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

Chapter: Chapter 4: Synthesis of Results of Case Studies and Interviews

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Suggested Citation:"Chapter 4: Synthesis of Results of Case Studies and Interviews." 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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Suggested Citation:"Chapter 4: Synthesis of Results of Case Studies and Interviews." 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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Suggested Citation:"Chapter 4: Synthesis of Results of Case Studies and Interviews." 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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Suggested Citation:"Chapter 4: Synthesis of Results of Case Studies and Interviews." 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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Suggested Citation:"Chapter 4: Synthesis of Results of Case Studies and Interviews." 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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Suggested Citation:"Chapter 4: Synthesis of Results of Case Studies and Interviews." 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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Suggested Citation:"Chapter 4: Synthesis of Results of Case Studies and Interviews." 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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Suggested Citation:"Chapter 4: Synthesis of Results of Case Studies and Interviews." 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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Suggested Citation:"Chapter 4: Synthesis of Results of Case Studies and Interviews." 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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Suggested Citation:"Chapter 4: Synthesis of Results of Case Studies and Interviews." 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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Suggested Citation:"Chapter 4: Synthesis of Results of Case Studies and Interviews." 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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Suggested Citation:"Chapter 4: Synthesis of Results of Case Studies and Interviews." 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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Suggested Citation:"Chapter 4: Synthesis of Results of Case Studies and Interviews." 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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Suggested Citation:"Chapter 4: Synthesis of Results of Case Studies and Interviews." 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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Suggested Citation:"Chapter 4: Synthesis of Results of Case Studies and Interviews." 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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Suggested Citation:"Chapter 4: Synthesis of Results of Case Studies and Interviews." 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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Suggested Citation:"Chapter 4: Synthesis of Results of Case Studies and Interviews." 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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Suggested Citation:"Chapter 4: Synthesis of Results of Case Studies and Interviews." 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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43 Chapter 4: SYNTHESIS OF RESULTS OF CASE STUDIES AND INTERVIEWS 4.1 OVERVIEW OF FINDINGS This chapter synthesizes the results of the case studies, which includes the interviews conducted with key supply chain stakeholders. It is important at the outset to note some aspects of the case study results that influenced the development of the guidebook (discussed in Chapter 5). These characteristics reflect the dynamics and perceptions of system resilience among the many different participants in the supply chain. The following key observations are important points of departure for understanding the remainder of this final report.  There is a clear distinction between “resilience” as viewed as part of incident response and “resilience” as viewed more broadly as part of a broader network or systems 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. Protocols and emergency operations centers have been established to provide command and control over the different elements of an incident response for which each organization has specific roles. 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 often are concerned with how to handle traffic after a disruption, they often do not think about things like 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. Most private companies interviewed have an existing decision-making framework and well-developed business continuity plans for disaster resilience reflecting the same basic tenets.  Business continuity dictates that companies strategically manage freight movements along their supply chain and make investments to protect their business from risks. It is thus important to understand each supply chain stakeholder’s priorities before, during, and after a disruption. Primary objectives of private companies in incident response efforts are, 1) safety, 2) get traffic flowing again, 3) maintain customer relations, and 4) ultimately do not significantly affect the financial status of the firm. Primary objectives of public agencies (depending on their mandate) include 1) administer to the injured, 2) public safety (including community evacuations, if warranted), 3) manage disrupted traffic on public rights-of-way, 4) investigate the causes of the incident, and 5) clean-up and recover the public facilities that were affected by the incident.  The competitive market environment makes it a challenge for public agencies to coordinate and support disaster preparation a priori ---- they cannot be viewed as favoring one firm over another. In the past, shippers and carriers have been reticent to share corporate logistics information including recovery and service resumption strategies. While the increasing number of natural disasters and other disruptive events has led, in some cases, to enhanced collaboration with private firms and industry groups, 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. Ironically the technologies adopted by larger and/or more advanced companies to enhance cargo movement transparency and operational efficiencies are the same resources that make these companies more susceptible to certain types of disruptions, such as cyberattacks.

44  At their core, successful resiliency efforts are carried forward by trained and experienced individuals. Reliance on computers, phones, and satellites have made it easier for individuals to abandon their knowledge of basic tools such as navigation instruments, which could be vital during disruptions involving electrical outages or loss of satellites. One of the many approaches to develop human capital discussed by those interviewed included mentoring and training employees so they can make decisions with less dependence on electrical devices in the event such devices are no longer available  Ensuring infrastructure resilience cannot be accomplished by simply 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 networks to provide cargo diversion alternatives that help maintain business continuity.  Because the responsibility for improving freight transportation resiliency does not fall to a particular sector or specific agency, all those potentially affected must work together collectively. Many of those interviewed noted the need for complementary federal, state, and local funding and policies that not only enforce standard practices on public infrastructure, but also have the flexibility to expedite recovery and service resumption efforts.  The freight transportation system is an interdependent network of organizations with different missions, operations, and programs, with assets exposed to varying degrees of risks and vulnerabilities. The scope of advancing resilience for this interconnected system requires often complex, coordinated, and collaborative interactions and sophisticated freight management strategies. The following summary of key points from the case studies provides an overview of the key characteristics of supply chain resiliency that are integrated into the guidance recommended by this research. 4.1.1 Location It became apparent during the interviews that while geographic location influences the types of weather disruptions likely to be faced (such as blizzards in the north and hurricanes in the Southeast), location-specific factors have little impact on efforts to enhance freight system resilience. For example, a road closure in Michigan is very similar to a road closure in Florida in that traffic must be rerouted, damage must be inspected, debris must be removed, and repairs must be made. Recovery measures from pipeline ruptures and train derailments are similar regardless of where they occur in the country. The same is true for infectious disease outbreaks leading to labor shortages, acts of terrorism, and computer system failures in that it does not matter where these events occur. They are handled in much the same way although with different organizations often with their own response protocols. However, there are situations in which a specific community’s quality of life is impacted by the spatial context and operability of freight transportation assets. For example, transportation system disruptions in moving agricultural products to seaports will have a greater impact on farming communities especially for perishable crops. The lack of access to communities that depend on vulnerable infrastructure such as single highway access or closed bridges and tunnels will require more focused attention (as found in many Vermont communities after Superstorm Irene). The specific location of these communities, the needed system resiliency enhancements, and their relationship to economic and human losses from local infrastructure closures merits further analysis outside the purview of this study. 4.1.2 Disruption Type Two distinct types of disruptions were highlighted by interviewees where planning and recovery approaches would be very different…those having advance notice versus those that arise without warning. Consistent with the concept of resiliency planning, interviewees felt that the effectiveness of resiliency strategies depends more on how much lead time responders have than on the actual type of disruption. Even with the most disastrous disruptions, if those responding and who will participate in the recovery have advance warning, negative impacts and consequences can be minimized.

