House Hearing Nibbles at Edges of Supply Chain Disruption

Last week, the House Committee on Transportation and Infrastructure held a hearing on “Industry and Labor Perspectives: A Further Look at North American Supply Chain Challenges.”  The hearing was the latest example of how supply chain disruption continues to be one of the nation’s spotlight issues.  As ranking member Rep. Graves (R-MO) pointed out, significant users of the supply chain—including shippers like large retailers—were notably absent from the proceedings. 

Many committee members and witnesses referenced upcoming infrastructure investments from the recent passage of the Infrastructure Investment & Jobs Act, though little detail was discussed about what investments are critical, and how priorities should be determined. As heavy users of our nation’s infrastructure, RILA welcomed this much-needed boost to modernize our ports, roads, and highways, which will allow retailers to innovate and invest in more effective and sustainable means to deliver goods to families across the country. However, we have long asserted that infrastructure funds alone are not enough—funds must be effectively targeted, focused on smart modernization, and that major users of transportation infrastructure must have a voice in helping prioritize investments.

Several speakers—especially Port of Long Beach Executive Director Mario Cordero—commented on the need to migrate ports and the broader supply chain to a 24/7 model. The industry largely agrees that 24/7 is needed, however in the near term it’s at least as important to maximize the effective use of existing gate hours.  Rep. Eleanor Holmes Norton (D-DC) highlighted the absolute necessity of addressing the broken system of appointments and empty container return—a critical element of tackling the current disruption.

While many committee members referenced the congestion in ports like Los Angeles and Long Beach, there was hardly any substantive mention of the need for ocean carriers to take more ownership of their role in port congestion.  Ports and truck yards in Southern California and elsewhere remain clogged with empty containers that foreign-owned carriers have been slow to accept and evacuate, in order to clear space and ease congestion.  RILA appreciated the brief discussion of the much-needed reforms and shipper protections in the Ocean Shipping Reform Act of 2021, introduced by Rep. Garamendi (D-CA) and Rep Johnson (R-SD) that would address ocean carriers’ consolidated market power.  Protecting American shippers and bolstering the Federal Maritime Commission’s oversight of foreign-owned ocean carriers is essential to avoiding future disruptions and alleviating inflationary risks from soaring ocean freight rates.

Lastly, several speakers underscored the need for metrics and data sharing to enable visibility across the supply chain.  Dr. David Corell of MIT shared insightful research on improving truck freight flows, illustrating that to improve you must first be able to measure.  RILA continues to advocate for investment in data infrastructure, and common standards for interoperability that are necessary for today’s supply chains.  As Executive Director Cordero stated, “digital transformation will be very important.”  To best understand and address supply chain challenges, it is critical to be able to measure the freight fluidity of our transportation networks.

Ultimately, the hearing underscored the fact that the current disruption and the supply chain ecosystem are extremely complex.  While no simple answers exist, some essential steps are clear: targeted investment for infrastructure modernization, addressing systemic operational challenges in major U.S. ports, and enabling data sharing and interoperability to facilitate end-to-end visibility.

RILA will be discussing these supply chain challenges and more at our upcoming LINK2022: The Retail Supply Chain Conference. Don’t miss the opportunity to join us in Dallas February 20-23 to explore solutions and shape the future of retail supply chains with industry peers and experts.
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