Requiring employers to pay truck drivers overtime and supporting legislation boosting shippers’ leverage against ocean carriers are among 62 policy recommendations in a sweeping 140-page supply chain vulnerability report the Biden administration unveiled on Thursday.
The U.S. Department of Transportation’s “Supply Chain Assessment of the Transportation Industrial Base: Freight and Logistics,” culminates a yearlong assessment of the U.S. freight transportation system, as required by an executive order signed by President Joe Biden last year.
The report lays out steps to begin to address disinvestment and consolidation in the freight transport sector, which in some cases has led to declining service and higher costs, according to DOT.
Source: DOT, Rail Customer Coalition economic report (2021)
“Decades of underinvestment in our infrastructure, unprecedented consumer demand amid our strong economic recovery, and continued pressure from the pandemic have all put immense strain on our supply chains,” said Transportation Secretary Pete Buttigieg in announcing the report.
“This report lays out critically important steps we can take — both right now and in the years ahead — to help strengthen our supply chains, create good-paying jobs, and ensure that Americans can affordably and efficiently access the goods they rely on.”
Respecting truckers’ work
Trucking — and truck drivers — receive significant attention in the report, given that trucking demand is expected to continue to grow faster than other modes — at a rate of 1.5% annually, or by 35% by the year 2040.
“While many transportation and logistics fields are growing, labor to fill existing and future job growth presents challenges. The transportation workforce is aging, and a significant portion of this workforce is either currently eligible for retirement or rapidly approaching this milestone.”
To help retain more drivers, DOT urges Congress to eliminate the Fair Labor Standards Act motor carrier exemption, noting that, under the current exemption, employers are not required to pay overtime to many drivers. Such a change is backed by the Owner-Operator Independent Drivers Association.
Among nine infrastructure investment recommendations, DOT said it will support state DOTs and the private sector on strategies to expand truck parking availability. The recommendation includes assisting in project development, preparing applications for competitive grant programs, and conducting research on how truck parking affects transportation efficiency and road safety.
Container shipping and the US flag
The report points out that surging demand for container imports since the onset of COVID-19 and the resulting supply chain disruptions have contributed to the high congestion levels at ports and intermodal facilities.
“These short-term changes have been coupled with long-term, macro-scale trends in the freight and logistics industry, brought on by deregulation of the ocean shipping industry, that have produced conditions that make the nation’s freight system more vulnerable to disruption than in the past,” the report states.
With industry consolidation giving ocean carriers unprecedented power to control freight capacity, DOT recommends supporting a host of efforts taken up by the Federal Maritime Commission to mitigate ocean carriers’ market control. Among those is the ability of FMC to review existing carrier alliances to determine the alliances do not unreasonably reduce transportation service, increase transportation cost or substantially lessen competition.
DOT wants Congress to enact ocean shipping regulatory reform — which has already passed in the House — to give the FMC more power to protect shippers and consumers from unfair practices. Prospects are considered strong for passage in the Senate as well, which like the House bill has bipartisan support.
Watch: Are freight volumes in a correction? (2/23/22)
DOT also wants to “explore the potential to increase U.S.-flagged ships, shipping companies, and shipbuilding,” noting that less than 2% of U.S. and international trade moves on U.S.-flagged ships, leaving the country vulnerable to international disruptions. “Investing in the portion of trade on U.S.-flagged ships would provide more reliability for a critical portion of the supply chain both inside and outside U.S. borders while strengthening economic and national security.”
Sharing data
DOT also addresses issues that directly or indirectly have contributed to supply chain bottlenecks and cargo flow, including intermodal chassis availability, container storage capacity at ports, 24/7 operations among industry players and the lack of a standard 53-foot marine container for international trade.
To improve supply chain efficiency and ultimately reduce transportation costs, DOT recommends developing a national freight portal as a longer-term policy. The goal would be to “share key data among stakeholders and an electronic information exchange standard for critical product flow tracking.”
According to DOT, the portal could be used as:
- A public database, website, map, dashboard or “truck air traffic control” data interface tool to share key data elements between public and private stakeholders. While the scope of the portal could vary, suggested data elements could include estimated loading, unloading and delay times at shipping/receiving facilities, which could help lessen detention times throughout the marketplace as drivers and motor carriers are likely to avoid locations that consistently have longer delays.
- A tool to provide real-time visibility into supply chain capacity, monitor leading supply chain inputs, and provide connectivity across shippers, truckers and receivers.
- A voluntary, nationwide port community system and an electronic information exchange standard for critical product flow tracking that would optimize and improve the resilience of national supply chains, logistics, trade and competitiveness.
- A tool to support the production and distribution of products critical to the health and safety of American citizens and U.S. security.
