The American Society of Civil Engineers (ASCE) today issued the nation's infrastructure a "D+" grade for the second time in four years, meaning the massive network encompassing everything from highways, rails, and ports to the water supply and the energy grid remains in fair to poor condition, but with capacity deteriorating near the point of failure.
The nation's roads, one of 16 infrastructure categories, but perhaps the most visible because virtually every American uses and relies on them, received a "D" grade. The nation's inland waterways also received a "D," while bridges and ports each received "C+" grades. The U.S. rail network, which encompasses the freight rail system and the Amtrak passenger rail operation, was the only category to receive a "B" grade, largely on the back of the significant annual investments made by freight railroads, which rely primarily on their own revenues and borrowing to maintain and improve their facilities.
ASCE called for a ramp-up of annual investment to an equivalent of 3.5 percent of U.S. GDP, compared with current levels of 2.5 percent. With US GDP coming in at $18.5 trillion in 2016, this would translate into an increase to $647.5 billion from $462.5 billion. The Trump administration is fast-tracking efforts to develop an infrastructure spending plan that is likely to approach $1 trillion a year. Late last month, the White House appointed DJ Gribbin, former general counsel of the Department of Transportation (DOT) under President George W. Bush, as special assistant to the president for infrastructure policy.
The group repeated its call for increases in federal taxes on diesel fuel and gasoline, levies that have not been changed since 1993. It also urged that policymakers take a closer look at the merits of a tax imposed on the number of miles a vehicle travels, noting that such a tax would capture consumption from electric-powered cars and trucks, and would take into account the enhanced per-mile fuel-efficiencies found in later-model vehicles.
The 2017 report card represents the first time that ASCE has embedded a discussion about funding in its broad conclusions. The group issued its first report card in 1998, and since 2001 has published its findings every four years. The 2017 report card was drafted by a team of 28 civil engineers, who grade each infrastructure category using eight criteria.
Among the findings:
The average delay per lock on the nation's inland waterway system nearly doubled to 121 minutes from 64 minutes between 2000 and 2014. Nearly half of all vessels experienced some form of delay in 2014, the last period for which full-year data was available. The report lauded the U.S. Army Corps of Engineers, which maintains the 25,000-mile network, for utilizing increased funding levels from government and users to expedite the completion of various lock and dam rehabilitation projects.
About 9 percent of the country's 614,387 bridges were in such poor condition last year as to be classified structurally deficient, according to the report. On average, there were 188 million trips per day across structurally deficient bridges, ASCE said. The number of bridges declared structurally deficient has been decreasing, the report found. However, the age of the typical span continues to rise, with 40 percent of bridges 50 years old or more, according to the report.
Port productivity declined by 25 percent or more over the past 10 years due to an increasingly congested landside network connecting ports, railroads, and highways ASCE said, citing port-industry data. Under the five-year federal transport-funding bill signed into law in late 2015, landside connections are scheduled to receive $11 billion in new funding. However, those intermodal connections are expected to require $29 billion in funding over that time, according to the report.
More than two out of every five miles of America's interstate highways near urban areas are congested, and traffic congestion costs the U.S. about $160 billion a year in delays and wasted fuel, according to ASCE. One out of every five miles of highway pavement is in poor condition, the report found. There is currently a $420 million capital backlog to pay for highway repair, the report found.
Capital allocated to fixing road infrastructure would be money well spent, according to the report. Citing data from DOT's Federal Highway Administration, ASCE said that each dollar spent on road, highway, and bridge improvements returns $5.20 in the form of lower vehicle maintenance costs; reduced traffic delays and fuel consumption; improved safety; lower road and bridge maintenance costs; and carbon emission cuts due to improved traffic flow.
Statements from trade groups reflected the sobering realities facing the millions of infrastructure stakeholders. The grades "provide yet another example of what occurs when a nation underinvests in the critical infrastructure systems that support economic development and quality of life," said Bud Wright, executive director of the American Association of State Highway and Transportation Officials (AASHTO). Wright said long-term, structural funding changes that go beyond even the five-year intervals mandated under the 2015 funding law are needed.
