As head of the U.S. Chamber of Commerce's transportation infrastructure programs, Janet Kavinoky balances the roles of lobbyist and policymaker—and does it all under the watchful eye of legendary Chamber CEO Tom Donohue.
Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
There may be people in Washington these days with fuller plates than Janet F. Kavinoky, but they might be hard to find.
As the head of the U.S. Chamber of Commerce's transportation infrastructure programs as well as the group's Americans for Transportation Mobility campaign and Let's Rebuild America coalition, the 37-year-old Stanford Business School graduate is at the pivot point of the Chamber's efforts to promote economic growth and job creation. In her role as the Chamber's top infrastructure lobbyist, Kavinoky is responsible for ensuring the collective voices of its 3 million members are heard during congressional negotiations to reauthorize the nation's transportation programs. She is spearheading the Chamber's ambitious effort to measure the performance of the nation's four infrastructure pillars: transportation, energy, broadband, and water. And she is doing it all under the watchful eye of Chamber CEO Tom Donohue, whose keen interest in and understanding of infrastructure issues goes back to his days running the American Trucking Associations.
Kavinoky spoke recently with DC Velocity Senior Editor Mark B. Solomon at the Chamber's Washington headquarters about her dual roles as policymaker and lobbyist, the importance of freight interests in driving the debate over infrastructure spending, and the challenges and opportunities of working with Donohue, one of the nation's most powerful trade association chiefs and one who doesn't suffer fools gladly.
Q: How did you find yourself at the Chamber, as well as in the transportation field?
A: I've been at the Chamber for four years, and I got an accidental start in transportation 15 years ago. I got a job at the Department of Transportation, and they stuck me in the policy office and said I was going to work on ISTEA [Intermodal Surface Transportation Efficiency Act] reauthorization. And I wrote down "Iced Tea?" on a notepad.
I stayed at DOT for four years, and finished my stint as special assistant to [DOT] Secretary [Rodney] Slater. I then got my M.B.A. at Stanford. After a time at a consulting firm, I called Jack Basso, who was director of budget and programs at the American Association of State Highway and Transportation Officials (AASHTO) and who was CFO at DOT when I was there. Jack made room for me at AASHTO. I stayed there for four years and then moved to the Chamber. Here, we like to say we handle everything that floats, flies, and rolls.
Q: Is there a value-add to your efforts that you work so closely with Tom Donohue, who is one of the most influential trade association executives in the country and has such a deep understanding of the work you do? A: Tom's interest in transportation and infrastructure makes our work a core priority. But when you work for someone who knows so much about this, it is also a bit daunting. I can't B.S. and say "I know what I'm talking about." I have to know my stuff. It makes me work a lot better. Tom takes a very personal interest in this issue, so even though I report to many people here, I feel I am directly accountable to him.
Q: What is the Chamber's infrastructure agenda for 2010 and how do you plan to execute on it? A: Our vision for infrastructure is that we have a physical platform to the economy that needs to work in the way business needs it to work and to accommodate the needs of what will be a growing economy. In 2010, our aims are to make sure that the environment for business to deliver is in place, and that the government is actually doing what it is supposed to be doing.
We want to bring a business perspective and a business voice to the discussion. Traditionally, infrastructure has been about the construction industry, or about the transportation services industry. We want to talk about infrastructure from a business perspective.
Q: Will the fact that this is an election year facilitate your efforts, or hinder them? A: One would think that because we know infrastructure supports and creates jobs, because we know that infrastructure has needs that are visible and apparent, and because people like to see things being built, in an election year, it would be a no-brainer. Unfortunately, there are members of Congress who want to politicize infrastructure. They call highway and bridge spending "wasteful." They characterize infrastructure investment as the same thing as more big government. Changing minds on Capitol Hill is a real uphill fight in an election year.
Q: About $27 billion of $787 billion in federal stimulus money went to roads and bridges. Were you disappointed that more money wasn't directed to infrastructure? A: We were disappointed that such a small amount was devoted to infrastructure. The real challenge now is on transportation reauthorization legislation. If you talk to people in the construction industry, they will tell you that unless there is a long-term highway and transit reauthorization bill, their industry will not come back. They are not starting the big projects, nor are they buying the big equipment until they see a roadmap.
