Railroads Wind Down Shipments as Strike Deadline Looms
By Kim Chipman and Ryan Beene (Bloomberg) — US railroads are poised to stop shipments of farm products and other key goods starting Thursday as the industry braces for a possible...
By Maia Kemp-Welch (The Loadstar) –
A Federal Maritime Commission (FMC) emergency order “won’t be enough” to alleviate supply chain congestion in the US, according to Frank Kenney, director of market strategy at digital consultant Cleo.
Speaking exclusively to The Loadstar, Mr Kenney said the FMC’s proposed emergency order would require carriers to share information about cargo availability directly with shippers, truckers and rail carriers.
But for there to be a significant change to the levels of congestion, more drastic action is needed, he said, arguing that there is a need for a change to the status quo of data sharing.
“I’m all for providing information about how containers are moving through the system, but it has to be for much longer than 60 days,” explained Mr Kenney.
While the Ocean Shipping Reform Act of 2022 grants the FMC the power to renew the order after 60 days, Mr Kenney believes a long-term measure is needed.
His main concerns with the current form of the emergency order involve the extent of visibility and the asymmetries between different companies’ ability to implement the data-sharing and use it effectively.
Mr Kenney said: “Hopefully they’ll do something that’s a little bit more real-time, rather than a post of container movements once a day.”
He is also concerned about data visibility and the technology behind it. He asked: “How exposed will the data be? You want to be very careful of how much visibility you’re giving.”
He added: “Most mature companies have a fairly sophisticated infrastructure, so they are going to want to leverage technologies that will do things in an automated way. The data-sharing will likely be highly efficient and beneficial for these larger companies.”
But for smaller companies, he explained, this would be harder to implement, as well as p[rove a heavier cost burden.
“The problem with only a short-term, 60-day measure is that smaller companies will not see a return on investing in this information-sharing technology.”
Mr Kenney also argued that this asymmetry in the implementation of data-sharing would depend on the quality of the infrastructure across different ports in the US.
“Some have not invested as much in infrastructure, so while they will have access to the same information, it will be a heavier technology lift,” he said.
Mr Kenney says the technology needs to be advanced enough to provide adequate security measures to protect the shared data, as well as sophisticated enough to provide a fully automated, real-time information sharing system that’s efficient and effective.
Moreover, he raised the issue of the dependency on the information-sharing, meaning that turning it off after 60 days would be very difficult. He explained: “I don’t want to turn it off, because getting more visibility around the movement of containers will make the entire supply chain more efficient, but the devil is in the details.
“I’d like to see the emergency order expanded, more defined and become something that isn’t a temporary order but a new status quo.”
The consultation period on the emergency order, ending on 14 September, gives an opportunity for interested parties to comment on its scope.The Loadstar is known at the highest levels of logistics and supply chain management as one of the best sources of influential analysis and commentary.
Join the 85,461 members that receive our newsletter.
Have a news tip? Let us know.