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« Previous: Part 1: Improving Freight Transportation Resilience in Response to Supply Chain Disruptions
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Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2019. Freight Transportation Resilience in Response to Supply Chain Disruptions. Washington, DC: The National Academies Press. doi: 10.17226/25463.
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Page 12
Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2019. Freight Transportation Resilience in Response to Supply Chain Disruptions. Washington, DC: The National Academies Press. doi: 10.17226/25463.
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Page 13
Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2019. Freight Transportation Resilience in Response to Supply Chain Disruptions. Washington, DC: The National Academies Press. doi: 10.17226/25463.
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Page 14
Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2019. Freight Transportation Resilience in Response to Supply Chain Disruptions. Washington, DC: The National Academies Press. doi: 10.17226/25463.
×
Page 14
Page 15
Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2019. Freight Transportation Resilience in Response to Supply Chain Disruptions. Washington, DC: The National Academies Press. doi: 10.17226/25463.
×
Page 15
Page 16
Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2019. Freight Transportation Resilience in Response to Supply Chain Disruptions. Washington, DC: The National Academies Press. doi: 10.17226/25463.
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11 SUMMARY The purpose of the NCFRP 50 project was to develop guidance for stakeholders to plan for, mitigate, and adapt to disruptions to supply chains with the aim of enhancing freight transportation system resilience. Disruptions are primarily defined as unplanned and unanticipated events that affect the normal flow of goods and operations in supply chains and transportation networks. This definition is, in certain cases, extended to include planned events, such as the planned shutdown of locks for maintenance that affect the normal flow of goods and operations in a supply chain. The project consisted of two research phases. Phase 1 included a robust literature review and the development of supply chain scenarios reflecting a range of market, transportation corridor, and disruption contexts. Phase 2 analyzed each identified commodity corridor scenario, interviewed supply chain stakeholders, and examined the application of analysis tools and freight models for better understanding the dynamics of supply chain responses to system disruptions. A stakeholder guidance document for supply chain disruptions was prepared and is published as a separate document. The literature review identified the characteristics of different types of disruptions and how they affected transportation system performance, the factors that could influence transportation system resiliency, and potential system resiliency mitigation strategies. 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. Of these factors, effective interagency and intergroup communication was identified by many in the literature as being the most important input into effective resiliency strategies. The literature was recorded in a searchable tool that can be filtered based on the type of disruption event, impact severity, and resiliency strategies employed.

12 The research team then identified candidate commodity-specific, supply chain flow corridors based on such factors as tonnage and value moved by origin-destination pair (surrogates for how important particular commodities are in the U.S. national freight system); mode(s) of transportation; geographic location; diverse origination locations (e.g., domestic versus international); and the length of the supply chain. From the candidate list, ten supply chain corridor flows were selected for more detailed analysis. The supply chain paths used key operations centers and/or infrastructure that, if disrupted, could have negative impacts on the operations and cost-effectiveness of the supply chain. Disruptive event scenarios were then developed for each supply chain corridor flow that targeted specific types of disruptions (e.g., extreme weather, labor strikes, pandemics, and the like). The modes/infrastructure and the assumed disruptions included the following: 1. Pipeline - Infrastructure closure/failure due to a weather event or pipeline rupture – Gulf Coast to East Coast petroleum products 2. Marine Terminal/Harbor - Infrastructure closure/failure due to cyber terrorism – International exports of agricultural products from San Joaquin Valley, CA 3. Port/Rail - Failure due to labor activity or pandemic – Imported consumer electronics from Southern California to Illinois 4. Roads/Bridges/Airports - Infrastructure closure/failure due to earthquake – Pacific Northwest exports - computer chips 5. Inland waterway/Locks - Infrastructure closure/failure due to accident (locks) or low water levels – Mississippi River-barged grains from the Midwest to New Orleans 6. Distribution Center/Airports/Highway - Infrastructure closure/failure – Florida to Texas pharmaceutical movement 7. Truck/Border crossing - Infrastructure closure/failure – U.S. to Canada motor vehicles 8. Highway/Airport – Infrastructure closure due to extreme weather – Northeast to Great Lakes precision medical instruments 9. Rail – Rail bridge or track failure – Ethanol movement from the Midwest to California 10. Military- Infrastructure closure/failure due to terrorist activity: Northwest Pennsylvania to Port of Philadelphia; commercial cargo and military equipment/supplies The scenario analysis defined the commodity and its value, the market and supply chain transportation corridor, supply chain operations, the associated disruption and its impacts, potential diversion alternatives, the entities responsible for disruption resiliency and recovery, factors that could affect supply chain performance, and suggestions for enhancing supply chain resiliency. The results of the scenario analysis and case studies aided in the development of a typology of strategies for building partnerships and coordination strategies that were subject to feedback in subsequent stakeholder interviews. These interviews focused on multiple stakeholders having various roles in either managing the supply chain or providing the infrastructure that was used to move the commodity. The intent of the interviews was to identify specific strategies for enhancing supply chain resiliency for each scenario and to obtain lessons learned from interviewee experiences with previous disruptions. 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.”

