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39 CHAPTER 3: SYSTEM RESILIENCY SCENARIOS AND CASE STUDIES As noted earlier, the use of supply chain flow scenarios was an important analysis approach in this research. The supply chain flow scenario was intended to take what could be considered a complex set of interactions and focus on key operations and infrastructure uses that, if disrupted, would have negative impacts on the operational and cost- effectiveness of the supply chain. In other words, how would a disruption at one point in the supply chain have significant impacts âdownstreamâ or âupstreamâ? 3.1 SUPPLY CHAIN SELECTION METHODOLOGY AND CRITERIA An initial screening process was used to identify potential candidate corridor freight flow scenarios. Multimodal and inter-regional, origin-destination flow data from the U.S. DOTâs Freight Analysis Framework (FAF) 4.3.1 were analyzed using a proprietary data visualization tool. Using data from the 2012 Commodity Flow Survey (CFS) and international trade data from the Census Bureau, FAF incorporates data from the agriculture, extraction, utility, construction, service, and other sectors. Commodities are classified at the 2-digit level of the Standard Classification of Transported Goods (SCTG). A complete description of these categories and their constituent parts can be found at https://bhs.econ.census.gov/bhs/cfs/Commodity%20Code%20Manual%20(CFS-1200).pdf. Commodities and mode-specific traffic volumes moving throughout the U.S. were identified as well as additional details as needed from the mode- and commodity-specific databases. Based on the FAF freight movements by value, the commodities shown in Table 1 were identified for further consideration as potential supply chain commodities for the study based on their economic importance and/or their potential as an essential supply chain in disaster recovery efforts. Table 1: Commodities Identified for Analysis by Value Commodity SCTG2 Code Description Electronics 35 Electronic and other electrical equipment and components, motors, appliances, computer and office equipment, and entertainment products/media devices (such as phones, TVs, DVD players, cameras) Motorized Vehicles 36 Autos and vans, vehicles for transporting goods, tractors, motorcycles, armored vehicles, motor vehicle parts Gasoline 17 Gasoline, aviation turbine fuel, and ethanol (includes kerosene and fuel alcohols) Coal-(not elsewhere classified--n.e.c.) 19 Lubricating oils and greases; gaseous hydrocarbons (includes liquefied natural gas (LNG), propane and butane; other liquefied and gaseous hydrocarbons; coke and semi-coke of coal, lignite or peat; petroleum coke and asphalt; bituminous mixtures; and other coal and petroleum products not elsewhere classified (n.e.c.) Pharmaceuticals 21 Chemical mixtures for medical use, biological products, bandages (such as adhesive) and related products prepared for medical use or in packages for immediate medical use Other foodstuffs 7 Dairy products; processed or prepared vegetables, fruit, or nuts; coffee, tea and spices; animal or vegetable fats and oils; sugars and syrups; other edible preparations (such as sauces, soups, powders, and concentrates); non-alcoholic beverages (such as soft drinks, juices and water) Plastics/rubber 24 Plastics and rubber in primary forms, articles of plastics and rubber (such as rods, sheets, pellets, tires, tubes, pipes and hoses) Textiles/leather 30 Textiles and articles (such as yarns, thread, fabrics, carpets, and linens) and leather and articles (such as footwear, luggage, cases, apparel and saddlery)
40 Base Metals 32 Base metals in primary or semi-finished forms and in finished basic shapes (such as ferro-alloys, iron, steel, copper, aluminum, lead, nickel, zinc and other nonferrous metals Precision instruments 38 Eyewear and other optical elements/instruments; photographic and photocopying machines; measurement instruments (such as navigational and surveying); medical, dental, veterinary, or similar instruments and apparatus Similarly, based on FAF freight movements by tonnage, Table 2 shows the additional commodities chosen as significant national contributors by tonnage and/or representing essential goods. Table 2: Commodities Identified for Analysis by Quantity Commodity SCTG2 Code Description Cereal grains 2 Wheat, corns, rye, barley, oats, grain sorghum, rice (excludes soybeans) Other agricultural products 3 Vegetables, fruits and nuts (edible, fresh, chilled, or dried); soybeans, seeds, flowers and plants, other agricultural products (such as tobacco, cotton, unprocessed coffee, and sugar cane) Wood products 26 Wood chips, lumber, plywood, particle board, windows, doors, shingles Once the candidate commodities were selected, the research team identified supply chain corridors that were representative of the diverse paths that these goods take within the U.S., with a strong interest in corridors that linked the nationâs 11 fast-growing âmegaregionsâ, within which more than 70 percent of the nation's population and jobs are now located (as defined by the Regional Plan Association, an independent, non-profit New York-based planning organization). Additional corridor selection criterial included: ï· Mode of transport - truck, rail, air, barge/vessel, pipeline; ï· Range of product types - e.g., agricultural products, food, fast-moving consumer goods, consumer staples, technology, natural resources, and the like; ï· Diversity of method of origination â mined, farmed, processed, manufactured, imported, and the like; ï· Perishability/obsolescence of product from a beneficial cargo owner (BCO) or consumer standpoint7; ï· Length of corridor â international or domestic, and through one or multiple regions; ï· Length of supply chain - number of days to traverse a supply chain to represent long, medium and short transits; ï· Points of entry/exit - a variety of points and modes of entry for international and national supply chains, specifically focused on export and entirely domestic commodities; ï· Potential for disruption from a range of unforeseen and uncontrollable events; ï· Level of disruption â moderate to severe cascading impacts to supply chain participants and/or consumers; ï· Availability of alternative routes; and 7 Perishability/obsolescence of produce and pharmaceuticals is different from a laptop computer or a pair of athletic shoes, but all can deteriorate to the point of being unsaleable or only saleable at a deep discount.
