Defense Transportation Journal

The Official Publication of the National Defense Transportation Association

February 2014

www.ndtahq.com

The Infrastructure Issue

Pipeline Capacity Ensuring the Resiliency the US Requires The NDTA Foundation The “Quiet Committee” In Flux America’s Transportation Infrastructure

Global Challenges: American Ingenuity

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February 2014

FEATURES Pipeline Capacity February 2014 • Vol 70, No. 1

Ensuring the Resiliency the US Requires

8

By Lt Col Darien J. Hammett, USAF Publisher

LTG Ken Wykle, USA (Ret.) Editor

Dr. Kent N. Gourdin Managing Editor

The NDTA Foundation The “Quiet Committee”

16

By Larry Larkin

Sharon Lo | sharon@ndtahq.com Circulation Manager

Leah Ashe | leah@ndtahq.com Publishing Office

NDTA 50 South Pickett Street, Suite 220 Alexandria, VA 22304-7296 703-751-5011 • F 703-823-8761

In Flux America’s Transportation Infrastructure

18

By Sharon Lo

Graphic Design & Production ManAger

Debbie Bretches

Advertising Account Manager

Jim Lindsey

Advertising & Production Carden Jennings Publishing Co., Ltd. Custom Publishing Division 375 Greenbrier Drive, Suite 100 Charlottesville, VA 22901 434-817-2000, x261 • F 434-817-2020

departments young leaders (formerly A-35) | Lori Leffler . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Editorial | Dr. Kent N. Gourdin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Defense Transportation Journal (ISSN 0011-7625) is published bimonthly by the National Defense Transportation Association (NDTA), a non-profit research and educational organization; 50 South Pickett Street, Suite 220, Alexandria, VA 22304-7296, 703-751-5011. Copyright by NDTA. Periodicals postage paid at Alexandria, Virginia, and at additional mailing offices.

Subscription Rates: One year (six issues) $35. Two years, $55. Three years, $70. To foreign post offices, $45.

Single copies, $6 plus postage. The DTJ is free to members. For details on membership, visit www.ndtahq.com.

Postmaster: Send address changes to: Defense Transportation Journal 50 South Pickett Street, Suite 220 Alexandria, VA 22304-7296

President’s Corner | LTG Ken Wykle, USA (Ret.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 special report | NDTA European Region. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Chapter spotlight | NDTA Tampa Bay Chapter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 professional development | Irvin Varkonyi. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 chairman’s circle. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 honor roll. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Bookshelf Ideas. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 index of advertisers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Young Leaders

NDTA Headquarters Staff LTG Kenneth Wykle, USA (Ret.) President

Challenges Looking Forward:

COL Mark Victorson, USA (Ret.) VP Membership

The Way to the Future for Young Professionals

Patty Casidy VP Finance

Lori Leffler, CTC, Young Leaders Chair

Lee Matthews VP Marketing and Corporate Development Leah Ashe Manager, Database Sharon Lo Director of Public Relations Rebecca Jones Executive Assistant to the President Carl Wlotzko Coordinator, Banquet & Special Events For a listing of current Committee Chair-persons, Government Liaisons, and Chapter & Regional Presidents, please visit the Association website at www.ndtahq.com.

Editorial Objectives The editorial objectives of the Defense Transportation Journal are to advance knowledge and science in defense logistics and transportation and the partnership between the commercial transportation industry and the government transporter. DTJ stimulates thought and effort in the areas of defense transportation, logistics, and distribution by providing readers with: • News and information about defense logistics and transportation issues • New theories or techniques • Information on research programs • Creative views and syntheses of new concepts • Articles in subject areas that have significant current impact on thought and practice in defense logistics and transportation • Reports on NDTA Chapters Editorial Policy The Defense Transportation Journal is designed as a forum for current research, opinion, and identification of trends in defense transportation and logistics. The opinions expressed are those of the authors and not necessarily of the Editors, the Editorial Review Board, or NDTA. Editorial Content For a Media Kit and Archives, visit www.ndtahq.com/education_dtj.htm Dr. Kent N. Gourdin, Editor, DTJ Director of the Global Logistics & Transportation Program, College of Charleston, Charleston, SC 843-953-5327 • F 843-953-5697 gourdink@cofc.edu Sharon Lo, Managing Editor, DTJ NDTA 50 South Pickett Street, Suite 220 Alexandria, VA 22304-7296 703-751-5011 • F 703-823-8761 sharon@ndtahq.com

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Defense Transportation Journal

(formerly A-35)

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Global Government Strategic Manager, The Hertz Corporation

M

ore youth involvement—that’s what this association needs. According to NDTA records, that was the topic of an NDTA Board Meeting in early 1970. The board recognized that NDTA was not attracting new young members, and after much discussion the NDTA Youth Involvement Committee was established. Its goals then, 44 years ago, were substantially the same as they are today: to provide professional, educational, career, social, networking, and service opportunities to the younger members of NDTA. The program was so successful that other transportation organizations began starting their own Young Professionals committees.

Initially, the committee was very Headquarters- and Washington, DC-centric, so they set about to change things. The immediate goals were: • Adding a representative to the NDTA Board of Directors • Reducing dues/Forum registration fees • Creating a Young Professional Award • Developing a mentoring program • Dedicating a column in the DTJ • Adding regional and chapter young professional representatives • Writing articles for the DTJ • Organizing scholarship fundraising events • Volunteering for community service projects A big advantage then, that today’s committee does not have, was numerous opportunities throughout the year to attend meetings, seminars, and regional and national forums. These events afforded the committee members opportunities to network face-to-face and be exposed to other young professionals from military, government, and industry. In the future, there will be fewer opportunities to attend and be involved in yearly Forums, meetings, and symposia. Additionally, the slots at upcoming meetings that are available will most likely go to senior leaders. The

February 2014

>> Whether you are young or just

young-at-heart, everyone can support NDTA’s Young Leaders Committee!

The committee’s success requires the support of the entire organization and everyone—no matter what age or professional level—can help. I encourage senior leaders to participate as a speaker for Young Leader events or to volunteer as a mentor. Another simple thing you can do is promote attendance to NDTA events among your younger staff members—not only will they benefit from the professional development, it will help grow your company’s network!

vital middle- and operating-level personnel could be shut out. Yet, that is the very group of members that stands to benefit most from the experiences and training such events provide. Furthermore, such experiences would grow them into loyal supporters of NDTA as they advance to senior positions in their organizations.

So the future challenge is obvious—we must review and adapt what has worked over our first 44 years, while we add new ideas for the future. We will be depending more on technology and social media to help us. Our Facebook, Twitter, and LinkedIn presence will be boosted, and we will depend more on webinars and other longdistance communications. Please contact me with your input on how to proceed in these areas.

We have already taken one small step toward strengthening our brand. We have changed our name from the A-35 Committee to NDTA’s Young Leaders Committee. This name better reflects our mission and committee composition.

However, while the name may be changing, the mission and legacy of the committee’s action-filled history will endure. DTJ

EDITORIAL A Visit to Panama Dr. Kent N. Gourdin, Editor, DTJ Director, Global Logistics and Transportation Program College of Charleston

Happy New Year and best wishes for a successful 2014!

The Johannes Maersk at the Miraflores Locks

G

iven the expected opening of the expanded Panama Canal in 2015, I am planning a travel study to Panama in June for my global logistics and transportation students. In anticipation of that trip, I made a quick visit there in early December to get a sense of the place and came away with a whole new appreciation for the canal’s impact on Panama and global trade. Indeed, we hear a great deal about the importance of the expansion to Charleston and US ports in general, but to actually see ships moving through the locks really brought home the strategic importance of that narrow body of water.

Completed almost exactly 100 years ago, the Panama Canal still remains one of the epic construction feats of all time.

Sadly, like many things, the magnitude of that accomplishment has paled over time; even the expansion has proceeded with relatively little fanfare. The canal has, for most of us anyway, simply always been there. The tremendous cost in human and economic capital to build the thing has been long forgotten as its use has become routine. Global trade and the vessels servicing that trade have grown well beyond the capabilities of a canal designed at the turn of the 20th century.

The fact that it has been relevant for so long is a true testament to the farsightedness of the engineers who created it. As is typical with transportation infrastructure projects, however, many new vessels entering maritime service are too large to transit even the expanded canal. Panamax ships are the largest presently able to use the canal and carry approximately 5,000 Twenty-foot Equivalent Units (TEU); the expansion will permit the transit of New Panamax vessels moving up to 13,000 TEU which means the new Triple EEE-

The cargo ship APL Arabia in the Panama Canal

class ships (20 of which Maersk has on order), each with a capacity of 18,000 TEU, will be unable to use even the larger canal.

One thing that really struck me during my brief stay in Panama, was the magnitude of the US footprint there, and how well the Panamanians are putting those resources to good use. The Panama Canal Zone, created in 1903, was a former US territory within Panama that included the canal and an area extending 5 miles on each side, (in fact, there was even a US District Court for the Canal Zone until 1982). Under the terms of a 1977 treaty, the zone was abolished in October of 1979 and returned to Pana-

manian rule; the canal itself was ceded to Panama in 1999. There were numerous US military installations in Panama (Albrook and Howard AFBs, and Fort Clayton to name a few), which are being repurposed.

In fact, those of you who were stationed there or perhaps grew up as a “CZ Brat” would probably recognize many of the old facilities. The official currency is the balboa, which is pegged to the US dollar; both are accepted interchangeably to the extent that no currency exchange is necessary.

Clearly, the Panamanians have capitalized on the resources the US left behind.

