Transportation congestion will
harm world economy
Warning from APL CEO, Ron Widdows
Inadequate transportation infrastructure and congestion will
negatively impact worldwide economic growth in the years ahead and
urgent action is required globally to accelerate the pace of
infrastructure development. That’s the warning from Ron Widdows, CEO
of one of the world’s top-ten container shipping lines,
Speaking before the European Conference of Ministers of Transport (ECMT)
last week, Widdows told the continent’s leading transportation
officials: “If our transport infrastructure can’t keep pace with the
rate of growth, then big question marks hang over the continuation of
the kind of economic prosperity that’s been delivered this decade.”
The 54-year old ECMT, created to focus on Europe’s transport issues,
convened its meeting in Sofia to consider a single issue for the
first time: “Congestion: A Global Challenge.” Widdows became the
first private-sector speaker to ever take part in the conference.
Acknowledging that transportation and congestion are global concerns,
the ECMT took an additional step to expand its scope by launching the
International Transport Forum. In addition to EU and other European
country ministers, ministers from Canada, Mexico, and Japan, other
non-European countries as well as the U.S. Department of
Transportation and the United Nations were represented at the
Widdows told the international audience that: "We are discussing an
issue of worldwide importance. That’s why it is encouraging that
ministers from so many countries are meeting to discuss how best to
address the impact that congestion has on global trade and economic
growth. The initiative to focus on the problem as a global issue is
to be commended.”
This was the latest in a series of high-level alarms sounded by APL
and Widdows to warn against overcrowding at seaports, highways and
railways worldwide. It was the shipping executive’s first major
opportunity to address European and other major government ministers
on the impact of supply chain congestion, following a series of
engagements with the U.S. Department of Transportation and the Bush
Administration’s Domestic Policy Council in 2006.
Widdows told his audience of government leaders that transportation
infrastructure can’t keep pace with global growth in trade. By 2010,
he said, global container volumes will be double the level of 2000.
But in many of the world’s key markets, he added, the transportation
infrastructure won’t be able to handle the load without negative
impact to the flow of goods.
Massive investments are needed to modernize and expand the transport
system, Widdows said: Otherwise, congestion will slow future economic
growth rates, add enormous costs to global supply chains and could
lead companies to reconsider their sourcing strategies.
To illustrate the problem, Widdows said that in the first quarter of
2007, only 46% of container vessels globally arrived at ports on time
– the lowest level on record. At the port of Rotterdam, only 35% of
vessels arrived on time. At European ports overall, less than 30% of
vessels arrived on time.
The problem is caused by transport bottlenecks around the world,
Widdows said. For example, he pointed out that:
Emerging economies in India and Vietnam urgently need to build and
expand ports and inland road and railway infrastructure.
In the leading consumer economies – Europe and the U.S. – there is a
need most significantly for expansion and greater efficiency at
Europe in particular must find a means for rail transport to play a
larger role since trucks continue to be the primary mode for inland
transport, creating greater congestion on the roads and a negative
impact to the environment.
“Because of the highly interconnected and integrated nature of the
systems that today service international trade, we need a consistent
worldwide approach to implement solutions,” said Widdows. “Congestion
in any major part of the world’s supply chain has global
Widdows called for an expedited, but environmentally sensitive
response to the problems of congestion. He urged governments –
including the European transportation ministers -- shippers and
transportation industry executives to collaborate on solutions.
“Everyone with a stake in global trade has a role to play,” said
Widdows. “Governments, shippers, transportation providers – we must
all do, and pay, our fair share. We must all contribute ideas. And we
must expect that it will take a long time.”