The consumer packaged goods (CPG) industry wants the federal government to get involved in initiatives that measure freight demand — currently deployed solely by the private sector — to get a more accurate picture of available trucking capacity.
The proposal was included in a study released Tuesday sponsored by the Consumer Brands Association (CBA), the Council of Supply Chain Management Professionals and Iowa State University. The purpose: Identify, through industry comments and suggestions, supply chain challenges and opportunities for the CPG industry that are directly impacted by public policy in the wake of the pandemic.
“The pandemic displayed just how fragile and essential supply chains are, especially for vulnerable populations where access, affordability and availability are paramount,” said CBA President and CEO Geoff Freeman.
“Supply chains deliver for millions of consumers every day, yet they don’t receive the necessary coordinated attention from our policymakers. Greater federal leadership on supply chain policy will lead to a stronger economic recovery, growth and stability for future crises.”
One of the focus areas was assessing ways to optimize freight movement over national transportation networks, particularly in the trucking sector. Truck transportation makes up more than 40% of total freight logistics costs in the country, the study noted, and transportation accounts for the largest share of order cycle time variability in most supply chains, “thus affecting inventory levels, stock-out costs and on-time delivery.”
One way to tackle those costs would be to devise a highway traffic control system similar to the air traffic control system regulated by the Federal Aviation Administration.
“There are several private sector initiatives doing this (e.g., Project 44, Macro Point and Trimble), but each is constrained by the number of shippers and carriers subscribing to their service,” the study points out. “Only the federal government can mandate the participation of all trucking companies (and other highway users) to achieve true optimization.”
It noted that the government, along with issues involving data security and protecting proprietary information are the primary obstacles because “Internet of Things” technology that optimizes freight capacity already exists. “The system could also include passenger vehicles for urban and last-mile parcel delivery,” the study suggested.
CBA’s study cited data privacy issues raised by the U.S. Department of Transportation in its National Freight Strategic Plan released last year, in which it stated that advances in technology that allow for more cost-effective collection and analysis of public and private data would better inform DOT policy decisions.
However, the study asserts, DOT “does not seem to consider that it may have a role in collecting and sharing data that would benefit the public” on a national level, even though DOT’s strategic plan describes a successful program funded by DOT that optimizes short-haul drayage at the ports of Los Angeles and Long Beach.
CBA recommended creating a White House Office of Supply Chain (OSC) to coordinate supply chain policies among federal agencies and also to coordinate with the private sector.
“The OSC should focus on three high-level (or macro-level) objectives of national supply chain policy: Supply Chain Security, Supply Chain Efficiency and Supply Chain Resilience. These are the fundamental requirements of a strong and enabling national supply chain. The OSC should develop national supply chain policies and the metrics for assessing progress in achieving them.”
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