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

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32 an extra part is always on hand for last-minute customer demands, i.e., a trade-off between too much and too little inventory retention. A similar approach may also better support the need for replacement parts during disruption event-induced emergencies. Likewise, strategies of sourcing a critical part or component from multiple suppliers and storing the item in more than one location is viewed as a prudent strategy to survive major disruptions. A workshop on “Developing Freight Fluidity Performance Measures” examined inventory management strategies that consider freight demand increases and a tightening transportation capacity, with the ability to hold inventory in place mentioned as a practical hedge against transportation constraints (TRB, 2014). Rose and Wei (2013) state that using “Input Substitution”, substituting production process goods that were like those whose production has been disrupted, should be considered, such as the use of natural gas instead of coal in electric utility and industrial boilers. One of the key principles in developing inventory management strategies is to gather and pay attention to the lessons learned from many small-scale disturbances (RAND Corp., 2009). Traffic management: Traffic flow management helps increase resilience by providing alternate routes, targeting strategies for moving commercial vehicles, and implementing communications protocols to make sure all those involved understand the options available for recovering service. For example, the State Route 520 Catastrophic Failure Plan developed by the Washington State Department of Transportation (WSDOT) for one of its most critical bridges talks about the development of a traffic management plan including a toolbox of interdependent strategies to keep people moving throughout the central Puget Sound region in the event of a bridge failure. This includes traffic management strategies for affected corridors, transit service, transportation demand management and system management, and freight considerations to keep commerce moving throughout a region. Other key transit strategies include emergency re-routing procedures, increasing public awareness and incentives, adding park-and-ride capacity, increasing transit service, consolidating transit routes, and reprioritizing service hours (WSDOT, 2008). Transactional/Financial: Financial strategies are important for any mitigation strategy. This includes investing in mitigation projects before a disruption occurs, as well as after a disruption as an aid to faster recovery. A report published by the New Zealand Transport Agency titled “Measuring the resilience of transportation infrastructure” talks about undertaking economic and engineering research to better understand and quantify a suitable level of investment in resilience. Depending on the asset or facilities being considered for resiliency enhancement, significant capital expenditures might be necessary (e.g., a major bridge or harbor terminal). Expenditures might be significant because of multiple investments required over a much larger universe of projects, or expenditures might be more modest where quick fixes or smaller levels of investment on a critically few number of projects could result in improved system resilience (AECOM, 2014). Financial transactions between customers and product carriers very much depend on information technology-based systems that rely on commercial and publicly available communication systems (e.g., communication satellites). Any disruption to these transactions would have significant impacts on the financial position of those involved in the supply chain. The literature review noted that in the absence of a clear and present danger, it is often difficult to secure public funding for projects that are designed to protect against something that might never occur. However, in some cases, new funding might be available given the public awareness of, and the potential magnitude of, the perceived threat. For example, a report by the Oregon Seismic Safety Policy Advisory Commission entitled “The Oregon Resilience Plan” recommends creating a sustained capital investment program for seismic rehabilitation, upgrading transportation routes, and establishing a State Resilience Office (OSSPAC, 2013). In other cases, the most effective funding strategy might be to incorporate resiliency-oriented improvements into project development as add-ons to normal project development costs.

33 The report on Transportation Sector Resilience by the National Infrastructure Advisory Council (NIAC) recommended enhancing public/private partnerships (PPPs) in securing and enhancing the resilience of critical infrastructure and their supporting functional systems. The report identifies PPPs as one of the most important opportunities for supporting infrastructure resiliency projects. Increased involvement of the private sector through PPPs provides incentives for them to get more involved in longer-term strategies to protect their investments against future hazards and threats (Boyer, Cooper, & Kavinoky, 2011). Communicational/Informational: Communication, coordination, and information-sharing are key components of any cooperative effort. The literature review identified various strategies for proper communication and information flow during disruptions. The most important characteristic of effective communication/information dissemination was identified as a prlori coordination among various stakeholders, especially in planning expected response and recovery strategies. The institutional mechanism for doing so were many, such as establishing committees or other coordinating mechanisms. One example noted was the Maritime Transportation System Recovery Unit (MTSRU), which identified a single point of contact (public agency, advocacy group, or industry) through which all information will flow in the event of a maritime emergency (Bynum, 2014; Southworth, Hayes, McLeod & Strauss-Wieder, 2014). Inter-organizational and stakeholder exchange of information can help identify issues at all levels of decision making, from strategic planning to tactical and operational details prior to, during, immediately after a disruption and over a longer-term recovery period. Faster response times and rapid information flows between stakeholders can also lessen the impact of a disruption (Baymout, 2014). Frequent coordination among various agencies and stakeholders also minimizes confusion in areas where jurisdictions overlap (RAND Corp., 2009). The resilience literature talks about setting up various groups or task forces that can help enhance better communication and information flow among stakeholders. An Interagency Port Resiliency Task Force, for example, is often considered