FMC convenes Supply Chain Innovation Team

A Federal Maritime Commission working group of industry leaders is meeting for the first time to address chronic problems freight movement in the ocean supply chain.    Ocean transportation leaders are meeting for a second day in Washington at the behest of the Federal Maritime Commission to develop process solutions for congestion at U.S. container ports.
   The FMC invited 34 industry representatives to participate in its Supply Chain Innovation Initiative, designed to improve port productivity and competitiveness, in response to gridlock during 2014 and 2015 that resulted in costly delays for importers, exporters and port trucking companies. The liner industry’s move to bigger ships led to peaks and valleys in cargo flows and uneven distribution of cargo handling resources, resulting in slow container yard sorting and long lines at truck gates. A major labor dispute between management and dockworkers on the West Coast compounded the congestion and caused severe economic dislocation for many shippers, forcing them to switch to more expensive alternative transport modes, reroute cargo to other ports, pay unexpected storage fees and lose potential sales because inventory was trapped at terminals or their warehouses.
   Several port authorities have established working groups that include representatives from all parts of the supply chain to address systemic inefficiencies causing shipping delays. 
   The effort is driven by the realization that no single party by itself can solve issues such as the imbalance in chassis availability. Any change made by one company or sector typically has ripple effects for other parties and if the changes aren’t coordinated then any improvements become a zero-sum game.
   At the same time, many industry leaders expressed a desire for a broader forum where thought leaders can exchange ideas on how to better share data and update traditional processes that cut across local port operations.
   The FMC is now attempting to facilitate that national dialogue. 
   This week’s private meeting is being led by Commissioner Rebecca Dye. The industry representatives are split up into teams looking at various issues.
   “We expect our teams to move beyond a discussion of problems to a plan of action,” Dye said in a statement.
   More brainstorming on how to modernize port operations will take place next week in Norfolk during the Virginia Maritime Association’s annual conference.