On average, the US moves more than 17bn tons or over $20 trillion worth of goods each year. But it is becoming increasingly clear that the US’s infrastructure is straining more and more under this tonnage. This year alone has seen port congestion, rail dwell times deteriorate and highways pressured with trucks transporting goods point to point – all resulting in delays.
Based on research conducted by the Brookings Institute and JP Morgan Chase, the biggest chunk of the $20 trillion in goods moved is from domestic trade between the 100 largest metropolitan areas ($6.3 trillion), followed by trade with other metropolitan areas ($4.2 trillion) and trade with non-metropolitan areas ($3.7 trillion). International trade represents a smaller amount ($1.9 trillion) and is dominated by four countries – China, Japan, Canada and Mexico.
Indeed, Brookings noted that only 10% of the US’s trade corridors move 79% of all goods. As such, a clear and concise national freight strategy is needed. The US Department of Transportation introduced the National Freight Advisory to address such concerns. But, for all entities involved – public and private – this will prove a difficult task, particularly when it comes to determining funding and prioritizing projects.
For instance, the need for a dedicated freight investment programme to support the country’s multimodal freight network is great. Also, much, if not all, national trade policy is focused more on where goods enter or exit the country, rather than on domestic trade between metropolitan areas. This means that it largely ignores supply chains connecting metropolitan areas to one another and to US ports.
While many concerns are the result of the congestion problems facing the US west coast ports, perhaps a national freight plan could help to alleviate some of these issues. But now the fear is that the congestion at the ports will have a domino effect across the US domestic supply chain. Even once congestion eases at the ports, trucks and railroads will become strained and thus longer times for final delivery are inevitable.
What can shippers do to confirm cargo is ultimately delivered to distribution centres and/ or to the final customer in a timely manner? They can collaborate with trusted supply chain partners, but the ability to be creative and implement solutions that are considered “outside of the box” will be most important. This will become all the more crucial as the current environment looks like it will be with us for quite some time.
GLOBAL SUPPLY CHAIN INTELLIGENCE (GSCi)