The Digital Age Still Needs Infrastructure

I am an unashamedly massive fan of the Back to the Future film franchise. Yes, even the sequels.

One of my favourite lines from the franchise is spoken at the end of the first film and the beginning of the second. Doc, Marty and Jennifer are about to travel to the distant future (2015, to be precise). When Marty points out there might not be enough road to get up to 88 mph, Doc flips down his brushed aluminium shades and intones: “Roads? Where we’re going we don’t need roads.” And the DeLorean flies off to the future thanks to an early 21st century hover conversion.

Brings a smile to my face every time

There’s then something quite prophetic in the fact that despite the second film’s somewhat idealised depiction of the (then) future, the three of them materialise in the middle of the hovercar equivalent of a traffic jam on the interstate. In the rain. So even in a world of hyper-accurate weather forecasts and super-quick justice (having, God forbid, disposed of all the lawyers!) there is clearly still a critical need for serious infrastructure to keep the world moving.

Well here we are in the real 2021 and we don’t have hovercars, self-drying jackets or Jaws 19 (although we do have a trailer for it). What we do have is quite incredible digital and information technology that allows many of us to work, shop, order pizza and watch the latest blockbuster from the comfort of our living rooms. And of course, over the last year, most of us having been doing that an awful lot. Travelling around is beginning to feel like something we’ll get nostalgic about with the grandkids, who will gasp in wonder at the very idea of us working in specially-designed buildings with lots of other people, and ask whether “catching the train” implies that locomotives used to fall sporadically from the sky onto unsuspecting commuters.

Because of this, people have started to question whether we now no longer need roads, or indeed all of that other pesky infrastructure that blights our countryside, creates pollution and tends to cost quite a lot of money. If people aren’t going to be commuting, do we really need HS2? Or Crossrail 2? If we’re not going to be flying abroad as often, does Heathrow really need a third runway?

The Ever Given has, inadvertently, provided a pretty clear answer to those questions. In the early hours of 23 March 2021, strong winds blew the 220,000-tonne ship off course and left it wedged at a jaunty angle in the bank of the Suez Canal, looking like the megaship equivalent of that annoying guy who takes up two spaces at a parking lot.

Suddenly, one of the world’s most important pieces of infrastructure was blocked, and hundreds upon hundreds of container ships couldn’t get where they needed to go. The world’s heaviest traffic jam promptly ensued.

The effect was considerable. $9.6bn of goods a day were held up. Much of the world’s trade froze. Oil prices spiked. Egypt counted tens of millions of dollars in lost revenue each day. Ship owners contemplated whether to wait it out or go the long way round – not a simple decision when a trip round Africa can add weeks to journey times, and when some of these ships burn through $26,000 of fuel a day. Various claims are even now being contemplated to compensate for the considerable losses suffered by multiple parties (and you can read the article on this subject by my brilliant colleagues Robert Hopkins and Joseph Pangaro here).

The first my other half heard about it was when she received an e-mail to the effect that the delivery of some clothes she’d ordered online might be delayed. Like many of us, I suspect, she had developed the habit of ordering stuff online and then expecting it to appear on our doorstep a few days later, with no real thought given to the incredible logistics involved in getting it here.

The fact is that somewhere north of 90% of all global retail trade is moved in containers. It is transported to the port by truck and/or rail. The vast majority of those containers are, on arrival, transported from port to warehouse by rail and then truck. The process is similar but different for the myriad other products that go into making our lockdown lives tolerable, whether it’s the fiber-optic cable connecting us to the outside world, the food in our supermarkets, the LNG that gets converted into the gas we use to cook that food with, the cars quietly rusting on our driveways or the petrol we aren’t putting in them.

All this stuff gets moved around constantly. Logistics companies have got the whole process down to a fine art, but they need good, modern, working infrastructure to allow these goods to move as freely and efficiently – and therefore cheaply – as possible. Drones are an interesting avenue to pursue but there is little prospect at the moment of them shuttling containers full of goods between China and Europe.

The Suez Canal is a brilliant example. Nothing like as technically complex as its sister in Panama, it is nonetheless an engineering marvel that accounts for 12% of global trade and has operated so seamlessly for the last 40-odd years that I’d be prepared to bet most of us had practically forgotten it was there. Until, of course, something goes wrong and we all become acutely aware of how much we all rely on these things, even if they are thousands of miles away.

Worth thinking about that.

I don’t expect projects like HS2 to be as critical to the global economy as the Suez Canal, but the notion that the digital age and the post-covid world will render it and its equivalents redundant seems to me to be flawed. It’s worth remembering that one of HS2’s goals is to take passenger trains off the existing lines to allow them to be more heavily used for freight – thereby taking trucks off the road and making the whole process greener and more efficient.

Hopefully, in time, it will become one of those infrastructure projects that becomes so good and efficient at what it does that most of us (those of us who don’t live along the route, for example) practically forget it’s there.

So, much as I revere Doc Brown, he was definitely wrong about one thing: the future does need roads. And rail, ports, airports and all kinds of other infrastructure. In fact, the real challenge lies not in abandoning infrastructure projects, but in building the smarter, greener, faster, cleaner infrastructure that the future demands.

Vijay Bange has written about the apparent conflict between the green agenda and infrastructure here, whilst our fellow Duane Morris partner Alex Geisler wrote last month about how governments can use green infrastructure, rather than legislation, to achieve climate change goals. Both are excellent and very worthwhile reads on these important issues.

© 2009- Duane Morris LLP. Duane Morris is a registered service mark of Duane Morris LLP.

The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

Proudly powered by WordPress