Contributing Writer-Austin Business Journal

Focusing solely on increasing transportation infrastructure to meet future demand often fails to acknowledge the changing nature of how goods are moved and the role innovation plays in doing so, according to H-E-B Grocery Co.’s senior vice president of supply chain and logistics.

Mike Graham — who addressed business leaders during an April 12 panel discussion on transportation financing during the Texas Lyceum’s 27th Public Conference focused on the state’s infrastructure — simply growing infrastructure isn't an adequate solution.

“We need to enable entrepreneurs to innovate and develop new transportation modes,” Graham said.

He cited how the introduction of stack trains in the 1970s enabled the railway system to double its efficiency without radical change. Looking ahead, he noted, the next generation of air traffic control will enable air traffic volume to increase by 50 percent through new software and technology.

The second important point, Graham said, is that the composition of future demand will likely be different than it is today. The Internet has resulted in e-commerce becoming the fastest-growing sector of retail, resulting in increased deliveries of small packages compared to bulk freight. Those UPS and FedEx vans making deliveries will add to congestion, which needs to be addressed.

Manufacturing's transformation to a just-in-time delivery system is another factor not often discussed, said fellow Lyceum conference panelist Pete Rahn, senior vice president of Leader National Transportation Practice.

“As a result you’ve got to have a robust and dynamic transportation system,” Rahn said.

Legislation filed this session includes proposals to provide funding for transportation infrastructure from vehicle sales tax and a state infrastructure fund.

Earlier during the Lyceum Conference, Gov. Rick Perry spoke in support of dedicating a portion of sales tax revenue from car sales to the state’s highway fund, while also leaving the door open to spending more of the Rainy Day Fund on infrastructure, the Texas Tribune reports.