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Federal Agencies Say They Have a Plan to Fix the Supply Chain

Federal agencies, from transportation and defense to health agriculture, painted broad strokes in outlining recommendations for tackling the nation’s supply chain woes.

Six reports from seven agencies were released this week, reflecting a year’s worth of research stemming from President Biden’s executive order signed last February that focused on reviving domestic manufacturing and bolstering supply chains.

The six reports were created by the Department of Defense (DOD), Department of Homeland Security (DHS),  Department of Commerce (DOC), Department of Energy (DOE), Department of Agriculture (USDA), Department of Transportation (DOT) and Department of Health and Human Services (HHS).

Transportation Secretary Pete Buttigieg blamed “decades of underinvestment in our infrastructure” mixed with high levels of consumer demand and the ongoing impacts of the pandemic for the country’s overworked goods movement systems.

“This report lays out critically important steps we can take—both right now, and in the years ahead—to help strengthen our supply chains, create good-paying jobs and ensure that Americans can affordably and efficiently access the goods they rely on,” Buttigieg said.

The DOT’s report alone offered more than 60 policy recommendations ranging from short- to long-term projects and rated them based on their implementation complexity.

“The rise of e-commerce has changed our lives for the better, but the reality is that our freight system was not built for a world where anyone can order anything to be delivered to their door with a couple of taps on their phone,” Buttigieg said in the DOT report, which pointed out same-day delivery is e-commerce’s fastest-growing service offering.

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The DOT report suggestions included more popup intermodal yards, use of battery electric and hybrid equipment, warehousing financial incentives and support for the Federal Maritime Commission in its fight for fair competition among ocean carriers.

Expanding port capacity has already happened with several projects, including the USDA most recently helping to fund a 22-acre container popup yard at the Port of Oakland for agricultural exports.

Griff Lynch, Georgia Ports Authority executive director, said Thursday during the State of the Port—the first live port update event since 2019—that a number of projects will help expand the Port of Savannah’s container capacity by nearly 60 percent. That increase equates to an annual capacity of 9.5 million twenty-foot equivalent units (TEUs) by 2025, compared to the current 6 million TEU capacity.

Perhaps most pressing is the looming June 30 expiration of the contract between the International Longshore and Warehouse Union (ILWU) and Pacific Maritime Association (PMA), which has ramifications for the nation’s supply chains.

Businesses have already seen what can happen when labor talks stall at the West Coast ports, which prompted National Retail Federation (NRF) president and CEO Matthew Shay to urge the two groups in a letter Thursday to get ahead of the expiration and begin negotiations.

Merchants typically see shipments of holiday product come in during the summer, making smooth contract negotiations key for the retail sector.

“NRF members are continuing to adjust to the ongoing supply chain disruptions,” Shay said in the letter. “Any kind of additional disruptions at the ports would add further costly delays to our members’ supply chains and likely add to inflation concerns and further threaten the economic recovery.”

Shay said several NRF members are already planning what to do in the event of potential disruptions.

While major infrastructure investments have dominated the conversations around supply chains, other agency reports released Thursday pushed for domestic manufacturing, measures that would address climate change and efforts to train the next generation of workers.

Cybersecurity’s threat to supply chains and the need for more cross-agency sharing of information were echoed in several of the reports.

The DOD pointed to the Fancy Bear hackers’ NotPetya malware cyberattack in 2017 that took out a number of businesses and led to more than $10 billion in global damages. Impacted companies included Maersk, FedEx, Merck and Nabisco among others.

Global logistics firm Expeditors International, which works with fashion companies such as The Kooples and Herschel Supply Co., continues to work its way through downed systems stemming from a cyberattack Sunday. The company has shared little in the way of what systems were impacted or when full operations might resume.

Expeditors said Friday afternoon its employees are using back-up procedures and its cybersecurity and technology teams “are diligently working to address the situation.”