The old Headquarters US Southern Command buildings are situated on beautiful grounds of what was Fort Clayton. Located directly across from the Miraflores Locks, these structures are being turned into the City of Knowledge, which, among other things, emphasizes academic programs and transfer of knowledge between businesses and universities. The old buildings are slowly being restored and new accommodations for student groups like ours are being built. continued on page 28

www.ndtahq.com | 5

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February 2014

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PRESIDENT’S CORNER 2014 Review & Outlook LTG Ken Wykle, USA (Ret.) NDTA President

T

he Department of Defense (DOD) business environment continues to evolve. Operation Iraqi Freedom is complete. Operation Enduring Freedom is scheduled to end December 2014. The recent budget passed by Congress restores some of the defense cuts, but significant reductions continue and the long term issue of sequestration remains unresolved.

The impact of these actions is reduced requirements and resources for the DOD. The DOD budget continues to shrink from a peak of about $738 billion to a projected 2014 budget of about $520 billion, plus almost $81 billion for Afghanistan and other overseas operations. This translates to a smaller Army and Marine Corps, a smaller surface fleet, and reduced procurements. The focus is shifting to special operations, unmanned aerial vehicles, cyber security, space, and submarines.

As we look three- to five-years into the future, we see a primarily US-based force; increased focus on the Asia-Pacific region, with its long distances and challenging supply lines; an increase in multinational military exercises in the Pacific area of operations; and a return to more robust training schedules at the national training centers. The DOD will seek efficiencies through an emphasis on firm fixed price, indefinite delivery/indefinite quantity, and lowest priced technically acceptable contracts. The Department will continue to seek efficiencies in logistics operations—champion commercial best practices, change processes, and reduce overhead costs.

In summary, defense requirements are decreasing, while the budget reductions and sequestration continue. DOD operation and maintenance, and personnel costs are rising. There is increased pressure on acquisition accounts, and ever increasing pressure to reduce the costs of service

contracts. The Department of Defense will continue to seek ways to reduce costs and increase buying power. Logistics and transportation companies doing business with the government and military will have significant challenges in 2014.

NDTA is also evolving to stay relevant and continue to provide value to our members. In 2014, it is our intent to focus on reducing our costs and build on the changes made with our events in 2013.

We are planning a spring Defense Travel and Government Transportation (DTGT) meeting in the greater Washington, DC area. We see opportunities in the areas of defense travel, inter-agency support, and disaster relief. While defense will continue to be the largest customer for most of our members, we are seeking ways for them to “offset” the decline in defense business.

We believe identifying opportunities in other government agencies, and informing members about logistics requirements in response to domestic and international natural disasters and humanitarian aid will provide value for our members.

We are also planning to again co-sponsor the Fall Meeting with US Transportation Command (USTRANSCOM). The dates for the meeting are 28-30 October 2014, at the Renaissance Grand Hotel in St. Louis, MO (the same location/hotel as the 2013 Fall Meeting.) We will be working with the USTRANSCOM staff over the next few months to develop the agenda and program. Please block the dates on your calendar and plan to attend. Should you have suggestions for the agenda and/ or program, email them to mark@ndtahq. com or to ken@ndtahq.com.

Additionally, we will continue with our scheduled committee meetings and Executive Working Groups (EWGs) during the year. We intend to sharpen the focus of these meetings to emphasize industry

save-the-date NDTA-USTRANSCOM FALL MEETING 2014 October 28-30, 2014 St. Louis, Missouri

and USTRANSCOM issues/topics. Active industry participation in these meetings is critical to success. Work closely with the appropriate committee chair to include your topics on the meeting agenda. For our Chairmans Circle Plus and Chairmans Circle members the Transportation Advisory Board (TAB) meeting is scheduled for 22-23 April 2014. This is a great opportunity for industry leaders to share knowledge on changes occurring in their industries, to network with other senior executives, share information on current issues, and to look three- to five-years into the future.

The strength of our association is networking and knowledge sharing. The schedule of events is designed to provide these opportunities. Achieving the best return on your membership investment requires active participation in all aspects of the association. Plan now to participate in our scheduled events.

Thank you for your commitment to NDTA, and for the work you do every day in support of the US economy and our national security. DTJ

W EL C

ME

NEW corporate

members as of January 30, 2014

Sustaining • UniTrans International, Inc.

corporate member upgrades Chairman’s Circle • Fikes Truck Line • U.S. Bank

www.ndtahq.com | 7

Six Key Plays Account for Nearly All Recent Growth in Oil and Natural Gas Production. Source: EIA Drilling Productivity Report

Pipeline Capacity Ensuring the Resiliency the US Requires

By Lt Col Darien J. Hammett, USAF

T

he most serious challenge facing the oil and gas industry today is the ability to meet the increasing demand for its products. With the recent boom in domestic sources of profitable light crude and natural gas, the need to transport these products has gone up significantly. Pipelines are a critical component of transporting these new sources to destinations for both domestic and export use. Since pipelines are safer and much more economical in transporting oil and gas, their use is preferred to other modes of transportation. However, in order to take advantage of the safety and profitability benefits of pipelines, the infrastructure must be in place to support the future demand of these products.

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Pipeline Background

The 2.5 million miles of pipelines in the US are the safest method of transport, responsible for far less injuries and deaths than trucking or rail.1 Pipelines are also more environmentally friendly than the other two modes of transport. As of 2009, pipelines carried 70.2 percent of total crude oil and refined products transported on a ton-mile basis, and approximately 80 percent of all crude oil in the US travels via pipeline.2 By way of contrast, water carriers, motor carriers, and railroads transported 23.1 percent, 4.2 percent, and 2.6 percent of petroleum and refined products, respectively.3 What’s more, is that pipelines have steadily increased carrying more of the load; in 1990, only 54.2

February 2014

percent of crude oil and refined products were carried by pipelines.4 Furthermore, almost all natural gas is transported via pipeline; transporting via barge, truck, or rail increases safety risk and would be much more costly.5 Although barges, trucks and rail are picking up some of the load in new areas being developed, they cannot come close to carrying the vast capacity sent via pipelines. Pipelines are the preferred method for transporting these products because they are not only the safest, they are also the cheapest and most reliable.6 Pipelines are two to three times less expensive than truck or rail.7 Therefore, it is safe to assume that pipelines will continue to carry the vast majority of capacity in transporting these

www.ndtahq.com | 9

While most of the country does not experience full utilization of natural gas pipelines, pipeline capacity is already a problem in a few localized areas of the US. Currently, limited areas of the West Coast, southern Nevada, upper Midwest, Northeast, and Southeast are well above 95 percent utilization on a regular basis.19 Further increases in demand or interruptions in flows could easily create shortages in those parts of the country.

types of products. Given this data and the expected increase in population and demand for these products, the US must ensure the capacity to meet future public and government needs for these valuable resources is preserved.

of our pipelines frequently operating in excess of 95 percent utilization, the current transportation system may need to be expanded in order to meet future demand.

(Pipelines are considered fully utilized when operating at 95 percent.11)

Future Population and Consumption

Bakken Shale Take-away Capacity

Population and consumption are inextricably linked in their effect on oil and natural gas demand; they are the two primary factors in determining future needs of these products. Presently, the US has steady population growth. Of course, growth can be affected by changes in birth rates and immigration, which isn’t always predicted accurately. However, the US Census Bureau estimates that in the year 2050, there will be over 422 million Americans.8 That is an increase of 43 percent from 2005. Using population growth models, the Energy Information Administration (EIA) extrapolates predicted trends in oil and gas consumption to determine needs for the future.9 From 2005 to 2025, demand is expected to increase by 62% for natural gas and 33% for oil.10 With many

North Dakota’s recent surge in oil production due to the shale formation discovery at Bakken is an example of where pipeline capacity is failing to meet the transport need. In March 2012, North Dakota overtook Alaska as the second largest oil producing US state.12 This formation has huge implications for the US reliance on foreign oil, but there are difficulties in getting the oil from the well to the locations that need it. Take-away capacity is the most critical issue for those producers exploiting Bakken, given its distance away from most of the US refining capability.13 Due to the limited pipeline infrastructure in the area, oil producers there depend on rail to move their product.14 However, there are economic consequences to this.

On average, shipping oil via rail is three

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February 2014

times more expensive than shipping via pipeline.15 BNSF is the largest rail mover of US crude (it transports a third of the oil from Bakken). The amount of oil BNSF transported increased 60 percent during the first half of 2012.16 Rail is an adequate option as a stop-gap measure, but is too costly for the long term. More investment in pipeline infrastructure must be made if producers are anticipating welling Bakken for some time. Although it is too early to predict how long the oil will last and remain profitable in Bakken, conservative estimates put the number at 45 years, while more progressive estimates put the number over 100 years.17 Either way, there are additional profits to be had (not to mention environmental and safety benefits) by investing in additional pipeline infrastructure now, and reaping the benefits of reducing costs by one-third.

The demand for natural gas has increased steadily since pipelines began transporting natural gas in the US in the 1920s. The increasing growth in natural gas demand and new sources of supply over the past several years, has led to an

increase in utilization of pipelines.18 This has resulted in the need for additional pipeline capacity in several areas. While most of the country does not experience full utilization of natural gas pipelines, pipeline capacity is already a problem in a few localized areas of the US. Currently, limited areas of the West Coast, southern Nevada, upper Midwest, Northeast, and Southeast are well above 95 percent utilization on a regular basis.19 Further increases in demand or interruptions in flows could easily create shortages in those parts of the country.

While history has shown that production has been able to keep pace with consumption, in 2020, consumption of natural gas is expected to outpace production by five trillion cubic feet (tcf ).20 The dominant driver in the need for additional natural gas pipeline capacity is the expansion of gas-fired electric power plants, which are more environmentally friendly than their coal counterparts.21 In fact, total natural gas production in the US rose from about 46 billion cubic feet (bcf ) per day in 2007 to 66.2 bcf per day in 2011.22 Production growth is primarily attributed to shale generation (like the gas produced at Bakken).23 With the move to greener sources of energy, we can expect the move to natural gas to continue.

