Banyan Global

Published: November 28, 2017

The Coming Infrastructure Crisis

As the lingering effects of the global recession continue to gnaw at economies around the world, container ships are being laid up and the rail and trucking industries are dealing with layoffs and decreased demand. But this slowdown in the transportation sector can’t mask a fundamental reality: the crisis in the logistics infrastructure that was building before the recession is now just a matter
of time.

This coming crisis is a megatrend—one that is going to sweep all of us along in its path. Fueled by increasing cross-border trade and rising global demand for everything from toothpaste to automobiles, the growing strain on transport capacity can be seen at the world’s container ports, on the railroads that move goods inland, on highways and urban roads strangled by gridlock, and at airports that struggle to operate with outdated air traffic control facilities and limited runway space.

In North America and Europe, these key components of infrastructure—the bones, muscles, and nerves that keep our goods in motion—are not being adequately maintained, much less enhanced. Squeezed by budget constraints, governments are putting infrastructure investment on the back burner. Our ports, roads, rails, and airports cannot keep up with the ever-greater demands we place on them. And as increasing congestion hinders the flow of goods, our supply chains will become less reliable—and less able to deliver on time and at anticipated costs.

First Published: FEBRUARY 02, 2011.bcgperspectives.com

 

Published: November 28, 2017

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George Stalk is a Senior Partner at BanyanGlobal. He leads Banyan’s strategy practice, which focuses on creating unassailable competitive advantage in family enterprises.