Fiscal cliff and economic uncertainty are top of mind in transport circles

Had enough of reading and hearing about companies scaling back investment, research, and hiring plans, due to the pending Fiscal Cliff and other things like economic uncertainty? Well, hold on for a while, because this stuff is not fading away anytime soon.

By ·

Had enough of reading and hearing about companies scaling back investment, research, and hiring plans, due to the pending Fiscal Cliff and other things like economic uncertainty? Well, hold on for a while, because this stuff is not fading away anytime soon.

Once the election ended, talk of the economy accelerated at a fervent clip, surpassing the level it hit near the end of the election—or at least it felt that way.

In case you are doubting the pace of the drumroll of economic uncertainty, an article in today’s Wall Street Journal outlines what our economy is up against (not exactly breaking news but still):

“U.S. companies are scaling back investment plans at the fastest pace since the recession, signaling more trouble for the economic recovery. Half of the nation’s 40 biggest publicly traded corporate spenders have announced plans to curtail capital expenditures this year or next. Nationwide, business investment in equipment and software—a measure of economic vitality in the corporate sector—stalled in the third quarter for the first time since early 2009. Corporate investment in new buildings has declined.”

Feelings of anxiety and uncertainty (there’s that word again) were prevalent when learning what may be in store for the economy at last week’s National Industrial Transportation League-Intermodal Association of North America TransComp event in Anaheim, California.

NITL President and CEO Bruce Carlton said that it is his hope that “adults sit at the table” to negotiate and come up with a solution that works for the betterment of the country.
“We need a rational way to go forward and get back to the business of tackling the national debt and getting this economy back on its feet,” said Carlton. “We are capable of doing it.”

I hope Carlton is right, especially from a supply chain perspective.

At a NITL-hosted press conference at last week’s event, Matt Ehlinger, NITL 1st vice chairman and director of corporate transportation for NCH Corporation in Irving Texas, said that nothing good can come out of it for supply chains.

“We are not looking forward to the domino effect which would happen if this kicks in,” he said. “It is going to be disruptive. How do you plan for it? These types of cuts have the potential to negatively impact a lot of things.”

NITL leadership stressed that this directly relates to supply chain and transportation stakeholders getting the services they need in order to continue doing what they do or U.S. commerce is going to be affected and the costs for operating businesses and supply chains will be hindered as will U.S. consumers subsequently.

“I don’t imagine there is enough time between [now] and the end of December to make every single decision about spending priorities,” explained Carlton. “There is time to draft a framework for it, but the President and the Speaker need to ultimately decide what the federal government is going to spend money on. You cannot do it all, so what are the priorities? Will they recalibrate existing programs or dip their toe into big entitlement programs, Social Security and Medicare? It is almost unavoidable. The election is over; Congress needs to get to work on this.”


About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

All Topics
Latest Whitepaper
How Lean is your Lean Quality Program?
Avoid quality program bureaucracy that can sap logistics productivity and increase costs
Download Today!
From the September 2016 Issue
Indecision revolving around three complex supply chain elements—transportation, technology and organizational structure—finds many companies waiting to commit to a strategic path. However, waiting too long will only result in a competitive disadvantage that will be difficult to overcome in today’s fast-paced, global economy.
Time for Asia’s ports to rebuild
Is the freight recession upon us…again?
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Supply Chain Best Practices: Visibility to In-Transit Inventory
During this webcast you'll learn on how various organizations have gained instant access to in-transit parcels and given access to this information to stakeholders.
Register Today!
EDITORS' PICKS
25th Annual Masters of Logistics
Indecision revolving around three complex supply chain elements—transportation, technology and...
2016 Quest for Quality: Winners Take the Spotlight
Which carriers, third-party logistics providers and U.S. ports have crossed the service-excellence...

Regional ports concentrate on growth and connectivity
With the Panama Canal expansion complete, ocean cargo gateways in the Caribbean are investing to...
Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....