Above the Fold: Supply Chain Logistics News (March 18, 2022)

By Adrian Gonzalez

Are there more doors or wheels in the world?

Debating this question is the latest internet trend, with no clear winner between Team Doors vs. Team Wheels because, well, there’s really no way to know for sure.

It’s like me telling my college roommate freshman year that half the countries in the world have an even number of chickens. Go ahead, prove me wrong.

Anyway, this may be trivial discussion, but it’s a break from all the brokenness in the world.

Which leads me to this week’s supply chain and logistics news:

COVID and Russia-Ukraine War

“Manufacturers of everything from flash drives to glass for Apple iPhone screens are warning of shipment delays as they comply with Chinese controls to curb the spread of COVID-19, further straining global supply chains,” report Brenda Goh and Josh Horwitz in Reuters. “Authorities across China are trying to stem the spread of the country’s worst COVID-19 outbreak in two years, putting millions of people in lockdown, curbing transport and shutting factories.”

Meanwhile, according to an article by Jun Concepcion in Lloyd’s List, the UN says that “due to higher fuel costs, rerouting efforts and zero capacity in maritime logistics, the impact of the war in Ukraine can be expected to lead to even higher freight rates.” Concepcion adds that the “UN conference on trade and development said Black Sea-Med aframax and suezmax tanker daily rates exceeded $170,000 on February 25, from about $10,000 a day on February 18.”

It’s only mid March, but any hope that supply chains would catch a break this year is quickly disappearing.

Meet Your Newest Supply Chain Operating Network Provider: The U.S. Government

I’ve been writing about the rise of Supply Chain Operating Networks for more than a decade, and how investment in these multi-enterprise business networks have been increasing in recent years (see list below for other related posts).

Apparently, there’s a new startup in town: The U.S. Government.

This week “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.” Here are more details from the announcement:

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.

Among the initial participants are shippers (Albertsons, Gemini Shippers, Land O’ Lakes, Target, True Value) and logistics service providers (FedEx, Prologis, UPS, CH Robinson).

Missing from the list: existing network-based technology companies — like E2open, Descartes, Blume Global, Elemica, Transporeon, Trimble, Transplace, project 44, FourKites, and others — that are already enabling some of these capabilities. Yes, much more work is needed on the standards front and to enable interoperability between these network providers, but it’s a bit of a head scratcher why not a single pure technology company is on the initial list.

Simply put, there are plenty of “freight information exchanges” available in the market today and they are well past the proof-of-concept stage. Is this another case of the government trying to reinvent the wheel?

In that case, maybe there are more wheels than doors in the world.

And with that, have a happy weekend!