The Top 5 Threats to Delivering the Intermodal Promise – Part Three

11 10 2011

By Cento Sharp, Cento Sharp Consulting

Cento Sharp#2 – Poor Development of Transportation Infrastructure

The transportation infrastructure aspect of the global supply chain is undoubtedly the most difficult aspect to improve. Significant infrastructure improvements cost countries billions of dollars. The improvements to waterways, railroads and highways must be planned, initiated and approved by government stakeholders as well as leaders in the business community.

What makes transportation infrastructure projects difficult to obtain approval is the inability of one or two single entities to profit quickly from their implementation. Infrastructure is a commitment to improving the overall community in which the businesses and corporations operate. When a coastal trade lane becomes capable of handling more raw tonnage in terms of freight imported and exported, it often takes years and sometimes decades to realise the financial benefits.

Across the globe:

  • India plans $7 billion in ports investment – estimated by 2017 to build seven new ports and triple merchandise exports
  • Marseille plans huge shift to rail – estimated in 10-15 years with rail shipments expected to double
  • President Obama pledges $50 billion for failing United States transport infrastructure – immediate start includes highways, railroads, airports and seaports
  • Bulgaria freight privatisation moves forward – more rail flexibility desired by splitting BDZ Passenger Services from BDZ Freight Services through privatisation of the organisation

As each of these stories indicates, the ongoing battle with infrastructure improvements is the global supply chain’s most ominous challenge. The long time to recoup the benefits of infrastructure investments and the massive business and political commitment required to ensure the success of these types of projects will keep expansion slow, but steady.

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