Ingredion to Senate EPW: Reauthorize MAP-21 with Long-Term Solution
Janet Kavinoky, Executive Director, Transportation & Infrastructure at U.S. Chamber of Commerce; ATM Vice President
Dave Gardner, Vice President of Supply Chain and Customer Experience at U.S. Chamber member Ingredion Incorporated, testified today in front of Environment & Public Works (EPW) – the U.S. Senate committee of jurisdiction for MAP-21 re-authorization; his message was clear – American businesses need a long-term solution to today’s nationwide transportation mobility issues. Ingredion – which produces hundreds of value-added ingredients for the food, beverage, pharmaceutical, corrugating, paper and animal feed industries – is headquartered outside of Chicago, IL, has a global R&D center is in Bridgewater, NJ, and employs nearly 2,000 in the U.S (11,000 globally).
Mr. Gardner’s remarks – which can be found (here) – marked the first time Ingredion has testified before Congress; they felt they could no longer afford to remain silent about the state of the nation’s infrastructure systems. In speaking on behalf of the Chamber, Mr. Gardner provided Ingredion-specific examples of the impact of U.S. transportation system woes that could be applicable for many other Chamber members.
With 13 North American manufacturing plants – seven in the U.S., scattered from California to the Carolinas – a smooth-functioning surface transportation system is essential to Ingredion’s business and impacts the bottom lines of both the company and their customers. Because logistics represents a significant portion of their corn and delivered finished product costs, they see daily real and anecdotal affects of the failing system – from increased cost to variability in supply, poor service and even a competitive disadvantage. In 2014 alone, their transportation costs increased by 3.6 percent, significantly outpacing inflation. Other affects on Ingredion include:
- More time to transport corn from the storage elevators to plants, resulting in millions of dollars in increased freight costs, higher manufacturing costs due to plant downtime and curtailed production.
- Decreases in average train speeds and increases in train delay time causing an increase in product inventories, shortage of rail cars to transport Ingredion’s products and issues meeting customer demand.
- Increased rail volume through Chicago causing unprecedented delays – up to three days just to exit the Chicago metropolitan area. It can take up to five days to reach by rail customers that are just seven hours by highway.
- Because of these rail-related delays, Ingredion must often revert to trucks, which costs significantly more than rail and is prone to its own challenges, including limited truck capacity compared to truck demand, tightening regulation on truck driver hours of service and deteriorating highway infrastructure.
As noted in Mr. Gardner’s testimony, increased transportation costs are impacting the broader American business community; in fact 87 percent of executives said that aging infrastructure had an impact on their operations in recent years, according to The Economist Intelligence Unit.
MAP-21 ended years of short-term extensions that had created a great deal of uncertainty for businesses such as Ingredion; after several years of band-aid like approaches to fund America’s transportation infrastructure since then, that uncertainty again lays like a heavy veil across U.S. businesses and communities. It’s time to lift that veil for the benefit of Ingredion and all other U.S. businesses that play a role in driving our economy in the right direction, beginning with EPW leadership on a long-term solution that funds America’s highway and public transit networks and keeps America moving forward.