necessary to connect the organizations associated with maritime transport with road and rail links and identify chokepoints and critical supply chain paths for energy distribution and freight flow (Sturgis, Smythe, & Tucci, 2014). Establishing stakeholder groups; creating an organizational charter and defining its goals, roles, and responsibilities; establishing communications plans; and creating a contact information database of key personnel are all important components of good communication strategy (Stevens Institute, 2013). Washington State DOT (WSDOT) recommends developing a communications plan that supports emergency response and recovery and that ensures a consistent messaging across agencies. The WSDOT developed a guidebook with recommended guidelines, strategies, and tools for jurisdictions and agencies to disseminate critical information effectively to their constituencies---as well as providing guidelines, strategies and tools for use by its own communications staff (WSDOT, 2008). Siedl and Schweighofer (2014), in their report on inland waterway transport, discuss the use of Information and Communication Technology (ICT) for developing “smart waterways” for inland navigation, river information services, barge planning, and a management information system for inland container shipping: and how the success of ICT depends on collaboration among public and private stakeholders. Another component of good communication/information transfer is enhancing the awareness among stakeholders about various disruptive events and mitigation strategies. Oke and Gopalkrishanan (2009) note that it is important to educate not only employees but also customers regarding risk management and emergency response to disruptions. They also state that promotions and incentives for customers during times of capacity shortfalls or other crises can better allow port operators and carriers to manage the demand for limited cargo-handling resources. Most studies of resilience identify data availability (and data quality) as a critical concern for considering resilience in agency/organization efforts. The literature review and several of those interviewed suggested creating databases to hold critical information that can be used for both resiliency planning or for emergency operations during disruptive events. The Transportation Research Board’s (TRB’s) Disaster Resilience – A National Imperative report discussed developing a “National Resilience Scorecard” through collaboration among public and private stakeholders, led by the Department of Homeland Security (DHS) (NAS, 2012), and encouraging inter-agency sharing of best practices

34 for addressing the potential impacts of various disruptive events. This would include the involvement of professional organizations such as the American Association of State Highway and Transportation Officials (AASHTO), Association of American Railroads (AAR), American Association of Port Authorities (AAPA), American Association of Airport Executives (AAAE) and federal agencies such as the Federal Highway Administration (FHWA), Federal Transit Administration (FTA), Federal Railroad Administration (FRA), Federal Aviation Administration (FAA), MARAD, Federal Emergency Management Agency (FEMA) and DHS. This sharing might include information about vulnerabilities to the supply chain, effective mitigation strategies, and the effectiveness of past contingency plans and infrastructure protection plans (TRB, 2008; DHS/OCIA, 2016). Once various task forces, command centers, and advocacy groups have been established, it is important to improve the effectiveness, transparency, and accountability of such efforts. The Government Accountability Office (GAO) (2016) recommends enhancing the effectiveness of these activities within the context of an Emergency Communications Preparedness Center (ECPC) by clearly documenting the ECPC’s strategic goals and the roles and responsibilities of the ECPC’s member agencies, and by developing a mechanism to track a Center’s successes and failures (GAO, 2016). Effective communication and information flow are also important for emergency military deployments. Some noted it could be the most importance factor in an efficient deployment. A report by the FHWA – Office of Operations provided guidelines for local, state and federal civilian agencies and private companies when working with the nation’s military services during national emergencies and military deployments. Effective communication and coordination of operations between the relevant Military Emergency Operations Center (EOC) and civilian authority centers (which may include a state EOC, a regional EOC and/or a local EOC) is essential to the efficient movement of military convoys both within the continental U.S. and through the nation’s seaports (FHWA, 2005). Regulatory/Oversight: Regulatory/oversight strategies can be an important part of an overall resiliency strategy, especially during a disruption and in a rapid recovery period (when some regulations might be relaxed). Regulatory/oversight strategies have some overlap with communicational/informational strategies as effective regulation and oversight depend on effective communications. It should be noted that some private sector interviewees for the research noted that from a service recovery perspective regulatory and investigation agency actions often “interfere” with the ability to recover from an incident (although there was recognition that such responsibilities were important). The National Cooperative Freight Research Program (NCFRP) Report 30 recommended that protocols need to be developed by the U.S. Coast Guard and Border Protection (CBP) to address the issue of diverted shipments when the destination port is no longer available (Southworth, Hayes, McLeod & Strauss-Wieder, 2014). This recommendation reflected the aftermath of Hurricane Sandy when the Jones Act did not allow foreign-flagged cargo diversion to ports unaffected by the storm (the Jones Act does not allow foreign ships to transport goods between U.S. ports). The report discussed the possibly of a temporary waiver of the Jones Act to achieve a faster and cost- effective means for handling diverted cargo. A temporary waiver with respect to fuel supplies was granted during the emergency; a short-term waiver was also approved after the 2017 Puerto Rico Hurricane Maria. However, such issues are sensitive politically (Oke & Gopalakrishnan, 2009). GAO’s report on Critical Infrastructure Protection also made regulatory recommendations relating to a resilience framework. It recommended focusing on specific milestones, including goals and subordinate objectives, activities, and performance measures. Sources as well as types of resources and contingency investments should be provided alongside any mechanisms for coordinating recovery efforts (GAO, 2012).