For example, according to the Canadian Energy Research Institute (CERI) gas demand in New England (Connecticut, Massachusetts, Rhode Island, Maine, New Hampshire, and Vermont)—which depends solely on pipelines for natural gas—will almost double, from 630 bcf in 1998 to 1.2 tcf in 2020; while, in the Mid-Atlantic, (New York, Pennsylvania, and New Jersey), gas demand will rise from 2.4 tcf in 1998 to 4.1 tcf in 2020.24 In 2010, the forecasted throughput on these pipelines operated near full capacity; the predicted demand will push past the current pipeline capacity and numerous pipeline projects are needed to ensure demand is met.25 Running at capacity will increase the price of the gas. Additional pipelines are needed to ensure demand is met and to control prices.

A number of rail expansion projects are planned to start this summer, to support the capacity need out of Bakken.26 Although rail is more expensive and less safe, it will give the fast-growing area of Bakken the immediate takeaway capacity

The Quadrennial Energy Review On January 9, 2014, President Barack Obama signed a Presidential Memorandum establishing the Quadrennial Energy Review (QER). The QER will focus on developing a comprehensive strategy for the infrastructure used to transport, transmit, and deliver energy. The memorandum was sent to the heads of all executive departments and agencies. These department and agency heads (or their designated representative) will be included as a member of the Quadrennial Review Task Force. Co-chaired by the Director of the Office of Science and Technology Policy and the Director of the Domestic Policy Council, the task force’s first review will be due to the President by January 31, 2015. An excerpt from the memorandum is below.

Other information regarding the review, including specific duties of the task force, can be found on www.whitehouse.gov.

“Affordable, clean, and secure energy and energy services are essential for improving US economic productivity, enhancing our quality of life, protecting our environment, and ensuring our Nation’s security. Achieving these goals requires a comprehensive and integrated energy strategy resulting from interagency dialogue and active engagement of external stakeholders. To help the Federal Government better meet this responsibility, I am directing the undertaking of a Quadrennial Energy Review.

The initial focus for the Quadrennial Energy Review will be our Nation’s infrastructure for transporting, transmitting, and delivering energy. Our current infrastructure is increasingly challenged by transformations in energy supply, markets, and patterns of end use; issues of aging and capacity; impacts of climate change; and cyber and physical threats. Any vulnerability in this infrastructure may be exacerbated by the increasing interdependencies of energy systems with water, telecommunications, transportation, and emergency response systems. The first Quadrennial Energy Review Report will serve as a roadmap to help address these challenges.

The Department of Energy has a broad role in energy policy development and the largest role in implementing the Federal Government’s energy research and development portfolio. Many other executive departments and agencies also play key roles in developing and implementing policies governing energy resources and consumption, as well as associated environmental impacts. In addition, nonFederal actors are crucial contributors to energy policies. Because most energy and related infrastructure is owned by private entities, investment by and engagement of the private sector is necessary to develop and implement effective policies.

State and local policies; the views of nongovernmental, environmental, faith-based, labor, and other social organizations; and contributions from the academic and non-profit sectors are also critical to the development and implementation of effective energy policies.

An interagency Quadrennial Energy Review Task Force, which includes members from all relevant executive departments and agencies, will develop an integrated review of energy policy that integrates all of these perspectives. It will build on the foundation provided in my Administration’s Blueprint for a Secure Energy Future of March 30, 2011, and Climate Action Plan released on June 25, 2013. The Task Force will offer recommendations on what additional actions it believes would be appropriate. These may include recommendations on additional executive or legislative actions to address the energy challenges and opportunities facing the Nation.”

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and flexibility it needs.27 This can open up economic competition by introducing areas to a market once closed due to the lack of pipeline. However without additional pipeline capacity, Bakken oil will eventually be squeezed out by cheaper, pipelineusing crude and natural gas producers. It seems that everyone in the oil business wants the Bakken crude. Shippers and

levels leaves the system vulnerable if an unexpected outage or catastrophe occurs.

Take the case on 19 August 2000, when an explosion occurred on the El Paso Natural Gas Company grid, which affected three pipelines crossing into New Mexico. Over a two month period, unanticipated outages and price spikes occurred in California and Arizona.36 California also experienced roll-

This rise in growth is creating a pipeline bottleneck. Much of the new sites for oil do not have adequate transportation options to compete with incumbent producers that have plenty of pipelines to get product to market.31 This bottleneck is expected to continue for shale oil locations even if all planned pipeline projects, such as Keystone XL and Northern Gateway, proceed as planned.32 refiners from the West Coast (serving the Los Angeles and Bakersfield markets), East Coast (serving Delaware, New Jersey, and Philadelphia), and even the Atlantic and Gulf Coasts all receive Bakken oil.28 In fact, Bakken crude is shipped to nearly every refinery on the Atlantic Coast via rail.29 US oil production is at a twenty year high in 2013, and it is expected to rise in the future.30 This rise in growth is creating a pipeline bottleneck. Much of the new sites for oil do not have adequate transportation options to compete with incumbent producers that have plenty of pipelines to get product to market.31 This bottleneck is expected to continue for shale oil locations even if all planned pipeline projects, such as Keystone XL and Northern Gateway, proceed as planned.32 Additional pipelines on the Gulf Coast would provide two things to domestic suppliers of oil: offshore suppliers would compete directly with domestic shale (which would be cheaper and most likely force prices to decrease) and a reduction of US imports of oil, providing spare capacity to be used elsewhere in the world.33 The extensive growth of shale production and the completion of critical pipeline projects, if approved, will mean that import sources of medium and heavy crude into the US could be replaced with domestic sources.34 Resiliency Needed

The EIA projects that continued development of domestic resources will require additional supplements to the current pipeline grid to support long-term demand.35 Running at or near capacity limit 12 |

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structure used by the refineries. Secondly, the military requires a more resilient pipeline system in the future. Sharing pipeline with other products (a common practice) is becoming an issue. High sulfur diesel contaminates cleaner jet fuel, making it harder to meet the military specification requirements. Meanwhile, ultra-low sulfur diesel is much cleaner and becoming a more popular diesel option. However, it is contaminated by jet fuel when sharing pipes, taking many pipelines out of service for jet fuel in favor of the more profitable ultra-low sul-

ing blackouts for months. In 2011, most major pipeline expansions occurred in the southeastern US; however, large pipeline developments also occurred in the northeast and west.37 With no storage, Florida is dependent on two pipelines to bring in gas, and they are at full capacity in times of high demand because of increased consumption.38 Weather can also wreak havoc on pipelines. Hurricanes Katrina, Rita, and Gustav all interrupted service in a key East Coast petroleum pipeline in separate instances.39 Mishaps, increased consumption, and weather all stress the resiliency of the US pipeline system. While there is a cost for resiliency, this suggests that a more resilient pipeline system may be needed to service these areas and be able to handle disruptions in a more efficient manner.

The Military Need for Resiliency

The military uses pipelines to mobilize for war and in everyday operations. The military has no infrastructure to transport high volumes of fuel to where they need it; they depend on commercial pipelines to move fuel.40 Due to the locations of the sources of supply, pipelines provide the only economical way to transport fuel for the military.41 For instance, the military would pay over a dollar more a gallon to transport fuel via truck than pipeline.42 Pipelines are used to transport fuel to defense fuel supply points, then on to military installations via pipeline or some other mode of transportation.43 The military has several issues with the current and future pipeline capacity structure. First, they must compete for space in the pipeline.44 Demand drives the pricing

February 2014

fur diesel.45 The military would clearly benefit, and in the future will require, a more robust and resilient pipeline system.

Social and Political Resiliency

In addition to their efficiency, pipelines also have important environmental and safety benefits. Compared to other inland transport modes, pipelines do not crowd our highways and rivers, and they produce negligible air pollution.46 Spill rates

for pipelines are significantly less than for trucking or rail. In order to meet the capacity needs of the future in a safe and environmentally friendly way, politicians need to streamline the process for companies to get licenses for pipeline building. Pipeline resiliency is the socially conscious way to meet the capacity needs of the future.

Economics Resiliency

Pipeline capacity plays an essential role in the determination of prices in oil and gas.47 Essentially, much of energy eco-

the main issues of safety, security, economics, and effect on the environment are at the forefront of any conversation.

Make it more Profitable

The first alternative to solve the pipeline capacity problem is to add a subsidy tax to oil and gas use much like the subsidy given to corn farmers for ethanol production. This subsidy tax would be passed straight to the oil and gas producers for the purpose of constructing and maintaining new pipelines. The benefit would

rates are significantly lower for pipelines than any other mode of transport.48 If the US needs additional capacity—and data presented here strongly supports that it does—pipelines are the economic and social carrier of choice. There are known formations of oil and natural gas that would provide additional sources of product once drilling technology and profit margins are improved, as in Niobrara and the Permian Basin.49 Therefore, if prices were to increase, these formations would become profitably lucrative, and supply additional sources of oil and gas. Additional pipelines also clearly benefit the refiners, as they will have steady domestic supplies via pipeline, rather than relying heavily on foreign waterborne imports, as they must today.50 This would reduce the US reliance on foreign oil.

Use Truck and Rail

US Natural Gas Pipeline Network. Source: Energy Information Administration, Office of Oil & Gas, Natural Gas Division, Gas Transportation System.

nomics comes down to simple supply and demand. If additional supply is provided and pipelines don’t run at full capacity, prices are lower. However, without additional capacity, pipelines run at or near their limits and prices rise.

Alternatives and New Policies Needed

When assessing alternatives to transporting oil and natural gas through pipelines,

be geared towards pipelines that are built to increase the capacity in the areas with the largest need in the future. This subsidy would only be given for investments in new pipeline infrastructure. Politicians also need to streamline the process for companies to get licenses for pipelines.

