ABOUT THIS TIME EACH YEAR, I TRY TO IMAGINE WHAT
supply chain developments we might see over the next 12 months.
But after the contentious presidential campaign and its surprise
outcome, it’s difficult to predict what might happen in 2017. My
hope is that we will continue to see exciting developments in areas
like drone use, last-mile deliveries, increased customer intimacy,
growing sophistication in the logistics service provider (LSP) sector,
driverless vehicles, supply chain transparency, and robotics.
I think it’s more likely, however, that this year will bring a number of changes in the more basic operational areas. What these
changes might be is difficult to predict, though. The slate of (
yet-to-be-confirmed) cabinet members and advisers selected by the
president-elect reveals little except the fact that it
is an eclectic group. It contains politicians, both
state and national; business leaders; military leaders; a female wrestling promoter; and a former
secretary of labor who happens to be married to
the Senate majority leader. What’s particularly
interesting is that some of them have a dog in
the hunt they will be managing. For example, the
new choice for secretary of labor is a fast-food
CEO who’s violently opposed to the idea of a $15
minimum wage. Where this band of merry men
and women will take us is anyone’s guess.
One thing I think we can finally count on
is some movement on shoring up the country’s crumbling infrastructure. President-elect Donald Trump has
released a plan that includes $1 trillion in investment, supported by
as much as $140 billion in tax credits. While this would fall short
of covering the total cost, at least it is a start, and I believe that for
the first time in many years, we might see a workable plan. Having
said that, I also believe we will all feel a little more comfortable
when we see a sound total funding proposal. Management of the
infrastructure initiative will fall to the secretary of transportation—
presumably Elaine Chao, who served as secretary of labor under
George W. Bush. Some think her marital relationship will help her
push the administration’s transportation agenda through Congress,
but whatever the case, I believe we will see some significant progress
on infrastructure. Both Democrats and Republicans in Congress
should be willing to get on board since Democrats will like the job
creation aspect and Republicans the tax reform.
Chao’s record in government suggests she is not a big fan of
regulation. During her four-year term as secretary of labor, OSHA
issued no significant new safety regulations. She seems to prefer
BY CLIFFORD F. LYNCH fastlane
2017: The big question mark
leaving regulation to the states. Since she
will be directly responsible for the Federal
Motor Carrier Safety Administration, this
bias could mean a new look at several con-
tentious motor carrier safety regulations,
including the driver hours-of-service rule.
Chao’s appointment to the top job at
the Transportation Department would like-
ly have implications for the rail industry
as well. The Surface Transportation Board
(STB) seems to be leaning toward some
serious rail reregulation (it is considering
new rules for reciprocal
switching as well as caps
on certain rates). Most
believe the board’s current
thinking runs counter to
the intent of the Staggers
Act of 1980 and will harm
both the industry and
the economy. The STB,
which is currently con-
trolled by Democrats, has
two vacancies. I believe
that between Trump and
Chao, we will see these
vacancies filled quickly, and new thinking
will prevail.
On another matter: Look for a quick resolution to the controversy over the Dakota
Access pipeline as well.
The supply chain will no doubt feel the
impact of other politically motivated changes in 2017. But once again, I believe the
best course of action for the supply chain
manager will be to stay flexible and seize any
opportunities that may come along.
Clifford F. Lynch is principal of C.F. Lynch & Associates, a provider of logistics management advisory services, and author
of Logistics Outsourcing – A Management Guide and co-author
of The Role of Transportation in the Supply Chain. He can be
reached at cliff@cflynch.com.
