WASHINGTON, D.C. — Transportation stakeholders are taking a lesson from the pandemic and taking steps to ensure a resilient supply chain, so future disasters don’t turn into catastrophes.
“There’s a difference,” said Jose Holguin-Veras, director, Center for Infrastructure, Transportation, and the Environment (CITE) at Rensselaer Polytechnic Institute. “A disaster assumes a region has the resources to respond within three days.
“A catastrophe wipes out the local capacity to respond.”
Holguin-Veras spoke at a panel discussion on supply chain disruptions Sunday at the opening session of the Transportation Research Board’s 104th annual meeting. The event attracts public and private entities along with academics, researchers, suppliers and other transportation stakeholders from around the world
“Disruptions occur on a port site almost every day,” said Jonathan Daniels, executive director, Maryland Port Administration (MPA). “I oversee 20,000 employees at the MPA, and stakeholders from rail, highway and maritime. We do a lot of ‘tabletops’. The [Francis Scott] Key bridge collapse in the Port of Baltimore in March 2024] involved more than 200 stakeholders.”
A tabletop exercise is a scenario-based methodology to test and refine emergency response plans.
A potential disruption occupying the attention of Daniels and other East and Gulf coast port executives is a potential strike by the International Longshoremen’s Association (ILA).
The union and port employers represented by the United States Maritime Alliance (USMX) are expected to resume contract negotiations on Tuesday, just a week before the current contract extension ends Jan. 15.
“An ILA walkout would be a local disruption in many respects but international in impact,” Daniels said, alluding to how a port shutdown would ripple through global logistics. “Hopefully that won’t occur as the sides are going back to the negotiating table this week.”
The panelists addressed how planning for disruptions has changed since the Covid pandemic, an event that put the worldwide supply chain in the headlines.
Daniels, who worked at the Mississippi State Port Authority and Port Everglades, Fla., during the pandemic, said the hardest part was not knowing how long it was going to last.
“But we did know that how we dealt with passenger ships was going to carry over to the cargo side. We were seeking to minimize the effects of disruption, both on the ships and on the docks. What we learned was how to put plans to counter large disruptions into effect very quickly and effectively. So now, it’s like muscle memory, putting in place protocols and procedures, scaling activities into large container terminals with thousands of people. Some of those at Port Everglades and at Baltimore put in place in 2020 and 2021 are still in place.”
Other panelists noted that there were signs supply chain required more attention even before the pandemic.
“We heard pre-Covid in the state legislature that there needed to be an elevated voice for freight,” said Christine Casey, deputy secretary for freight policy for the California State Transportation Agency and the first such cabinet-level appointee, by Gov. Gavin Newsom.
“Everybody notices when the state stops working, that’s where my position and team came from, with direct communications with the Governor. We saw disruptions most visibly at the Port of Los Angeles-Long Beach, with all the ships waiting to get in. We want too get it front of mind for policy makers, for policy changes that will help in the future, coordinating with industry, an open-door policy with freight and transportation stakeholders.”
Emergency response also needs to be focused on the most vital freight, what one panelist termed supply chain exclusivity.
“That Covid could happen was something that we never think about,” said Farideh Dassi, senior planner for the Texas Department of Transportation. “We have to respond to the public, how to make a disaster less disruptive and how we can move goods like food and medication and fuel.”
In 2017 access to Port Houston, the second-busiest U.S. port, was cut off when Interstate 10 was flooded by Hurricane Harvey. Said Dassi, “We planned for alternate highway movements for freight on I-610. We also had to carefully consider freight movements coming up from Mexico because we don’t have alternatives. That involves a lot of fruit imports. But we’re working on that so we can have alternate infrastructure for that.”
Daniels said how planning for disruptions was informed by what he learned from his father, a grain shovelman at the Port of Erie, Pa., and a football coach.
“Talk about hard work — a shovelman made sure grain didn’t clog during loading of ships. As a coach, I saw how he prepared and anticipated the next play,” said Daniels, who worked as a defensive coordinator for Maine Maritime Academy football. “You have to think 30 seconds ahead, and what the next play is moving forward. Like, what do we have to do to prepare for disruptions in other parts of the supply chain? Resiliency within port structures, and how trucking and rail have to step up.”
Ever the football coach, when asked by FreightWaves Daniels said that he preferred a base 3-4 defense “because of its flexibility, for logistics planning.”
