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Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains (2014)

Chapter: Chapter 3 - Interviews with Supply Chain Experts

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Suggested Citation:"Chapter 3 - Interviews with Supply Chain Experts." National Academies of Sciences, Engineering, and Medicine. 2014. Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains. Washington, DC: The National Academies Press. doi: 10.17226/23428.
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Suggested Citation:"Chapter 3 - Interviews with Supply Chain Experts." National Academies of Sciences, Engineering, and Medicine. 2014. Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains. Washington, DC: The National Academies Press. doi: 10.17226/23428.
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Suggested Citation:"Chapter 3 - Interviews with Supply Chain Experts." National Academies of Sciences, Engineering, and Medicine. 2014. Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains. Washington, DC: The National Academies Press. doi: 10.17226/23428.
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Suggested Citation:"Chapter 3 - Interviews with Supply Chain Experts." National Academies of Sciences, Engineering, and Medicine. 2014. Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains. Washington, DC: The National Academies Press. doi: 10.17226/23428.
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Suggested Citation:"Chapter 3 - Interviews with Supply Chain Experts." National Academies of Sciences, Engineering, and Medicine. 2014. Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains. Washington, DC: The National Academies Press. doi: 10.17226/23428.
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Suggested Citation:"Chapter 3 - Interviews with Supply Chain Experts." National Academies of Sciences, Engineering, and Medicine. 2014. Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains. Washington, DC: The National Academies Press. doi: 10.17226/23428.
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Suggested Citation:"Chapter 3 - Interviews with Supply Chain Experts." National Academies of Sciences, Engineering, and Medicine. 2014. Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains. Washington, DC: The National Academies Press. doi: 10.17226/23428.
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Suggested Citation:"Chapter 3 - Interviews with Supply Chain Experts." National Academies of Sciences, Engineering, and Medicine. 2014. Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains. Washington, DC: The National Academies Press. doi: 10.17226/23428.
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Suggested Citation:"Chapter 3 - Interviews with Supply Chain Experts." National Academies of Sciences, Engineering, and Medicine. 2014. Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains. Washington, DC: The National Academies Press. doi: 10.17226/23428.
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Suggested Citation:"Chapter 3 - Interviews with Supply Chain Experts." National Academies of Sciences, Engineering, and Medicine. 2014. Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains. Washington, DC: The National Academies Press. doi: 10.17226/23428.
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Suggested Citation:"Chapter 3 - Interviews with Supply Chain Experts." National Academies of Sciences, Engineering, and Medicine. 2014. Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains. Washington, DC: The National Academies Press. doi: 10.17226/23428.
×
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Suggested Citation:"Chapter 3 - Interviews with Supply Chain Experts." National Academies of Sciences, Engineering, and Medicine. 2014. Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains. Washington, DC: The National Academies Press. doi: 10.17226/23428.
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Suggested Citation:"Chapter 3 - Interviews with Supply Chain Experts." National Academies of Sciences, Engineering, and Medicine. 2014. Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains. Washington, DC: The National Academies Press. doi: 10.17226/23428.
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Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

30 Our operational capabilities also include developing a national capacity for Marine Transporta- tion System recovery. The nation needs a coordinated, integrated approach to planning for and responding to major disruptions in our marine transportation system, the lifeblood of America’s economy. —Adm. Thad Allen, 2007 State of the Coast Guard Address (USCG, 2008) 3.1 Introduction This chapter describes the results of a series of expert interviews drawing on different roles in moving freight through U.S. seaports. Individual interviews were conducted with more than 20 experts responsible for different activities within seaport-inclusive freight supply chains. The interviews are intended to supplement and make further contributions to the discussion of U.S. ports’ resiliency in times of major cargo movement disruptions, adding to the information presented in previous research studies involving the activities of government entities serving in various oversight/regulatory roles. The interviews, drawn primarily from private industry, included key executives at seaports, beneficial cargo owners (BCOs), 3PLs, shipping agencies, railroads, trucking and warehousing companies, and trade organizations. See Appendix 3A for a list of sample questions and a complete list of participating organizations. In keeping with the supply chain focus of the research, these interviews also focused on three pieces of the business continuity puzzle, all of which need to fit together to ensure effective cargo throughput. The components are as follows: • Shipping/shipping channel, • Port operations, and • Landside, intermodal freight processing. The interviews included questions on identifying port resiliency steps, with port resiliency defined as the ability of a coastal seaport to provide and maintain an acceptable level of service, notably a steady freight volume throughput, when disruptive forces impose upon it. These steps primarily involve coordinating freight movements through ports in times of severe stress on existing operating infrastructures and services—whether being stressed because of damage to port facilities or to the highway, rail, and waterway routes leading into and out of the port; from stoppages of work or port closures due to other disruptive events; or because of the need to handle additional cargo volumes due to port disruptions elsewhere. The research team asked the executives interviewed to specifically consider the following three aspects of the supply chain: • Transactions and information flow, • Physical/logistical infrastructure that supports the movement of goods, and • Regulatory/government agency involvement. C H A P T E R 3 Interviews with Supply Chain Experts