While concerns need to be heard and adjudicated, continuing the debate indefinitely is not an option. Statistics strongly support that pipelines are safer and spill

The most obvious secondary alternative to alleviate the capacity issue for pipelines to transport oil and natural gas is using truck and rail. They have the capability and already carry oil and liquid natural gas today. Trucking has traditionally contributed to the transport of crude and natural gas via the “last mile” to the final destination, but not generally over very long distances. It would be the most expensive option due to the sheer number of trucks it would take to transport high volumes of product. However, it could and does contribute in local transport of product. That being said, non-pipeline modes of transport, especially rail, have recently been increasing their contributions in carrying crude and natural gas from well to final destination. During the first half of 2012, the amount of crude and petroleum products transported by rail increased 38 percent from the same period in 2011.51 Suppliers and buyers have been relying on primarily rail, and to a smaller extent trucking, to fill the pipeline capacity gap to meet increasing domestic demand during this healthy growth in domestic supply. Trucks and rail have more access than pipelines—they can go essentially anywhere there is a road or railroad—but they can only go where there is a road or railroad. Roads and railroads don’t always offer the most efficient route. However, pipelines can be built just about anywhere they are approved. Furthermore, the amount of oil or natural gas www.ndtahq.com | 13

moved by a single pipeline requires 1,400 tanker truckloads or 441 tanker railcars.52 That amount of traffic creates congestion on the roads and railroads, and adds pollution to our environment. Trucking and rail is also statistically more dangerous than pipelines. Finally, although the initial infrastructure costs for generating a new pipeline are high, trucking and rail have significantly higher operating costs than pipelines. Hence, trucking and rail are a considerably more expensive option to pipelines in transporting oil and natural gas. Trucking and rail should provide overflow capability when demand cannot be met with pipelines, but they are not a long-term solution to the pipeline capacity deficiency and should be used only until adequate pipeline capability is in place.

Just Go Green

The final alternative is to implement policies that promote green energy as an alternative to oil and natural gas. As power plants continue to be scrutinized for pollution and look for non-nuclear sources of energy, green energy becomes

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more and more attractive. However, there is another potential benefit to green energy sources. If green energy were made more attractive, the need for oil and natural gas would be less. This alternative would reduce consumption and thereby, reduce the need for more pipeline capacity throughout the US. The proliferation of green energy sources may even reduce consumption of oil and gas with additional population growth. The gas pipeline issue is exacerbated by the fact that most of the new gas-fired power plants are driving capacity to the limits. In 2001, after rolling blackouts and a declared energy crisis in the state of California, the Governor worked with the state legislature to institute programs that gave 50% tax credits for renewable generation systems powering large apartment complexes and office buildings, and $50 million dollars in tax rebates for personal renewable generation systems.53 There needs to be more motivating policy initiatives such as these, and incentives for additional green energy research and development, to increase the use of green energy. There simply wasn’t

February 2014

enough natural gas pipeline capacity to fuel the power plants to satisfy the energy demand. The five pipelines servicing the area were running at full capacity, making renewable energy (such as wind, solar, geothermal, water, and biomass) very attractive.54 California pushed for renewable sources of energy in the 1970s, but market forces, regulatory roadblocks, and utility company reluctance inhibited the effort.55 Removing these roadblocks and instituting renewable sources of energy would go a long way to reduce the capacity issue in places like California. Enacting policies to commercialize migration to green energy would have the social benefit of providing a cleaner source of energy for power plants to pursue and create more economic competition in the energy industry. Although this will not help with the current pipeline capacity problem, it will give valuable options down the road.

Conclusion

The current pipeline infrastructure is not resilient enough to meet future US demand of oil and natural gas. Primar-

ily due to shale developments, the US oil and gas markets are changing. Users are becoming more reliant on domestic pipelines for supply and less dependent on foreign imports.56 The plus-up of rail in transporting oil and gas has temporarily satisfied the additional capacity needs at Bakken and other new developments, but

at much greater cost and less safety than pipelines afford. Additional pipelines are needed now to ensure demand is met and prices are managed. More pipelines also add resiliency to a system that suffers extreme stress from increased consumption and interruptions due to weather and mishaps. That said, we also need future

investment in green energy sources of power. This vast resource can be made viable, if regulations supported by large energy companies make it profitable. With these changes, the domestic oil and gas industry will be able to take advantage of their new found source of production and meet demand in the future. DTJ

deliveries of oil and petroleum products up 38% in first half of 2012,” http://www.eia.gov/ todayinenergy/detail.cfm?id=7270 15 Ibid.

16 Ibid.

17 Chip Brown, “North Dakota went Boom,” The New York Times Magazine, 31 January 2013. http://www.nytimes.com/2013/02/03/ magazine/north-dakota-went-boom. html?pagewanted=all&_r=0 18 US Energy Information Administration Office of Integrated Analysis and Forecasting, “US Natural Gas Markets: Recent Trends and Prospects for the Future,” May 2001, 16.

19 Ibid, 17-18.

20 Ibid, 33.

21 Ibid, 19.

22 US Energy Information Administration, “Natural Gas Year-in-Review,” 10 Jul 2012, 3. http://www.eia.gov/naturalgas/review/ print_version.cfm 23 Ibid, 3.

24 PennWell Corporation, “Pipeline capacity key to gas-price market stability in northeastern US and Canada,” Oil and Gas Journal, 28 August, 2000.

25 Ibid.

26 Platts Price Group/Oil Division Special Report, “New Crudes, New Markets,” March 2013, 6.

27 Ibid, 6.

28 Ibid, 7-9.

29 Ibid, 11.

30 Patti Domm, “US Oil and Gas Boom Takes Many by Surprise,” CNBC Digital, 4 March 2013. http://www.cnbc.com/id/100513916 31 Dian Chu, “Lack of Transport Causes Short Term Problems for US Oil Industry,” OilPrice, 2 April 2013. http://oilprice.com/Energy/CrudeOil/Lack-of-Transport-Causes-Short-TermProblems-for-US-Oil-Industry.html 32 Daniel Graeber, “Pipelines Can’t Handle North American Oil Boom,” OilPrice, 27 March 2013. http://oilprice.com/Energy/Crude-Oil/ Pipelines-Cant-Handle-North-American-OilBoom.html 33 Platts Price Group/Oil Division Special Report, “New Crudes, New Markets,” March 2013, 17.

34 Ibid, 19.

35 US Energy Information Administration, Office of Oil and Gas, “Expansion of the US Natural Gas Pipeline Network: Additions in 2008 and Projects through 2011,” September 2009, 15.

36 US Energy information Administration, “Status of Natural Gas Pipeline System Capacity Entering the 2000-2001 Heating Season,”

Natural Gas Monthly, October 2000, xviii.

37 US Energy Information Administration, “Natural Gas Year-in-Review,” 10 Jul 2012, 12. http://www.eia.gov/naturalgas/review/ print_version.cfm 38 Ibid, 13.

39 Colonial Pipeline Company, “Colonial at Full Capacity after Hurricane Gustav,” Press Release, 10 September 2008. http://www. colpipe.com/press_release/pr_92.asp 40 Bill McCaren, GS-14, Bulk Petroleum Purchase Analyst, DLA Energy-B, Telephone Interview. 2 April 2013.

41 Ibid.

42 Ibid.

43 George Atwood, GS-15, Director, Procurement Process Support, DLA Energy, Telephone Interview, 31 March 2013.

44 Ibid.

45 Bill McCaren, GS-14, Bulk Petroleum Purchase Analyst, DLA Energy-B, Telephone Interview. 2 April 2013.

46 Association of Oil Pipelines, “About Pipelines,” http://www.aopl.org/ aboutPipelines/ (accessed January 27, 2013).

47 PennWell Corporation, “Pipeline capacity key to gas-price market stability in northeastern US and Canada,” Oil and Gas Journal, 28 August, 2000.

48 Association of Oil Pipelines, “Pipelines Retain Leading Role Transporting American Crude Oil and Petroleum Products,” February 7, 2012. http://www.aopl.org/pdf/AOPL_Shift_ Report_Press_Release_Feb_7_20121.pdf (accessed January 27, 2013).

49 Platts Price Group/Oil Division Special Report, “New Crudes, New Markets,” March 2013, 9-10.

50 Ibid, 3.

51 US Energy Information Administration, “Rail deliveries of oil and petroleum products up 38% in first half of 2012,” http://www.eia.gov/ todayinenergy/detail.cfm?id=7270 52 TransMountain, Industry Safety and Regulations, Pipeline Alternatives, http:// www.transmountain.com/pipelinealternatives 53 Editorial, “Gas Pipelines: Next Big Issue; There can be no solution to California’s crisis unless the fuel for new power plants can be delivered,” Los Angeles Times, 26 February 2001, updated 21 September 2011, B6.

54 Ibid, B6.

55 Ibid, B6.

56 Platts Price Group/Oil Division Special Report, “New Crudes, New Markets,” March 2013, 19.

End Notes 1 The George Washington University—Face the Facts USA Project, “Pipelines: Moving energy and chemicals, but how safely?” 10 Jan 2013. http://www.facethefactsusa.org/facts/ pipelines-moving-energy-and-chemicalshow-safely/ 2 Association of Oil Pipelines, “Pipelines Retain Leading Role Transporting American Crude Oil and Petroleum Products,” February 7, 2012. http://www.aopl.org/pdf/AOPL_Shift_ Report_Press_Release_Feb_7_20121.pdf (accessed January 27, 2013).

3 Ibid, (accessed January 27, 2013).

4 Ibid, (accessed January 27, 2013).

5 Shell Oil and Gas, “Offshore 101,” Chapter Four: Transporting Oil and Natural Gas, 5 October 2011, 3. http://s04.static-shell.com/ content/dam/shell/static/usa/downloads/ alaska/os101-ch4.pdf 6 Association of Oil Pipelines, “Pipelines Retain Leading Role Transporting American Crude Oil and Petroleum Products,” February 7, 2012. http://www.aopl.org/pdf/AOPL_Shift_ Report_Press_Release_Feb_7_20121.pdf (accessed January 27, 2013).