35 Institutional: Institutional mitigation strategies include both political and social components. Sadeka et.al, in their paper on social capital and disaster preparedness stated that despite the evidence about its efficacy, resiliency research and disaster management practices have yet to fully embrace social capital as a critical consideration (Sadeka, Mohamad, Reza, Manap, & Sarkar, 2015). The Gujarat (2001) and Kobe (1995) earthquakes showed that communities with high trust, norms, participation, and social networks were able to more quickly to recover from disaster (Nakagawa & Shaw, 2004). A report by Williams (2015) on social resiliency and Superstorm Sandy discussed how to build community resilience. The report stated that it is important to foster local leadership and social networks that connect vulnerable residents to local groups, government officials, neighborhood institutions and service providers in order to develop social capital and preparedness programs in neighborhoods with vulnerable populations. Becker and Caldwell (2015), based on interviews with 57 stakeholders involved in port activities in Gulfport, MS and Providence, RI, also encouraged external-to-the-port stakeholder involvement, and demonstrated that taking a local stakeholder-based approach to data gathering can identify thoughtful and longer-range port resiliency strategies. 2.6.2 Military Operations The physical and logistical issues associated with cargo movements are somewhat similar for both commercial and military cargo moves, at least in concept. However, military deployments occur under a host of regulations and pre- specified federal, state, and local agency roles and responsibilities that place considerable importance on inter- agency coordination and communication. As can be seen in the following discussion of past and proposed military operations, the DOD and USDOT, as well as several other federal, state, and local government agencies, have invested a great deal of effort to improve the physical capacity and inter-agency coordination of freight-handling activities during large scale and rapidly developing military deployments. Physical Infrastructure: Since MARAD’s 2005 report to Congress (ibid, Section 1.1.4), several efforts have been made to address anticipated shortcomings associated with future commercial seaport-supported deployments. On the civilian government side this included efforts by the Department of Homeland Security (DHS, 2006; Bynum, 2014) to ensure the resilience of the maritime system’s physical infrastructure, and MARAD’s efforts to improve military as well as commercial cargo throughput and handling via its Agile Ports program1 and National Ports Readiness Network.2 For the military, this includes a number of Congressionally-requested studies to ensure the readiness and resilience of the nation’s strategic seaports when faced with a significant surge in military cargo (Simpkins et al, 2008; GAO 2007, GAO, 2011, GAO 2013) Transactional/Financial: A GAO report on defense logistics identified six potential sources of funds for infrastructure improvements – port revenues, general obligation bonds, revenue bonds, loans, grants, and other miscellaneous sources (GAO, 2013). The goal was to ensure cargo throughput and build capacity into, through, and out of a seaport. The U.S. military is already spending funds on enhancing and protecting access to military bases in expectation of future climate conditions. However, this investment is not occurring at the port of embarkation where some of the bottlenecks will likely occur. Looking at a mobilization from the total system's perspective might identify areas of critical vulnerability that would benefit from multiple source funding. Logistical/Communicational/Informational: For security as well as efficiency purposes, and with so many different actors playing a part in a military deployment, a great deal of real time communication and coordination is required among stakeholders. These include port and individual terminal operators, commercial carriers, and different branches of federal, state, and local governments (DHS, 2006; JCS, 2013a). Starting with the over-land portion of a 1 https://www.marad.dot.gov/ports/office-of-port-infrastructure-development-and-congestion-mitigation/intermodal-transport- networks/agile-port/ 2 https://www.sddc.army.mil/sites/TEA/Functions/SpecialAssistant/Pages/PortsNationalDefense.aspx