The Precarious Relationship of Infrastructure and Supply Chain Transportation

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The supply chain is a complex ecosystem involving many interconnected parts, and transportation is one of the main pillars of supply chain that cannot be overlooked. Without transportation, products would never make it from the supplier to the receiver resulting in business failure. Understanding the role transportation plays in supply chain management is very complex, and it’s impossible to fully appreciate everything that goes into transportation without an understanding of infrastructure- specifically, transportation infrastructure. According to supplychainquarterly.com, “No supply chain activities can take place without infrastructure” and infrastructure is pivotal in influencing how effective or costly these activities are.

 

Transportation infrastructure involves all of the highways, byways, railways, waterways, bridges, and airfields a product must cross before it gets into the hands of the receiver. You’ve probably heard by now that a lot of the world’s infrastructure, particularly in North America, is reaching the end of its lifespan and falling into disrepair.

 

In the United States, infrastructure is a key concern addressed by political figures and factored into their agendas. President Trump addressed an overhaul of infrastructure as one his primary objectives, spurred by some alarming statistics. According to the U.S. government, one out of every nine bridges in the United States is considered structurally deficient and at risk of collapse, yet they continue to support massive volumes of traffic every day. Illinois and Connecticut are home to some of the worst roads in the country, with 73 percent of the roads in each state considered to be in poor or mediocre condition. The American Society of Civil Engineers (ASCE) gives America’s infrastructure a grade of a D+ and estimates that full repairs to the nation’s crumbling infrastructure will require an investment of $3.6 trillion by 2020. If repairs and reconstruction are delayed even further, this number could hit $14 trillion by 2040.

 

These huge numbers are alarming for obvious reasons, and it is important to consider that in addition to being a major macroeconomic concern, problems to infrastructure are also problematic to businesses on the micro-level by impacting the supply chain. A report from a meeting of the World Economic Forum states that, “Deficiency in transport and communications infrastructure is one of several supply chain barriers that act as obstacles for speeding up global economic growth.”

 

If supply chain transportation avenues are impaired, economic growth falls into the same category. A nation’s supply chain is closely tied to its economy in a quasi-symbiotic relationship. If one fails, the other is almost certainly guaranteed to fail as well. As these statistics indicate, the relationship is a precarious one at best.