President Obama recently released his budget for the 2016 fiscal year. While the Republican majority in Congress is expected to strongly oppose any of the President’s major proposals, it is interesting to see where the President wants to spend money in 2016. And the good news is that the logistics industry is slated to be a top priority for the President.
At the top of the President’s budget plan sits a transportation proposal for $478 billion over the next 6 years. This amount marks a 33% increase on transportation funding to fix crumbling bridges, tunnels and roads. This is good news, especially because the current transportation budget is slated to run out during the summer. It should be noted that these infrastructure proposals were the exact same as the ones he introduced previously, which were rejected by Congress.
In the budget, the President issued $18 billion for freight shipping. Specially, these were part of his National Export Initiative. Examples include projects aimed at reducing trucking congestion, more intermodal expansion and more safety measures for shipping oil. If passed, these proposals could lower expenses for shipping companies, and thus possibly lower freight shipping rates.
Meanwhile, ocean freight shipping earned a mixed bag of results from the proposed budget. The good news is that the Port of Charleston and the Port of Savannah are going to receive their funding for deepening projects. Once the projects occur, these ports can handle larger vessels. However, other US ports were left out of the President’s budget proposal. The plans call for ports to receive nearly $1 billion less than what is needed for dredging projects. This proposal would hurt many US maritime businesses.
Shippers who are concerned about the impact of the budget on their shipments should speak to a trusted freight forwarder. However, it is unlikely that the current Congress will pass all of these proposals.