A step closer to better roads

As an industry that relies on our nation’s roads to move goods from place to place, it is refreshing to see Congress finally acting on behalf of infrastructure improvements.

Last week, the House of Representatives approved a six-year, $325 billion bill to fund our nation’s surface roads. The Senate approved a similar plan in July. The legislation is now before House and Senate conferees to reconcile the two bills. Both chambers will then have to approve the conference version. Hopefully, it will soon be in front of President Obama for his signature.

One of the significant measures in the House bill is a National Highway Freight Network that will provide funds and structure for connections to ports and intermodal facilities. This is an important piece considering that these connections are vital to logistics operations.

Another key provision is the requirement that the Department of Transportation set up a program to investigate granting modified commercial driving licenses to what it terms “novice licensed drivers.” These would be drivers between 19 years, 6 months and 21 years of age. Currently commercial licenses are available only for drivers over 21. This potentially opens the doors to a pool of drivers before they begin other careers and should help to fill the ranks where shortages have been persistent for years. Personally, I feel this should extend to drivers 18 and up, but this is a step in the right direction.

Unfortunately, the House also killed a provision that would have raised the weight limit for trucks from the current 80,000 pounds to 91,000 pounds. This is despite evidence that shows such a raise would better utilize existing capacity without compromising safety. It would reduce miles driven, energy consumed, and the total number of vehicles on our highways. Hopefully such a measure will be considered again in the future.

On the whole, it was a good week for transportation advocates.

The high cost of not caring

In my first job after college, I worked in the ocean shipping industry. One of my responsibilities was to arrange transportation of hazardous materials, including verifying that they were properly classified, marked, and documented. As part of my training, I attended a safety seminar designed for shipping line employees, freight forwarders, and stevedores. The Coast Guard officer who presented the seminar began by dimming the lights and projecting a photo of a large cargo ship on a screen at the front of the room. Suddenly the slide changed; in the next image the ship had been blown to pieces, with chunks of steel flying through the air and a huge fireball and black smoke filling the sky above what was left of the hull. “This is what happens if you don’t do your job right,” the officer said. “Take it very, very seriously. People will die if you don’t.”

That was nearly 40 years ago, and I have never forgotten that image or the instructor’s warning. They invariably came to mind each time I handled a hazmat shipment during the 10 years I was an export traffic manager. And they were front of mind again earlier this month, when an explosion that originated in a hazardous materials warehouse destroyed a large area in and around the port of Tianjin, China.

For anyone involved in international trade, the news photos of 40-foot ocean containers that had been twisted, crushed, and tossed like empty soda cans by the blasts were shocking. But that is a truly minor consideration compared to the loss of human life and the innumerable injuries suffered by people who lived nearby.

Which brings us to the title of this post. Because someone—business owners, real estate developers, local government officials, maybe all of the above—did not take the risks of storing and transporting hazardous materials very, very seriously, companies were allowed to construct apartment and office buildings dangerously close to huge quantities of those materials. And because someone—the warehouse operator, and perhaps its customers—did not care enough to do everything possible to eliminate those risks, hundreds of people are dead, injured, or missing.

Safe handling of dangerous goods in transport and storage requires appropriate training, strict discipline, constant vigilance, ferocious attention to detail, and an unflagging commitment by every employee at every point in the supply chain to follow the rules and always do the right thing—no matter how difficult, costly, or time consuming that may be. It is challenging, of course, to enforce such practices across supply chains that span the globe. But as the events at Tianjin make painfully clear, failure to do so could have tragic consequences.

Fast track off track on trade disputes

With its vote to end a Democratic-led filibuster, the US Senate will pass fast track authority this week for the Trans-Pacific Partnership(TPP), the most wide ranging trade deal since the North American Free Trade Agreement. The House will be under enormous pressure to go along.

Most of the details of the pact remain secret as negotiations continue, and that secrecy is one of the reasons that authorizing fast track authority has run into opposition. 

But a more contentious part of the deal is the Investor-State Dispute Resolution (ISDS) mechanism. That creates a binding arbitration process by which foreign investors can challenge a nation's laws or regulations that they contend unfairly cause those investors economic harm. 

ISDS has been a part of trade agreements for a long time. but as large international firms have used the process more and more often to go after laws and regulations they don't like, ISDS has become a central issue to opponents of TPP and similar agreements (notably the now stalled Transatlantic Trade and Investment Partnership.) 

When you look at some of the ISDS challenges, it's no wonder. As the Economist reports, "Among the cautionary examples often cited are the suit brought by Vattenfall, a Swedish energy firm, against the German government for phasing out nuclear power after the Fukushima disaster and that of Veolia, a French utility, against the Egyptian government for raising the minimum wage." And there others like that that create similar concerns. Philip Morris Asia, for example, has challenged Australia's rules aimed at reducing smoking by requiring health care warnings on tobacco packaging under the ISDS procedures. The results of that case are pending. Furthermore, ISDS cases have proliferated, jumping sharply over the past decade or so, 

It surprises me that the Obama administration has not seemed amenable to reforms in the ISDS process to allay at least some of the concerns of the TPP opponents. The Economist, in the same report, says European trade authorities, in an effort to restart the transatlantic talks,  have suggested changes that would make the process more like that found in courts of law, with public access, permanent arbitrators, and an appeals process.

The original idea behind ISDS processes was to protect investors from arbitrary and confiscatory rules in nations where they invested in order to encourage that very investment. But it seems to being used more often to challenge laws and regulations that are merely inconvenient--health and environmental rules, minimum wage laws and the like. Furthermore, with business investment flourishing around the world, even the need for ISDS might be questionable.

I'm no foreign trade expert, but a process that could let outside arbitrators rather than our own courts determine whether our rules and regulations are legitimate--a process, by the way not open to all-- makes me as a citizen pretty uncomfortable.