45 Weather-related disruptions were viewed as having a longer lead time compared to disruptions such as earthquakes, accidents, terrorism, or cyberattacks. For example, hurricanes, floods, and blizzards can be anticipated, which allows organizations to make early logistical decisions to help them prepare and redirect supply chain flows if possible. Also, these types of disruptions have occurred more frequently in the past and thus agencies and firms have had experience in dealing with them. Examples of preparatory responses to these types of events include staging relief and replacement equipment in strategic locations, clearing out yards and assets in vulnerable locations, stockpiling supplies in advance, and re-routing cargo. The lead time advantage also helps organizations communicate with their own employees, suppliers, and customers to let them know what to expect and how to prepare, including e-mailing bulletins and putting up signage to alert users. Supply chains in regions with frequent large weather events have established, well-tested procedures for handling these types of disruptions. Other disruptions, such as earthquakes, cyberattacks, or crashes (such as highway crashes, train derailments, or loose barge collisions), are so sudden they preclude stakeholders from taking advance measures such as pre- positioning of response resources or of having the logistics of moving freight around the impacted areas already functioning. Resilience strategies for abrupt disruptions of this sort focus heavily on making plans, conducting drills, and dealing with the aftermath through the processes and institutional structures established for doing so. Interviewees noted that the best way to handle sudden disruptions is to maintain a constant state of readiness. Whether a disruption is natural or man-made, its impacts on the freight transportation system are similar, with the notable exception of a cyberattack. Most disruptions will cause the physical closure of transportation infrastructure assets and a loss of personnel to support freight movements. For example, whether the disruption is a hurricane, earthquake, or a terrorist attack, the likely result is the closure of roads, bridges, ports, airports and rail lines; a short- term reduction in personnel to move goods, and a possible loss of critical supporting networks such as electricity and water. For these types of disruptions, interviewees suggested two principal freight recovery strategies: either divert the cargo to a less affected area or wait and resume operations after the disruption. The decision between the two actions is determined by the anticipated duration of the event and the cargo type. For example, if the disruption is expected to occur for more than a few days or if the freight includes goods vital to services and markets elsewhere, interviewees felt that it was more likely that the cargo will be diverted to alternate routes and different transportation modes. The literature and those interviewed agreed that recovery strategies from a cyberattack are very different in complexity and in the cascading effects to the rest of the organization (and possibly to others in the supply chain). Many of the cyberattacks seen on transportation agencies affect many different functional units within the organization because many information technology systems are integrated throughout the organization. For example, a 2018 cyberattack on the Colorado DOT caused disruptions in every functional unit. Given the potential for such attacks, officials will need to address not only impacts on freight and critical infrastructure, but also the foundational information technology (and often the command and control systems) underlying the operation of the network. Recovering from an advanced cyberattack could take weeks rather than days. One interview participant noted that it took days just to retrieve contact information for employees, customers, and responders after their computers went down. 4.1.3 Commodity Freight carriers, especially those in the intermodal business, prioritize their recovery response based on the type of commodity being carried---highly perishable goods, hazardous cargo, or critical emergency supplies receive priority. Perishable commodities, such as agricultural products or refrigerated cargo, lose their value if not delivered within a certain timeframe and thus have a higher priority. As noted by some of the interviewees, accidents are "exponentially more difficult to recover from" when they involve hazardous or flammable materials. Hazardous cargo includes chemicals, radioactive materials and other products that can pose a risk to the health and safety of the

46 public if released. These cargo types require special handling and safety precautions to avoid leaks or spillage that could have significant health effects on a community during a disaster. Certain low value cargo such as cement, aggregate, lumber, and brick can become valuable commodities after a disruption, essential to the reconstruction of roads and buildings in the impacted region. All interviewees indicated that it is imperative to pre-position and transport relief supplies, such as medical provisions and fuel, into disaster zones. Road and bridge closures, and congested evacuation routes can make it extremely difficult to deliver these supplies. Certain suppliers interviewed have used drones and helicopters to fly supplies such as medicines into disaster areas. High-water trucks have also been used to navigate flooded communities. 4.1.4 Transportation Mode/Asset Each transportation mode has its own set of distinctive logistical, physical, and regulatory resiliency strategies. For example, trucks can typically divert or be rerouted easily around a localized disruption with very little notice. Drivers can also use a variety of strategies for waiting out a disruption, such as using rest areas and staging areas, waiting by the side of the road, or diverting to an alternate route. Disruptions that impact labor availability have the most significant impact on this mode. State DOTs are primarily responsible for ensuring that roadways are always open to traffic and thus have robust resiliency plans and recovery practices, although usually focused on personal vehicles rather than trucks carrying freight. Trains are more difficult to reroute, requiring careful consideration of existing train traffic and the capacity of each line and yard. Private rail carriers are responsible for preparing for and recovering from a disaster that impacts their trackage and other assets. Rail carriers that have redundancy built into their system, such as multi-tracks, parallel lines, or track access agreements with other carriers, are more resilient to disruptions. Incidents that destroy critical infrastructure assets such as bridges and tunnels can cause lengthy delays in rail freight operations. During the interviews, it was noted that truck and train deliveries outside the tender window are extremely difficult to accommodate, which makes delays due to road or rail closures difficult to manage. Ocean carriers, with various logistics options throughout the world, experience disruptions on a very frequent basis. They are adept at rerouting around storms, managing delays, and diverting to alternate locations or modes if needed. As a result of carrier alliances, global shipping lines have even more resources for resumption and recovery efforts including moving cargo to different vessels and/or to alternate terminals. Carriers with smaller ships have access to additional ports for cargo diversion as they are less limited by channel depth, bridge draft, crane height, and yard capacity. The main issue in these cases is having the capacity at these diversion ports and recovering the costs of the extra journey length, as well as the land side modal connections needed to move the product to market. Disruptions that impact logistics such as labor shortages and cyberattacks have severe consequences on this mode. Barge operations have a unique set of challenges, due to the aging infrastructure of locks and dams on the U.S. inland waterways combined with fluctuating water levels. The interviewees involved in barge cargo operations emphasized the fragility of the U.S. inland waterway system. The locks and dams are particularly subject to failure, which can take days or weeks to resolve, requiring coordination between the USACE, other governmental agencies, and private industry. Air freight carriers, much like ocean carriers, are well-practiced in maintaining business continuity during disruptive events. Air cargo is typically transporting higher value goods that require expedient service. Hazardous materials are prohibited on most airplanes. Air cargo diversions require coordination between the airline and freight forwarder and/or integrator and are contingent on the capacity of the alternate airport, as well as airline alliances and agreements with these airports.

