By Anne Cosgrove
From the May / June 2024 Issue
In November 2023, the White House Council on Supply Chain Resilience held its inaugural meeting during which President Biden and Secretary of Homeland Security Alejandro N. Mayorkas introduced the Supply Chain Resilience Center (SCRC), a U.S. government entity designed to collaborate with the private sector toward improving supply chains. The SCRC is focused on analyzing vulnerabilities and conducting scenario planning with stakeholders to help mitigate supply chain disruptions and ensure reliable and efficient deliveries of goods and services.
“Securing our critical infrastructure is fundamental to staying competitive in a 21st century economy, and the Department of Homeland Security’s new Supply Chain Resilience Center will enhance our efforts to do just that,” said Secretary Mayorkas at the time. “The global pandemic has revealed that the supply chains that Americans rely upon for food and essential other goods must be more robust and resilient. Conflict, political instability, and climate change could challenge our supply chains in the years ahead.
As the SCRC continues its work in 2024, government officials and private sector stakeholders are focused on four primary aspects of work announced at that launch last November. These are as follows:
Identify security vulnerabilities at U.S. seaports and develop concrete and actionable solutions to mitigate threats to the U.S. supply chain. This includes evaluating the risks to ports posed by adversarial nation state threats, overreliance on untrustworthy equipment subject to nation-state control, data extraction, insider risk, and unvetted virtual and physical access. The SCRC will collaborate with port authorities and operators, shipping, transportation, logistics, and other industry stakeholders, and the U.S. Department of Transportation to conduct its analysis.
Analysis and recommendations will include reservation systems, logistics management platforms, and data production. This work will complement other agency efforts to address port security vulnerabilities, including a shared interest in reducing cyber-related risks from different sources, including untrusted or unauthorized access.
Launch efforts, in coordination with the Department of Commerce and the private sector, to help secure the semiconductor supply chain, strengthen resilience, and further the implementation of the CHIPS Act.
Partner with industry to identify how the U.S. government can ensure strategically valuable infrastructure owners and operators can provide essential goods and services in instances of disruptions or shortages.
Host table-top exercises in 2024 to test the resiliency of critical cross-border supply chains with other U.S. federal agencies, foreign governments, and industry partners.
In 2022, Secretary Mayorkas tasked the HSAC to look at what steps DHS could take to achieve a more secure, resilient, and efficient supply chain. HSAC’s Final Report, which was adopted on March 16, 2023, recommended DHS “establish a Supply Chain Resilience Center to act as a central clearing house to aggregate and disseminate information about critical supply chain vulnerabilities and disruptions.”
“I am pleased to see Secretary Mayorkas and Undersecretary Silvers act on the recommendations of the Homeland Security Advisory Council (HSAC) Supply Chain Security Subcommittee to establish a Supply Chain Resiliency Center within DHS to enhance the security of our nation’s supply chains,” said Dmitri Alperovitch, Chairman of Silverado Policy Accelerator and Co-Chair of HSAC Supply Chain Security Subcommittee.
“The work of the SCRC will be vital for addressing potential vulnerabilities, such as in our nation’s ports infrastructure, and enhancing resiliency of semiconductor supply chains.”
U.S. DOT Flow Program Takes Stock After Two Years
This past March, on the second anniversary of the launch of the Freight Logistics Optimizations Works (FLOW) initiative, the U.S. Department of Transportation (DOT) announced that the FLOW platform had begun to publish data on inland freight hubs, including rail terminal and warehouse end destination data. This data will help inform capacity decisions and avoid supply chain challenges, such as delays.
FLOW is a first-of-its-kind private-public partnership created and led by DOT that creates a more complete, shared picture of the U.S. supply chain for members, which include the nation’s busiest container ports, major ocean carriers, and some of the largest retail importers.
Port of Baltimore Update
After the collapse of the Francis Scott Key Bridge in Baltimore, supply chain and logistics professionals and companies alike are following developments in terms of the status of the Port of Baltimore operations. In early May, Richard Scher, Director of Communications at Maryland Port Administration/Port of Baltimore, shared with Business Facilities:
“It’s certainly possible that there could be situations where consumers may find some of their targeted items at their favorite retail stores low in stock or out of stock for a temporary time. More than 70% of containers handled by the Port of Baltimore end up within 70 miles of Baltimore. The Baltimore-Washington DC-Northern Virginia consumer market is one of the largest in the country.
Throughout this crisis, the Maryland Port Administration has been communicating daily with its customers who have asked what they can do to help. Our response has been simple… promise to return when the channel is cleared and already our customers have begun doing that.”
“We expect to fully rebound however it will not happen overnight. The advantages that the Port of Baltimore has over its competing ports have not gone away. Baltimore is still the closest East Coast port to the Midwest which means goods can reach the heartland quicker and more cost effectively than from other East Coast ports. We have four on-dock auto processors, more than other ports, which gives our auto customers choices on which processor can best handle their business. Our highly-skilled International Longshoremen’s Association labor force and unique cargo-handling quality programs also help Baltimore standout.”
“Although the collapse of the Key Bridge and the blocking of the channel have been significant occurrences, they are temporary. When the Port of Baltimore’s permanent 50-foot deep channel is restored by the end of May, the worldwide stream of commerce will once again travel to and from Baltimore.”
DOT and supply chain stakeholders are applying lessons learned from the pandemic-caused disruptions as it helps manage changes in freight traffic resulting from the Houthi attacks against vessels in the Red Sea, as well as the reduction of traffic in the Panama Canal due to drought conditions.
Through the FLOW initiative, DOT collects, aggregates, and anonymizes key information shared by participants on inbound containerized freight, starting with importer purchase orders, and aligns future demand volumes against current regional capacity to move ocean containers. FLOW now includes the five largest U.S. container ports, seven of the largest ocean carriers, and nine of the 20 largest retailers by imports, and has more than 60 companies in the onboarding process.
DOT works with industry members to continue to improve and build use cases with FLOW data.
Participants are using FLOW data as an input into existing company processes to better inform supply chain planning.
Marcia Brey, Vice President, Logistics with GE Appliances, said, “FLOW improves visibility of total freight movement through key supply chain nodes across the U.S. indicating system health. FLOW also provides networking opportunities for supply chain companies to discuss freight movement concerns and to collaborate on solutions that avoid interruption in the flow of critical components and consumer goods.”
Jennifer McNeill, Senior Vice President, Supply Chain with TrueValue, said, “We are representing local, independent businesses across America that serve their communities every day. Our retailers depend on us for supply chain expertise that enables a consistent movement of goods to their business, and FLOW helps us deliver on that.”