“The pandemic was a case study in resiliency and disruption, and how it affected the supply chain global implications. I learned about time management in small increments, and how to work with my counterparts at other ports. I hate to do it because we are competitors, but Covid impacted us as a whole.
“Sometime you need to step outside the competitive advantage that we have to ensure that it all works smoothly.”
There’s ample available research into supply chain, said Casey, but how to tap into that research to make it usable for decision-makers is a challenge, particularly when it’s sometimes collected in a bubble.
“Next, and so important, is having the voices of stakeholders in my head when we’re freight planning. There’s a lot of noise but you have to hear all of it. There’s not always one right answer.
“You have to have everything in front of you before you make a decision.”
The nub, Dassi said, “is what does ‘freight’ mean, and how do we work with that? As a state agency, we are working for the public. But they don’t want to know about policy, so we want to transmit a simple message.”
In a separate panel focused on international disruptions, Georgia Ayfantopoulou, senior advisor for the Hellenic Institute of Transport, Greece, said, “We learn through impacts. Planning, forecasting — we are always looking for new models for forecasting. And, we need more coordination to plan for the future.”
What’s the elephant in the room?
Port analyst Walter Kemmsies said shipping has learned the hard way to diversify.
“Assessing risk, for example. [Shippers] have to use more ports, more gateways. Don’t bring all your shipments from Asia into Los Angeles — that’s stupid if something happens [to the port].”
Important as diversification is, Kemmsies added that because so much of business is dominated by Wall Street interests, “they want us to keep costs down, and don’t want us to buy ‘insurance’ But I need to pay for insurance if I’m going to stay in business, no matter what the MBA’s say.”
Ayfantopoulou said collaboration is needed to produce disruption solutions.
“Solutions come from innovation. But we need to see the validity of the technology that provides the solutions. It must be well-defined and well-selected, and heuristic. There is always new research agenda — new models, new ways of profiling new tools. The elephant in the room is cost. In Europe, there is something else: We are going for green transport and that will add costs.
“How will we share those costs of making things happen?”
What’s missing?
“If I’m a shipper, I want U.S. locations that are going to have a good Nafta trade, for domestic and global flows,” Kemmsies said. “That would be Dallas, for all three coasts, highway connections. Shippers are always looking for the three Cs: costs, consistency, and capacity. But we have found the freight planning for that is woefully inadequate. Working with commercial real estate companies, we have knocked a lot of [U.S.] locations off this list because they don’t have those things. We need to think a lot more about shippers. For international it’s even worse; there are only a handful of ports for that.”
Modernizing project management, policy-making, and planning should be international priorities.
“In Europe, planning is not very well coordinated, planners need to build on a consistent approach,” said Ayfantopoulou.
Kemmsies said that lack of coordination was missing in the U.S. during the pandemic.
“Truck drivers were turning back because they found state-to-state differences in what was ‘essential’ freight. It was incredible how much food got [wasted] because it was going somewhere that wasn’t considered essential.”
It was pointed out that current container volumes moving through the Port of Los Angeles-Long Beach Port are approaching pandemic numbers, but with no disruptions.
What Kemmsies terms the fiefdoms of railroads moving coal, grain, and other freight, are fading.
“You can’t have that in a resource-constrained system like we have,” he said. “In Los Angeles, what we are seeing is that this is changing. Same in Savannah [Georgia]. We are seeing domestic and international trains being built in the same place. Why? Because it makes sense. Domestic is beginning to work more with international.”
Difference between disasters and catastrophes
The panelists advised planners to fortify the supply chain ahead of catastrophic events.
“Disaster response plans are designed for disasters, and assume locals have the capacity to respond within the first three days,’ said Holguin-Veras. “But a catastrophe requires a different way to respond.”
He pointed out that government and religious leaders died in the Haiti earthquake of 2010, and in the tsunami that devastated Kobe, Japan in 2011.
“In Puerto Rico there were basically no local supplies after Hurricane Maria [in 2017], he said. “We need to pre-position supplies. I don’t believe what we are doing is enough to prepare.”
To that end, Ayfantopoulou said critical networks need to be developed, as part of capacity-building for logistics infrastructure.
“We’ve studied all that but the economics are tough,” Kemmsies said. “There’s a cost-benefit curve that you trace out over time. And, the interior of this country doesn’t see as much of that as the East Coast, and places that get frequent storms. A lot more needs to be done. People don’t understand that a supermarket is critical infrastructure if an ice storm takes out the electrical grid.”
Find more articles by Stuart Chirls here.
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