47 Pipeline transport is one of the most vital modes to the nation's economy as it transports the energy products that are needed for all other modes and for everyday life. Pipelines are also the safest method for moving hazardous liquid bulk cargoes. While the pipeline industry is diligent in keeping these assets in good operating condition, pipelines are vulnerable to power outages and leaks primarily from weather-related events. At least one major pipeline disruption has occurred annually in North America in the past five years. These events can have serious repercussions to the environment, impacted communities, and the economy. 4.2 PRIORITIZING STRATEGIES Disruption effects and the need for intervention on the part of those interested in mitigating the associated economic and other impacts will vary by stage of disruption. The following approach allows those responsible for disaster mitigation and response strategies to get a sense of which activities are more important than others prior to a disruption, during a disruption, and post-disruption. The following also reflects the differences in approach that might occur because of cargo type. 4.2.1 Pre-disruption The best opportunity for enhancing system resiliency is planning for the disruption and needed response/recovery activities prior to an event occurring. As noted earlier, some disruptions have little or zero advance notice. For these types of disruptions, planning (including field role playing in exercises) is the best preparation. For disruptions that have longer lead times, such as hurricanes and blizzards, transportation organizations can take direct action by moving assets out of harm’s way, stockpiling cargo in safe locations until after the area has recovered, and staging repair materials and recovery supplies. Public agencies and freight companies should have plans in place for a variety of plausible disruptions, although such plans will vary by scale of operations and the level of involvement in supply chain activities. Plans should include:  Defined goals, actions, and responsibilities as well as a method to track whether these are being fulfilled.  Provisions for employee and social well-being.  Clearly outlined chains of command within the organization and the supply chain. Employees need to understand who to contact in the case of a disruptive event, including public and private stakeholders.  Pre-established emergency contracts and contracting procedures. Depending on the disruption, it may be necessary to shorten or bypass normal contracting procedures.  Communication strategies with and without normal power supply. Organizations should consider how they communicate internally among employees, as well as externally to customers or operators via computers, cell phones and land lines. Communication strategies should include back-up methods such as texts and chats, satellite phones, and radios. Paper copies of communication information, such as phone numbers and email addresses, should be kept in a safe place in case a cyberattack or IT failure takes out entire computer systems. Another essential step before a disruption is to identify qualified workers at each level in a company or agency that will be responsible for making key decisions during an event. This recognizes that leadership may not be available after an unpredictable disruption, and that some short-term logistical decisions might have to be made (not likely any decisions that will have long-term financial impacts on the company). Certain employees should have the skills and composure amid stressful situations to make logical decisions, regardless of company or agency rank. These pre- identified employees will be more likely to take actions in the best interest of the organization if they are equipped with the right knowledge and tools, and they are not afraid of negative repercussions.

48 Depending on the severity of the disruption, organizations might have to temporarily shift their operations to an emergency operations center. Organizations should thus ensure that their resiliency plans outline how to establish and operate this facility. Plans should cover details such as the center’s location, availability of backup communication devices and power sources, and relevant contact information. Supply chain stakeholders should be cognizant that their organization may need to be represented in another organization’s emergency operations center and should identify the appropriate individuals to fulfill this role. A provision for establishing an emergency communications center should be outlined in the organization’s continuity of operations plan. Another strategy used by many organizations is running practice drills to help employees prepare for disruptions. The lessons learned from such drills need to be reviewed and disruption plans updated on a regular basis. One organization that was part of this research has a standing practice of reviewing two chapters of its emergency plan every quarter during meetings. This ensures the document is reviewed, discussed, and updated periodically. Disruption planning has a lot of overlap with emergency planning. For example, organizations should plan to have a supply of food, fresh water, first aid supplies, and medicines on hand to take care of employees who may end up stranded at work in a major disaster. Most organizations should also consider keeping emergency generators and fuel on-site if power goes down for long periods of time. 4.2.2 During a disruption While a supply chain participant may have several priorities during a disruptive event, the following stood out from interviewees as the most important --- human safety, delivery of essential supplies, effective communication, quick decision making, and the ability to improvise. Human safety is the most important priority during a disruption. If the disruption is an adverse weather event, this may mean checking on workers to make sure they are safe and alerting first responders if they are not. For state DOTs, this may mean providing food, water, and first aid to stranded truck drivers. For rail lines, this could mean providing rolling bunk houses stocked with supplies. For carriers, ensuring that emergency cargo, such as medical supplies, gasoline, food and water, is delivered to those in need takes precedent over transporting other freight during and after a disruption. Supply chain participants will need to work together to make sure those in need receive supplies. For example, as noted by one of the interviewees, during a shutdown of a pipeline serving the northeast U.S., Jones Act tankers and barges stepped in to ensure gasoline was delivered to this market. Effective communication is essential to disruption recovery and for supply chain visibility. Communication internally with staff and externally to stakeholders should follow the protocols established during the planning for a disruptive event. Supply chain participants need to ensure that there is effective communication among the many different participants. Depending on the disruption this could include federal and state agencies, and the many different participants in the supply chain itself. Carriers need to communicate with beneficial cargo owners (BCOs) on the status of their cargo, and operators should communicate with their drivers, captains, and pilots on the current conditions and the best information on recovery. State DOTs can communicate status updates via road signage, email blasts, and press alerts (radio and TV) depending on the severity of the disruption. Supply chain stakeholders need to maintain a certain degree of flexibility to aid recovery during a disruption. Every disruptive event presents a unique set of challenges to those in a supply chain. Pre-determined response plans may not cover every aspect of the disruptive event. For this reason, it is important that organizations are prepared to improvise temporary operational solutions should they be required. Employees should be empowered to take initiative and act quickly. This can be achieved through training and by fostering a company culture of flexibility and resilience. As an example, one of the interviewed organizations improvised a work-around for communication during a systems failure involving a private messaging service that ultimately expedited recovery.