Interviews with Supply Chain Experts 31 Additionally, respondents were asked to provide insight regarding how quickly private industry alters business practices based on lessons learned from events such as the 2002 West Coast Lockout, Hurricanes Katrina and Ike, and Superstorm Sandy. This dynamic and competitive industry is found to be remarkably collaborative and connected during times of major distress, as demonstrated in the following summary of the key points that emerged from the discussions. 3.2 Differences in Types of Port Disruptions The respondents identified two key differences in types of port disruptions, making a distinction between natural disasters and manmade disruptions (e.g., labor disputes, security threats, technological emergencies). It was also noted that (1) the geographic impact of an event and (2) the probability of a disruption occurring considerably affected the respondents’ ability to plan and subsequently react to it. For example, looming storms are monitored as they near a port, and plans for moving cargo in and out are coordinated between the vessel operators, the USCG, and the ports, in addition to many other participants. In contrast, manmade disruptions can be less predictable and may impact more than a single port. For example, the 2013 computer/ information system issues at Maher Terminals—one of the largest terminals at the Port of New York and New Jersey—generated ripples through the other terminals in the immediate region, as well as affected several other East Coast ports. Within the Port of New York and New Jersey, other terminals were asked by carriers to handle their vessels in addition to their regular customers. Vessel, terminal, and inland operations were affected, leading to at least one carrier, Hapag Lloyd, asking their customers to switch cargo routing to alternative East Coast ports (Bonney, 2013). Labor disputes can impact port resiliency and business continuity planning. Following the 2002 International Longshore and Warehouse Union (ILWU) West Coast Lockout, BCOs proactively revised their strategies and operating plans for importing goods by diversifying and creating redundancy. For example, many major retailers that prior to 2002, had relied on one or two dis- tribution centers, decided to develop redundancy in their system by constructing facilities near all four corners of the country (NW, SW, SE, NE), a strategy dubbed “the four corners approach.” Additionally, they began purchasing the same item from more than one supplier located in different parts of the world. BCOs also have altered the way they do business to minimize impacts caused by labor disputes and, in so doing, made themselves more resilient to other port disruptions that have occurred in the past decade. 3.3 Communications and the Flow of Information Communicating and maintaining the flow of logistics information throughout the supply chain—from truckers to suppliers to carriers to key federal agencies—was considered by the executives interviewed to be the single most important element to returning operations to normal following a port disruption. The ability to maintain the flow of information before, during, and after a port disruption directly affects recovery time. The amount of warning time and the belief that the event will actually occur also contributes to resiliency. Respondents impacted by both manmade and natural disasters indicated that knowledge of whether an event would occur and when it would happen resulted in different response approaches. For example, an imminent hurricane prompts early communication about potential physical damage that could disrupt communication capabilities, whereas a terrorist attack would not. Due to these differences, those respondents were asked to provide lessons learned for both types of disruptions. The

