“Where’s The Beef?” Supply Chain Issues Centennial Recap
December 17, 2021|Jonathan Hammond
Many of the goods imported into the U.S.—all told worth around $3 trillion—rely on intricate, finely-tuned international supply chains. When the COVID-19 pandemic wreaked havoc on international supply networks, causing shortages, price increases, and instilling plenty of worry in consumers, it also set the holiday season into a more-frenzied-than-usual few months of commercial activity. In other words, ‘tis the season to be weary (of shipping timetables).
Eno recently hosted a series of webinars, panels, and discussion on the pressing issues facing transportation. One panel explored the reasons behind supply chain issues and what actors in the private and public sector can do to address the crisis. The panel included:
Christopher Conner, President & CEO, American Association of Port Authorities
Bob Costello, Chief Economist & Senior Vice President, American Trucking Association
Jordan Stone, Assistant Vice President of Governmental Affairs, Association of American Railroads
Pre- and Post-Pandemic Challenges
According to Connor (AAPA), cracks were already showing in supply chains in the U.S. before the COVID-19 pandemic. Port facilities, particularly the Ports of Long Beach and Los Angeles, had languished due to a generation of underinvestment. Additionally, as more and more Americans participated in e-commerce during the pandemic, significantly more ships from Asia (specifically China) traveled to American ports that operated quite differently than their sources. Bottlenecks became even worse as demand for goods vastly exceeded supply. Pandemic delays resulted in 169 ships—a record number—waiting to dock outside the Port of Los Angeles with an estimated 200,000 containers aboard.
Problems were no less severe for the American trucking industry. Despite transporting roughly 70 percent of goods in the United States, Costello (ATA) reported that the trucking industry faces an aging workforce. In 2021, the average trainee was 38 years old, with the average age of drivers being around 50. The prospect of older, more vulnerable employees contracting COVID-19 accelerated an ongoing retirement process. In November 2020, for instance, the trucking industry had 80,000 fewer drivers than it did in 2019. Not only that, but the industry is facing a pressing equipment shortage and is only currently able to secure less than 20 percent of the trucks and tractors needed to maintain operations.
The railroad industry, a historic transporter of goods and services, also faced problems that originated before the pandemic. Stronger, more erratic weather patterns were grinding freight trains to a halt across the U.S. and Canada. Trade disputes also slowed the delivery of goods to ports and intake facilities across the country. As COVID shut down factories due to outbreaks, goods were not able to leave factories to be delivered elsewhere. Additionally, Stone (AAR) elaborated that the industry has encountered issues where in-gate movements exceeded out-gate movements. Stone also stated that imports would not be as large of an issue if the industry was not the busiest it has ever been. In August 2021, the rail industry saw year-over-year increases in intermodal traffic, and in the first six months of 2021 freight rail saw the most intermodal traffic ever.
Adapting to Adversity
The industry has innovated in several ways to overcome the issues that affect all links in the supply chain. Connor indicated that the $5 billion in the Infrastructure Investment and Jobs Act (IIJA) for port infrastructure modernization provided a “good start” for ports dealing with aging equipment, and that increased public investment will attract the private funding necessary to help ports thrive. He also expressed approval of President Biden’s appointment of U.S. Port Envoy John Porcari because Conner noted that only an effort that coordinated with owner operators, facility operators, and labor unions could create substantial corrective measures.
Costello also noted his excitement for the IIJA because of its 38 percent increase in funding for roads and bridges across the U.S. Costello reiterated the aging workforce issue facing the trucking industry but expressed optimism at the passage of the “DRIVE Safe” Act that would let younger drivers at the age of 18, 19, and 20 interested in trucking careers take to the roads before they find other careers.
The rail industry also suffered from bottlenecks in factories and warehouses. As COVID shut down factories due to outbreaks, goods were not able to leave factories to be delivered elsewhere. Stone highlighted increased funding for Infrastructure for Rebuilding America (INFRA), Consolidated Rail Infrastructure and Safety Improvements (CRISI), and Crossing Elimination grants that will help improve the efficiency, resiliency, and effectiveness of railroads across the country. However, all three panelists indicated that the issues facing the supply chain are not easily solvable, with Connor suggesting that disruptions could extend well into the first half of 2022.