49 4.2.3 Post disruption After an event, supply chain participants’ attention turns to resumption and recovery activities. Delivering cargoes such as gravel, cement, wood and other construction materials that will expedite post disruption recovery is a priority once human physical needs have been addressed. Other post-disruption steps depend on each organization’s purview. For instance, state DOTs and rail operators prioritize cleaning, assessing, and subsequently repairing damage to roadways and rails. Similarly, airports must assess and repair runways, and ensure that buildings are safe for people. For these organizations, clean up, assessment, and repair are important priorities. For carriers and logistics providers, the steps to recovery depend on whether they prioritize customer relations or cost effectiveness. If customer relations are paramount, logistics providers may switch transportation modes to make sure cargo arrives promptly. For example, shipments may be sent by air if truck and rail are not available or are not quick enough (and the shipments are conducive to the air mode). Diversion using a different mode of transport is typically only viable for high value or perishable goods. Another strategy may be to increase capacity along a given corridor once it is open. This could involve deploying additional trucks, ships, and flights while absorbing or passing along the extra cost. If cost effectiveness is a priority, then carriers and logistic providers may opt to recover more slowly, relieving bottlenecks incrementally using existing capacity. This may make sense for low value commodities that do not lose value over time. For every organization, a debrief should always be held where the staff involved in the event speak candidly about actions taken, their opinion of what went right and what went wrong, and the lessons learned. These sessions should be held as soon as practicable in the wake of a disruption to ensure learning outcomes are sufficiently captured. Employees should be encouraged to speak about what they learned and how to improve response during the next disruption. Outcomes from these debrief sessions should be incorporated into planning documents to improve the organization’s future contribution to supply chain resiliency. Finally, organizations should recognize workers who go above and beyond expectations and/or contributed long or unusual hours during the emergency. Offering compensation in the form of bonus pay or time off generally makes employees feel more invested and willing to contribute when there is another disruption. This is important for employee retention and critical knowledge transfer. In any type of organization, it is beneficial to have experienced staff on hand who can help guide the group towards a quicker recovery. 4.3 INFORMATION STRATEGIES Communication is considered the most important factor in successfully recovering from supply chain disruptions. In 4eneral, communication strategies are common to all modes and disruption types. However, effective communication depends on a fully-operational electrical grid and telecommunications systems. Organizations, especially those in charge of providing disaster relief, need a plan for alternative communication, such as satellite phones and radios, in the event of a power outage or overloaded systems. Interviewees emphasized the need for backup generators and fuel for keeping the power running during a power outage. The notion of redundancy in communication systems was mentioned numerous times during the interviews. Organizations are more resilient if they can have multiple “war rooms” or command centers in different parts of the country, or even the world. Similarly, having access to more than one power supply can help enormously during a disruption. For example, an airport operator (APO) explained that they have two power supplies, one from the north of the airport and another from the south. If something happens to one of these grids but not the other, they can maintain power. A localized power supply such as generators or solar cells can also be helpful.

50 Another beneficial strategy is to develop and maintain alliances with groups that have common interests in terms of enhanced system resiliency, e.g., trucker, distributor, and operator associations. Alliances offer a broader network of resources and give a stronger voice to their members, making advocacy for their interests more effective. The following sections identify internal and external communications strategies that can help organizations improve resiliency. Not all strategies suit every type of organization, but the goal of every strategy is to enhance communication. 4.3.1 Internal Communication Internal communication strategies for preparing an organization for disruptions include:  Conduct regular, short meetings to bring any disruption concerns to the forefront quickly. For example, one of the large organizations interviewed holds 15-minute meetings at the same time every day, where high-level managers from different parts of the country briefly mention the most salient issues to them. These issues can then be elevated or dealt with accordingly. The advantage of this approach is that it heightens awareness for the whole company and is an efficient way to get attention and resources where needed.  Hold regular meetings to review resiliency plans and emergency manuals. This helps new members become familiar with the manual and it creates a culture of discussing and constantly improving emergency procedures.  Hold debrief meetings after a disruption to discuss the lessons learned. Use the outcome of these meetings to update resiliency plans accordingly. Strategies for keeping lines of communication within an organization open during a disruption include:  Keep paper copies of phone directories available in case the power goes down or the computer system fails.  Have a fallback plan such as a private messaging service like WhatsApp or personal email accounts if the internal computer system goes down.  Keep land lines, satellite phones (preferably more than one type so they rely on more than one satellite), radios, and even shortwave radio on hand in case cell phones do not work.  Designate multiple emergency command centers in geographically different areas if possible so that if one goes down the other is still available. 4.3.2 External Communication For freight transportation, communication to outside stakeholders especially distributors and BCOs is equally important to effective communication internally within an organization. The following examples describe how some organizations effectively communicate with stakeholders before, during, and after a disruption. Pre-disruption  Provide constant reviews and updates of weather data pertaining to adverse weather events such as floods, hurricanes, and blizzards. Send e-mail alerts, notices, and bulletins as appropriate.  Maintain and update active e-mail lists, as well as social media accounts to announce delays and status changes of bridges/roadways. Encourage truckers to follow these accounts to get real-time information and status updates.  Prepare a list of who to call externally during a disruption.  Hold annual conferences or more frequent workshops to share and discuss latest technologies (such as theft prevention). Use these forums for individuals within an industry to get to know each other personally and exchange contact information.

51  Distribute weekly/monthly newsletters discussing salient issues.  Schedule coordination meetings for planned maintenance (pertains especially to inland waterways, road/bridge/tunnel repairs). Use research and data-based models to prioritize repairs. Use the models to quantify the costs of various disruptions so that data and measurements can be used to inform scheduling and repair decisions. During disruption  Use electronic road signage to inform truckers about road closures, turn-around points, and waiting areas.  Send out e-mail blasts as often as twice a day and include links to other useful emergency information sites in the body of the message.  Build and maintain a telephone hotline and website that users can check, like 511. Numerous state DOTs maintain a 511 website, a phone number and a mobile app that offers transportation and traffic-related information specific to that region.  Automatically generate an e-mail list specific to the manifest of a diverted ship – send info to those BCOs only to keep them updated on where their cargo is located.  Daily direct phone calls to customers, depending on size of company.  Issue radio, TV and press releases as appropriate. This is typically done at the state level. Post disruption  Generate standard “I’m OK” procedures to check on staff during or immediately after event. This helps the organization know whether to look for them.  Communicate what happened, what is coming, and what to expect. For example, following a rail problem there may be a surge in truck traffic to deliver all the cargo that should have come by train. Advise truckers that the surge is coming, the reason why, and note that the surge is temporary.  Establish a standard debrief procedure following any disruptions. Keep the tone of the meetings frank, informal, and non-judgmental. Do not record the meetings so that people can speak freely. Discuss what went right, what went wrong, any lessons learned. Use the insight to update resiliency procedures. 4.4 LOGISTICAL STRATEGIES Automation is a double-edged sword regarding freight transportation resiliency. Freight carriers have become more efficient by being more automated, especially with respect to using computer systems to track cargo and fill out manifests. The tradeoff, however, is that they have become more vulnerable to cyberattacks, IT failures, and major power outages. During a disruption that affects computer systems, carriers are more exposed than previously and have a harder time tracking cargo and communicating with customers. Disruptions are especially complex and problematic when they involve hazardous or flammable materials. Multiple state DOTs and rail operators reported that accidents involving hazardous materials (hazmat) are exponentially harder to manage than typical accidents. For example, a derailment of a tanker car carrying hazmat involves the following activities that are supplementary to other response and recovery efforts:  Establish incident command center and bring in emergency responders trained in hazmat response. Verify responders have appropriate personal protective equipment (PPE)  Notify appropriate agencies of chemical release  Determine risks posed by hazmat and continue to monitor environmental conditions  Establish control zones around incident and restrict access to site