7 US Energy Information Administration, “Rail deliveries of oil and petroleum products up 38% in first half of 2012,” http://www.eia.gov/ todayinenergy/detail.cfm?id=7270 8 US Department of Commerce, US Census Bureau, International Data Base, http:// www.census.gov/population/international/ data/idb/region.php?N=%20Results%20 &T=13&A=separate&RT=0&Y=2050&R=1&C=US# 9 Graham Zabel, “Peak People: The Interrelationship between population Growth and Energy Resources,” Energy Bulletin, 20 April 2009. http://www2.energybulletin.net/ node/48677 10 The Global Education Project, Earth: A graphic look at the state of the world, World Energy Supply, http://www.theglobaleducationproject. org/earth/energy-supply.php 11 US Energy Information Administration Office of Integrated Analysis and Forecasting, “US Natural Gas Markets: Recent Trends and Prospects for the Future,” May 2001, 17.

12 US Energy Information Administration, “Rail deliveries of oil and petroleum products up 38% in first half of 2012,” http://www.eia.gov/ todayinenergy/detail.cfm?id=7270 13 Platts Price Group/Oil Division Special Report, “New Crudes, New Markets,” March 2013, 6.

14 US Energy Information Administration, “Rail

www.ndtahq.com | 15

This article is the first in a three-part series that will take a closer look at the NDTA Foundation.

The NDTA Foundation The “Quiet Committee”

By Larry Larkin, Vice President – Foundation, and Chair, NDTA Foundation Committee It comes as a big surprise to many of our members that NDTA has been operating a foundation that has made frequent contributions to the Association’s success for decades. In fact, the NDTA Foundation celebrated its 50-year anniversary in 2011.

History of the Foundation

Since its founding, one of NDTA’s missions has been “to support, conduct and assist programs of transportation education, science, research and development, among private, industrial, educational and governmental agencies…” These programs required funding. In 1961, the Association established the NDTA Foundation as a separate corporate entity to raise and provide the funds needed to accomplish this mission.1 The Foundation has its own Board of Trustees, known as the Foundation Committee. The Vice President of the Foundation serves as the Chair of the Committee, which is comprised of NDTA’s: • President • Chairman of the Board • Three most recent Chairmen of the Board • Vice Chairman of the Board • Vice President – Education • Vice President – Finance • General Counsel • Treasurer The Early Years

During its first twenty years, the Foundation sponsored many different activities: • Funded research projects driven by specific requests from US Government partners. These projects included studies on how to optimize small shipments within DOD, and how to improve Red Cross vehicle and logistics support, among others. The number of research requests quickly exceeded the availability of funds.

• Published industry reports such as “The Role of Transportation in the United States Conflicts,” written by NDTA member Dr. E.W. Williams of Columbia University, as well as compilations of presentations given at 16 |

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From the October 1984 DTJ: William Pownell (second from left) is presented with the NDTA scholarship check from Richard A. Borges, NDTA Mid-Atlantic Regional Vice President. Joseph Torsani (second from right), NDTA State Vice President for Maryland, and Joseph Mattingly (far left), NDTA Career Education Committee Chairperson, assisted in the presentation.

NDTA-sponsored events, such as the DOD Container Seminar of 1968.

• Underwrote administrative costs of the Industry Advisory Committees (IACs) NDTA set up to advise military commanders on transportation issues/challenges. At the time, the IACs operated as tiger teams, addressing specific topics. These were so successful that they evolved into the standing nationallevel committees that have become an integral part of NDTA’s current organizational structure.

• In 1968, the Foundation participated in Operation Handi-Vet, a national program sponsored by the President’s Council for Employment of the Handicapped, designed to find jobs in industry for disabled Vietnam War veterans. The Foundation undertook the task of finding job opportunities in the defense transportation industry, identifying viable candidates, and matching them with the available jobs.

• Awarded life memberships annually to members under 40 years of age from each of the Association’s nine regions.

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Awardees were selected by a special committee for their outstanding contributions to NDTA. One year, the Foundation even sponsored a College Essay Contest which, alas, was not very successful.

A New Focus

In 1983, the Foundation established an academic scholarship program. Its first award consisted of two $300 scholarships. The winners were William Pownell, President of the University of Maryland Student Chapter, and Alfredo Cavazos, Jr., a member of the San Antonio Chapter.

Since that time, the Foundation has continued awarding scholarships. As a result of generous contributions, judicious investments, surplus operating funds, and fundraising activities, such as the Duck Races, golf tournaments, and 5K races, the value and number of scholarships has steadily increased. Over the last continued on page 28

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driving up costs. There is an average of 52 service interruptions a day throughout the system. Projects to repair and replace aging locks and dredge channels take decades to approve and complete, exacerbating the problem further.5 PORTS Grade: C

America’s Transportation Infrastructure

By Sharon Lo, Director of Public Relations, NDTA

O

n January 7, Secretary of Transportation Anthony Foxx told attendees of the ninth annual Texas Transportation Forum that the US is currently facing an ‘infrastructure deficit’ that is enough to derail its economy. He explained that, “we risk losing one of the biggest competitive advantages that our country has always had—that is the safest, most efficient, and reliable transportation system the world has ever known.”1 While to some this may seem an overstatement, others such as the American Society of Civil Engineers (ASCE) would say otherwise.

The ASCE releases a report card on the state of America’s infrastructure every four years. The purpose of the report card is to provide a comprehensive assessment of current infrastructure conditions and needs, and to make recommendations for improvements. An advisory council assigns grades based on eight criteria: capacity, condition, funding, future need, operation and maintenance, public safety, resilience, and innovation.

Since 1998, and including this past year, the US has had grades near failing. For 2013, America’s Grade Point Average (GPA) was a ‘D+’. The reason behind such poor grades? Delayed maintenance and underinvestment across most infrastructure categories. Here are the specifics of what ASCE has to say about the categories that make up our transportation infrastructure: 2 AVIATION Grade: D

Despite the effects of the recent recession, commercial enplanements were about 33 million higher in number in 2011 than 18 |

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in 2000, stretching the system’s ability to meet the needs of the nation’s economy.

The Federal Aviation Administration (FAA) estimates that the national cost of airport congestion and delays was almost $22 billion in 2012. If current federal funding levels are maintained, the FAA anticipates that the cost of congestion and delays to the economy will rise from $34 billion in 2020 to $63 billion by 2040.3 BRIDGES Grade: C+

Over two hundred million trips are taken daily across deficient bridges in the nation’s 102 largest metropolitan regions. In total, one in nine of the nation’s bridges are rated as structurally deficient, while the average age of the nation’s 607,380 bridges is currently 42 years. The Federal Highway Administration (FHWA) estimates that to eliminate the nation’s bridge deficient backlog by 2028, we would need to invest $20.5 billion annually, while only $12.8 billion is being spent currently. The challenge for federal, state, and local governments is to increase bridge investments by $8 billion annually to address the identified $76 billion in needs for deficient bridges across the US.4 INLAND WATERWAYS Grade: D-

Our nation’s inland waterways and rivers are the hidden backbone of our freight network—they carry the equivalent of about 51 million truck trips each year. In many cases, the inland waterways system has not been updated since the 1950s, and more than half of the locks are over 50 years old. Barges are stopped for hours each day with unscheduled delays, preventing goods from getting to market and

February 2014

The US Army Corps of Engineers estimates that more than 95% (by volume) of overseas trade produced or consumed by the US moves through our ports. To sustain and serve a growing economy and compete internationally, our nation’s ports need to be maintained, modernized, and expanded. While port authorities and their private sector partners have planned over $46 billion in capital improvements from now until 2016, federal funding has declined for navigable waterways and landside freight connections needed to move goods to and from the ports.6 RAIL Grade: C+

Railroads are experiencing a competitive resurgence as both an energy-efficient freight transportation option and a viable city-to-city passenger service. In 2012, Amtrak recorded its highest year of ridership with 31.2 million passengers, almost doubling ridership since 2000, with growth anticipated to continue. Both freight and passenger rail have been investing heavily in their tracks, bridges, and tunnels as well as adding new capacity for freight and passengers. In 2010 alone, freight railroads renewed the rails on more than 3,100 miles of railroad track, equivalent to going coast to coast. Since 2009, capital investment from both freight and passenger railroads has exceeded $75 billion, actually increasing investment during the recession when materials prices were lower and trains ran less frequently.7 ROADS Grade: D

Forty-two percent of America’s major urban highways remain congested, costing the economy an estimated $101 billion in wasted time and fuel annually. While the conditions have improved in the near term, and federal, state, and local capital investments increased to $91 billion annually, that level of investment is insufficient and still projected to result in a decline in conditions and performance in the long term. Currently, the FHWA estimates that $170 billion in capital in-

vestment would be needed on an annual basis to significantly improve conditions and performance.8 ASCE estimates that if current trends continue through 2020, the investment needed to maintain our transportation infrastructure in a state of good repair (a grade of ‘B’) will be $248 billion per year. Funding is predicted to only cover 54% of this amount, leaving a funding gap of approximately $114 billion each year10—a daunting figure when considering the US government’s budget issues over the past year. However, it is all not doom and gloom, there is some good news—the 2013 ‘D+’ reflects improvement from a grade of ‘D’ in 2009. Since 2009, bridges improved from a ‘C’ to ‘C+’ and roads improved from a ‘D-‘ to a ‘D’.

The greatest improvement, however, was in rail infrastructure, which went from a ‘C-‘ to a ‘C+’.11 While the US has not quite reached an overall passing GPA, at least there is progress.

