Customs Update: Pulse of the industry
(Published in The JOURNAL of COMMERCE April 28, 2004 )

In last month's column, the proposal was made that forwarders be allowed to X-ray cargo as a means to expedite release upon arrival in the United States. By a resounding 3-to-1 margin, the answer was no! This month, we want to find out how you feel about infrastructure improvements.

In a February article, Bill Mongelluzzo discussed a proposal by California Assemblyman Alan Lowenthal that deals with port congestion in California. The idea is to charge a premium fee for goods picked up during normal business hours. The theory behind the bill is that if it cost less to pick up cargo during off hours, that would lessen congestion on California's freeways -- a goal with which everyone in the region agrees.

Obviously the federal government has neither the will nor the ability to seriously deal with badly needed infrastructure improvements such as dredging, access roads, rail connections, and the like, much less expansion and repaving of highways. Even if Congress could make a firm decision today, it would take years for the full impact to be felt. Unless something is done in the near future, capacity will outstrip infrastructure. If that occurs, how will ports and transport companies respond? What will be the reaction of consumers when the latest hot toy for the Christmas season can't get to the shelves in time?

The American Highway Users Alliance (AHUA) released a report recently which is of interest. While the report covered traffic clogs the AHUA calls bottlenecks, clearly the focus was rush-hour commuters. Finding the worst bottleneck to be the Ventura Freeway interchange with the San Diego Freeway (something those of us living in Southern California knew instinctively), the study found that modest investments in infrastructure result in large savings. The report cited the example of a $293 million project to reconstruct a major interchange in Albuquerque. The net result was that annual hours of delay dropped from 16 million in 1997 to 1.1 million in 2002.

The yearly race for highway dollars is again before Congress and languishes during the squabbling which inevitably occurs in an election year. Lowenthal's bill deems the hours of 8:00 a.m. to 5:00 p.m. Monday through Friday as regular business hours. Its stated intention is to push the big companies to move their goods during off-hours. The Assemblyman has also said he introduced this bill as a means to push the private sector to a solution. So, the first question is, should the private sector be responsible for reducing traffic congestion?

Assuming you agree with that premise, how would this work? Clearly the big shippers can revise their operations to allow receipt of cargo on weekends and at night, but what about the little guy? As things stand, he doesn't even have enough buying clout to insure that his order is properly filled, can he really be expected to receive cargo at night? The likely answer is no which means the burden of storing the cargo will fall on the truckers, who are already overworked and, some would say, underpaid. So the second question becomes, is it realistic to expect truckers to provide this service? If so, how much more would you be willing to pay for safe overnight storage of your cargo?

The Lowenthal proposal gives tax credits to those companies which ship at night and on weekends. If one assumes this is a proper way to proceed, wouldn't it make more sense to find a way to not put smaller companies at the competitive disadvantage the increased costs will cause? That brings us our third survey question this month: Should off-hours pick-up only kick in for shippers of a certain size?

Finally, Mr. Mongelluzzo's article discussed targeted user fees. Our final survey question: Would you agree to the imposition of a modest user fee to deal with the congestion problem if there was a way to insure that user fee was collected, administered and dispensed locally?

I look forward to your responses.