52  Relocate intact assets away from the hazardous material spill or fire  Notify and evacuate individuals in surrounding area that are at risk  Conduct rescue and containment operations  Ensure individuals experiencing medical problems receive medical treatment  Safely transfer the remaining product from the truck or railcar  Transport carrier personnel to medical facilities for federally required DOT toxicology test  Identify and deploy contractor to perform remediation and environmental assessment As shown by this action list, recovery from a disruption that involves a hazmat incident can be very difficult, especially if the accident happens in a remote area or somewhere with complicated access. Most agencies reported that they either have or would benefit from having expedited emergency contracting procedures, or pre-approved emergency contracts on file, for making cleanup and repair faster. For example, it is helpful to have debris removal contractors already under contract so that clean up can begin as soon as possible after an event. It is important to have multiple contractors from different areas because some of the contractors may either be out of service themselves or might already be engaged helping a different area recover. Other logistical strategies employed by freight transportation organizations for supply chain disruptions include: Pre-disruption  Run drills and practice sessions, complete with eating ready-made meals and sleeping on cots. Conduct debriefings afterwards with the staff involved to hear what they learned and whether they have suggestions for improvement.  Position equipment for clearing debris in critical locations. For a port or airport, this could mean having cleanup crews and equipment on hand. For roadways, this could mean stationing dump trucks and pickup trucks with snowplow attachments in critical locations throughout the region. For areas at risk of flooding, high water trucks can be brought in as preparation for moving supplies and personnel.  Similarly, position repair supplies ahead of time. For example, a rail line could bring gravel, ballast, riprap, railroad ties, and extra rails and place them near a site where flooding and scouring are likely to damage portions of the line.  Allocate space for staging equipment and supplies just outside of storm- or flood-prone areas. Maintain a national database of where these staging areas are located so that responders from one state can find facilities in neighboring states. These staging areas should incorporate truck waiting areas with amenities such as bathrooms, food, and fueling facilities if possible. Smaller staging/waiting areas can be built near bridges or tunnels that may experience closure, such as border crossings or vulnerable infrastructure in blizzard zones. They should include enough space for trucks to turn around and leave the area at will.  Develop an understanding of possible diversion alternatives and work with carriers to incorporate these alternatives into resiliency plans. For example, ocean carriers can swiftly decide where to call if the original port is unavailable by identifying key factors in their planning documents including water depth, number and size of cranes, bunkering, ship stores, crew changes, reefer capability, chassis availability, highway weight limits, rail capacity, and navigational limits such as daylight-only transit.  Negotiate contracts ahead of time for alternatives. For example, cargo owners can have contracts with operators of different transport modes. Ocean carriers can have contracts with terminal operators at different ports. DOTs can have contracts with cleanup crews or repair crews. Recovery will be much quicker if contracts and agreed upon rates are already in place when a disruption occurs.  Partner ahead of time with other similar facilities to help each other in the event of a disruption. For example, airports in the same region can arrange their tender documents so that air cargo usually flown out of one airport can be trucked to a different airport and flown out of there instead with the same paperwork.

53  Stage assets at critical locations if downtimes are known in advance, such as planned repairs or storms and floods with long lead times. For example, tugs and barges, can be strategically located either upstream or downstream of a closed lock if the closure is known in advance. Similarly, locomotives and rail cars can be moved appropriately so they do not get stranded behind a closed bridge or tunnel or they can be moved to high ground to avoid damage by submersion in flood waters. Intermodal shippers may want to stockpile empty containers so they are located where they are needed, either to be filled with exports or to be shipped out empty. Empty containers can create an inventory problem if they have nowhere to go.  Diversify modes and points of entry/exit (for international cargo movements). This strategy applies best to large BCOs who, due to their size, have the flexibility to move cargo through various regions. Large importers may use a “four corners” strategy to insulate themselves if an entire region or coast is down. For example, given a lengthy coastwide disruption on the U.S. West Coast, they may choose to ship through Prince Rupert, Canada or Lazaro Cardenas, Mexico. They may also shift to an all-water route to either the Gulf of Mexico or the East Coast. It is worth noting that cargo that shifts to another route might not come back. During disruption  Increase capacity on evacuation routes as much as possible to enhance access into the affected areas for delivery of supplies. This can be achieved by opening both highway directions to outbound only travel or opening both shoulders on the outbound highway and keep the inbound highway open for evacuation. The directions could then be reversed for getting emergency supplies into the affected area.  Encourage truck drivers and dispatchers to use Waze, Google Maps, and other common applications to reroute trucks and avoid closures or congestion.  Dispatch trucks early if there is a known road disruption to make a certain delivery cutoff time. Freight forwarders can also sometimes extend the cutoff times to a later tender to accommodate trucks that are late due to a known disruption.  Shift modes if feasible, if it helps avoid a disruption. For example, truck cargo may be able to go by rail to avoid a prolonged road bridge outage, or vice versa. High value or light weight cargo may be able to travel via air if ground methods are not available. Barged goods might be able to shift to rail if the waterway system is down for a long time.  Create partnerships, if possible, among carriers in the same market. For example, ocean shippers have formed alliances to support each other. This cooperation allows them to share information about port status, for example, during a disruption. This helps avoid the situation of multiple large ships making the same diversion decision and ending up at the same small port. Post disruption  Keep generators on hand and set them up as needed to provide emergency power. An example might be to run street or rail signals in areas where power is out. Generators may need to be locked or guarded to prevent theft. A supply of extra fuel for the generators and a system for re-fueling should be in place as well.  Have designated assessment teams to go out immediately after events to figure out where the damage is and find areas with most urgent need. Pack trucks with food, water, supplies, extra fuel, flash lights, batteries, and safety gear before the incident.  Prioritize repairs to save lives first. Have experienced managers make a priority list based on urgency.  Add extra capacity to clear out congestion if assets and schedule permit. For example, operators could run longer trains or put extra barges in a tow. Airports can add extra flights if there is room in the schedule.