41 ï· Knowledge of the dynamics of actual supply chains and relationships with participants including: o Third Party Logistics (3PL) o Airfreight Forwarder (AFFW) o Airport Operator (APO) o BCO o Customs/Government Agency (CGA) o Distribution Center o Intermodal Marketing Company (IMC) o Integrator (INT) such as DHL, FedEx, UPS o Marine Terminal Operator (MTO) o Motor Carrier (MC) o BOs o Railroad o Ocean carrier, Non-vessel Operating Common Carrier 3.2 OVERVIEW OF CANDIDATE SUPPLY CHAIN FLOW SCENARIOS A candidate list of 15 supply chain scenarios was developed and submitted to the project panel and modified as per panel input. Based on this input, ten commodity-corridor scenarios shown in Figure 3 became the basis for the more detailed analysis. Between them, all major modes of transportation are represented across the 10 commodity- corridors examined (while recognizing in each case that more than one mode may be used along the entire supply chain, including post-disruption mode shifts): 1. Pipeline - Infrastructure closure/failure due to a weather event or pipeline rupture â Gulf Coast to East Coast petroleum products 2. Marine Terminal/Harbor - Infrastructure closure/failure due to cyber terrorism â Exports of agricultural products from San Joaquin Valley, CA 3. Port/Rail - Failure due to labor activity or pandemic â Imported consumer electronics from Southern California to Illinois 4. Roads/Bridges/Airports - Infrastructure closure/failure due to geological event â PNW exports - computer chips 5. Inland waterway/Locks - Infrastructure closure/failure due to accident (locks) or low water levels â Mississippi River barged grains from the Midwest to New Orleans 6. Distribution Center/Airports/Highway - Infrastructure closure/failure due to theft â Florida to Texas pharmaceutical movement 7. Truck/Border crossing - Infrastructure closure/failure â U.S. to Canada motorized vehicles 8. Highway/Airport â Infrastructure closure due to extreme weather â Northeast to Great Lakes precision medical instruments 9. Rail â Rail bridge or track failure â Ethanol movement from the Midwest to California 10. Military- Infrastructure closure/failure due to terrorist activity: Commodity-Corridor: Northeast - Philadelphia commercial cargo and military equipment/supplies Case studies were prepared for each of these corridors, including telephone interviews with parties who might be affected by different types of disruptions, in order to better understand the following: ï· Commodity: Overview of the identified commodity including its importance to the U.S. in terms of volume and value. ï· Market and Corridor: Description of the identified market for the commodity and how the commodity is moved between the origin and destination. ï· Mode of Transport: Description of the mode(s) used to transport commodities along the entire supply chain, including motor carrier, rail, pipeline, barge/ship and air.
42 Figure 3: Chosen Commodity Corridors ï· Supply Chain: Description of the supply chain including how the commodity is manufactured/produced, the major links (e.g., bridges, tunnels) and nodes (e.g. tank farms, warehouse, distribution center, transload facilities) of the supply chain and the operations involved for major nodes such as ports and terminals. ï· Disruption: Discussion of the identified disruption and summary of historical disruptions that have impacted the corridor. ï· Diversion Alternative(s): Description of alternative infrastructure that could be used to divert the commodity in the event of a disruption. ï· Entities: List of the agencies, organizations and/or firms that are involved in planning for and/or recovery after a disruptive event in the commodity-corridor. ï· Performance: Identification of factors that influence the performance of the commodity-corridor. ï· Boosting Resiliency: Identification of mitigation strategies that came out of the interviews that are specific to each commodity-corridor. A synthesis of the case studies fed into the development of a typology of strategies for building partnerships and coordination strategies that guided the development of the guidebook. An example of a non-military case study is found in Appendix A. Because of the unique nature of a military deployment, Appendix B presents the case study for this scenario.