Forging the Future
In addition to addressing short-term issues that arose from the pandemic, all three panelists discussed future innovations they hope will help eliminate current supply chain issues. Conner elaborated on the plan for ports across the U.S. to share relevant information that will better illustrate the current workloads and footprints of ports. Although some ports expressed concern over the plan because of privacy issues, Connor believes that sharing relevant data will only help the industry coordinate more effectively and operate more efficiently. Meanwhile, Costello expressed excitement for upcoming technological pilots included in the IIJA. Costello was enthusiastic about the prospect of technological driving aids that let drivers turn on assistive technologies that can reduce dangers and improve efficiency. However, Costello was quick to note that he did not support driver replacement, stating that the technology wasn’t sophisticated enough to match weather and infrastructure conditions. Stone was proud of the rail industry’s $26 billion investment in private, high-grade infrastructure that helped the industry navigate some of its busiest times of the year. Stone also hoped that the FRA would expedite the approval of experimental technology waivers so railroads can continue to innovate.
As supply chains adjust to pandemic disruptions and changing consumer habits, Stone, Costello, and Connor indicated what kinds of programs, policies, and solutions operators should pursue. Conner reemphasized the need for relevant data sharing between ports to better understand their footprints and activities. Conner also expressed concerns over distributers panic buying materials. Stone reiterated that the AAR was navigating the problems of the pandemic relatively well on its own, but expressed frustration with a recent executive order by the Biden Administration that they claimed harmed competition between railroads.
As the holiday season arrives, all three panelists discussed how their respective industries plan to address the busiest time of the year. Costello noted that the trucking industry is planning on increasing hiring efforts to make up for driver shortages, while both ports and rail operators are communicating as best they can with retailers and distributers their most accurate shipping assessments. Conner made sure to note that workers in the San Pedro gateway have already increased their productivity to handle the increased demand. However, Conner was also quick to remind the audience that the current supply chain crisis has no easy fix, and that consumers should expect delays for at least another year.
To hear more from the panelists on the supply chain crisis, check out a recording of the panel hosted during Eno’s Centennial Institute on September 22, 2021.
September 22, 2023 | Kirbie Ferrell
September 19, 2023 - The House Subcommittee on Coast Guard and Maritime Transportation met to discuss the use of autonomous...
September 15, 2023 | Kirbie Ferrell
September 13, 2023 - In the midst of National Trucking Week, the House Subcommittee on Highways and Transit met to...
August 31, 2023 | Jeff Davis
August 31, 2023 - The story of the creation of, and changes to, the Inland Waterways Trust Fund
July 28, 2023 | Anusha Chitturi
July 28, 2023 - The Senate Environmental and Public Works’ subcommittee on Clean Air, Climate, and Nuclear held a hearing...
June 16, 2023 | Jeff Davis
June 16, 2023 - A draft bill approved in an House subcommittee yesterday would provide $9.6 billion in new funding...
May 26, 2023 | Anusha Chitturi
May 26, 2023 - The House Ways and Means’ Subcommittee on Trade held a hearing on May 25 to discuss...
May 26, 2023 | Jeff Davis
May 26, 2023 - The House Transportation and Infrastructure Committee this week approved sixteen bills making discrete policy changes to...
May 12, 2023 | Garett Shrode
May 12, 2023 - On Wednesday, May 10, the Subcommittee on Transportation and Maritime Security under the House Committee on...
May 12, 2023 | Eva Madden
May 11, 2023 - The House Committee on Transportation and Infrastructure met to discuss overcoming supply chain challenges faced within...
May 12, 2023 | Anusha Chitturi
May 12, 2023 - The House T&I Subcommittee on Railroads, Pipelines, and Hazardous Materials held a hearing on May 11...
May 12, 2023 | Jeff Davis
May 12, 2023 - This is a summary of S. 576, the Railway Safety Act of 2023, as amended and...
April 28, 2023 | Jeff Davis
April 28, 2023 - Two Democratic Senators allowed Senate Republicans to pass a resolution this week overturning the Environmental Protection...