54 4.5 INSTITUTIONAL STRATEGIES Organizational leadership needs to consider what constitutes organizational capacity for handling system disruptions. Such considerations include the types of staff they are hiring, training and retaining; how resiliency can be incorporated into the agency/company culture and in particular the organization’s standard operating procedures; and the institutional mechanisms for coordinating with external organizations. Trained employees that are level-headed during and after a disruptive event were viewed by interviewees as an irreplaceable resource. Most interviewees had been primary emergency responders in previous events, and both public agencies and private corporations rely heavily on these in-house personnel to manage response activities for future incidents. The loss of the institutional knowledge they possess would be detrimental to not only the company, but also to supply chain resiliency. Company leadership should recognize the value of these individuals and work diligently to retain skilled employees and synthesize their knowledge through active mentoring programs. While certain employees require training on digital devices and advanced technical platforms, interviewees noted that some younger employees lacked basic abilities such as reading and using non-digital navigation devices, which was essential during response and recovery efforts when electronic devices were not operational. Training younger employees on basic skills such as reading a paper map or navigating with a sextant reduces dependencies on electronic systems that are susceptible to outages or cyberattacks. Other institutional strategies to disruptions include:  Consider human needs during a response by providing generators, food, water, and porta-potties. Railroads might also consider pre-positioning “rolling bunk rooms” in case employees are stranded at work due to high water. The Oregon DOT, for example, has already stocked such supplies at several locations in the state that are designated as recovery sites for a major earthquake.  Foster a company culture of decentralized decision-making when the normal chain of command is down.  Offer time off after the event to compensate for overtime or long and unusual hours spent during emergency.  Coordinate with local police if a dangerous situation arises, such as a volatile protest or strike. Organizations should make a concerted effort to maintain positive relations with local agencies that will likely be part of a response. Use local law enforcement personnel for wellness checks and courtesy patrols for truckers waiting out a disruption on the roadside.  Focus on employee retention. It is very helpful to have long-time employees with experience in previous disruptions. These employees know what to do and who to call when things start breaking down.  Designate “emergency essential” staff ahead of time so they know they are expected to stay even during an evacuation. Organizations should ask for volunteers for these positions, provide training sessions for volunteers ahead of time, and make sure proper employees have Class B commercial driver’s licenses so they can drive trucks if required.  Train all staff on cyber security and how to recognize and react to hostile e-mails and efforts to infiltrate the system.  Train key staff on operations on different segments of the system so staffing can be ramped up in places that need it.  Consider ramping up staff, possibly with temporary employees, to take care of extra clerical work as operations return to normal. For example, if shipping manifests were created manually during a computer outage, then those manifests will need to be entered into the computer system once it comes back on line.

55 4.6 PHYSICAL STRATEGIES All interviewees were asked how the physical infrastructure for their transportation mode could be improved or made more resilient to disruption. Most respondents knew exactly what changes they would make to make the supply chain more durable and resilient. In all cases, funding was identified as the main barrier to making improvements. For example, respondents from DOTs said that concrete roadways are more durable than asphalt, but also much more expensive. Similarly, pipelines that run underground are more resistant to hurricane damage but are more expensive to build and maintain. Building redundancy and extra capacity into the system is good for both maintenance (in that no single facility handles all the demand) and resilience. Having multiple locks, multiple tracks, multiple bridges, multiple routes, and multiple runways is beneficial, if not crucial, to maintaining a functional freight transportation system. Extra capacity is helpful in times of need, but it is expensive to build and maintain when it is not needed. For example, increasing the capacity of smaller ports so that large ships can divert if required entails deep channels, tall cranes, larger storage areas with enough plugs for refrigerated cargo, and the ability to accommodate additional hazardous containers. However, it is cost prohibitive to maintain excess capacity at every port. Keeping systems, infrastructure, and assets safe and in a state of good repair was another dominant theme. Preventing accidents, such as crashes, derailments, or loose barge strikes, is critical for keeping infrastructure open and in good condition. Methods for doing this include best practices for design, such as sight lines, signage, lighting, minimal curvature, and speed limits on highways. For barge transportation, well maintained channels with appropriate guides to navigation are critical. Monitoring devices such as cameras, sensors, and vibration monitors can be placed on sensitive pieces of infrastructure such as locks and dams to provide insight and advance warning on components that are in danger of failing. Operational pipelines can be used to bring gas and diesel fuel into areas hit by hurricanes. Fuel is a necessity in the aftermath of a storm, but roads and waterways are often damaged and closed. State DOTs and rail carriers both have extensive experience repairing roads and rail track after disruptions. Each system relies on bridges, tunnels, road, and rail track. Each system is also subject to sudden incidents such as truck or car accidents, train derailments, bridge failure, and prolonged closures due to inclement weather. Bridges and tunnels can be made more resilient with regular maintenance and periodic upgrades or replacements. Areas and facilities not physically damaged are typically tasked with handling unanticipated surges of cargo as the supply chain adjusts to blockages. In some cases, the elements of the freight system and the alternative regions could see more serious disruptions from these unanticipated flows than the areas where the original disruption occurred. The inland waterway system is subject to both high water and low water events that can shut down river traffic. These events can last on the order of days or even weeks. After flood events, rivers can remain closed to navigation due to shoaling from the extra sediment and debris that was pushed downstream. It takes time for the USACE to bring in the proper dredging equipment to clear the segment for safe navigation. Another related problem is that buoys and aids to navigation can be dislocated or lost completely in a flood. The system is also vulnerable to failures in the aging locks and dams, as well as lock closure due to damage caused by loose barges or other navigation mishaps. For these reasons, the inland waterway network is essentially always in a recovery mode. Shippers and barge operators report that system reliability is a major issue for them. The inland waterway system would be more resilient if it could build up an inventory of spare parts for locks. This would help speed up the repair process when a lock fails or is hit by a barge because the spare parts are on hand and the repair can be made quickly. Currently, the USACE must go through their normal contracting process before they can contract with a vendor to build the replacement part, which can take months. The main challenge is that the locks were all built at different times and each one has custom parts. As locks are replaced and modernized in the future, they should be standardized as much as possible so the parts can be interchangeable. Another way to make the inland waterway system more resilient is to increase the number of USCG tenders available, so they can quickly

