Dozens of ships anchored outside of America’s busiest ports, steadily spiking freight rates, and frustrated consumers inheriting both the paralyzing delays and the exorbitant price increases: these have been the painful realities within the global supply chain in recent years. In a whole-of-government effort to mitigate the root and proximate causes of the supply chain crisis, the Biden administration has responded with a roadmap for achieving a more efficient and more resilient supply chain. On 24 February, the U.S. Department of Transportation (DOT) released a report titled “Supply Chain Assessment of the Transportation Industrial Base: Freight and Logistics,” which provides multiple recommendations to address the ongoing supply chain crisis. Responding to Executive Order 14017: America’s Supply Chains, the report identifies and addresses ongoing challenges, while offering potential policy responses to strengthen the nation’s supply chain.
The central theme of the DOT’s thorough report is the necessity to build resilient supply chains to address current and future disruptions. As a result of several factors, including the growth of “just in time” supply chains, the overwhelming demand for import cargoes during the COVID-19 pandemic, industry consolidation, and a general lack of investment in infrastructure, DOT is concerned that the current supply chain lacks resilience. The report highlights that concern in stark terms, noting that the pandemic has compounded existing supply chain issues, which has resulted in temporary port closures, shortages across the supply chain, elevated levels of congestion, and increased prices for consumers. The release also highlights a number of barriers to supply chain resilience that the recommendations hope to mitigate, including equipment and warehouse capacity, workforce conditions, and data availability, among others.
The report recognizes that the federal government cannot unilaterally solve supply chain disruptions, as many of the component parts of the freight supply chain are owned and operated by the private sector, but notes that federal, state, and local agencies can still play an important part by funding infrastructure investments, appropriately regulating the industry, improving supply chain data flows, and supporting cross-sector or multi-jurisdictional efforts to address supply chain resilience.
The report makes 62 specific recommendations for action by the DOT and related agencies in order to address these challenges and attempt to bolster the nation’s supply chain. The recommendations cover the whole spectrum of transportation supply chain stakeholders, addressing both very broad and relatively narrow policies. The findings are further separated based on the level of complexity of achieving its goal balanced against the cost of implementation and other corresponding factors. Among the report’s key recommendations are:
- Investing in freight infrastructure, such as ports, bridges, and railroads, to enhance capacity and connectivity;
- Developing inland ports and warehouse locations, as well as investing in the inland waterway system;
- Coordinating with interagency partners to provide temporary solutions to ease port congestion, such as “pop-up” intermodal yards for containers;
- Providing technical assistance to support the planning and coordination of freight investments and operations and supporting workers employed in this sector, including through new apprenticeship programs and a focus on utilizing military veterans to fill civilian logistics jobs;
- Developing and implementing strategies to improve the trucking sector, including ensuring that there is truck parking availability consistent with land use and safety considerations;
- Supporting domestic manufacturing, ally-shoring and nearshoring efforts;
- Improving data and research into supply chain performance, including the tracking of freight and supply chain data, and…
Read More: DOT Releases Policy Recommendations Targeting Supply Chain Disruption | K&L Gates LLP