Lack of US logistics standard for ‘essential’ service imperils cargo flow

Lack of US logistics standard for ‘essential’ service imperils cargo flow

A set of national standards for essential supply chain participants in the United States is an imperative that cannot be ignored. Photo credit: Shutterstock.com.

A railroad crew has reached the end of its federally mandated work hours. It stops the train and gets off, but there are no replacements in sight. The relief crew has been prevented from working by local authorities enforcing a strict stay-at-home mandate. The train — and the freight it carries  remains stopped through the night and part of the next day as the situation is sorted out.

Scenarios similar to this are playing out already and impacting transportation and logistics workers of all kinds, as states and municipalities implement stringent stay-at-home measures to help slow the spread of the coronavirus disease 2019 (COVID-19). Decisions about movement control are often being made locally, in circumstances that range from confusing to frightening, endangering the efficient flow of needed supplies across the country.

National policy makers have provided some broad guidance — for example, the Department of Homeland Security has deemed what it considers essential workforces for critical infrastructure. But many questions have been left unanswered, and “who needs to move” when it comes to the supply chain is far from clear. In part, this is because the supply chain requires many functions and activities that may not be easy for local authorities to define as essential, but are essential nonetheless.

The United States needs a set of clear and unambiguous movement standards for the national freight transportation and logistics network. It is a matter of both national security and economic necessity that the flow of goods to end-markets is preserved. In turn, this requires identifying in detail the critical roles required for the transportation system to function.

Meeting transportation needs efficiently

The supply chain is a hierarchy of multimodal and integrated functions that must all be preserved and protected together from disruption. Bottlenecking or eliminating any link in the chain will impact the flow of goods throughout the whole system.

To that end, the accompanying illustration identifies the critical freight transportation and logistics functions and roles that should be part of a detailed national standard — across all modes, for shippers of all sizes, and for both domestic and international shipments.

All of the entities shown are critical to keeping supplies flowing: Makers — such as manufacturers, packagers, and distributors — produce and direct goods through the transportation system. Movers — such as ports, motor carriers, railroads, and third-party logistics providers — physically move or coordinate the movement of goods. And mobilizers — from hotels and fuel stops to spare parts makers and repair services — provide the support services necessary to keep the system functioning.

Identifying the ‘essentials’

According to the Bureau of Transportation Statistics, nearly 20 million tons of goods are projected to move across the United States this year. Hundreds to thousands of companies in each of the categories shown make up the supply chain network for this freight. With “movers” alone employing more than three million people (per the Bureau of Labor Statistics), it is critical to identify workers on site and on the move, to allow these enterprises to continue to safely operate without undue restrictions. 

Two steps are required at the national level to ensure that freight mobility across the network is unimpeded:

·      Outlining standard, practical guidelines that local jurisdictions and enforcement can use to determine what mobility restrictions apply to essential functions; and

·      Developing clear definitions that companies and individuals can use to self-identify and provide enforcement with quick, definitive confirmation that their mobility is necessary to support the supply chain.

Companies should, of course, create work-from-home capabilities wherever possible — but many supply chain functions require workers to be on site or in transit. These workers need the backing and documentation to confirm that they must be mobile/away from home if questioned by local authorities.

A set of national standards (either voluntarily adopted by all jurisdictions or recommended/ mandated at the federal level) is an imperative that cannot be ignored. Supply chain participants are already encountering a proliferation of non-standard protocols as they move freight across the country, leading to undue complexity, stress, and delays. A national protocol for transportation and logistics-essential functions across the supply chain would offer clarity to states, municipalities, and companies seeking a way forward in this increasingly difficult environment — while ensuring that essential goods get to the people who need them as quickly as possible.

Adriene Bailey, a partner at Oliver Wyman, can be reached at Adriene.Bailey@oliverwyman.com.