56 replace navigational buoys that were displaced in a flood or accident. Similarly, it would be helpful to increase the number of dredges and supporting equipment so that channels could be readily repaired and maintained. Shoaling often occurs after floods. If the shoaling is extensive, it can make the channel unsafe for navigation, prolonging the closure even after flooding is over. With respect to dredging, users of the inland waterway and USACE representatives alike reported frustration in the funding mechanism for dredging projects. Stakeholders were unanimous in wanting guaranteed multi-year funding for projects so that they can be scheduled far in advance with stakeholder input on the least-intrusive timing for each element of the project. Funding currently covers only a single year and is not guaranteed in subsequent years. This piecemeal approach is an inefficient and costlier way to conduct projects as it incurs multiple mobilization and demobilization costs and adds contracting complexity. 4.7 REGULATORY FACTORS Interviewees emphasized the need to revisit certain provisions outlined in the Jones Act and Stafford Act that, if temporarily waived or revised, could assist in increasing resiliency in freight transportation during and after a supply chain disruption. 4.7.1 Jones Act The Jones Act refers to the section of the 1920 Merchant Marine Act mandating that any waterborne cargo carried between two U.S. ports must be carried on a U.S. flagged ship, built in the U.S., owned by U.S. citizens, and crewed by U.S. citizens or permanent residents. In the event of a necessary diversion, such as Hurricane Sandy preventing ships from calling in New York and New Jersey, ocean carrier’s vessels that do not meet Jones Act requirements must call at a different port outside the disaster zone. When that happens, the Jones Act prevents them from subsequently moving that cargo back from the diversion port to the original port by ship. Their only options are to move the cargo inland by truck or train, which means they may encounter problems of weight restrictions on the highways or insufficient rail capacity or access at the secondary port. They must be very careful about which port they use so that cargo does not get stranded, unable to move either on land or by sea. The carriers interviewed reported that Jones Act waivers are exceedingly difficult to obtain but would be helpful in supporting cargo diversions and increasing supply chain resiliency. 4.7.2 Stafford Act The Stafford Act refers to the Disaster Relief and Emergency Assistance Act passed into law in 1988. It dictates how the federal government disburses aid to states and local governments to help recover from a disaster. Financial and physical assistance are delivered primarily via FEMA once the president declares an emergency. One common criticism of the mitigation portion of the Stafford Act is that it only provides mitigation funding after a disaster has occurred. Many resiliency experts contend that mitigation funding could be more beneficial before an emergency. Interviewees also noted that the provision in the Stafford Act requiring infrastructure be built back to pre-disaster conditions impedes resiliency. Critics question why these vital assets could not be built back with improvements that make it able to withstand another event. For example, relief funds could not be used to rebuild previously above ground utility lines underground where they would be more resilient to storm damage. Other examples include a stretch of road or railway that is vulnerable to accidents due to poor visibility or a tight turning radius, or a bridge with abutments vulnerable to tree or boulder strike during flooding. Any infrastructure destroyed in a disaster and rebuilt using FEMA assistance, must be rebuilt the same way it was prior to the disruptive event. In these instances, there is a lost opportunity to improve the infrastructure and make it more resilient. The FHWA has an emergency relief (ER) funding program to help rebuild highways damaged during disasters. In all cases, the repair must bring the infrastructure element back to the standards it was built with. In some circumstances, the project can include betterments such as realigning a roadway further from a river that floods

57 frequently, incorporating larger culverts, using grouted riprap, or rebuilding a bridge higher or with a wider span. The FHWA relief money can be used for a betterment if it can be shown that the project will save the agency money over time. Another regulatory issue that came up in multiple interviews was the allowance of overweight trucks on roadways during, and immediately after, disruptions. This could be in the context of ships diverting to a different state with lower allowable highway loads, or in the context of barge or train disruptions requiring a modal shift to trucks. Despite the different situations, part of the solution was the same --- having waivers to allow high, wide, and heavy trucks on certain roads during and immediately after a disruption. Shippers and distributers should communicate with state DOTs in advance to understand the regulations and the waiver process. 4.8 BARRIERS TO QUICK RECOVERY In addition to regulatory issues, interviewees identified potential barriers to response and recovery, some of which echoed literature on supply chain resiliency and others that were unique to their industry. The following barriers to implementing effective mitigation and response strategies are presented in three categories: organizational culture, collaboration and resources. 4.8.1 Organizational Culture The following factors pertaining to organizational culture affect disruption recovery:  An organizational mission that is not geared towards disaster resiliency and disruption recovery. For instance, an organization with a mission geared towards maximizing profit may find it difficult to recovery quickly from a disruption if funds are not allocated to bring service back or to invest in improvements to minimize future disruptions.  Organizational motivation in terms of responding quickly and cost-effectively.  Standardized practices or operating procedures that are difficult to work around.  Organizational inertia in implementing responses.  Professional mindset of dominant organizational groups.  Language barriers that govern how easy it is to coordinate disruption response within and outside of the organization. These barriers are most often related to the different terminology used by the participants in a disruption response. 4.8.2 Collaboration Since institutional relationships, processes and procedures, and the "mindset" of those responsible are different from one locale to another, collaboration is essential to a successful response. Interviewees noted that the following barriers hinder disruption recovery:  A major barrier to collaboration is often a reluctance to accept risks by both public- and private-sector organizations.  Lack of leadership at critical times and loss of leadership after the process has been underway for a period can represent serious setbacks to successful collaboration.  More complicated efforts at collaboration which represent more formalized interaction can often be difficult to attain. However, crises or the threat of crises can be an important motivator for putting in place collaborative frameworks that can serve as the foundation for further joint activities.  In many cases, collaborative efforts work well until initiatives are taken to institutionalize relationships in formal agreements. Such agreements often commit agencies to certain courses of action, which are often reviewed for legal, institutional, and political consequences.

