Taking care of business, Office Depot CEO calls on Congress to raise fuel tax to pay for “critical”

That’s according to Steve Odland, chairman and CEO of Boca Raton, Fla.-based Office Depot, the $14.5 billion-a-year office supply company that operates in 48 countries through a network of more than 1,700 stores. Odland spoke Wednesday at the U.S. Chamber of Commerce “CEO Leadership Series” luncheon in Washington.

 

“We have an investment gap—five to eight cents a gallon for the next five years is nothing,” Odland told business leaders who traveled to Washington to lobby Congress on transport spending. “Our view is that it’s a user fee.”

 

That avoids the dreaded word “tax.” The federal tax on fuel—18.4 cents on gasoline, 24.4 cents on diesel—has been unchanged since 1993. That has resulted in the bankruptcy of the federal Highway Tax Fund as revenue has not kept pace with the rising cost of building and maintaining highways and bridges. And that, he said, means raising that fuel tax.

 

“Revenue and funding is the elephant in the room,” he said. “It’s in a dire situation. We have to deal with the gas tax. I know it’s a political third rail. But we have to deal with it. It’s a good short- and medium-term solution.”

 

Failure to act could mean the chance of the United States falling from its preeminent economic perch, Odland predicted.

 

“Our infrastructure has helped create the greatest economic superpower,” Odland said. “We need to create and sustain the pre-eminent transportation system in the world—and we need to do it now.”

 

Unlike most years, transportation is high on Washington’s agenda this year. That’s because the current $286 billion, five-year highway reauthorization bill is expiring Sept. 30.

 

There are various proposals floating around Washington that would expand the highway authorization bill in the neighborhood of $450 billion over five years. The Obama administration, fighting two foreign wars abroad and the recession at home, has signaled it favors an 18-month extension of the current law at approximately the same spending levels before seriously tackling the nation’s crumbling infrastructure in 2011.

 

Whatever comes out of Washington will directly impact shippers and business leaders such as Odland, whose business depends on a smoothly functioning transportation system to satisfy its customers. Odland came to Office Depot at 2005 after a stint as CEO of AutoZone and a former senior executive at Quaker Oats.

   

“The supply chain and national infrastructure is a passion of mine,” Odland said. Office Depot is one of the largest internet retailers with a $4.8 billion e-commerce operation. Office Depot operates two separate North America distribution centers more than a half-million deliveries a week.

 

“Our dependence on the surface transportation system is considerable,” Odland said. “We use the entire complex web—roads, rails, air, water—as an interconnected network that leverages all kinds of assets around the nation.”

 

Odland served on the 2005-2008 bipartisan 12-member national transportation system studying how best to expand the highway bill to fix the nation’s crumbling infrastructure. The commission assessed the entire surface transportation network and concluded with a 50-year strategic plan.

 

“This was an eye-opening experience for me,” Odland said. “The history of infrastructure in our country is constructive. Everything we have accomplished as a nation is a result of our infrastructure. It created a connection of the vast continent that resulted in an economic powerhouse.”

 

What created the United States as a superpower, Odland asked? “It was our economic might supported by our infrastructure.  Now that the country has evolved from an agrarian to an industrial society, the nation has outgrown our current transportation system,” he said.

 

 

Source: Logistics Management