Victoria Kickham started her career as a newspaper reporter in the Boston area before moving into B2B journalism. She has covered manufacturing, distribution and supply chain issues for a variety of publications in the industrial and electronics sectors, and now writes about everything from forklift batteries to omnichannel business trends for DC Velocity.
Logistics industry trade groups and others are lukewarm on the Biden Administration’s request that Congress suspend the federal gas tax for three months to ease pain at the pump, with some calling it a “gimmick” that would do little to help consumers and would harm recent efforts to improve the nation’s infrastructure.
President Biden asked Congress to suspend the tax–which is 18.4 cents per gallon for gasoline and 24.4 cents a gallon for diesel–last week, but the request was met with skepticism from many, including industry trade groups such as the the American Trucking Associations (ATA) and the International Foodservice Distributors Association (IFDA).
Shippers, carriers, and logistics services providers gathered for this week’s SMC3 Connections conference in San Diego said they are skeptical as well. Paul Bingham, director of transportation consulting for S&P Global Market Intelligence, said the proposal would do little to curb the effects of inflation, for instance, saying the move would be “more for show” than anything else. Bingham delivered a U.S. financial update on the first day of the conference. Other speakers at the event agreed, calling it a “band-aid approach” that would bring little savings to U.S. consumers in exchange for a big hit to the recently passed infrastructure spending bill, which receives much of its funding from the gas tax. The proposal could cost about $10 billion, according to White House estimates.This week’s comments echoed those of ATA President and CEO Chris Spear, who spoke out on the issue following Biden’s proposal last week, calling it a gimmick and asking the administration to “get serious about lowering energy prices and reducing inflation.”
“After months of touting the passage of the well-funded Infrastructure Investment and Jobs Act–a much-needed investment in our nation’s roads and bridges–the Biden Administration wants to cut that same highway system’s primary source of funding with a suspension of the federal fuel tax,” Spear said in the press statement, adding that Congress and the Biden Administration should consider three alternatives that “will actually make a difference.” Those alternatives are: making America energy independent, renewing trade agreements with the European Union and Asian Pacific nations to export more American oil and natural gas, and balancing the budget, according to ATA.
“… stop wasting hard-earned taxpayer dollars on senseless programs that drive up inflation and runaway deficits,” Spear said. “Energy independence, trade and a balanced budget. Do that, and America wins.”
Officials at IFDA agreed, emphasizing the need to increase energy production in the United States.
“Instead of a gas tax holiday, which will take away from badly needed infrastructure dollars, President Biden should focus on making America energy independent,” IFDA President and CEO Mark S. Allen said in a statement to DC Velocity. “Increasing energy production here at home will have a meaningful impact on energy and gasoline prices and provide lasting relief for all Americans.”
The move would have little effect on shippers, according to Matt Muenster, chief economist at transportation management solutions firm Breakthrough, adding that the larger problem of inflation will continue to dampen consumer spending and overall economic growth.
“Consumer expectations for inflation are an important driver of consumer spending, and a three-month tax holiday will not likely improve those expectations,” he said. “... we can still expect consumer demand for goods to gradually slow with slower economic growth. That leaves the transportation energy and freight markets mostly unchanged for shippers and their respective transportation costs and demand.”
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The U.S. manufacturing sector has become an engine of new job creation over the past four years, thanks to a combination of federal incentives and mega-trends like nearshoring and the clean energy boom, according to the industrial real estate firm Savills.
While those manufacturing announcements have softened slightly from their 2022 high point, they remain historically elevated. And the sector’s growth outlook remains strong, regardless of the results of the November U.S. presidential election, the company said in its September “Savills Manufacturing Report.”
From 2021 to 2024, over 995,000 new U.S. manufacturing jobs were announced, with two thirds in advanced sectors like electric vehicles (EVs) and batteries, semiconductors, clean energy, and biomanufacturing. After peaking at 350,000 news jobs in 2022, the growth pace has slowed, with 2024 expected to see just over half that number.
But the ingredients are in place to sustain the hot temperature of American manufacturing expansion in 2025 and beyond, the company said. According to Savills, that’s because the U.S. manufacturing revival is fueled by $910 billion in federal incentives—including the Inflation Reduction Act, CHIPS and Science Act, and Infrastructure Investment and Jobs Act—much of which has not yet been spent. Domestic production is also expected to be boosted by new tariffs, including a planned rise in semiconductor tariffs to 50% in 2025 and an increase in tariffs on Chinese EVs from 25% to 100%.
Certain geographical regions will see greater manufacturing growth than others, since just eight states account for 47% of new manufacturing jobs and over 6.3 billion square feet of industrial space, with 197 million more square feet under development. They are: Arizona, Georgia, Michigan, Ohio, North Carolina, South Carolina, Texas, and Tennessee.
Across the border, Mexico’s manufacturing sector has also seen “revolutionary” growth driven by nearshoring strategies targeting U.S. markets and offering lower-cost labor, with a workforce that is now even cheaper than in China. Over the past four years, that country has launched 27 new plants, each creating over 500 jobs. Unlike the U.S. focus on tech manufacturing, Mexico focuses on traditional sectors such as automative parts, appliances, and consumer goods.
Looking at the future, the U.S. manufacturing sector’s growth outlook remains strong, regardless of the results of November’s presidential election, Savills said. That’s because both candidates favor protectionist trade policies, and since significant change to federal incentives would require a single party to control both the legislative and executive branches. Rather than relying on changes in political leadership, future growth of U.S. manufacturing now hinges on finding affordable, reliable power amid increasing competition between manufacturing sites and data centers, Savills 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.