Issue 2, June 2022
Pete Buttigieg might be the most famous U.S. Secretary of Transportation. Yes, in part, it’s because of his candidacy for President, but it’s equally due to the unprecedented visibility of the country’s transportation system, which he oversees. The backbone of what we call the supply chain isn’t just the everyday concern of the Secretary; it’s on the radar of everyday Americans now, too, anytime they can’t get building materials for their company or formula for their babies. We asked Sec. Buttigieg to share his and the Biden-Harris Administration’s vision, the challenges still looming, and the historic opportunity to meet them.
ON SUPPLY CHAIN OPTIMIZATION
So many more people are now talking about where the supply chain is broken and how we can fix it. How has your understanding of the supply chain, its parts and their interconnectivity evolved, and how does this administration’s approach differ from past thinking?
Pete Buttigieg, United States Secretary of Transportation: Recent events have highlighted the importance of our supply chains—regional or global networks that are mainly privately operated but depend on public infrastructure. Everything is tightly connected: A bottleneck or shutdown in China will be felt at the mall near my house in Michigan. Achieving better fluidity in our supply chains requires us to work across all of the different modes involved, and also pay attention to the digital technologies that cut across the modes but are always not adequately integrated.
Today the USDOT, together with the Supply Chain Disruptions Task Force, is engaging partners across the supply chain landscape, from ports to rail to trucking to warehousing, on near-term operational improvements that can help get goods from ships to shelves quicker and more affordably while we make long-needed investments in our nation’s critical transportation infrastructure for the long term.
The past two years have accelerated a transformation in how goods are moved across the country. What are some of the innovative approaches you have seen to streamlining processes? And what role do you see the government playing in helping to solve the supply chain’s most pressing challenges?
PB: It is important for our transportation supply chain network to creatively address today’s challenges, with an eye toward the future. One innovative approach that the Biden-Harris Administration has helped make a reality is supporting temporary or “pop-up” container yards near exceedingly busy ports, which has helped us move significant amounts of goods through, for example, the Georgia Ports Authority, Port of Oakland, and Northwest Seaport Alliance.
We’ve also brought together companies in sectors such as retail, shipping and logistics, chassis operators, and ports to share better data with each other, help goods move quicker, cut down on shipping costs, and ultimately lower prices for consumers.
One of the critical roles we play is that of an honest broker among regional and private-sector players. We have been bringing different key entities together weekly—if not daily—to overcome barriers, coordinate more effectively, and help alleviate some of the bottlenecks.
What is the FLOW Initiative, and how were initial participants selected?
PB: FLOW is an information sharing initiative between players across the goods movement supply chain. These key stakeholders, of which Prologis is one, are currently working together with the Administration to develop a proof-of-concept that gives companies better information on the health of the supply chain at key nodes, and a preview window into demand and capacity, so that cargo can be moved more quickly, ultimately bringing down costs for families. FLOW includes private sector participants that were selected because they represent a range of perspectives across our supply chains, including beneficial cargo owners, warehousing, and logistics companies, ports and more.
While public-partnerships exist at a smaller scale throughout the supply chain, a national data-sharing initiative to smooth supply chains at this scale is unprecedented.
How unique is this public-private partnership across the supply chain? Why was it so crucial to gather stakeholders from so many sectors?
PB: USDOT has a history of data collaboration with the private sector, including in the aviation industry and with automotive companies. Investing in this kind of private-public innovation around the supply chain is critical, given the leading role of the private sector in owning and operating the bulk of our supply chains. While public-partnerships exist at a smaller scale throughout the supply chain, a national data-sharing initiative to smooth supply chains at this scale is unprecedented.
Why is data transparency important? How might it ease bottlenecks caused by global events such as China’s shutdowns and the war in Ukraine?
PB: Right now, data and the health of the supply chain are largely assessed after the fact. FLOW improves upon this approach by providing participants with a preview of what and where bottlenecks are estimated to occur so companies can act proactively to address them, thereby allowing goods to move faster and ultimately bringing down pressure on shipping times and costs.
ON THE BIPARTISAN INFRASTRUCTURE LAW
These investments are aimed at future-proofing our supply chains. What are you most concerned about when it comes to the future? What types of events must we prepare for?
PB: Over the last two years, global supply chain disruptions caused by the pandemic have affected families, workers, and businesses—deeply and personally. After decades of underinvestment in America’s supply chains, the investments we are now making in freight rail, ports, inland waterways, highways and bridges and more, are going to modernize America’s infrastructure and make it stronger and more resilient for generations to come. The partnerships we are building today will help as well. This resiliency matters precisely because we can’t fully predict what will happen next—pandemics, weather disasters, conflicts or other shocks to the system—but we know that with these collaborations we will be better prepared for the unknown.
How will you ensure equity for underserved communities when it comes to the investments and the workforce that will put these funds to use?
PB: When we look at past infrastructure investments in this country, it’s clear that they did not benefit all Americans fairly or equitably—including when it comes to who was hired to build them. At USDOT, in a number of our largest discretionary grant programs, we have made clear that we are looking for how project sponsors are proactively considering equity considerations in their proposed work and weighing this in our decisions. That could mean, for example, that projects with workforce development programs focused on hiring people from the local community now will be more competitive. One of our new programs, the Reconnecting Communities grant program, is investing in communities that have been disconnected by past infrastructure decisions, supporting work to ensure that the future brings good transportation connections to jobs, education, and critical services like health care.
How will the law support climate and clean energy goals?
PB: The Biden-Harris Administration set a target for the United States to achieve a 50-52 percent reduction from 2005 levels in economy-wide net greenhouse gas pollution by 2030. In just the first 15 months of this Administration, we’ve finalized new fuel economy standards that will save people hundreds of dollars at the pump and reduce vehicle emissions, supported development of sustainable aviation fuels to make air travel cleaner, partnered with DOE to deploy historic funding for states to start building a national network of EV chargers, and released funding that will support 1,000 low and no emissions electric buses every year over the next five years, and the facilities to support them, so people don’t breathe in toxic fumes on their way to school or work. The Bipartisan Infrastructure Law contains funding for important climate investments, including so much of the above, which will put people to work, save lives, and help ensure U.S. global competitiveness for decades to come.
