EPA's carbon decision a clear case of backdoor regulation
By declaring carbon dioxide to be an air pollutant under the Clean Air Act, the EPA has granted itself the authority to embark on a sweeping regulatory initiative—whether Congress approves of the idea or not.
Mitch Mac Donald has more than 30 years of experience in both the newspaper and magazine businesses. He has covered the logistics and supply chain fields since 1988. Twice named one of the Top 10 Business Journalists in the U.S., he has served in a multitude of editorial and publishing roles. The leading force behind the launch of Supply Chain Management Review, he was that brand's founding publisher and editorial director from 1997 to 2000. Additionally, he has served as news editor, chief editor, publisher and editorial director of Logistics Management, as well as publisher of Modern Materials Handling. Mitch is also the president and CEO of Agile Business Media, LLC, the parent company of DC VELOCITY and CSCMP's Supply Chain Quarterly.
So the eldest offspring is applying to grad school. And despite having watched one of her parents labor in the profession for her entire lifetime, she is considering going for a master's degree in (gulp) journalism. As part of the admissions process for one school, she was asked to list her picks for the Top 10 news stories of 2009.
This journalistic exercise, commonly conducted in newsrooms around the world at the beginning of every year, made for some interesting dinner conversation last week. For 2009, her choices more or less mirrored the entries on most of the lists published in the first half of January: the inauguration of Barack Obama, the economy's collapse, the health care reform debate, the death of Michael Jackson, the heightening war on terror in Afghanistan, Obama's earning the Nobel Peace Prize, the attempted Christmas Day bombing of a U.S.-bound airplane, the Fort Hood massacre, the death of Massachusetts Sen. Edward Kennedy, and the "Miracle on the Hudson" plane crash.
Based on the view from here, though, there was one important story missing from these lists. Perhaps that was because it was a bit subtle. Its ramifications, though, are decidedly unsubtle. This development has implications for virtually every business in America, including (or maybe especially) those involved in transportation and logistics.
The news broke on Dec. 7—appropriately, Pearl Harbor day, a date which will live in infamy. On that Monday (which also happened to mark the start of the Copenhagen climate change summit), the Environmental Protection Agency (EPA) announced it would begin developing regulations aimed at reducing carbon dioxide emissions. Given that almost 90 percent of U.S. economic activity currently relies on the use of fossil fuels, the EPA's proposed actions could eventually affect virtually every U.S. business and every U.S. citizen.
In its announcement, the EPA declared carbon dioxide to be an air pollutant under the federal Clean Air Act. In so doing, it granted itself the authority to embark on a sweeping regulatory undertaking and expansion of its own powers—whether Congress is willing to go along with it or not. Some call it "regulation without representation." A more appropriate term would be backdoor regulation, because that is simply what it is.
From a purely political standpoint, the timing of the EPA's announcement makes sense. Just weeks earlier, the news broke that scientists researching global warming had withheld evidence that contradicted their own theories about climate change. Once the news leaked out, the current U.S. administration no doubt saw the handwriting on the wall for both the Copenhagen talks and for its own carbon-reduction initiative, the plan popularly known as cap and trade.
With the prospects of getting cap and trade through Congress fading (and indeed, the Jan. 19 election of Massachusetts Republican Scott Brown to the U.S. Senate will likely seal the measure's fate), the administration needed a backup plan. Enter the EPA. If Congress doesn't act, it appears the EPA will step forward and implement its own set of carbon regulations with no accountability whatsoever to American voters.
The other senator from Massachusetts, Democrat John Kerry, not only sees nothing wrong with this egregious political move, he actually thinks it's a good idea. To quote the senator: "The message to Congress is crystal clear: get moving. If Congress does not pass legislation dealing with climate change, the administration is more than justified to use the EPA to impose new regulations."
As we said, regulation sometimes comes through the back door. Beware!
The number of container ships waiting outside U.S. East and Gulf Coast ports has swelled from just three vessels on Sunday to 54 on Thursday as a dockworker strike has swiftly halted bustling container traffic at some of the nation’s business facilities, according to analysis by Everstream Analytics.
As of Thursday morning, the two ports with the biggest traffic jams are Savannah (15 ships) and New York (14), followed by single-digit numbers at Mobile, Charleston, Houston, Philadelphia, Norfolk, Baltimore, and Miami, Everstream said.
The impact of that clogged flow of goods will depend on how long the strike lasts, analysts with Moody’s said. The firm’s Moody’s Analytics division estimates the strike will cause a daily hit to the U.S. economy of at least $500 million in the coming days. But that impact will jump to $2 billion per day if the strike persists for several weeks.
The immediate cost of the strike can be seen in rising surcharges and rerouting delays, which can be absorbed by most enterprise-scale companies but hit small and medium-sized businesses particularly hard, a report from Container xChange says.
“The timing of this strike is especially challenging as we are in our traditional peak season. While many pulled forward shipments earlier this year to mitigate risks, stockpiled inventories will only cushion businesses for so long. If the strike continues for an extended period, we could see significant strain on container availability and shipping schedules,” Christian Roeloffs, cofounder and CEO of Container xChange, said in a release.
“For small and medium-sized container traders, this could result in skyrocketing logistics costs and delays, making it harder to secure containers. The longer the disruption lasts, the more difficult it will be for these businesses to keep pace with market demands,” Roeloffs said.
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
National nonprofit Wreaths Across America (WAA) kicked off its 2024 season this week with a call for volunteers. The group, which honors U.S. military veterans through a range of civic outreach programs, is seeking trucking companies and professional drivers to help deliver wreaths to cemeteries across the country for its annual wreath-laying ceremony, December 14.
“Wreaths Across America relies on the transportation industry to move the mission. The Honor Fleet, composed of dedicated carriers, professional drivers, and other transportation partners, guarantees the delivery of millions of sponsored veterans’ wreaths to their destination each year,” Courtney George, WAA’s director of trucking and industry relations, said in a statement Tuesday. “Transportation partners benefit from driver retention and recruitment, employee engagement, positive brand exposure, and the opportunity to give back to their community’s veterans and military families.”
WAA delivers wreaths to more than 4,500 locations nationwide, and as of this week had added more than 20 loads to be delivered this season. The wreaths are donated by sponsors from across the country, delivered by truckers, and laid at the graves of veterans by WAA volunteers.
Wreaths Across America
Transportation companies interested in joining the Honor Fleet can visit the WAA website to find an open lane or contact the WAA transportation team at trucking@wreathsacrossamerica.org for more information.