Q: Are you concerned, as some are, that Congress will fail to pass a long-term transportation reauthorization bill during President Obama's term and that transportation funding will survive on a long series of continuing resolutions? A: I think there is a real danger that unless people outside the Beltway see the effects of not having reauthorization, and unless the users of the transportation network tell members of Congress that they are making a big mistake and that it's hurting their business, it will be very easy to have continuing resolutions.
Q: How would you rate the Obama White House on its knowledge of the issues and its management of transportation policy? A: We've seen a White House that has come to grasp the power of infrastructure. What they haven't done yet is paint a comprehensive picture of what transportation policy should look like. For example, they haven't talked a great deal about the importance of the nation's freight infrastructure.
Freight doesn't vote. People say that over and over again, but it's more than just a saying. When I got here, I was told the most important thing I could do was bring businesspeople to the table and talk about transportation. That's because infrastructure is not facing businesses squarely in the face the way taxes and health care are.
Q: In previous reauthorization cycles, shippers haven't stepped up to the table and voiced their opinions about transportation. Are you seeing a stronger, more active shipper voice this time around? A: I think we are seeing shippers becoming more engaged. But it tends to be on very specific, industry-related issues. We could always use more shipper involvement in simply talking about the role that good-performing infrastructure plays in getting their business done. It is vital to hear a retailer saying how important our freight network is in getting products to market, and how it helps generate jobs. We need more shippers talking about the role infrastructure plays in their everyday life.
Q: Does there need to be more focus on freight in this reauthorization cycle? A: Definitely. Freight was left on the cutting room floor in the last reauthorization [in 2005]. As the bill was moving through conference, freight programs were cut to make room for member earmarks and fiddling with the "formula" here and there. There has not been a focused effort on freight, and to be honest, the freight community doesn't help itself because quite often they are at war with themselves. It's shippers against carriers. Or it's the trucks versus the rails. When you tell Congress that freight is important and they ask what we should do about it and you can't give them specifics because no one agrees, you put yourself in a bad situation.
Q: The Chamber has said its members will support an increase in gasoline and diesel fuel taxes to finance infrastructure improvements. Is that still the Chamber's position? A: Our board has said it would support a reasonable increase in fuel taxes as long as the transportation reauthorization legislation meets national needs, lays the groundwork for a sustainable revenue source for the future, creates the opportunity for more public-private partnerships, limits congressional earmarks, and removes barriers to project delivery.
Q: What's reasonable in the Chamber's view? A: I would guess something that's phased in, maybe 3 to 5 cents a year for five years and then [increases] indexed to inflation.
Q: Is it doable? A: This is a problem of political will and of being honest with the voters. You have a wide array of stakeholders that say if you do good things with [reauthorization legislation], we will support a gas tax increase. And yet for some reason, this is the political football. It gets the same gut reaction as if Congress were to go out and raise middle class taxes by 25 percent.
Congestion on U.S. highways is costing the trucking industry big, according to research from the American Transportation Research Institute (ATRI), released today.
The group found that traffic congestion on U.S. highways added $108.8 billion in costs to the trucking industry in 2022, a record high. The information comes from ATRI’s Cost of Congestion study, which is part of the organization’s ongoing highway performance measurement research.
Total hours of congestion fell slightly compared to 2021 due to softening freight market conditions, but the cost of operating a truck increased at a much higher rate, according to the research. As a result, the overall cost of congestion increased by 15% year-over-year—a level equivalent to more than 430,000 commercial truck drivers sitting idle for one work year and an average cost of $7,588 for every registered combination truck.
The analysis also identified metropolitan delays and related impacts, showing that the top 10 most-congested states each experienced added costs of more than $8 billion. That list was led by Texas, at $9.17 billion in added costs; California, at $8.77 billion; and Florida, $8.44 billion. Rounding out the top 10 list were New York, Georgia, New Jersey, Illinois, Pennsylvania, Louisiana, and Tennessee. Combined, the top 10 states account for more than half of the trucking industry’s congestion costs nationwide—52%, according to the research.
The metro areas with the highest congestion costs include New York City, $6.68 billion; Miami, $3.2 billion; and Chicago, $3.14 billion.
ATRI’s analysis also found that the trucking industry wasted more than 6.4 billion gallons of diesel fuel in 2022 due to congestion, resulting in additional fuel costs of $32.1 billion.
