The need for forward-looking legislation for resilient U.S. supply chains.
During the pandemic, a surge in U.S. consumer demand drove a surge in imports. Ports, rail heads and trucking could not meet the demand, and the resulting inland congestion had vessels waiting outside ports for days and weeks, reducing available ocean capacity. Together, congestion and unprecedented demand drove up rates.
The landside import congestion also caused export challenges, with U.S. exporters including farmers are trying to get their hands on the same containers, chassis, and truckers — all of which are in short supply due to the ongoing import congestion — to move their goods from their business and farms to ports for export.
Despite these challenges, the supply chain delivered record volumes of goods to consumers, and supported American farmers in delivering record-breaking exports. Today, freight rates are back to pre-pandemic levels and reliability is going back to normal.
Forward-looking legislation promotes resilient supply chains.
The issues we all faced during the pandemic were driven by an extraordinary social and economic situation, and by macroeconomic factors of supply and demand. The market has adapted and work through the issues as the situation has normalised.
To build resilience, lawmakers should focus their efforts on boosting infrastructure and frameworks for the future, to handle the ever-increasing demands put on our nation’s supply chains on land and at sea.
The infrastructure bill is a step in the right direction, and investments in ports, warehousing, road and rail infrastructure need to be prioritized. Initiatives to train, attract and retain more supply chain workers to ports, railway and trucking are essential.
Lawmakers should also encourage the FMC and other regulatory bodies to continue promoting communication, innovation, and collaboration across sectors.
Companies need reassurance that regulatory frameworks are stable so that they can be agile in managing their part of the bigger chain. The FMC has the necessary authority and is taking action to ensure a well-functioning market.
If instead, as is proposed by the House, ocean carriers are singled out and required under penalty to manage factors out of their control, congestion and service will get worse, not better. With millions of good-paying jobs at stake, Congress work with supply chain actors to solve supply chain challenges.
The international ocean and U.S. intermodal transportation system is moving more cargo right now than any time in history. And this historic situation has been met by a momentous response. If we work together – if we collaborate to make our supply chain more efficient and resilient with things like better data sharing and asset optimization – we can manage the current influx and set the system up for long-term success.