet it was safety groups—rather than shippers—that mustered the strongest voice to influence a government policy that will determine how truck drivers operate their vehicles.

The war on terrorism necessitates imposing safeguards on the supply chain, but those safeguards may have a negative impact on transportation services and pricing. Yet shippers for the most part have remained silent while government bureaucrats write policies that could ultimately re-regulate transportation in the name of security and safety.

Given the potential ramifications of these regulations on their operations, shippers cannot afford to sit back and grumble. With so much at stake, shippers need a stronger voice than ever in Washington. Perhaps now is the time for more shippers to mobilize and make their collective voice heard, loud and clear, in the halls of the nation's capital.

Shippers must urge the government to weigh the impacts on transportation and logistics of safety and security initiatives against the proposed benefits. They must get involved as a group and take over the reins of national policy to maintain the freedoms of the marketplace.