13  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.  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. Some of the suggested strategies identified as part of this study included:  Share information among key stakeholders on likely needs and response strategies before, during, and after a disruptive event;  Pre-plan likely scenarios to ensure alternatives are available after, or during, a disruptive event;  Build redundancy into supply chain infrastructure and operational strategies;  Overcome regulatory barriers by working with regulatory authorities prior to a crisis; and  Establish clear lines of communication and responsibility for different types of disruptions, especially having in place contingency strategies for breakdowns in central command and control.

14 An accompanying guidance document provides a framework for the steps that can be taken to assess an agency’s current efforts at promoting system resiliency and of developing organizational capability. The framework consists of the following steps. Step 1: Organize for Success – Identify responsibilities for improving supply chain resilience or the components of the transportation system for which your agency/firm is responsible. Establish organizational mechanisms and institutional relationships that will serve as foundational partnerships as you move forward with the process. If necessary, institutionalize these partnerships with formal agreements, protocols, or understandings (these most often emphasize who is responsible for what). Ensure that those responsible are supported by leadership and have enough resources to succeed. Step 2: Develop a Communications/Information Exchange Strategy – Think about the information channels that need to be established for this effort to be successful. Who are the key participants? How to best reach out and engage them in the process? Develop or enhance current communication strategies both during the resilience planning process and during emergency response efforts. Understand what types of information support and types of data will be necessary to support and maintain the resilience planning process. Step 3: Assess Current Practice – Focus on what you and your partners are currently doing with respect to infrastructure provision and system operations. Are you designing key infrastructure with resilience in mind? Has your continuity of operations plan been updated recently? Does your staff have the knowledge, expertise, and the resources to promote resilience in supply chains? Step 4: Understand Hazards and Threats and Their Impacts/Consequences – This step is perhaps one of the most critical in that enhancing supply chain resilience depends on the type and nature of the expected disruptions. This step could look at all the types of threats and impacts that might be faced in the future, or it could focus on the one or two threats expected to be most likely or most impactful. This effort will vary by the level of detail desired, the degree to which other background information is already available from other sources (e.g., future flooding locations from already-conducted adaptation studies), and the amount of resources (both funding and human expertise) available to conduct the assessment. Step 5: Develop Strategies, Actions and Plans – Based on the assessment from Step 4, collaboratively identify strategies, actions, and plans to improve supply chain resilience. These actions could focus on issues internal to your organization or on improving the relationships among key participants in the supply chain. The breadth of actions is quite broad, ranging from actual infrastructure changes, changes to standard operating procedures, enhancements to existing institutional relationships, training for staff and so forth. This step also includes identifying "early wins", which is designed to establish credibility in the process by identifying actions/strategies/ projects that can be implemented in the short term (and hopefully without much financial support). This could include physical changes to projects already in the development stage, changes in protocols, changes to emergency response/operational strategies, or training opportunities for staff. Step 6: Implement Strategies and Actions – This step includes identifying which of the strategies and actions from Step 5 should proceed to implementation based on organizational capabilities and resources, and which of these actions will have to be implemented later. Implementation plans would include those actions that can be taken solely by one agency and those that will require joint efforts (and if so, how the responsibilities will be divided among those involved). Step 7: Monitor Performance and Incorporate into Assessing Current Practice – Provide feedback into the planning and decision-making processes after disruptions occur. Based on actual experience with disruptions, what should be done differently to enhance supply chain resilience in the future? How can operations be improved and how should infrastructure be provided differently to enhance system resilience?

