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Remarks at Supply Chain Infrastructure Competitiveness Conference

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AS PREPARED FOR DELIVERY

Monday, May 11, 2009

CONTACT OFFICE OF PUBLIC AFFAIRS

202-482-4883

Secretary of Commerce Gary Locke
Remarks at Supply Chain Infrastructure Competitiveness Conference
Washington, D.C.

Thank you, Michelle. Good morning everyone. Transportation Secretary Ray LaHood and I are pleased to welcome you to today’s Supply Chain Infrastructure Competitiveness Conference.

I want to thank the Council on Competitiveness and the International Trade Center for their help in putting together this program.

We’re also honored to have Senator Mark Warner here with us this morning.

We’ve invited you here to discuss an issue critical to nearly every facet of our economy: the health of America’s domestic supply chain infrastructure.

To be competitive in today’s global economy, U.S. companies need to be able to move products and goods securely, quickly and efficiently within our borders and beyond. America cannot compete successfully in the 21st century with a 20th century infrastructure.

Secretary LaHood and I are committed to working together with stakeholders to develop new national policies and a comprehensive approach to addressing this complex issue. This conference is the first step toward that goal.

At its most basic, a competitive domestic supply chain infrastructure represents our ability as an economy—as a nation—to move products and goods.

As governor of Washington state, I saw first-hand the importance of a strong supply chain infrastructure. The exports and imports that flowed through the supply chains in Washington supported more than 10 percent of our private sector jobs. And 90 percent of Washington’s exporting companies were small and medium-sized enterprises, with fewer than 500 employees.

While much of the debate over supply chain infrastructure focuses on international trade, the fact is that domestic commerce is responsible for more than 85 percent of what passes through U.S. rail, trucking, air, and marine systems.

What this means is that America’s supply chain infrastructure deficiencies don’t only impact the competitiveness of our foreign trade. They affect the strength of the entire American economy.

The logistics sector today represents about 10 percent of U.S. GDP by itself. By international standards, that is relatively low and suggests a high degree of efficiency, especially in comparison with other important economies that spend as much as 20 percent or more of GDP on logistics and transport.

However, America’s job prospects depend on the health of the infrastructure that supports our domestic and international supply chains.

Of five major industry sectors that represent over 80 percent of the U.S. economy, four—manufacturing, retail, services, and agriculture and natural resources—are critically dependent on transportation. The fifth sector is the transportation and distribution sector itself.

Last year, the U.S. Chamber of Commerce reported that employment in these four transportation-dependent sectors accounted for some 99 million U.S. jobs, or nearly 71 percent of the U.S. workforce.

The transportation and distribution sector—including direct transportation, warehousing, and wholesale trade—account for an additional 7.5 percent of our workforce, nearly 11 million jobs.

Our nation has long enjoyed a world-class transport infrastructure. But we are placing rapidly growing demands on aging infrastructure systems.

We need to find new methods to move products more efficiently if we are to keep pace with the rest of the world.

That means viewing the relationship between trade and transportation more broadly, in interconnected and interrelated ways that are much more complex.

Old solutions are not enough. Supply chains today are being changed dramatically by forces that go beyond traditional transportation remedies.

At every level of a supply chain, one sees more advanced information technology applications, more sophisticated equipment, more integrated business processes. These developments require higher levels of education and training—plus some means to fund them.

In Washington, we made investments in our ports in Seattle and Tacoma, while at the same time forging partnerships with the great companies and universities in our region to provide the educated workforce that can compete at the top in today’s global economy.

Our challenge is to explore supply chain issues in an interconnected, intermodal way that cuts across the broad range of national priorities and sets the path to future success.

So thank you for sharing your time and expertise with us today.

I conclude with this: It is my pleasure to announce with Secretary LaHood that we plan to reach an agreement between our two departments to further address the challenges and opportunities identified during this conference.

Once again, let me express our joint commitment to working with all of you here today – and with the broad spectrum of America’s businesses and consumers—to achieve a faster, safer, more environmentally sound, more efficient national supply chain network that will meet our needs for the 21st century.

Thank you.