32 Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains communication and coordination process was delineated into three time periods: before, during, and after a major port disruption. Before the Disruption Before a natural disaster, the USCG utilizes Marine Transportation System Recovery Units (MTSRUs), often consisting of existing port coordination teams that typically include the National Weather Service, port staff, vessel operators, terminal operators, tug boat operators, railroads, emergency responders, CBP, MARAD, USACE, utility operators, shipping agents, and many others. Decisions, such as where to move assets, when to close the port, and how to prioritize cargo flows before and immediately following the resumption of operations, often begin as soon as a major storm becomes known. Communication between ports also may begin at this point, as with Superstorm Sandy, which resulted in the diversion of 57 ships to alternative ports along the U.S. East Coast. Shipping agents, the primary conduit for communications between carriers, shippers, regulatory agencies, and the USCG, played a significant role in this process. In the case of Superstorm Sandy, the vessel diversion planning involved the Port of New York and New Jersey communicating with other East Coast ports, such as the Virginia Port Authority. Other major players in the communication and coordination of the diversions may include USCG, CBP, tug operators, terminal operators, trucking companies, and the shipping agents representing carriers and BCOs. At one large port, port employees may get an email or a reverse 9-1-1 call when an event occurs (in this case, to about 6,000 people in a matter of seconds) that provides status updates about access impacts and requests that recipients acknowledge receipt of the message. Port employees also carry a card with instructions on what to do in case of such notifications. Regular testing can ensure that when an event occurs, all employees will receive status updates and emergency response instructions. The ports interviewed indicated that they maintain contact information for all staff, and test emergency blast emails and reverse 9-1-1 calls to all listed telephone numbers (office, home, work cellular, and personal cellular). Quarterly testing is often conducted and failed contact attempts are identified. When a failed attempt occurs, Risk Management staff contact the employee and request updated contact information. In addition to regular test calls, Hurricane Katrina prompted regular drills to ensure that first responders understand the communication and Emergency Operation Center (EOC) protocols. Participants typically include USCG, USACE, FEMA, MARAD, USDOD, CBP, FBI, local fire and police, various port authority staff, tug boat operators, marine terminal operators, rail- road operators, and others. Interview participants commented that ports need a designated and suitably trained and knowledgeable (certified) emergency manager who plans for, receives stakeholder calls, coordinates activities, and monitors disruptive events. Some participants also recommended the comingling of the port’s executive director, public affairs officer, and emergency manager in the EOC. One port respondent suggested the need for at least two table-top exercises each year. These exercises require a significant amount of planning to carry off. A full-day exercise that includes testing of the various communication channels between stakeholders may require 3 to 4 months of planning. Early preparation may allow for dissemination of satellite phones to key personnel, protection of back-up power sources, and use of two-way radios, as well as deployment of USDOD vessels with satellite communication capabilities and direct lines of communication to key government officials, including the president. One respondent suggested ensuring that back-up copies (hard and electronic) of the emergency operation procedures and recovery plans and any other critical documents (such as manifests) are stored offsite prior to an event, since the information could become inaccessible due to flooding, road closures, etc. during and after a disruption.

Interviews with Supply Chain Experts 33 This respondent described the idea of an emergency backpack containing a laptop loaded with all critical plans and information. During the Disruption Communication during port disruptions occurs at two different levels: operational and public information. Clear, constant, and consistent transmission of operational information reduces the impact of an event. In this regard, the USCG facilitates regular conference calls with all private and public participants and implements response plans, including daily calls, when a disruption occurs. Maintaining communication capabilities during an emergency requires appropriate technological capabilities and an adopted process. Many respondents stated that technological capabilities have been greatly expanded through investments in satellite telephones and two-way radios. During Hurricane Katrina and for several days after, MARAD vessels and other vessels at the Port of New Orleans equipped with satellite communication and two-way radios provided the sole source of communication between emergency responders and the outside world, including the White House and DOD. This allowed the federal government to understand the needs on the ground and quickly deploy the appropriate resources—in the case of Hurricane Katrina this included the deployment of highly skilled SWAT teams. Since 2005, to provide similar support, the DOD has worked closely with ports when hurricanes are approaching. Many interview participants reported that they have invested in satellite phones and disseminate them to key personnel prior to an anticipated natural disaster. In addition, many respondents have invested in cellular telephones with out-of-state area codes and two-way radios. Ports also have implemented IT redundancy. Several respondents, in both the private and public sectors, reported that they now have servers in two or three locations with at least one server residing in another state. Similarly, out-of-area call centers and administrative office spaces have been identified in recent plans. Clear communication with the media has proven successful in providing the public with regular status updates (good examples include Hurricanes Katrina, Superstorm Sandy, and the 2002 Lockout) as well as preventing or reducing speculation. Regular media updates provide information to all stakeholders and facilitate the recovery process. Additionally, providing regular updates to the media and trade associations representing cargo owners, shippers, and carriers has been strengthened over the past decade. However, whereas communication has been strengthened with most supply chain participants, many respondents identified two areas of improvement: (1) port access for workers and truck drivers, and (2) contacting and coordinating with private companies outside a port’s jurisdiction that have been impacted by the disruption. Many respondents indicated that it was difficult to access the port during and immediately following a natural disaster due to emergency road closures and security protocols at a port. For example, in the case of Hurricane Katrina, all roadways were converted to one-way out. Hence, workers and truck drivers destined for the Port of New Orleans were denied entry by local law enforcement. Respondents involved in other Gulf and East Coast hurricanes described similar problems. Most recently, TWIC requirements have hindered recovery efforts in the Port of New York and New Jersey because there are not enough TWIC holders to escort recovery workers. Overall, respondents pointed to a need to improve communication and coordination with local, state, and federal agencies. Implementation of a system that provides placards to drivers and recovery workers was suggested by multiple respondents. Some interview participants commented on the difficulty of contacting private terminals and companies that are impacted by the closure of the main shipping channel due to a natural