Kurt Nagle, president and CEO of the American Association of Port Authorities (AAPA), said the slight improvement in port grades (to C+ from a C in 2013) indicates that while some progress has been made, much work still needs to be done. Nagle acknowledged the poor condition of landside connections, contending that the federal government isn't adequately investing in those links to keep freight moving efficiently. The mediocre grade "reinforces our view that the federal government is still underinvesting in the landside and waterside connections to ports," Nagle said.
A move by federal regulators to reinforce requirements for broker transparency in freight transactions is stirring debate among transportation groups, after the Federal Motor Carrier Safety Administration (FMCSA) published a “notice of proposed rulemaking” this week.
According to FMCSA, its draft rule would strive to make broker transparency more common, requiring greater sharing of the material information necessary for transportation industry parties to make informed business decisions and to support the efficient resolution of disputes.
The proposed rule titled “Transparency in Property Broker Transactions” would address what FMCSA calls the lack of access to information among shippers and motor carriers that can impact the fairness and efficiency of the transportation system, and would reframe broker transparency as a regulatory duty imposed on brokers, with the goal of deterring non-compliance. Specifically, the move would require brokers to keep electronic records, and require brokers to provide transaction records to motor carriers and shippers upon request and within 48 hours of that request.
Under federal regulatory processes, public comments on the move are due by January 21, 2025. However, transportation groups are not waiting on the sidelines to voice their opinions.
According to the Transportation Intermediaries Association (TIA), an industry group representing the third-party logistics (3PL) industry, the potential rule is “misguided overreach” that fails to address the more pressing issue of freight fraud. In TIA’s view, broker transparency regulation is “obsolete and un-American,” and has no place in today’s “highly transparent” marketplace. “This proposal represents a misguided focus on outdated and unnecessary regulations rather than tackling issues that genuinely threaten the safety and efficiency of our nation’s supply chains,” TIA said.
But trucker trade group the Owner-Operator Independent Drivers Association (OOIDA) welcomed the proposed rule, which it said would ensure that brokers finally play by the rules. “We appreciate that FMCSA incorporated input from our petition, including a requirement to make records available electronically and emphasizing that brokers have a duty to comply with regulations. As FMCSA noted, broker transparency is necessary for a fair, efficient transportation system, and is especially important to help carriers defend themselves against alleged claims on a shipment,” OOIDA President Todd Spencer said in a statement.
Additional pushback came from the Small Business in Transportation Coalition (SBTC), a network of transportation professionals in small business, which said the potential rule didn’t go far enough. “This is too little too late and is disappointing. It preserves the status quo, which caters to Big Broker & TIA. There is no question now that FMCSA has been captured by Big Broker. Truckers and carriers must now come out in droves and file comments in full force against this starting tomorrow,” SBTC executive director James Lamb said in a LinkedIn post.
Bloomington, Indiana-based FTR said its Trucking Conditions Index declined in September to -2.47 from -1.39 in August as weakness in the principal freight dynamics – freight rates, utilization, and volume – offset lower fuel costs and slightly less unfavorable financing costs.
Those negative numbers are nothing new—the TCI has been positive only twice – in May and June of this year – since April 2022, but the group’s current forecast still envisions consistently positive readings through at least a two-year forecast horizon.
“Aside from a near-term boost mostly related to falling diesel prices, we have not changed our Trucking Conditions Index forecast significantly in the wake of the election,” Avery Vise, FTR’s vice president of trucking, said in a release. “The outlook continues to be more favorable for carriers than what they have experienced for well over two years. Our analysis indicates gradual but steadily rising capacity utilization leading to stronger freight rates in 2025.”
But FTR said its forecast remains unchanged. “Just like everyone else, we’ll be watching closely to see exactly what trade and other economic policies are implemented and over what time frame. Some freight disruptions are likely due to tariffs and other factors, but it is not yet clear that those actions will do more than shift the timing of activity,” Vise said.
The TCI tracks the changes representing five major conditions in the U.S. truck market: freight volumes, freight rates, fleet capacity, fuel prices, and financing costs. Combined into a single index indicating the industry’s overall health, a positive score represents good, optimistic conditions while a negative score shows the inverse.
Specifically, the new global average robot density has reached a record 162 units per 10,000 employees in 2023, which is more than double the mark of 74 units measured seven years ago.
