Government Tries Working with the Private Sector to Speed Supply Chains

That supply chains even now are in a messy state is not surprising to the CRE industry. Just look at construction backlogs.

The problem is large and beyond what any one company can do by itself (although many could vastly improve their own supply chains with software and cooperation with vendors to provide transparency as well as a change in supply chain management strategy). In March, the White House announced an initiative called Freight Logistics Optimization Works, or FLOW, “an information sharing initiative to pilot key freight information exchange between parts of the goods movement supply chain.” 

Key stakeholders “including private businesses, warehousing, and logistics companies, ports, and more” were to partner with the administration “to develop a proof-of-concept information exchange to ease supply chain congestion, speed up the movement of goods, and ultimately cut costs for American consumers.” 

Now the Department of Transportation has announced a meeting of the effort, which includes 36 participants and, so the DOT says, will continue to grow over the coming months, along with listening sessions with small businesses and technology experts. The meeting was, among other things, to discuss the results of the first data sharing efforts.

Among the members are some major ports, major names in transportation and logistics, and some large corporations in food, consumer packaged goods, high tech, medical supplies, and other areas. 

“Currently, the lack of transparency across supply chain networks makes our supply chain brittle and unable to adapt when faced with an anomaly,” the DOT said. “Through the FLOW pilot, USDOT is serving as an independent steward of supply chain data across a largely privately-operated enterprise that spans shipping lines, ports, terminal operators, truckers, railroads, warehouses, and beneficial cargo owners. By providing a shared view of the national logistics system, including both supply and demand assets, participants can better understand supply chain capacity nationally.”

Having a better view into supply chain needs and capacities is an important aspect of fixing problems. However, given the scope of supply chains and their issues, there are many names in manufacturing, technology products and services, retail, wholesale, and other areas that can have a large impact on demand and supply and would have been good to see involved and expanding the amount of information available.

Additionally, having a view into supply chains needs to happen on a corporate basis with companies having information into their own inbound and outbound logistics chains. The problems triggered by the pandemic are also issues that experts have warned about for at least 20 years, as C-suites have tried to trim inventory, to free capital and improve how balance sheets looked to investors, by running overly lean operations. Transparency alone won’t address those problems.