34 Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains disaster. In the cases of Hurricanes Ike and Katrina, respondents described a concerted effort by the entire port community to pull together, citing cases of private tug operators working with port staff and other government agencies to traverse the port waters in order to investigate damage and reach private port users who had no means of communication. Hurricane Rita prompted the development of a list of port users in the path of the storm. This list aided recovery efforts after Sandy; however, some of the information had not been updated in over a year. The use of this data during Sandy prompted changes to the maintenance of the data. After the Disruption Following a port disruption, communication can prove difficult, particularly if power is lost. Communication and coordination efforts have greatly improved since Hurricane Katrina. The Port of New Orleans provided a detailed account of lessons learned that has contributed to the development of emergency preparedness and business continuity plans at most large U.S. ports. For example, since Hurricane Katrina, U.S. DOD’s naval vessels equipped with satellite phone systems have served as a hub of communication when all other sources have been unavailable due to power outages and damage to cellular telephone facilities. Respondents generally agreed that communication directly correlates with recovery time and business resumption after a port disruption. Port closures result in major congestion at the gates, vessel queuing in harbors, backlogs at warehousing transloading facilities, and manufacturing production stoppages (caused by lack of material to manufacture or lack of storage room for manufactured goods). These bottlenecks further result in significant costs to businesses that have goods stored on the docks and cannot find a drayage firm to pick them up due to high demand, impacts to vessel schedules, a lack of ability to maintain supplies at retailers due to just-in-time inventory practices, etc. Port disruptions can cause small and large companies to go out of business, and place undue burden on many others, such as the Ports of Oakland, Seattle, and Tacoma that lost customers to other ports (including Prince Rupert in Canada) during the 2002 West Coast Lockout. Some interview participants remarked that certain decisionmakers did not understand the vital role that ports played in recovery efforts, such as supplying gas and other necessities to the impacted communities. One respondent suggested port and logistics training for first responders and other stakeholders (e.g., electrical companies) prior to an event to foster collaboration and provide an understanding of the importance of resuming cargo flow after a disruption. Respondents also suggested better coordination and communication among all parties to discuss opportunities for improving efficiencies after a major port disruption. Processing queued vessels and extending gate operating hours were considered particularly important after a port disruption to quickly dissolve the backlog. The interviews found that port disruptions that close several ports on one coast for more than a week result in significant queuing of vessels. When a hurricane closes a port for 10 days, vessel operators may skip the impacted port to maintain their schedule or divert to another port. However, during the 2002 West Coast Lockout, vessels destined for multiple ports along the West Coast, most of which called to the Ports of Los Angeles-Long Beach first, had no option but to drop anchor along the coast. One respondent with a terminal in South America opted to divert to that port and off-load goods in order to remain on schedule, but this respondent stated that they were one of the few operators with this option available. As a result, a vessel queue extending 20 miles south of Los Angeles-Long Beach ensued. Eliminating the queue required close coordination with vessel operators, terminal operators, shippers, and many others. Respondents indicated that USCG led the process, much like they have in other regions of the country following a natural disaster. Respondents stated that all participants cooperated and disputes over prioritization rarely occurred.

