U.S. supply chain leaders look for alternative to shipping legislation.

• A trade group comprising companies such as Prologis, Johnson Controls, Sierra Northern Rail Company, labor unions, and port terminal owners is concentrating on addressing freight transportation concerns.
• The Supply Chain Council will push for laws that enhance supply chain resilience and boost domestic investment.
• To better handle challenges such as the Red Sea attacks, Panama Canal drought, and labor-management tensions over automation, the global shipping network must be strengthened.

A new trade group, the Supply Chain Council, has been formed by labor unions, maritime shipping interests, and other supply chain businesses to advocate for increased domestic infrastructure investment to protect the supply chain. The council's board members include Sierra Northern Rail Company, SSA Marine, Laborers' International Union of North America, and the Pacific Merchant Shipping Association.

"Josh Wood, CEO of the Supply Chain Council, stated, "We will unite the links of the supply chain and advocate for legislation to enhance supply chain resilience and employment.""

Before Covid, supply chain segments were typically viewed separately, but the need to focus on the interconnectedness of freight segments has intensified as the supply chain has faced significant challenges.

"Steven Hussain, vice president of Prologis' Workforce Programs and Community Relations division and chair of the council, stated that while there has been much discussion about the importance of the supply chain in recent years, policy has not kept pace with the moment. He emphasized that effective policy should address all aspects of the supply chain, not just parts like ports or trucking. Hussain pointed out that creating policy for one entity could negatively affect another supply chain participant. He stressed the need for education on the interconnectedness of the supply chain."

One example of the impact of supply chain interconnectivity is the recent CrowdStrike IT outage, which was caused by air freight delays and is expected to take weeks to recover.

"The interconnectivity of the supply chain makes creating resiliency complex, as Hussain pointed out. We were not anticipating the impact of CrowdStrike, but it is just one of the challenges the supply chain is facing. Additionally, there are the Red Sea and the Panama Canal, which further complicate matters. Despite these challenges, we must ensure that we do not unintentionally weaken the supply chain, as this can hinder investment and diversification."

Wood emphasized the importance of redundancy and data sharing in the supply chain, stating that it is crucial for both data security and resiliency. He added that the need for real-time recording and gathering of data is critical.

The director of external affairs at the Southern California chapter of the Laborers' International Union of North America, Josh LaFarga, tells CNBC that the U.S. supply chain is a national issue and labor should be included in discussions about supply chain resiliency.

"Having conversations with opposing thoughts within the supply chain is crucial," LaFarga stated. "Not only do companies benefit from a strong and resilient supply chain, but workers, consumers, and everyone else relies on it."

The use of automated technology at some U.S. ports is a contentious issue in the supply chain, as evidenced by the suspension of negotiations between the International Longshoremen's Association and the United States Maritime Alliance over a new contract.

Harold J. Daggett, ILA President, has warned that a strike is becoming more probable as the September 30 contract deadline nears. In a recent statement, he declared, 'We haven't had a strike since 1977. It's time we hit the streets!'

According to LaFarga, the distinction between automation investments that enhance work and those that erase jobs is thin.

"We aim to enhance the quality of life for all employees. For instance, laborers who previously used sledgehammers and pick axes for demolition now employ jackhammers. It is crucial to keep an eye on technology, but we must also discover ways to collaborate with it. We must prioritize human employment over automated jobs," he stated.

Ports in the US are competing not only with domestic ports but also globally. To remain competitive and sustainable, they need to be educated on the impact of proposed legislation by the trade group.