This progress is a direct result of investments in infrastructure projects. The Association of American Railroads estimates that in recent years, freight railroads have spent approximately $12 billion per year on infrastructure and another $10 billion on equipment.12 Funds for other improvements, such as those to bridges and roads, have been made using funds from a variety of sources, including public private partnerships, funds from state and local governments, and funds from the federal government. Federal funds include those from the American Recovery and Reinvestment Act (also known as stimulus funds). In a January 8, 2014 interview with PBS Newshour, former Pennsylvania Governor Ed Rendell said about the stimulus funds, “Pennsylvania got a billion dollars for its roads and highways. We created 24,600-plus jobs with that billion dollars. We repaired bridges and roads. Thanks to stimulus and money that I put in, state money I put in, we went from having 6,600 structurally deficient bridges to 4,500.”13 Another important piece of legislation, the Moving Ahead for Progress in the 21st Century Act (P.L. 112-141, also known as MAP-21) was signed into law in July of 2012 and provided funding for surface transportation programs through Fiscal Year 2014 (FY2014). With the end

of FY2014 only eight months away, the House Committee on Transportation and Infrastructure has already kicked off its push for reauthorization and hopes to bring its bill to the House of Representatives floor before Congress takes its August recess. Regarding the bill, Committee Chairman, Congressman Bill Shuster says, “This bill needs to be fiscally responsible and to build on the reforms in MAP-21. We need to continue to reduce regulatory burdens. And we need to make sure our federal partners have flexibility in how they spend their money and approve projects.”14 While it remains to be seen how the budget woes of the past year will affect these Acts and other measures that provided funds for infrastructure investments, President Obama is continuing to encourage transportation and infrastructure spending. During his State of the Union Address on January 28, 2014, he asked Congress to finish transportation and waterway bills this summer, promising to slash bureaucracy and streamline the permitting process for key projects.15 The group Building America’s Future has their own recommendations for how the US can address its transportation infrastructure needs, including passing a long-term transportation bill, establishing a national infrastructure bank to fund freight and other industrial projects, and consideration of gas or mileage fees to fund building and maintenance. Former Secretary of Transportation Ray LaHood, who is co-chair of the group says, “We have to do something about the gas tax or a vehicle miles travel tax. And we have got to be realistic about that. We have got to create an infrastructure bank that can do credit enhancements that will allow more money to flow into the system.” While others from state and local governments, as well as private sector must take part in reviving America’s infrastructure, Secretary LaHood thinks the Federal government must take the lead.16 For the time being, America’s infrastructure appears to be left in a state of flux. Will reduced government spending mean the ‘D+’ GPA can be expected to remain (or even slip backwards)? While the idea of continuous government spending may be hard to stomach, what happens if we do not invest in these improvements

stands to be far worse. From disasters such as the I-5 Skagit River Bridge collapse to revenue lost daily from traffic delays, there are too many things that can—and likely will—go wrong. Realistic long-term solutions must be sought by both politicians and the American public. Investment in our transportation infrastructure now will result in long-term savings and financial stability for our country far into the future. DTJ Endnotes

1 Forsyth, Jim. 1200 News Radio WAOI. January 7, 2014. http://www.woai.com/articles/ woai-local-news-119078/us-transportationsecretary-in-sa-infrastructure-11952361/ (accessed January 16, 2014).

2 American Society of Civil Engineers. 2013. http://www.infrastructurereportcard.org/ (accessed January 17, 2014).

3 American Society of Civil Engineers. 2013. http://www.infrastructurereportcard.org/a/#p/ aviation/overview (accessed January 17, 2014).

4 American Society of Civil Engineers. 2013. http://www.infrastructurereportcard.org/a/#p/ bridges/overview (accessed January 17, 2014).

5 American Society of Civil Engineers. 2013. http://www.infrastructurereportcard.org/a/#p/ inland-waterways/overview (accessed January 17, 2014).

6 American Society of Civil Engineers. 2013. http://www.infrastructurereportcard.org/a/#p/ ports/overview (accessed January 17, 2014).

7 American Society of Civil Engineers. 2013. http://www.infrastructurereportcard.org/a/#p/ rail/overview (accessed January 17, 2014).

8 American Society of Civil Engineers. 2013. http://www.infrastructurereportcard.org/a/#p/ roads/overview (accessed January 17, 2014).

9 American Society of Civil Engineers. 2013. http://www.infrastructurereportcard.org/a/#p/ transit/overview (accessed January 17, 2014).

10 American Society of Civil Engineers. 2013. http://www.infrastructurereportcard.org/a/#p/ grade-sheet/americas-infrastructureinvestment-needs (accessed January 18, 2014).

11 American Society of Civil Engineers. 2009. http://www.asce.org/Infrastructure/ReportCard/2009-Report-Card-for-America-sInfrastructure/ (accessed January 22, 2014).

12 Association of American Railroads. n.d. https://www.aar.org/keyissues/Pages/ Infrastructure-Investment.aspx#.Uu-k7rSiaPU (accessed January 24, 2014).

13 Rendell, Ed, interview by Judy Woodruff. Former Governor of Pennsylvania (January 8, 2014).

14 Schuster, Bill, statement from hearing on Building the Foundation for Surface Transportation (January 14, 2014).

15 Obama, Barack, State of the Union Address (January 28, 2014).

16 PBS Newshour. January 8, 2014. http://www.pbs.org/newshour/bb/nationjan-june14-infrastructure_01-08/ (accessed January 25, 2014).

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special report

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NDTA European Region

By Col John T. Rausch, USAF (Ret.) and Kurt Lengert

D

uring the week of 4 November 2013, NDTA‘s European Region arranged several informational and training events for organizations and personnel involved in military transportation chains in Europe. On 4 Novem-

Col John Rausch, USAF (Ret.), President of the NDTA European Region, welcomes members of industry and the military.

LTG Kenneth Wykle, USA (Ret.), President of NDTA, highlighted challenges military distribution chains for global forces.

ber, LTG Kenneth Wykle, USA (Ret.), President, NDTA, and Col John Rausch, USAF (Ret.), President, NDTA European Region welcomed approximately 50 industry and military members in the 435 Construction Training Squadron Auditorium, Ramstein AB, Germany.

Keynote speeches delivered by MG John O’Connor, USA, Commander 21st Theater Sustainment Command (TSC), and LTG Wykle highlighted the challenges of military distribution chains for globally positioned forces.

During the event, senior leaders from the 21st TSC, European Command (EUCOM) Logistics Directorate (J4) European Deployment and Distribution Operations Center (EDDOC), 521st Air Mobility Operations Wing (AMOW), 598th Transportation Brigade, and 86th Logistics Readiness Group (LRG) provided information on strategic aspects of today’s environment, with regard to transiting Europe with military goods. During surface and air transportation panels, participants discussed military and industry capabilities, and highlighted achievements and challenges for sustainment of missions and retrograde operations from deployed locations in remote areas of the world. All 20 |

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Senior military leaders provided information on strategic aspects of today’s environment.

Surface panel members discussed military and industry capabilities.

participants agreed that events like this are extremely valuable in providing an opportunity to exchange information, learn, and improve processes and services supporting the military supply chain. The audience included members of industry, employees of United States military logistics organizations, and logisticians of the German and Belgian armed forces. The Rhineland Pfalz Chapter, under the lead of MSgt Daisy Galan, USAF; and the Benelux Chapter, under the lead of Lt.Col. (Res.) Eddy Geudens, BE Army, provided support as conference administration.

On 6 November, a group of NDTA members met with leaders of the Logis-

February 2014

tics Center of the German Armed Forces (GAF) at Wilhelmshaven. The GAF, under the lead of LtCol Funke, provided detailed information on how the national and international logistics system of the GAF is organized. A special item of interest was the movement control system installed in accordance with the NATO Allied Movement Publications (AMovP). This includes requirements for road transport, border crossing, communication standards for routings, and intermodal traffic. Several GAF logistics agencies, offices of the Federal Ministry of Defense, and civil authorities are involved in clearing cargo of United

States and other foreign forces in Germany. The information received can be applied in other European NATO and Partnership for Peace member states, as many have similar clearance systems in place for military cargo. This reflects the AMovP NATO standards and the European Union Directives. It was learned that up to five different authorities, military and civilian, can be involved in clearing a United States military or foreign forces cargo transport. Failure to achieve all appropriate approvals can lead to refusal by customs agencies to allow border crossings.

On 7 November, the group of NDTA members visited the Hamburg Harbor and the offices of NDTA member Kühne & Nagel (K&N). At K&N, participants received an overview of the capabilities of a globally organized logistics provider and how the military customer can benefit from such capabilities. K&N was established in 1890 in Bremen, GE, and is present in over 100 countries, with more than 1,000 offices. K&N employs over 65,000 people. According to K&N, the company is number one worldwide in seafreight with 3.2 million Twenty-foot Equivalent Units (TEUs), and ranked in the top three for air cargo, including charter flights for industry and military supply chains. It also provides road and rail service, as well as over seven million square meters of warehouse capability.

That is equal to 1,729,731 acres! Applying the non-development view, the briefers from K&N clearly demonstrated how a globally organized logistics provider can manage a military supply chain in any part of the world. The additional aspects which a regular military supply chain cannot easily achieve include cooperation with other commercial providers and the consolidation of military goods of various nations in one line of communication. This has the potential to achieve synergies and cost savings that are not available to a single supply chain managed by one nation‘s military logistics organization. After the briefings and discussions the group received an impressive tour of the largest German seaport, the Hamburg Harbor. DTJ

Air panel members highlighted retrograde achievements and challenges.

NDTA members met with leaders of the Logistics Center of the German Armed Forces in Wilhelmshaven.

NDTA members visited the offices of NDTA corporate member Kühne & Nagel.

