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Supply Chain Innovation Teams Report Published

December 7, 2017

Contact: John K. DeCrosta (202) 523-5911

The American economy relies upon an international supply chain that can be made more efficient and resilient through private sector initiatives such as the creation of a National Seaport Information Portal.

This is one of the key recommendations that Commissioner Rebecca Dye highlighted in a report published today by the Federal Maritime Commission. The Final Report on the Commission’s Supply Chain Innovation Initiative summarizes the work of the six Supply Chain Innovation Teams she has led over the past 18 months.

The Innovation Teams were tasked with identifying commercial solutions to increase American international supply chain performance.

"We undertook this project to increase the reliability and resilience of the American freight delivery system. If we can harmonize the behavior of the actors in our supply chain and stop working at cross purposes, it will boost American economic growth and competitiveness," said Commissioner Dye.

The initiative was unique in several respects, beginning with candid discussions in small teams of industry experts. The small teams model, adopted for both import and export supply chain discussions, encouraged participants to actively engage with each other, rather than reciting talking points.

"Our overall commercial supply chain is a complex, dynamic ecosystem, and the systemic interactions within the system make it difficult to develop solutions in isolation from each other. We need to look beyond the dock and the terminal gate, and ‘step out of our enterprise silos’ to identify solutions to supply chain challenges."

Commissioner Dye identified several major systemic challenges in her report. "The lack of direct customer relationships between actors in the commercial supply chain system (such as shippers and marine terminals) impedes problem-solving. Where direct customer relationships exist between supply chain actors, there is a commercial vehicle to adapt supply chain behavior."

Dye also pointed out that the lack of mutual commitment or "skin-in-the-game" is an impediment to realizing the full potential from customer relationships that do exist in the commercial system, for example, in service contracting and export container availability. "One of our Export Teams recommended a ‘premium customer’ option that would solve the dual problems of export container availability and carrier booking integrity by increasing mutual customer commitments of carriers and exporters."

But Dye said the "Value Proposition" for increasing supply chain performance is providing visibility of critical information throughout the commercial supply chain. "Without critical, timely information, supply chain actors are ‘flying blind.’ Access to the right information will promote behavior ‘self-correction’ and ‘harmonize’ the supply chain." In this regard, the Teams all supported the concept of a National Seaport Information Portal.

"A National Seaport Information Portal would change the behavior of actors in the supply chain and increase the performance of the American freight delivery system." Dye stated.

Commissioner Dye noted that earlier this year the Port of Los Angeles initiated a pilot project to improve visibility of key supply chain information. "I am closely following the Port of Los Angeles/GE pilot project, another demonstration that economic imperatives will always drive innovation. I look forward to seeing the results of their work and evaluating its potential to become a national seaport information portal."