ATRI used a combination of data sources, including its truck GPS database and Operational Costs study benchmarks, to calculate the impacts of trucking delays on major U.S. roadways.
There’s a photo from 1971 that John Kent, professor of supply chain management at the University of Arkansas, likes to show. It’s of a shaggy-haired 18-year-old named Glenn Cowan grinning at three-time world table tennis champion Zhuang Zedong, while holding a silk tapestry Zhuang had just given him. Cowan was a member of the U.S. table tennis team who participated in the 1971 World Table Tennis Championships in Nagoya, Japan. Story has it that one morning, he overslept and missed his bus to the tournament and had to hitch a ride with the Chinese national team and met and connected with Zhuang.
Cowan and Zhuang’s interaction led to an invitation for the U.S. team to visit China. At the time, the two countries were just beginning to emerge from a 20-year period of decidedly frosty relations, strict travel bans, and trade restrictions. The highly publicized trip signaled a willingness on both sides to renew relations and launched the term “pingpong diplomacy.”
Kent, who is a senior fellow at the George H. W. Bush Foundation for U.S.-China Relations, believes the photograph is a good reminder that some 50-odd years ago, the economies of the United States and China were not as tightly interwoven as they are today. At the time, the Nixon administration was looking to form closer political and economic ties between the two countries in hopes of reducing chances of future conflict (and to weaken alliances among Communist countries).
The signals coming out of Washington and Beijing are now, of course, much different than they were in the early 1970s. Instead of advocating for better relations, political rhetoric focuses on the need for the U.S. to “decouple” from China. Both Republicans and Democrats have warned that the U.S. economy is too dependent on goods manufactured in China. They see this dependency as a threat to economic strength, American jobs, supply chain resiliency, and national security.
Supply chain professionals, however, know that extricating ourselves from our reliance on Chinese manufacturing is easier said than done. Many pundits push for a “China + 1” strategy, where companies diversify their manufacturing and sourcing options beyond China. But in reality, that “plus one” is often a Chinese company operating in a different country or a non-Chinese manufacturer that is still heavily dependent on material or subcomponents made in China.
This is the problem when supply chain decisions are made on a global scale without input from supply chain professionals. In an article in the Arkansas Democrat-Gazette, Kent argues that, “The discussions on supply chains mainly take place between government officials who typically bring many other competing issues and agendas to the table. Corporate entities—the individuals and companies directly impacted by supply chains—tend to be under-represented in the conversation.”
Kent is a proponent of what he calls “supply chain diplomacy,” where experts from academia and industry from the U.S. and China work collaboratively to create better, more efficient global supply chains. Take, for example, the “Peace Beans” project that Kent is involved with. This project, jointly formed by Zhejiang University and the Bush China Foundation, proposes balancing supply chains by exporting soybeans from Arkansas to tofu producers in China’s Yunnan province, and, in return, importing coffee beans grown in Yunnan to coffee roasters in Arkansas. Kent believes the operation could even use the same transportation equipment.
The benefits of working collaboratively—instead of continuing to build friction in the supply chain through tariffs and adversarial relationships—are numerous, according to Kent and his colleagues. They believe it would be much better if the two major world economies worked together on issues like global inflation, climate change, and artificial intelligence.
And such relations could play a significant role in strengthening world peace, particularly in light of ongoing tensions over Taiwan. Because, as Kent writes, “The 19th-century idea that ‘When goods don’t cross borders, soldiers will’ is as true today as ever. Perhaps more so.”
Hyster-Yale Materials Handling today announced its plans to fulfill the domestic manufacturing requirements of the Build America, Buy America (BABA) Act for certain portions of its lineup of forklift trucks and container handling equipment.
That means the Greenville, North Carolina-based company now plans to expand its existing American manufacturing with a targeted set of high-capacity models, including electric options, that align with the needs of infrastructure projects subject to BABA requirements. The company’s plans include determining the optimal production location in the United States, strategically expanding sourcing agreements to meet local material requirements, and further developing electric power options for high-capacity equipment.