58  Fostering public awareness of a collaboration and of what it can produce is a good strategy to weather changes in leadership. If the public has come to expect collaborative undertakings from a group of organizations, it will be difficult for new leadership to disband this group.  The external environment for collaboration is often characterized as some players having more influence than others. 4.8.3 Resources Resources involved in a supply chain disruption can broadly be split into several categories. The following factors affect quick supply chain recovery after a disruption. Commodity  Perishability can be a hindrance to supply chain recovery. Perishable products can deteriorate during a long supply chain disruption, making it tougher for the supply chain to recover quickly.  The seasonality of certain resources can affect supply chain recovery after a disruption.  Resource visibility within a supply chain can affect recovery after a disruption. Knowledge of where resources are will help a supply chain recover quickly. Not all supply chains are able to perfectly disseminate information; this serves as a barrier to quick recovery. Some of the interviewees were in the process of implementing cargo tracking technologies, such as Radio Frequency Identification (RFID), to bolster resource tracking and visibility. Financial FEMA funding is expressly intended to help communities recover after a disaster. Issues involved with FEMA funding that were expressed during the interviews included a lack of enough funds, difficulties in the application process, timely receipt of funds, and restrictions from the Stafford Act as discussed in the 4.7 Regulatory Factors section. Currently FEMA does not have the capacity or the amount of funding required to fully fund every recovery effort. Given that extreme weather events are becoming more intense and frequent, there are proposals to increase local and state funding allocations by 25%, 35%, or 50%, restructuring the assistance as loans, or having states pay a deductible before federal assistance starts. The filing and bookkeeping requirements for getting reimbursed by FEMA are extensive and detailed, requiring lengthy processes that often delay the delivery of funding when it is most needed. Many organizations are not adequately prepared, staffed or trained to successfully complete the proper documentation. For example, a single street cleanup recovery may have to be divided into many individual projects, such as one for each street (in case FEMA reimburses for one portion of the cleanup work but not another). For each project, separate records must be kept detailing personnel, materials and supplies, equipment, rented equipment, and contract work. This type of meticulous record keeping can be a barrier during a recovery effort. Information  Unwillingness or inability of participants to share lessons learned or share data to help with analysis. Such information includes the location and state of cargo in transit.  Lack of response coordination between the public and private sector, and individuals within a competitive industry.  Delays in the transmission of information among participants in disruption recovery.

59  Insufficient number of staff needed for the normalization of operations. This can be caused by internal constraints (e.g., inability to hire extra staff); or external constraints (e.g., staff stranded by a natural disaster).  Staff is too inexperienced to quickly implement disruption recovery procedures. This can be due to low staff retention that results in the loss of employees with valuable experience. This could also be due to insufficient disruption recovery training.  Inability to incentivize existing staff and potential temporary hires with financial rewards due to binding collective bargaining agreements. Capital Resources and Tools  Inadequate analysis tools that can be used to assess the most cost-effective action in disruption recovery.  Inability of the organization to invest in technologies that streamline operations and disruption recovery.  Compatibility issues between information systems used by different organizations.  Systems dependencies in which the resumption of one system depends on the resumption of another.  Breakdown of proprietary tools that can only be repaired by specialists.  Inadequate storage and equipment replacement. Disruptions can cause product build ups and backlogs at supply chain nodes; there needs to be in place contingency plans to handle excess cargo. Airports need to make sure they have enough skids and pallets while seaports need to ensure they have enough containers. 4.9 CONCLUSION The case studies and subsequent interviews were valuable methods for understanding how to make the nation’s freight transportation systems more resilient. For the most part, the resiliency themes that emerged from the interviews transcend geography, commodity, and disruption type, but tended to focus on individual incidents. The exact type of disruption, whether natural or manmade, is not as important for recovery as the duration of disruption and the amount of lead time available before the disruption occurs. Some resilience strategies are specific to mode and type of infrastructure. Notably, river transport by barge relying on a system of locks and dams has a specific set of strategies that cannot be applied to roads, rail, airports, or pipelines. Sharing information is crucial, before, during, and after the incident. Keeping communication lines open is critical to all parties in their recovery. The types of disruptions that are most challenging from a communication standpoint are instances where power, phones, or computers are down. Organizations should have backup communication plans in place, such as radios, satellite phones, and possibly the latest types of applications such as chats and private messaging services such as WhatsApp. Keeping paper copies of contact lists can be invaluable when electronic systems shut down. Another form of sharing information is when groups within the same freight transportation market form coalitions or alliances. Even shippers who are competitors can realize benefits from sharing information and possibly resources during emergencies. These groups all have a common interest in resolving the disruption and returning to normal operations. The best form of logistical resilience is planning. This takes the form of having backup routes along corridors with known vulnerabilities and possibly contracts in place in case cargo needs to switch modes, for example truck-to-rail or barge-to-truck, or if cargo needs to change ports of entry. Planning also includes locating places to stockpile cargo or supplies in a safe place prior to known closures. Labor

60 From an institutional standpoint, a message that was repeated multiple times is that experience is a great teacher. Organizations should take advantage of smaller disruptions to incrementally improve the system and generate lessons learned. In the same vain, it is important to retain individuals who have been through disruptions and have experienced recoveries, both good and bad. These are the people who can guide an organization through the next disruption, constantly building on their connections and contacts with other stakeholders. Hand in hand with this is the concept of fostering a company culture of taking care of employees, which, in return, encourages an “all hands- on deck” attitude during disruption. One of the best ways to make freight transportation more resilient is to build redundancy into the infrastructure of every system. However, this, along with adding extra capacity, is very expensive and not always practical. Another strategy is to design and build infrastructure to be as durable as possible. This will not avoid every disruption, of course, but having alternate bridge crossings, redundant power stations, high durability pipelines, for example, will help avoid total shut down during most incidents. Regional closures, typically caused by weather events, are better mitigated by building durable structures that can withstand the most common events for that region, such as flooding, blizzards, or high winds. If this is the strategy, the organization must then look at potential future types of disruptions to determine how to best position the organization for those types of disruptions. Regulatory barriers to supply chain recovery can be mitigated by working with regulatory authorities. Organizations should liaise with regulatory authorities to determine whether some key regulations can be waived or revised to aid supply chain recovery. Supply chain stakeholders should try to do so prior to a supply chain disruption. There is no single way to make a supply chain more resilient. It is a question of balancing planning initiatives, organizing resources, and sharing information within each market and region. Governments can do their part by helping fund and build durable infrastructure and creating redundancy wherever possible. Individuals and organizations who have lived through disruptions and experienced the road to recovery can be the most valuable resources in making systems more resilient in the future.

Next: Chapter 5: Analysis Tools and Models for Supply Chain Resilience »
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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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