Broken into geographical regions, the European Union has a robot density of 219 units per 10,000 employees, an increase of 5.2%, with Germany, Sweden, Denmark and Slovenia in the global top ten. Next, North America’s robot density is 197 units per 10,000 employees – up 4.2%. And Asia has a robot density of 182 units per 10,000 persons employed in manufacturing - an increase of 7.6%. The economies of Korea, Singapore, mainland China and Japan are among the top ten most automated countries.
Broken into individual countries, the U.S. ranked in 10th place in 2023, with a robot density of 295 units. Higher up on the list, the top five are:
The Republic of Korea, with 1,012 robot units, showing a 5% increase on average each year since 2018 thanks to its strong electronics and automotive industries.
Singapore had 770 robot units, in part because it is a small country with a very low number of employees in the manufacturing industry, so it can reach a high robot density with a relatively small operational stock.
China took third place in 2023, surpassing Germany and Japan with a mark of 470 robot units as the nation has managed to double its robot density within four years.
Germany ranks fourth with 429 robot units for a 5% CAGR since 2018.
Japan is in fifth place with 419 robot units, showing growth of 7% on average each year from 2018 to 2023.
Progress in generative AI (GenAI) is poised to impact business procurement processes through advancements in three areas—agentic reasoning, multimodality, and AI agents—according to Gartner Inc.
Those functions will redefine how procurement operates and significantly impact the agendas of chief procurement officers (CPOs). And 72% of procurement leaders are already prioritizing the integration of GenAI into their strategies, thus highlighting the recognition of its potential to drive significant improvements in efficiency and effectiveness, Gartner found in a survey conducted in July, 2024, with 258 global respondents.
Gartner defined the new functions as follows:
Agentic reasoning in GenAI allows for advanced decision-making processes that mimic human-like cognition. This capability will enable procurement functions to leverage GenAI to analyze complex scenarios and make informed decisions with greater accuracy and speed.
Multimodality refers to the ability of GenAI to process and integrate multiple forms of data, such as text, images, and audio. This will make GenAI more intuitively consumable to users and enhance procurement's ability to gather and analyze diverse information sources, leading to more comprehensive insights and better-informed strategies.
AI agents are autonomous systems that can perform tasks and make decisions on behalf of human operators. In procurement, these agents will automate procurement tasks and activities, freeing up human resources to focus on strategic initiatives, complex problem-solving and edge cases.
As CPOs look to maximize the value of GenAI in procurement, the study recommended three starting points: double down on data governance, develop and incorporate privacy standards into contracts, and increase procurement thresholds.
“These advancements will usher procurement into an era where the distance between ideas, insights, and actions will shorten rapidly,” Ryan Polk, senior director analyst in Gartner’s Supply Chain practice, said in a release. "Procurement leaders who build their foundation now through a focus on data quality, privacy and risk management have the potential to reap new levels of productivity and strategic value from the technology."
Businesses are cautiously optimistic as peak holiday shipping season draws near, with many anticipating year-over-year sales increases as they continue to battle challenging supply chain conditions.
That’s according to the DHL 2024 Peak Season Shipping Survey, released today by express shipping service provider DHL Express U.S. The company surveyed small and medium-sized enterprises (SMEs) to gauge their holiday business outlook compared to last year and found that a mix of optimism and “strategic caution” prevail ahead of this year’s peak.
Nearly half (48%) of the SMEs surveyed said they expect higher holiday sales compared to 2023, while 44% said they expect sales to remain on par with last year, and just 8% said they foresee a decline. Respondents said the main challenges to hitting those goals are supply chain problems (35%), inflation and fluctuating consumer demand (34%), staffing (16%), and inventory challenges (14%).
But respondents said they have strategies in place to tackle those issues. Many said they began preparing for holiday season earlier this year—with 45% saying they started planning in Q2 or earlier, up from 39% last year. Other strategies include expanding into international markets (35%) and leveraging holiday discounts (32%).
Sixty percent of respondents said they will prioritize personalized customer service as a way to enhance customer interactions and loyalty this year. Still others said they will invest in enhanced web and mobile experiences (23%) and eco-friendly practices (13%) to draw customers this holiday season.