Freight Logistics Optimization Works (FLOW) Will Speed Up Delivery Times and Reduce Consumer Costs
White House to Host Launch Event Today with Key Industry Stakeholders
Since taking office, the Biden-Harris Administration has been focused on addressing supply chain vulnerabilities and congestion, working to speed up the movement of goods, and lower costs for families. Last year, the ports and the private sector moved a historic amount of goods with record holiday sales and delivery times below pre-pandemic levels. Currently, real retail inventories excluding autos are six percent higher than at the end of 2019 and products at grocery and drug stores are 90 percent in stock, just 1 percentage point below pre-pandemic levels.
The Administration is also focused on addressing the longer-term weaknesses in our nation’s supply chains, the result of decades of underinvestment, outsourcing, and offshoring instead of investment in long-term security, sustainability, and resilience. The Bipartisan Infrastructure Law (BIL) is now making a generational investment in our ports, highways, and other parts of our physical infrastructure, which will help speed up the movement of goods and lower costs. But we can further strengthen our goods movement supply chains by making a similarly bold improvement in a digital infrastructure to connect the supply chain.
To take the first step toward addressing this challenge, the Biden-Harris Administration is announcing the launch of Freight Logistics Optimization Works (FLOW), an information sharing initiative to pilot key freight information exchange between parts of the goods movement supply chain. FLOW includes eighteen initial participants that represent diverse perspectives across the supply chain, including private businesses, warehousing, and logistics companies, ports, and more. These key stakeholders will work together with the Administration to develop a proof-of-concept information exchange to ease supply chain congestion, speed up the movement of goods, and ultimately cut costs for American consumers. DOT will lead this effort, playing the role of an honest broker and convener to bring supply chain stakeholders together to problem solve and overcome coordination challenges. This initial phase aims to produce a proof-of-concept freight information exchange by the end of the summer.
A Novel Data Sharing Partnership
Recent supply chain disruptions have raised national awareness of the need for improved information exchange. Supply chain stakeholders deserve reliable, predictable, and accurate information about goods movement and FLOW will test the idea that cooperation on foundational freight digital infrastructure is in the interest of both public and private parties. FLOW is designed to support businesses throughout the supply chain and improve accuracy of information from end-to-end for a more resilient supply chain.
Resiliency—the ability to recover from an unexpected shock—requires visibility, agility, and redundancy. The lack of digital infrastructure and transparency makes our supply chains brittle and unable to adapt when faced with a shock. The goods movement chain is almost entirely privately operated and spans shipping lines, ports, terminal operators, truckers, railroads, warehouses, and cargo owners such as retailers. These different actors have made great strides in digitizing their own internal operations, but they do not always exchange information with each other. This lack of information exchange can cause delays as cargo moves from one part of the supply chain to another, driving up costs and increasing goods movement fragility.
This effort shows a strong and deliberate response by the Administration to tackle this challenge head-on and set the country on the right trajectory for a resilient and globally competitive 21st century goods movement chain. The Biden-Harris Administration is laser focused and creative in identifying ways to speed up the movement of goods from ships to shelves and cut costs for American consumers. With FLOW, the Biden Administration will play a leadership role in bringing companies together to problem solve for the American people. Initial partners in FLOW include:
- Port of Long Beach
- Port of Los Angeles
- Georgia Ports Authority
- CMA CGM
- Fenix Marine Terminal
- Global Container Terminals
- Gemini Shippers
- Land O’ Lakes
- True Value
Logistics and Warehousing:
- CH Robinson
These first partners are committed to working with the Biden-Harris Administration to identify and operationalize a first information exchange that will support a more resilient and fluid supply chain. They represent stakeholders throughout the supply chain including large BCOs (beneficial cargo owners) like Target, small and medium size businesses represented by True Value and Gemini Shippers, as well as agricultural producers such as Land O’Lakes. FLOW will be able to address issues such as ensuring early return dates are consistent across partners, measuring more accurate chassis availability and understanding aggregate dwell time throughout the supply chain. The principles of the pilot include the following: it is a voluntary, secure national exchange for freight information, it is available to participants who share data, and it is sustained by supply chain operational improvement.
For additional interested parties, the Biden-Harris Administration is launching a webpage to gauge additional stakeholder interest in supporting foundational freight infrastructure:
While starting with a limited pilot, DOT wants to hear from others who are interested in engaging as part of FLOW as a participant as the initiative grows. Within one month of the FLOW launch, DOT will launch a web page to gauge industry interest in participation and data sharing for a potential long-term FLOW effort.
Building on Ongoing Supply Chain Achievements
The FLOW initiative builds on previous successes of the Biden-Harris Supply Chain Disruptions Task Force to ensure cargo is getting from ship to shelf, including:
- Reduced Dwell Time in Los Angeles and Long Beach. At the beginning of November, with support from the Administration, the Ports of Los Angeles and Long Beach proposed charging the ocean carriers for cargo that dwelled on the docks for nine days or more, which led to about a 60 percent reduction in the number of long-dwelling import containers on the docks to date.
- Alleviated congestion at the Port of Savannah by funding the Georgia Port Authority pop-up container yards project. With this policy change, the Georgia Port Authority was able to reallocate more than $8 million to convert existing inland facilities into five pop-up container yards in both Georgia and North Carolina. Since the temporary container yards opened in late November, the container yards have provided relief to about 5,000 containers over eight weeks and freed up more dock space, speeding goods flow in and out of the Port of Savannah.
- Secured commitments to move towards 24/7 operations via a Presidential call to action to encourage every link in the goods movement chain to move towards a 24/7 pace to increase the volume and pace of products flowing through the system. The Ports of Los Angeles and Long Beach and International Longshore and Warehouse Union (ILWU) workers joined together to make the first commitment. Some of the countries’ largest companies joined in as well—including Walmart, Target, FedEx, UPS, Home Depot, Best Buy, The Gap, and Samsung—committing to try a new solution.