Freight Transportation Resilience in Response to Supply Chain Disruptions (2019)

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84 CHAPTER 9: CONCLUSION This research has examined the impacts and institutional roles of those involved when supply chains are disrupted. As noted, the major focus of most of the participants in such efforts is in incident response and emergency management, certainly a key effort. However, the implications of supply chain disruptions as they potentially reverberate throughout the economy cannot be overlooked in such efforts. The key components of the supply chain that were found to contribute to system resiliency included:  Physical Infrastructure – infrastructure that enables the physical movement of goods from origin to destination such as road, rail and pipeline infrastructure; terminals; distribution centers; and warehouses.  Logistical – components of the supply chain that manage and decide logistics arrangements such as network routing, reassigning vehicle/vessel capacity, creating transportation management plans, and risk pooling.  Financial – components such as the capital investment program, potential funding sources, investment decisions for infrastructure improvement, and public private partnerships (PPPs).  Communication / Transactional / Informational – components such as inter-organization or stakeholder communications, exchange of invoices and payments, emergency communications documentation, communication roles and responsibilities, information gathering, employee education, and the like.  Regulatory / Oversight – components such as lobbying, post-event oversight, public policy updates and changes, promoting national programs and policies, and the like.  Institutional – components such as corporate policies, social and political influences, and social capital, which reflects the relationships and institutional structures that establish boundaries for interagency and interpersonal interactions. The following key observations came from the interviews:  There is a clear distinction between “resilience” as part of incident response and “resilience” as part of a broader network or systems performance perspective. Both public agencies and major transportation firms have in place plans and operational strategies for the former….and thus feel like they are fully prepared to handle incidents and recovery efforts. Most of those interviewed have not been engaged in the second, much broader, perspective of “resilience.”  Public agencies focus on disruptions to the transportation systems for which they are responsible. Although they are concerned about how to handle traffic after a disruption, they often do not think about how that disruption is affecting activities outside their jurisdiction such as supply chains. Hence, the resiliency of the freight network during times of disruption typically defaults to the private sector with some localized support from federal, state and local governments in times of need.  Business continuity dictates that companies strategically manage freight movements along their supply chain and invest in strategies to protect their business from risks. From a system resiliency perspective, it is thus important to understand each supply chain stakeholder’s priorities before, during, and after a disruption.  The competitive market environment makes it difficult for public agencies to coordinate and support disaster preparation and recovery actions for freight movements (because of a reluctance to show perceived preference to one industry or firm over another). While the increasing number of natural disasters and other disruptive events has led, in some cases, to enhanced collaboration with the private sector, there are still few examples where this has occurred outside the context of emergency response.

85  The degree to which an organization, whether public or private, is actively engaged in preparing for system disruptions is largely driven by the perceived likelihood of future hazards, their experiences with previous events, and by association the geographic scale of their market. For example, global companies have more exposure to the multitude of disturbances and stresses that impact their activities around the world and have more resources to address resiliency challenges.  At their core, successful resiliency efforts are carried forward by trained and experienced individuals. An important strategy for enhancing organizational capacity for addressing resiliency is to mentor and train employees so they can make decisions at the local level in real-time response to issues that arise during a disruption. For example, several of those interviewed noted that they have faced situations where communications and information exchange was not working after a major disaster and thus centralized command and control for the company response was greatly hindered.  Ensuring infrastructure resilience cannot be accomplished solely by restoring a system to its previous state after a disruption, particularly in circumstances in which essential transportation assets are already vulnerable from lack of maintenance. Interviewees emphasized the importance of redundant infrastructure for critical transportation assets, and if necessary, plan for cargo diversion alternatives that help maintain business continuity.  The freight transportation system is an interdependent network of organizations with different missions, operations and programs, and assets exposed to varying degrees of risks and vulnerabilities. Because the responsibility for improving freight transportation resiliency does not fall to a particular sector or specific agency, all stakeholders must work together collaboratively, which for public agencies means under an umbrella of a regulatory framework and a range of funding programs. The research has provided guidance that can go a long way in preparing supply chain participants to reduce the impacts of disruptions. The challenge will be, given the different motivations and responsibilities of both public agencies and private firms, getting the different groups involved to recognize the important roles that each have in minimizing supply chain disruptions.