There's no getting around the fact that other countries provide sourcing alternatives that create structural challenges to our supply chain. At the same time, however, our relationships with overseas suppliers should lead to increased demand for our goods in their markets. If an overseas supplier does well, we should expect some demand for our goods and services in return. This certainly flies in the face of a hands-off approach to free markets. But the theoretical free-market system assumes a degree of homogeneity that doesn't fit the current model.
As a free-market society, we should benefit from the ability to create new businesses, products and jobs. But if the multi-nationals are forced to seek less expensive unit production elsewhere, we'll have to make up for the loss in jobs by developing alternative business models. We'll have to rely on our small- and medium-size businesses to be the mainstay of new jobs in the U.S.
We must increase our investment in the production factors that encourage the creation of these businesses, including our distribution system. We must improve that system significantly, as well as invest in the infrastructure needed to support the movement of goods. We need accurate and reliable data so we can identify trends in delivery systems and equipment requirements in order to help equipment developers, distribution system designers, and infrastructure planners meet our future needs.
No matter what our individual roles in the supply chain, we all need to understand how the decisions are made that affect getting goods and services to market. If we don't, and the flow of goods is restricted, the economic harm that follows will be difficult to overcome.
Most people don't understand that cost-effective transportation is what makes it possible to stand in a supermarket in Florida and have a choice of apples from Washington, Michigan or New York. When markets are opened to several suppliers, competition ensures that people will get the best quality at the lowest price. Not only does quality of life improve with the quality of goods, but keeping prices in check helps keep inflation under control. Trucking makes this possible.
The average length of haul for Class 8 tractors has increased dramatically during the past decade. As the rail system loses market share to trucking, the pressure on trucking's infrastructure increases. For the most part, this fact seems to go unnoticed by both regulators and those who control the budgets in Washington, DC.
Those who think that spending money on infrastructure is not a priority need to be made aware of the benefits that would result. First, there's the creation of jobs in the geographic areas where infrastructure development is taking place. Second, is the fact that companies in these areas will be able to get their products to distant markets. Third, these companies will also be able to choose from a wider range of suppliers, taking advantage of better prices. Last but not least, there will be a reduction in traffic congestion, resulting in better air quality and increases in productivity.
Recently, state and local governments across the country have seen revenue shortfalls that will likely result in a shift of priorities away from spending on infrastructure. Since we expect the economy to improve next year, it's not too soon for all of us in trucking to try to convince the government to change its priorities. Everyone will benefit.