As a part of the 2021 Infrastructure Investment and Jobs Act, the BABA Act aims to increase the use of American-made materials in federally funded infrastructure projects across the U.S., Hyster-Yale says. It was enacted as part of a broader effort to boost domestic manufacturing and economic growth, and mandates that federal dollars allocated to infrastructure – such as roads, bridges, ports and public transit systems – must prioritize materials produced in the USA, including critical items like steel, iron and various construction materials.
Hyster-Yale’s footprint in the U.S. is spread across 10 locations, including three manufacturing facilities.
“Our leadership is fully invested in meeting the needs of businesses that require BABA-compliant material handling solutions,” Tony Salgado, Hyster-Yale’s chief operating officer, said in a release. “We are working to partner with our key domestic suppliers, as well as identifying how best to leverage our own American manufacturing footprint to deliver a competitive solution for our customers and stakeholders. But beyond mere compliance, and in line with the many areas of our business where we are evolving to better support our customers, our commitment remains steadfast. We are dedicated to delivering industry-leading standards in design, durability and performance — qualities that have become synonymous with our brands worldwide and that our customers have come to rely on and expect.”
In a separate move, the U.S. Environmental Protection Agency (EPA) also gave its approval for the state to advance its Heavy-Duty Omnibus Rule, which is crafted to significantly reduce smog-forming nitrogen oxide (NOx) emissions from new heavy-duty, diesel-powered trucks.
Both rules are intended to deliver health benefits to California citizens affected by vehicle pollution, according to the environmental group Earthjustice. If the state gets federal approval for the final steps to become law, the rules mean that cars on the road in California will largely be zero-emissions a generation from now in the 2050s, accounting for the average vehicle lifespan of vehicles with internal combustion engine (ICE) power sold before that 2035 date.
“This might read like checking a bureaucratic box, but EPA’s approval is a critical step forward in protecting our lungs from pollution and our wallets from the expenses of combustion fuels,” Paul Cort, director of Earthjustice’s Right To Zero campaign, said in a release. “The gradual shift in car sales to zero-emissions models will cut smog and household costs while growing California’s clean energy workforce. Cutting truck pollution will help clear our skies of smog. EPA should now approve the remaining authorization requests from California to allow the state to clean its air and protect its residents.”
However, the truck drivers' industry group Owner-Operator Independent Drivers Association (OOIDA) pushed back against the federal decision allowing the Omnibus Low-NOx rule to advance. "The Omnibus Low-NOx waiver for California calls into question the policymaking process under the Biden administration's EPA. Purposefully injecting uncertainty into a $588 billion American industry is bad for our economy and makes no meaningful progress towards purported environmental goals," (OOIDA) President Todd Spencer said in a release. "EPA's credibility outside of radical environmental circles would have been better served by working with regulated industries rather than ramming through last-minute special interest favors. We look forward to working with the Trump administration's EPA in good faith towards achievable environmental outcomes.”
Editor's note:This article was revised on December 18 to add reaction from OOIDA.
A Canadian startup that provides AI-powered logistics solutions has gained $5.5 million in seed funding to support its concept of creating a digital platform for global trade, according to Toronto-based Starboard.
The round was led by Eclipse, with participation from previous backers Garuda Ventures and Everywhere Ventures. The firm says it will use its new backing to expand its engineering team in Toronto and accelerate its AI-driven product development to simplify supply chain complexities.
According to Starboard, the logistics industry is under immense pressure to adapt to the growing complexity of global trade, which has hit recent hurdles such as the strike at U.S. east and gulf coast ports. That situation calls for innovative solutions to streamline operations and reduce costs for operators.
As a potential solution, Starboard offers its flagship product, which it defines as an AI-based transportation management system (TMS) and rate management system that helps mid-sized freight forwarders operate more efficiently and win more business. More broadly, Starboard says it is building the virtual infrastructure for global trade, allowing freight companies to leverage AI and machine learning to optimize operations such as processing shipments in real time, reconciling invoices, and following up on payments.
"This investment is a pivotal step in our mission to unlock the power of AI for our customers," said Sumeet Trehan, Co-Founder and CEO of Starboard. "Global trade has long been plagued by inefficiencies that drive up costs and reduce competitiveness. Our platform is designed to empower SMB freight forwarders—the backbone of more than $20 trillion in global trade and $1 trillion in logistics spend—with the tools they need to thrive in this complex ecosystem."