HBR Threat of Global Gridlock Jul 09 tcm80 48165
www.hbr.org
The Threat of Global
Gridlock
by George Stalk, Jr.
Reprint R0907T
This article is made available to you with compliments of BCG. Further posting, copying or distributing is copyright infringement. The Threat of Global
Gridlock
COPYRIGHT © 2009 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED.
by George Stalk, Jr.
As our worldwide transportation network becomes less and less able to support the demands of a global economy, we’re heading straight into a crisis.
A crisis? How can we be facing a critical shortage in transportation capacity when plummeting demand and rising protectionism have reduced the flow of goods around the world to a trickle? When container ships are being laid up and the rail and trucking industries are laying off workers? When the
United States is spending billions of economic stimulus dollars on improving its transportation infrastructure?
Today’s economic meltdown masks the threat. But if prerecession trends reappear
when the economy recovers, lack of infrastructure capacity, in combination with rising oil prices, will constrain global trade and drive up costs. The U.S. stimulus package, with its focus on “shovel-ready” projects that quickly create jobs, will produce newly painted bridges and newly paved roads but is unlikely to address the capacity problem.
Few executives realize the magnitude of the challenges that are about to hit them. Even fewer are investing to reduce transportation costs, improve logistics, and gain an advantage.
But before companies can outsmart competitors with creative responses to the crisis, they need to understand it.
harvard business review • july–august 2009
This article is made available to you with compliments of BCG. Further posting, copying or distributing is copyright infringement. page 1
The Threat of Global Gridlock
By Truck
By Ship
Increases in traffic have outpaced road construction in Europe and the U.S. Consider that the capacity of the U.S. highway system
The Threat of Global
Gridlock
by George Stalk, Jr.
Reprint R0907T
This article is made available to you with compliments of BCG. Further posting, copying or distributing is copyright infringement. The Threat of Global
Gridlock
COPYRIGHT © 2009 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED.
by George Stalk, Jr.
As our worldwide transportation network becomes less and less able to support the demands of a global economy, we’re heading straight into a crisis.
A crisis? How can we be facing a critical shortage in transportation capacity when plummeting demand and rising protectionism have reduced the flow of goods around the world to a trickle? When container ships are being laid up and the rail and trucking industries are laying off workers? When the
United States is spending billions of economic stimulus dollars on improving its transportation infrastructure?
Today’s economic meltdown masks the threat. But if prerecession trends reappear
when the economy recovers, lack of infrastructure capacity, in combination with rising oil prices, will constrain global trade and drive up costs. The U.S. stimulus package, with its focus on “shovel-ready” projects that quickly create jobs, will produce newly painted bridges and newly paved roads but is unlikely to address the capacity problem.
Few executives realize the magnitude of the challenges that are about to hit them. Even fewer are investing to reduce transportation costs, improve logistics, and gain an advantage.
But before companies can outsmart competitors with creative responses to the crisis, they need to understand it.
harvard business review • july–august 2009
This article is made available to you with compliments of BCG. Further posting, copying or distributing is copyright infringement. page 1
The Threat of Global Gridlock
By Truck
By Ship
Increases in traffic have outpaced road construction in Europe and the U.S. Consider that the capacity of the U.S. highway system