US must “up its game” in logistics performance

U.S. logistics costs need to improve significantly before the domestic steel supply chain can optimize trade into the country or fully exploit future trade agreements, according to the American Institute for International Steel (AIIS).

“If we want to be in top competitive form in the international marketplace, particularly with respect to trade in steel … we have to “up our game” in terms of facilitating trade—that is, in our comparative logistics performance,” AIIS executive director Richard Chriss told AMM via e-mail Nov. 6.

The U.S. ranks behind major trading partners, including Japan, the United Kingdom, Germany and Canada, in overall logistics performance, according to testimony Chriss presented to the U.S. Federal Maritime Commission (FMC) Nov. 3.

Criteria like ease and timeliness of shipment contributed to the United States earning a ranking of 14th in the world in terms of logistics performance as measured by a World Bank analysis, according to Chriss.

But in terms of domestic logistics costs, the U.S. ranked a “dismal” 144th out of 150 countries, he said in his testimony, presented at an FMC forum in New Orleans that was centered on supply chain efficiency and U.S. Gulf Coast ports.

Chriss highlighted U.S. truck driver shortages as one serious obstacle curbing trade through U.S. ports and inflating national supply chain costs.

The American Trucking Association said in March that there were “30,000 unfilled jobs for drivers in the trucking industry.” That shortage is poised to widen in the coming years, the groups said, estimating that nearly 100,000 additional drivers will be needed annually over the next decade to keep pace with rising freight demand.

Costs related to insufficient truck capacity “cascade” through the steel supply chain, Chriss noted in his testimony, citing higher port charges and costs related to delivery and production delays.

“The availability and quality of inland transport of cargo is such an enormous factor affecting trade growth through our ports,” he wrote in the testimony.

Little truck availability means it is hard both to “catch cargo in direct discharge, or to catch cargo for movement to a temporary storage facility in the port,” Chriss added.

“In competitiveness terms, lack of proficiency in these (logistics) areas is equivalent to an additional tax,” Chriss told AMM via e-mail.

Representatives from port authorities, shipping companies, trucking associations and terminal companies attended the FMC forum, overseen by FMC commissioner Rebecca Dye.

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