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As Con-way Freight’s representative in Washington, Mullett follows a lot of issues, especially those that affect Con-way’s operating costs and productivity or that eliminate choices for shippers, he says. Halfway through 2014, the topic at the top of his agenda is transportation funding.
“As of August, the Highway Trust Fun, will be insolvent and it is critical that Congress pass an extension, even one that just takes us through the end of MAP 21 in October,” he says. “My guess is that they will pass a six- to nine-month extension to carry us beyond the first of next year.”
How to pay for such bridge funding will be a difficult issue to resolve, particularly given the uncertainty around which party will control the Senate after the November elections, Mullett says. “I think the Republicans smell blood in the water and that takes away a lot of their incentive to get something done before the end of the year.”
Mullett says he thinks a short extension will be passed with some sort of compromise on transferring money from the general fund. After the first of the year Congress hopefully will get serious about passing a full highway funding bill. “They will have to decide whether to combine the House version of the bill with various Senate versions that have been crafted by Democratic controlled committees,” says Mullett. “If the Republicans win a majority in the Senate, they will want those to become Republican bills.”
Mullett says he is continually surprised that business interests aren’t more active in supporting highway funding legislation. “Many businesses are very dependent on the highway system to reach markets, maintain their supply chains and to be competitive in the rest of the world, so it always been a surprise to me that people in the shipping community do not pay more attention to these issues,” he says. One reason, he believes, is that for so long logistics costs, as a percent of sales, were on a downward trend. “Because of low oil prices, strategies like just-in-time, technology advances, and because we have had such great infrastructure, logistics costs for many years were going down,” says Mullett. “That flattened out around the turn of the century and that trend line is now creeping up. But because it went down for so long, shippers didn’t see the need to pay much attention.”
Another reason, he says, is that in many companies the people involved in logistics and the supply chain do not report to the CEO. “They are catchers rather than pitchers – they don’t control the ball,” Mullett says. “This is a great frustration to me as I try to put coalitions together in Washington.”
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