Speeding up the FLOW

“Nothing happens until something moves.”

That observation from Einstein, one pretty smart fellow, was the opening line in a keynote address from General Stephen Lyons at ASCM Connect on Monday. The former Commander of the U.S. Transportation Command, Lyons was tapped 3 months ago to be the United States Department of Transportation Special Port and Supply Chain Envoy. His job, essentially, is to figure out what’s preventing product from moving once it hits the U.S. ports and begins its journey from Long Beach, Los Angeles, Savannah, New Jersey and elsewhere to the next destination or destinations.  

That quote perhaps sums up the enormity of the task in front of Lyons, as well as the broader supply chain task force put in place by the Biden administration. Afterall, about the time he took the job, not much was moving and hence not much was happening in the transportation sector, especially as regards the ports.

In his address, and the press conference that followed, Lyons covered a lot of ground. There were questions about the recently averted rail strike and the two holdout unions (he is optimistic that the agreement will be ratified by all of the parties); and proposed dwell fees for the East Coast (they are not being enacted by the White House, and in any event, he believes they won’t be enacted because they don’t incentivize the right actions); and the challenges facing American exporters, especially of agricultural products, to get containers to ship their products (Lyons noted the enormity of product that is imported in the U.S. and the fact that for the shipping lines, it’s more profitable to import than to export; hence, that’s their focus).

However, the bulk of Lyons time, and the work he is most involved in, relates back to making something move so something happens. He described his job, and that of the federal government in supply chain, as “alleviating congestion, reducing costs and restoring confidence.” He views his job as “centered on fluidity, conveyances must keep moving.” As an envoy to the ports and maritime industry, he said the starting point in that effort is the terminals because “that’s where the congestion occurs.”

It is an enormous issue, given the amount of product both imported and exported. As Lyons noted, short-term fixes are difficult because while we need more assets, we can’t simply build more terminals, chassis and trailers overnight or mint a new army of truck drivers, warehouse workers and rail engineers. What’s more, addressing the issue at one node may simply move the problem to the next: It’s great to unload more inventory at the ports, and get ships out of the harbor, but nothing is happening and nothing much is moving if there are no chassis or room at warehouses when the containers arrive.

What we can do is get more data and more transparency about where are the blockages in the supply chain. A major initiative he touched on is Freight Logistics Optimization Works, or FLOW, which is a first of its kind data sharing initiative designed to speed up delivery times and reduce consumer costs.

FLOW is presently in the pilot stage, which includes “eighteen initial participants that represent diverse perspectives across the supply chain, including private businesses, warehousing, and logistics companies, ports, and more,” according to an administration fact sheet. The pilot participants will develop a proof-of-concept exchange, led by the Department of Transportation, with a goal of producing a proof-of-concept freight information exchange in the coming months.

“The lack of digital infrastructure and transparency makes our supply chains brittle and unable to adapt when faced with a shock,” the fact sheet notes. “The goods movement chain is almost entirely privately operated and spans shipping lines, ports, terminal operators, truckers, railroads, warehouses, and cargo owners such as retailers. These different actors have made great strides in digitizing their own internal operations, but they do not always exchange information with each other. This lack of information exchange can cause delays as cargo moves from one part of the supply chain to another, driving up costs and increasing goods movement fragility.”

If successful, the exchange will provide more transparency into how and where product is moving and also dwelling. Information will be anonymous, but insights and reports will be public.

Lyons said that the results of the pilot to date have been encouraging and that he is optimistic that more stakeholders will join the initiative in the coming months. “The level of commitment is good,” he said, but added, “there is no one fix in the supply chain.”

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