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Global Grid Lock Essay

2481 words - 10 pages

www.hbr.org

The Threat of Global
Gridlock
by George Stalk, Jr.

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This article is made available to you with compliments of BCG. Further posting, copying or distributing is copyright
infringement.

The Threat of Global
Gridlock

COPYRIGHT © 2009 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED.

by George Stalk, Jr.

As our worldwide transportation network becomes less and less able to support the demands of a global economy, we’re heading
straight into a crisis.
A crisis? How can we be facing a critical
shortage in transportation capacity when
plummeting demand and rising protectionism have reduced the flow of goods around
the world to ...view middle of the document...

S. Consider that
the capacity of the U.S. highway system increased only slightly in the years after 1990,
while traffic grew by nearly half. Truck traffic
grew even faster, particularly in metropolitan
areas. Over the next few years, that trend is
likely to return.

Before the recession, the increasing volume of
cargo passing through key container and bulk
ports in the U.S. and Europe was pushing at
capacity limits. The three largest European
ports (Antwerp, Hamburg, and Rotterdam) experienced significant congestion in recent
years, as did U.S. West Coast ports—most of
which are located in densely developed urban
areas, making expansion of capacity politically
difficult.

U.S. vehicle
traffic

100
1990

indexed to 1990

141
2007

105
2007

Throughput, in millions
of TEU (20-foot
equivalent units)
9.9 9.8

Miles of U.S.
highway lanes

8.2
6.5

Source: U.S. Federal Highway Administration

8.9

8.7

10.8 10.8
9.3

9.7

8.1

Congestion
level

7
.0

2008
2007
2006
2005

By Train
Some look to railroads to reduce pressure on
an overburdened road system. In Europe, however, differences in national gauges, electrical
systems, and management practices place constraints on rail transport. And in the U.S., the
number of track miles fell before the downturn, while the volume of freight traffic
steadily rose, making delays in shipments inland from West Coast ports more frequent.
171
U.S. rail freight traffic

100

2007

indexed to 1990

1990

81
Miles of U.S.
railroad tracks

Antwerp

Hamburg

Rotterdam

Source: Shipping Statistics Yearbook 2008,
Lloyd’s List for 2008, BCG estimates

By Air
Airways may become as jammed as roads, rail
lines, and ports. No new airports are planned
for North America or Europe, and new runways can take a decade to gain approval.
Major upgrades to air traffic control (ATC) systems are needed but have been repeatedly delayed. Without those improvements, traffic
could exceed capacity at nearly 20 major U.S.
airports by 2015.

2007
Airports needing additional capacity
PVD
EWR

Source: Association of American Railroads

ORD
OAK

LAS

MDW

PHL

LGB
PHX

SNA

JFK
LGA
CLT

IAH

TUS
PBI
HOU
FLL
in 2007

George Stalk, Jr., is a senior adviser
and a BCG fellow at the Boston Consulting Group in Toronto and the author of Five Future Strategies You Need
Right Now (Harvard Business Press,
2008).

by 2015, even with planned ATC improvements
by 2015 if planned ATC improvements are delayed
Source: U.S. Federal Aviation Administration

harvard business review • july–august 2009
This article is made available to you with compliments of BCG. Further posting, copying or distributing is copyright
infringement.

page 2

The Threat of Global Gridlock

How Companies Are Affected
Most of today’s retail and durable-goods companies put down their business footprints—
their sourcing, manufacturing, distribution,
...

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