Split Decision

Split Decision

For the logistics and transportation industry, the world moved on two very sharply different tracks in 2005 - one showing off the logistics industry at its very best and the other demonstrating the steep challenges businesses face in keeping goods flowing and ensuring that supply chains fulfill larger missions without stumbling over roadblocks along the way.

The wide division in 2005 was between what private industry delivered through logistics and what government did not.

The clouds over supply chains in 2005 formed the year before, when an economic resurgence ran right up against a transportation capacity crisis that sent logistics managers scrambling for new strategies.

But the year began with unimaginable tragedy as extent of the South Asian tsunami at the end of 2004 became clear, with more than 200,000 lives lost and civilization seemingly wiped away in moments.

Yet this sorrow unseen in modern times also showed logistics at its very best. With many millions of people facing starvation and disease, logistics operators from around the globe not only brought in supplies but also tasked hundreds of workers to set up logistics centers across the sprawling disaster zone, creating rapid and efficient pipelines for relief that helped the region avoid even greater suffering.

In the commercial world, shippers responded last year to the problems of 2004 by undertaking a massive reconfiguration of supply chains in North America.

Container ships famously stacked up off the Port of Long Beach the year before were sent on new routes across the West Coast and through the Panama Canal to the East Coast. At the same time, new distribution centers were planned, built or expanded in the Southeast, the Midwest and other points to handle shipments moving on new pathways to final destinations. The rails may have taken new heat for some service issues, but the new hires and new strategies largely paid off in clear track. With backlogs finally cleared, the ports in Southern California set up a more permanent solution by implementing changes such as PierPass and set up new plans to clear the docks and keep an import-driven economy moving.

In fact, for shippers, their logistics providers and transport carriers, it was a year of exhilarating accomplishment - unless they counted on Washington.

From Congress to the battered shorelines of the U.S. Gulf region, the government in 2005 failed to deliver.

The collapse in the response of Hurricanes Katrina and Wilma was terrible enough but what they said about the nation's readiness to respond to disaster four years after the September 11 terror attacks was shameful.

Congress finally delivered a highway bill but it was two years late and the politics of it made the transportation world's top spending plan an object of ridicule. Moreover, the bill itself lacked the backing needed for important freight projects and it offered nothing whatsoever for intermodal connectors.

That supply chain managers could deliver so much in 2005 is a testament to their skills and attention to solving the problems of 2004. That the government delivered so little foretells the sort of flexibility and creativity those logistics managers will have to bring to supply chains in 2006 and after.