During their visit to Kühne & Nagel, NDTA members received an overview of the globally organized logistics provider.

www.ndtahq.com | 21

Chapter Spotlight Tampa Bay Chapter Representatives Joined USCENTCOM Coalition Partners for an International Celebration

By Daren Baker and Scott Hood

S

ince 2001, the US Central Command (USCENTCOM) has worked with coalition representatives from more than 55 nations that stand with the US, prepared to react to regional contingencies within the USCENTCOM Area of Responsibility (AOR). This includes twenty countries in central Asia and the Middle East.

There are approximately 250 USCENTCOM Coalition representatives and their families living in Tampa. The annual “Coalition International Night” is put together as a token of the coalition’s appreciation for the support from local military and civilian leadership in Tampa, including NDTA. RADM Mats Fogelmark, Senior National Representative, Sweden, and Chairman of the Coalition Forces/USCENTCOM MacDill Air Force Base Tampa, invited Mr. Daren Baker, NDTA’s South Eastern Regional President to bring a small group of NDTA representatives to attend the 2013 Coalition International Night on December 5, 2013. Some of the NDTA attendees included: Daren Baker (South East Regional President), Wally Gonzalez (Florida State President), Lt Col Janette Ketchum (Tampa Bay Chapter President), and Scott Hood (Tampa Bay Chapter Secretary and Treasurer).

As a tradition since 2004, International Night is an opportunity for coalition members and their families to display and discuss their unique customs and culture, while offering national culinary delights.

The concept of International Night is not rooted in formalities, but rather serves as an opportunity for camaraderie, education, fun, and an appreciation of language and cultural differences that helps to unify the efforts of members of the USCENTCOM coalition.

NDTA members participating in the 2013 Coalition International Night were honored to attend and found themselves 22 |

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Scott Hood, Tampa Bay Chapter Secretary and Treasurer, enjoys a bagpipe performance.

“

It’s sometimes difficult to celebrate the separate national days of each country, so to make it easy, we set all of them up as a way to say thank you to USCENTCOM and MacDill Air Force Base for being great hosts Daren Baker, South East Regional President, watches as the band plays on.

amazed at the generosity, friendliness, and wonderful food and drinks offered by the various countries. There was so much to see that the NDTA members found it challenging to engage with every country, much less sample all the goodies being offered—though they certainly tried! Everyone enjoyed the opportunity to talk with country representatives and thank them for their steadfast support, including the Ro-

February 2014

”

– RADM Mats Fogelmark, Senior National Representative, Sweden, and Chairman of the Coalition Forces/USCENTCOM MacDill AFB Tampa

manians, Canadians, British, Australians, Jordanians, Italians, and many others.

The NDTA Tampa Bay Chapter are keeping their fingers crossed that there is another Coalition International Night next year and it can expand its attendance! DTJ

Cut at line & mail or fax to: National Defense Transportation Association | 50 S. Pickett St., Suite 220, Alexandria, VA 22304-7296 | (FAX) 703-823-8761

Costs are minimal, but the rewards are great! >> Contact NDTA for more information at 703-751-5011 or visit www.ndtahq.com << NDTA Membership

Maybe you know someone who would like to join. The

National Defense Transportation Association (NDTA) is a nonpolitical and non-profit educational Association composed of government, military, and industry professionals dedicated to fostering a strong and efficient global transportation and logistics system in support of national security. Membership in NDTA affords opportunities to serve and educate the community in your area of expertise as well as other special benefits.

Corporate Membership

Corporate membership in NDTA provides increased exposure and networking opportunities for those companies wanting to do business with the US government or military. Membership should be a key part of any business plan where the defense and government transportation, travel, and logistics system is the target market.

Position/Title

When you join NDTA as a corporate member, your company’s executives will have the opportunity to share ideas with top military, government, and industry officials at NDTA events.

These events are conducted and attended by high-level military decision-makers, defense and other government officials, and industry leaders—the individuals who are setting and influencing the transportation, travel, and logistics agenda for the future.

Organization

Application for Membership

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Name

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$450.00 – LIFE $110.00 – Regular (3 Years)

Fax

$40.00 – Regular (1 Year) $30.00 – SPECIAL RATE Young Leaders (35 years or younger) Gov (GS 10 & below)/ Military (Pay grade 03 & below + enlisted grades) Retired (Not employed)

Membership Type $9,500.00 – Chairman’s Circle Plus (Global or national company with multiple operating entities) $6,200.00 – Chairman’s Circle (Global or national operating company) $1,200.00 – Sustaining Member (National or Regional operating company)

$15.00 – Students

$550.00 – Regional Patron (Small Business or local operating company)

Amount Remitted $_____________________

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www.ndtahq.com | 23

The Future of Work

How Talent Management is Powering the Knowledge Value Revolution Irvin Varkonyi, President, Supply Chain Operations Preparedness Education (SCOPE) ivarkonyi@scopedu.com

H

ow much priority is given within your organization to developing talent? This concerns both recruiting new workers, as well as developing current workers in your organization. And, how well has your organization evolved to understand those coming into the workplace in the past ten years, as well as those coming in the future? We’ll take a look at how talent management and the knowledge value revolution are intertwined, and call for a very different approach from the “non-connected online, non-global world” before the turn of the century.

Have you watched MTV? Yes, we know MTV as a repository of old music videos, but it is also a reflection of tastes, culture, and style of the millennial generation.

MTV conducted the “No Collar Worker” survey which revealed that 89% (!) of millennials (who will compromise 75% (!) of all employees only a little more than a decade from now in 2025) think it is important to be constantly learning at their job.5 And how is this learning expected?

It is much more of a hybrid, blended approach that will involve classroom training, as well as collaborative, social and on-demand approaches. “Embedding collaboration into corporate learning so that employees seamlessly learn while working and work while learning is as fundamental to the future as ever before . . .”6 There are other highlights of the MTV survey: 1. 80% of millennials want regular feedback from their supervisors.

2. 89% want their workplace to be social and fun.

3. 50% would rather have no job than a job they hate. (Really? Go home to their parents?)

everything from employee training and recruiting, to product testing and sales force management, to be more game-like and interactive. The Gartner Organization predicts that some 70% of a survey of 2,000 organizations will use gamified applications for employee performance, health care, marketing, and training by the end of 2014.7 Here are three steps to adopt a gamification strategy: 1. Articulate the business problem to be addressed, incorporating a multi-disciplinary team approach, and incorporate tools to measure success.

2. Utilize a feedback mechanism to gather and learn from new data.

3. Keep the process dynamic, tweaking, measuring, and enhancing your approach as part of a continuous improvement process.

So what are the options available to your organization to enable the Millennials to learn while doing, learn on demand, and have fun? Gamification is one of the more popular options. How so? Seek to redesign everyday routines and tasks,

The application of talent management strategy has critical consequences for the defense industry. Specifically, in aerospace, the workforce crisis is worsening.

“The so-called silver tsunami—the aging of the country’s population—will hit the

24 |

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Finally, talent management will achieve success when it is owned by all areas of the company, and not relegated to the Human Resource (HR) department: 1. The HR departments will integrate talent management into management programs.

2. Integrate people processes into standard business processes, such as corporate strategic planning, budgeting, and new product development.

3. Shift responsibility to managers, pushing accountability and the responsibility for executing people management down to the line management levels.

4. Measure success with productivity, shifting success measures from the more traditional HR and recruiting functional metrics, towards measuring the overall productivity of the workforce.8

February 2014

Definitions Talent Management – the integrated process of ensuring that an organization has a continuous supply of highly productive individuals in the right job, at the right time. Rather than a one-time event, talent management is a continuous process that plans talent needs, builds an image to attract the very best, ensures that new hires are immediately productive, helps to retain the very best, and facilitates the continuous movement of talent to where it can have the most impact within the organization.1 Knowledge Value – the traditional elements that give products and services value—the value of the materials and labor that went into the product or service—have shifted toward a single dominant element. That element is the value of the knowledge contained in a product or service.2 Millennial(s) – a term used to refer to the generation, born from 1980 onward, brought up using digital technology and mass media, the children of Baby Boomers; also called Generation Y.3 Gamification – gamification is a novel, new way to scale motivation efforts in an attempt to boost performance of some kind by enhancing the focus of workers to accomplish more by making tasks more engaging and game-like.4

aerospace industry especially hard. It received an influx of workers in the Apollo era . . . Cuts to that program in the mid- to late-1970s and 1980s, plus the Vietnam and Cold Wars, kept the industry from ever receiving a major infusion of fresh talent. As a result, the average age for an aerospace and defense worker today is 45-47 for an aeronautical engineer—compared to the median age of 42 continued on page 28

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A Team Logistics LLC American Roll-On Roll-Off Carrier Best Western International BNSF Railway Bristol Associates DHL Global Forwarding Fikes Truck Line

26 |

Global Aviation Holdings Inc. Hertz Corporation Horizon Lines, LLC International Shipholding Corporation KGL Holding Lockheed Martin Matson Navigation Company Inc.

National Air Carrier Association Norfolk Southern Corporation R & R Trucking Raith-CTS Logistics The Pasha Group Union Pacific Railroad U.S. Bank

These corporations are a distinctive group of NDTA Members who, through their generous support of the Association, have dedicated themselves to supporting an expansion of NDTA programs to benefit our members and defense transportation preparedness.

Defense Transportation Journal

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February 2014

HONOR ROLL

OF

SUSTAINING MEMBERS AND REGIONAL PATRONS

ALL OF THESE FIRMS SUPPORT THE PURPOSES AND OBJECTIVES OF NDTA

SUSTAINING MEMBERS 1-800-PACK-RAT AAT Carriers ABF Freight System, Inc. Accenture ACTCO-Afghanistan Logistics Advantage Rent A Car Aeroscraft Air Transport International, LLC Airlines for America AIT Worldwide Logistics, Inc. Alaska Airlines/Alaska Air Cargo Al-Hamd International Container Terminal American Maritime Officers Arven Services, LLC Associated Global Systems Atlas International Baggett Transportation Company Booz Allen Hamilton Engineering Services, LLC C.L. Services, Inc. C2 Freight Resources, Inc. Carlson Rezidor Hotel Group CGI Chalich Trucking, Inc. Chamber of Shipping of America Citigroup Coyne Airways Coyote Logistics, LLC Crowley Maritime Corp.