15 The project also identified the following research needs: 1. Detour/Alternate Route Assessments: Examine the entire spectrum of identifying detour routes, assessing their capabilities in terms of handling more traffic, and identifying the types of strategies that could be used to implement these strategies. 2. Develop Supply Chain Performance Measures: Develop performance measures for use by transportation planners that reflect the impact of transportation system performance on supply chains. 3. Emergency Response and Planning: Examine the linkage between emergency response/emergency management planning and the long-range transportation planning process to identify areas of commonality and where planning can help prepare the transportation system better for potential disruptions. 4. Hazard Mitigation Plans: Explicitly examine how supply chain considerations and factors (or at least awareness) can be integrated into state Hazard Mitigation Plan and other plans that focus on preparing for and responding to disruptions. 5. New Transportation Agency Roles and Responsibilities for Addressing Resiliency: In light of increasing occurrences of natural and man-made disasters, transportation agencies and organizations may benefit from establishing new roles and responsibilities to enhance organizational responses to supply chain disruptions at the state and local level. There is a need to identify specific capabilities, knowledge, and tools that employees would need to fit this role. 6. Integrate Transportation and Emergency Management Planning: Coordination between transportation and emergency management agencies is often overlooked in the planning process, because Emergency System Functions (ESF) are usually implemented at the operational level and not the planning level. There is a need to examine the possible contributing roles of metropolitan planning organizations (MPOs) in emergency management planning. 7. Continue to Promote Freight Fluidity Planning and Data Collection Techniques: Freight fluidity describes how well a supply chain performs in a freight transportation network, measuring supply chain performance across multiple jurisdictions using travel time, travel time reliability and cost. State and local transportation officials should examine selected supply chains to better understand freight performance and identify freight bottlenecks and congested areas that may require transportation system improvements to enhance freight movement. Collaborating with the private sector to collect data to examine candidate supply chains can bring a greater understanding to freight fluidity planning efforts at the local, regional, and national level. 8. Research the Use of State Freight Plan Data to Evaluate Supply Chain Disruptions: State freight plans use some type of commodity flow data to evaluate how commodities are transported in and out of the state. State DOTs can examine state freight plans and identify candidate supply chains for future research and examine what types of data would be needed to incorporate supply chain concerns into agency planning. 9. Incorporate Resiliency into State Freight Plans: The Fix Americas Surface Transportation (FAST) Act requires state DOTs to consider resiliency as part of their state freight plans. This project would examine how resiliency could be incorporated into these plans by using a commodity flow/disruption scenario analysis methodology. 10. Develop Vulnerability and Adaptive Capacity Assessments: State DOTs should assess the vulnerability of the freight system, based on the defined natural and man-made hazards. This study would illustrate how such assessments would incorporate supply chain concerns into the methodology. 11. Support for Military Deployments: Using a wide range of the latest cargo handling and communications technologies, the US DOD has developed detailed procedures and protocols for moving men and their supporting equipment and supplies to designated deployment seaports. As the nation’s cargo volumes continue to increase, and as new freight handling technologies come on line, future deployments can benefit from continued research into several areas, including:

16 Intra-and Inter-Agency Communications  Use of the latest communications technologies to ensure continuous real time in-transit visibility of the condition and location of both cargos and cargo handling assets,  Exercising inter-agency communications protocols: to ensure that appropriate priority is given to military convoys and their cargos, including early communication of modified asset needs (e.g. Extended seaport gate opening hours),  Simulation exercises of potential cyber-based as well as physical attacks on deployment assets and infrastructures, including procedures to provide backups to inter-agency communications during loss of primary communication methods. Deployment Assets Management  Procedures for handling large and heavy non-containerized military equipment during seaport vessel loadings, typically under heavy security, and with coordination of activities by experienced military cargo handlers.  Methods from rapidly identifying and responding to the location and status of possible backup assets (e.g. alternative modes or routes) in case of lost asset capacity.  Cargo handling procedures in support of force package integrity: procedures to ensure the availability of enough staging areas, trained personnel, loading equipment, and vessels for moving complete military units through the nation’s strategic seaports (thereby greatly reducing the time a unit must spend in assembly upon arrival within theater). Performance Assessments  Development of standardized land corridor-based as well as seaport-based performance measures that can be used to identify and quantify operational concerns: including assessments of the potential for and possible remedies to worst-case (e.g., heavy “sea-lift surge” ) conditions during periods of joint military- commercial cargo operations both within and on the routes leading to and from a designated seaport.

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TRB’s National Cooperative Freight Research Program (NCFRP) has released a pre-publication version of Research Report 39: Freight Transportation Resilience in Response to Supply Chain Disruptions. The report provides guidance to public and private stakeholders on mitigating and adapting to logistical disruptions to supply chains resulting from regional, multi-regional, and national adverse events, both unanticipated and anticipated.

The report, which makes a significant contribution to the body of knowledge on freight transportation and system resiliency:

(1) assesses research, practices, and innovative approaches in the United States and other countries related to improving freight transportation resiliency;

(2) explores strategies to build relationships that result in effective communication, coordination, and cooperation among affected parties;

(3) identifies factors affecting resiliency;

(4) analyzes potential mitigation measures;

(5) characterizes spatial and temporal scale considerations such as emergency planning and response timeframes;

(6) prioritizes response activities by cargo types, recipients, and suppliers;

(7) identifies potential barriers and gaps such as political boundaries, authorities, ownership, modal competition and connectivity, and social and environmental constraints; and

(8) examines the dynamics of supply chain responses to system disruptions.

The report also includes a self-assessment tool that allows users to identify the current capability of their organization and institutional collaboration in preparing for and responding to supply chain disruptions.

Disruptions to the supply chain and their aftermath can have serious implications for both public agencies and companies. When significant cargo delays or diversions occur, the issues facing the public sector can be profound.

Agencies must gauge the potential impact of adverse events on their transportation system, economy, community, and the resources necessary for preventive and remedial actions, even though the emergency could be thousands of miles away.

Increasing temporary or short-term cargo-handling capacity may involve a combination of regulatory, informational, and physical infrastructure actions, as well as coordination across jurisdictional boundaries and between transportation providers and their customers.

For companies, concerns can include such issues as ensuring employee safety, supporting local community health, maintaining customer relationships when products and goods are delayed, and ultimately preserving the financial standing of the company.

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