The current supply chain crisis will be the subject of a series of hearings led by Federal Maritime Commissioner Carl Bentzel beginning on Tuesday when the FMC will begin laying the framework. The meetings will be with industry and public partners on maritime data infrastructure. Meetings with specific port participants begin next week.
In an exclusive interview, Bentzel tells American Shipper that to resolve the current supply chain crisis, not only is new physical infrastructure needed but also 21st century data infrastructure to manage the nation’s supply chain.
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AMERICAN SHIPPER: Data sharing is so important to have a fluid, efficient logistics system. But it’s the “sharing” of data that is one of the biggest obstacles. Those in the port bubble do not need to know what’s inside the container. What kind of data will be needed so you can have an airport style of container/cargo monitoring?
BENTZEL: “You are right, we do not need information about cargo content or contract terms. However, as freight moves through the supply chain, information about that freight is created but often not shared effectively. This is sometimes caused by lack of consistent taxonomy and lexicon and/or systems not ‘speaking’ to each other.
“Because ‘ownership’ of the data changes as the freight moves through the system, this lack of an efficient maritime data system cannot be solved by one party in the chain alone. It will take cooperation and collaboration. I plan to structure initial conversations around these issues, identify best practices for naming, storing and transmitting data and develop a set of best practices to improve transportation efficiency.
“However, we do need to know where the cargo is in real-time transit, estimates of when it will or should be available for transit and changes of status in the movement of cargo. In order to do better, we will need to know about the status of cargo at marine terminals, availability of intermodal equipment and information on trucking availability.
“In my view, we also need better insight into railroad intermodal services from major port gateways and information on the major distribution hubs and off-terminal sites transferring cargo. In short, we need to paint a better operating picture from all the major players involved in the international intermodal transport system.”
AS: What kind of data would you like to see in this national logistics data dashboard?
BENTZEL: “I think that we need data that will facilitate greater efficiency of movement. We will be working with the industry to develop a standard lexicon and develop standards for the public dissemination of information relating to transit of international intermodal cargo, so we will be working with ocean carriers, marine terminals, trucking and railroads, intermodal equipment providers, warehousing and distribution interests affiliated with port operations and shippers.
“Establishing standards that to the maximum possible extent allow the industry to utilize existing technology, require open architecture and access is the objective. We do not want to reinvent the wheel; we want it to be easier for the industry to connect the dots and be more efficient.
“Having said that, I do not believe that we need to look at data that is commercial in nature but solely related to positioning cargo, describing the status of movement and policies related to transportation such as hours of operation and/or operational restrictions.”
AS: Connectivity is a problem at ports like Los Angeles. Your phone drops. This is not only a security problem but a productivity problem as well. Will the FMC be looking into how Wi-Fi and cellphone dead spots are impacting the flow of trade? There is technology out there to eliminate this problem.
BENTZEL: “Connectivity is crucial and is definitely something to consider if it will impede information from being conveyed to the public. I know the administration is supportive of the FMC’s effort, and hopefully working with the industry, some of the new infrastructure funding can be allocated for communications upgrades to help maximize data exchange.”
Watch: Bentzel discusses FMC’s role in managing container shortage
AS: The Inland Port of Utah is a great example of data sharing and creating that deep line of sight of trade. Will this port be used as an example?
BENTZEL: “I am a fan of inland ports. I recently was in Salt Lake City, meeting with the state and Inland Port of Utah about their plan. Our major intermodal gateway ports are in heavily congested urban areas where they are very limited in developing more space. However, expedited on-dock rail to inland port destinations with less congestion, and room to grow, is something larger gateways ports are already doing.
“I would say that for it to work well, you must have a committed railroad partner and a highly integrated system of shipping information exchange. The railroads will need to be contributors and active partners in building a 21st century physical and data infrastructure.”
AS: We have been hearing more and more about the need of inland ports. How many do you think are needed to create an efficient logistics data chain?
BENTZEL: “Georgia Ports Authority and South Carolina Ports Authority have both very successfully established multiple inland port sites, and North Carolina’s Port Authority is now also moving forward with their own inland port. While the Port Authority of NY/NJ has not established its own inland port, they have worked with the railroads to build out intermodal capacity.
“On the West Coast, Long Beach is partnering with the Inland Port of Utah, and the Northwest Seaport Alliance is also aggressively moving out to partner with inland destination ports.
“Historically, most of our major exiting port gateways were the reason that the city around the port grew; now the major port complexes are constrained from expanding locally, and they will have to think about inland ports. So while I would not commit to a number, I do believe that the upward trend will continue.”
AS: How would you grade the U.S. logistics system now?
BENTZEL: “Regretfully, I would have to give it a D-plus, solely based on levels of congestion and price increases. Let’s face it, it’s taking two or three times longer to deliver cargo because of congestion and conservatively prices are three to five times higher.
“I would caveat it that while my grade was based solely on performance, that we also need to recognize the essential criticality of maritime shipping to our nation. I’ve heard estimates that aviation lost as much as 75% of capacity during the pandemic period; by comparison, I was reviewing an FMC report that indicated that the ports of Los Angeles and Long Beach have had increases of 26% and 21.5% during this same time frame.
“So while I believe inflation is being driven in large part by supply chain congestion, I would also point to the fact that the industry worked throughout the pandemic, in large part sustaining our economy.”
Watch: What the flow of trade is telling us
AS: You have said there will be a series of hearings, with Tuesday’s meeting laying the framework on why to build out the infrastructure. How many are you hoping to do?
BENTZEL: “I do not have a set number in mind but want to hear from all segments of the industry, so as many as necessary to get as wide a set of views and suggestions as possible. We will kick off industry meetings the week of Dec. 14 and conduct public meetings with industry every week starting in January.
“I think that one positive that has emerged with COVID-19 is recognition that we can do online meetings, and they can work effectively with minimal cost and can in fact amplify public outreach.”
AS: The Biden administration has been very supportive of the FMC, urging Congress to give more tools in the toolbox and authorizing the DOJ in an executive order to help in investigations. How quickly do you think the FMC can perform this fact finding and present a plan to get a national logistics dashboard up?
BENTZEL: “To be clear, this initiative is not fact finding. This maritime data infrastructure initiative will be open to the public throughout as I have said. The plan is to do as many meetings as necessary to solicit industry perspectives and in the spring to convene a data summit to present recommendations for public review.
“While the FMC is an independent agency, I have been in regular contact with the administration and am encouraged that they are publicly supportive of this effort and very thankful of President Biden’s support of additional funding for our agency. We will continue to work with them and keep them updated throughout this process.”