The President’s Supply Chain Resilience Council, a recent initiative, aims to “boost America’s supply chains” and “cut costs for families.” With 30 actions, this council aims to improve medicine accessibility, economic data access, and other programs linked to goods production and shipment. Its goal is to enhance both accessibility and efficiency in these critical areas. However, while it’s got all the government big shots, where’s the industry’s voice in this council?
The White House seems to have a newfound focus on supply chains. It’s something those in the industry always stressed, even before COVID made it crystal clear. The White House underscores that strong supply chains lead to lower prices, benefiting American families, workers, farmers, and entrepreneurs. As a result, this strategic approach aims to foster economic advantages for a wide spectrum of stakeholders.
It’s great to see the government honing in on the US supply chain, aiming to combat inflation, which, in part, resulted from snags in this chain. Inflation, once at a high of 9.1% in June 2022, has since dropped to 3.1%. Yet, companies are feeling the pinch with increased logistics costs—a whopping 19.6% jump in US Business Logistics Cost in 2022. The President’s calling out “price gouging,” but many companies are facing reduced profits and tough financial times.
Despite record-breaking profits for shipping lines during COVID, rates have nosedived, leading to significant cutbacks, even massive layoffs. Rising supply chain expenses result from a combination of factors, including labor shortages, strikes, increasing insurance rates, and geopolitical impacts on raw material costs. These challenges collectively contribute to the growing complexity and costs within the supply chain.
The government’s action plan involves creating private-sector partnerships to address bottlenecks, expedite deliveries, and enhance global competitiveness in freight networks. They’re not just focusing on the US—international initiatives with the EU, Japan, South Korea, and trade pacts with Canada and Mexico are in the works.
Technology’s in the mix too! There’s talk of cross-government data sharing, innovative risk assessment tools, and partnerships to monitor and improve supply chains. Commerce and Health and Human Services are collaborating to analyze industry and import data, focusing on critical drug dependencies and vulnerabilities. This joint effort aims to significantly enhance understanding and address key challenges in ensuring drug supply chain resilience.
The DOT’s FLOW program uses data to enhance logistics decisions, prevent bottlenecks, and build a more resilient freight network. This initiative reflects a commitment to leveraging information for strategic enhancements in the transportation sector.
It’s an exciting phase. As the economy aims for recovery in 2024, it could pave the way for a successful 2025 across the industry.