CRST Logistics, Inc. CSC CSX Transportation

REGIONAL PATRONS Acme Truck Line, Inc. Agile Defense, Inc. Alaska Marine Lines Alaska West Express All-Lift Systems, Inc. Allswell Supply Company American Moving & Storage Association American Trucking Associations Amyx Association of American Railroads ATS Specialized, Inc. Blkbird, Inc. Boeing Company C5T Corporation CakeBoxx Technologies Cargo Experts Corp.

Cargotec USA, Inc. Cavalier Logistics Center for the Commercial Deployment of Transportation Technologies (CCDoTT)

Cubic Global Tracking Solutions, Inc. CWT SatoTravel DAMCO DB Schenker Delta Air Lines DHL Express Dollar Thrifty Automotive Group Dynamics Research Corporation Embry Riddle Aeronautical University Enterprise Database Corporation Estes Forwarding Worldwide, LLC Executive Moving Systems, Inc. Express-1, Inc. FlightSafety International Fluor GE Aviation General Dynamics/ American Overseas Marine GeoDecisions Greatwide Truckload Management Green Valley Transportation Corp.

Hilton Worldwide Hub Group, Inc. IBM Intermarine, LLC Intermodal Association of North America (IANA) International Longshoremen’s Association (ILA), AFL-CIO International Organization of Masters, Mates & Pilots Interstate International J. B. Hunt Transport, Inc. Kansas City Southern Keystone Shipping Co.

Knight Transportation Krown1 Fzc KU Transportation Research Institute Kuehne + Nagel, Inc. Labelmaster LMI Lockheed Martin Aeronautics M2 Transport Marine Engineers’ Beneficial Association Mayflower Transit McCollister’s Transportation Systems, Inc. Medallion Transport & Logistics, LLC Menlo Worldwide Logistics Mercer Transportation Company National Van Lines, Inc. North Carolina State Ports Authority Northern Air Cargo Inc. Ocean Shipholdings, Inc. Omega World Travel Omnitracs, LLC One Network Enterprises, Inc. ORBIS Corporation Overdrive Logistics, Inc. Panalpina Pilot Freight Services PODS Port of Beaumont Port of San Diego Posidon Pratt & Whitney Preferred Systems Solutions, Inc. Prestera Trucking, Inc. Priority Solutions International Priority Worldwide Services Radiant Logistics Partners LLC

Ramar Transportation, Inc. Roadrunner Transportation Systems Rockey’s Moving & Storage, LLC Sammons Trucking SBA Global Logistics Services Seafarers International Union of N.A. AGLIWD (SIU NA) Sealed Air Corporation Sealift, Inc. Secured Land Transport SEKO Logistics Southern Air Southwest Airlines Co. SRA International, Inc. Teradata Corporation Textainer Equipment Management (U.S.) Limited The Exchange The Parking Spot TQL Transportation Institute Transportation Intermediaries Assn. (TIA) Transportation Management Services Tri-State Motor Transit Co. (TSMT) TTX Company Tucker Company Worldwide, Inc. United Airlines United Van Lines, Inc. UniTrans International, Inc. UTi Aerospace and Defense Group Winston & Strawn LLP Women In Trucking Association, Inc.

Ceres Terminals Incorporated CGM-NV a NovaVision Company Chapman Freeborn Airchartering Chassis King, Inc. Dalko Resources, Inc. EADS North America Enterprise Holdings Enterprise Management Systems Erudite Company Europcar Car & Truck Rental FlightWorks FMN International, Inc. Fox Rent A Car Hanjin Intermodal America, Inc. JAS Forwarding K & S Trucking, LLC Kalitta Charters, LLC LMJ International Logistics, LLC Load Delivered Logistics, LLC Marriott International McLane Advanced Technologies MCR Federal, LLC

Mi-Jack Products Military Sealift Command (MSC) Miramar Transportation Morten Beyer & Agnew MOTIONOLOGY, INC. M-Pak Incorporated Naniq Global Logistics LLC National Motor Freight Traffic Association, Inc. NCI Information Systems, Inc. NFI Oakwood Worldwide Overwatch, Inc. (a division of Avalon Risk Management) Owner-Operator Independent Drivers Association Pak Shaheen Freighters (Pvt) Ltd. Patriot Contract Services, LLC Payless Car Rental System, Inc. Philadelphia Regional Port Authority PITT OHIO Port of Port Arthur Portus

Reckart Logistics, Inc. Royal Trucking Company Ryan’s Express Transportation Sea Box, Inc. Seabridge, Inc. Seatac Marine Services Semper Veritas Maritime Security Solutions Sicuro Group LLC SkyLink Air and Logistics Support (USA), Inc. Southeast Vocational Alliance Stratos Jet Charters, Inc. TechGuard Security Tennessee Steel Haulers The Cartwright Companies Trailer Transit, Inc Trans Global Logistics Europe GmbH TRI-STATE Expedited Service, Inc. Utley, Inc. Virginian Suites Arlington YRC Freight

www.ndtahq.com | 27

Kent Gourdin

The Path Between the Seas The Path Between the Seas by David McCullough (Simon & Schuster, 1978), ISBN13: 9780671244095, 704 pages, in paperback ($15.53) and Nook book ($14.57).

F

irst, a glorious vision of what might be animates worldwide imaginations: a canal to bisect the New World whereby commerce in vast quantities would pass more cheaply than anyone had heretofore dreamed. France in particular had the vision and the man for the job: Ferdinand de Lesseps, who had led the construction of the Suez Canal.

A long back and forth about the new canal’s route several times almost gave the nod to Honduras. Then, what type of canal should it be: sea level or lock based?

Meanwhile, the Isthmus of Panama festered-a malarial swamp interspersed with

continued from page 16

seven years, the Foundation has awarded scholarships to 140 students. Scholarships awarded average $32,000 each year, ranging in value from $500 to $6,000. When combined with the scholarships awarded by local chapters, NDTA awards some $100,000 in scholarships every year.

Initially, scholarships were awarded to enrolled college students studying/majoring in the field of transportation. Qualifying fields of study were later expanded to include logistics, supply chain, physical distribution, and passenger travel services.

The program was then opened to collegebound high school graduates interested in careers in these fields. In recent years, to address the needs of deployed personnel, the program was further expanded to include students enrolled in distancelearning college programs.

The Foundation’s mission of awarding scholarships is more important than ever.

As the cost of attending college has risen astronomically over the past 10-15 years, so has the amount of debt students have had to take on in order to earn a degree.

Student loan debt has surpassed $1 trillion and is now greater than credit card 28 |

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high mountains, awash in bubbling mud, sick with yellow fever. Pulitzer Prize winner McCullough gathers all these threads and adds the human drama: engineers who underestimated the challenge; their families, many of whom died from the yellow fever; and black workers from the Caribbean who were better paid than they could have been elsewhere. The engineering was spectacular; the locks still function flawlessly today. (Editorial Review

by Don Wismer, Cary Memorial Library, Wayne, ME, Copyright 2004 Reed Business Information.) In addition to McCullough’s excellent writing, there are numerous photographs that add to the richness of the book. This work is still the definitive chronicle of the building of the Panama Canal. I am partway through the book and simply cannot put it down. DTJ

debt in the United States.2 Seventy percent of the class of 2013 graduated with an average debt of $35,200—an increase of 55% from 2005.3 Even more alarming is the fact that one third of student loan borrowers under 30 years of age are over 90-days delinquent on their loans—a 65% increase from 2004.4 This is an unsustainable trend. Easing the burden of a college education for the future leaders of our profession is now a major priority for the Foundation. DTJ More information on the NDTA Foundation and national scholarships, including a link for donations, can be found under the Education tab on the NDTA website www. ndtahq.com.

Special thanks to Mark Victorson for contributing to the research of this article.

1 In 1968, the Foundation was brought under the NDTA structure though it still operates as a separate non-profit entity.

2 Bureau of Consumer Protection; US Dept. of Education.

3 Study conducted by Fidelity Investments; Federal Reserve Bank of New York.

4 Investor’s Business Daily, May 7, 2013.

February 2014

continued from page 5

Howard is being transformed into Panama Pacifico, a multi-use facility which will include a large free-trade zone offering legal, immigration, and labor incentives, as well as business and residential developments.

In fact, Panama is emerging as a business hub for all of Central and South America, due, in no small part, to the canal and supporting infrastructure built by the US. I was happy to see these resources being used to develop more economic opportunities for the people of Panama. DTJ

continued from page 24

for all American workers . . .”9 The wave of retirements is the silver tsunami.

Will the right talent management approach, utilizing gamification and other collaborative, on demand strategies encourage infusion of workers into the defense industry, and incorporate the right learning approach? The Society of Human Resource Management (SHRM) and leading organizations believe it can.

Do you? DTJ 1 “Talent Management Defined,” Dr. John Sullivan, www.ere.net, Sept 13, 2004 2 Taichi Sakiya, quoted by Glen Hiemstra, Supply Chain 24/7, www.supplychain247.com, Dec 10, 2013 3 www.dictonaryreference.com 4 www.humancapitalist.com, Oct 17, 2013 5 www.supplychain247.com 6 www.supplychain247.com 7 www.supplychain247.com 8 www.ere.net, Dr. John Sullivan, Sept 13, 2004 9 www.management.fortune.cnn.com, Claire Sillman, Nov 12, 2013

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