Interviews with Supply Chain Experts 35 One respondent suggested that a Recovery Advisory Unit could be developed to support effective communication between the key stakeholders who need to determine the prioritization of vessels in a queue based on factors such as national security and perishable goods. Extending gate hours to 24/7 operations immediately following the reopening of a port was discussed as another option that could reduce impacts on the overall supply chain. Communicating the extension of gate hours could be achieved through media broadcasts. Lessons Learned • Educate decisionmakers involved in the recovery on the vital role that ports have in ensuring necessary supplies are available after a disruption. • Maintain back-up copies of important documents in both electronic and hardcopy formats. • Regularly test reverse 9-1-1 calls and verify/update employee contact numbers. • Ensure USCG has current contact information for a list of port users involved in emergency planning and quarterly emergency preparedness and recovery drills. • Contact and collaborate with private companies that use impacted shipping channel(s) prior to a disruptive event. • Invest in satellite and two-way radios, as well as out-of-area cellular telephones; regularly prac- tice the plan for disseminating equipment and establishing a communication tree. • Identify multiple, alternative EOC locations where emergency correspondences can be exchanged by affected parties. • Develop an access plan and a communication protocol with input from police, first responders, industry, etc., to ensure that truck drivers moving cargo or carrying FEMA supplies can access the port after a natural disaster. • Develop a media plan for processing press releases; use press releases to communicate economic resiliency, attract labor, and provide regular status updates (needs and progress). • Consider establishing Regional Operations Centers to share information between ports and port users. • Develop a Recovery Advisory Unit to prioritize vessel processing. • Extend gate hours following a port disruption and communicate with media to ensure truckers and other stakeholders are aware of change in terminal operation. 3.4 Physical Infrastructure Respondents described how past physical disruptions have impacted the power supply, safe passage of ships, trains, and trucks; and access to water and sewer, as well as labor actions that have restricted access to goods on ships, in marine terminals, or in warehouses. Power Generation Many interview respondents remarked that they have begun to re-evaluate their emergency preparedness and recovery plans and incorporate new features for ensuring that power generation is either maintained or quickly recovers following a major disruption to power lines or to the electricity grid. Loss of regional grid-based power supply can become a “single point of failure” issue in some ports (note: no power means no fuel pumps working). During Superstorm Sandy and Hurricanes Ike and Katrina, respondents identified damage to back-up generators that were stored in low-lying areas and the inability to utilize solar power during outages to the grid. Respon- dents also mentioned the lack of access to fuel for generators that survived the storms, as well as access to vehicles for priority personnel. One respondent lost both personal automobiles and could not locate a rental car within 800 miles. All respondents mentioned the importance of power at ports, and some port authorities have begun to discuss options such as reversing cold ironing

36 Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains capabilities (the practice of providing shore power to a ship so the ship may shut down primary and secondary combustion engines while in port) to allow vessels to power the marine terminals. One possible option suggested for consideration involved drawing power from nuclear powered Navy ships (or submarines). However, the process of how exactly to tap into this ship power safely and to the satisfaction of the power companies has yet to be solved. Although drawing power from Navy ships is considered technically feasible, it was suggested that a port would need at least the following four things to happen first: • Identify power supply components and capabilities, • Identify power supply necessary to operate port, • Develop physical cut-off mechanism and operational protocol to ensure port-generated electricity does not access and damage the grid, and • Coordinate with DOD/Navy personnel to investigate feasibility of tapping into nuclear power supply on vessels. Not all power losses need to be widespread to be costly. An example was cited of a damaged power line leading to a 3-day partial port closure. In this case, key recovery aspects included access to back-up generators and communication. Lessons Learned • Ensuring power is crucial for recovery and business continuity. • Locate generators above flood levels. • Store fuel for generators and priority personnel vehicles. • Encourage port personnel to top-off personal vehicles and store vehicles outside of potential flooding areas. • Investigate alternatives for accessing solar power and reversing cold ironing during extended grid outages. Channels/Harbors The USCG and USACE work closely to identify and repair damage to the channels and quickly clear waterways after storms and other events that result in obstructions to safe passage of vessels. The two agencies coordinate directly with industry, ports, and other regulatory agencies to pro- vide information necessary for prioritizing ship movements immediately following reopening. Channels and harbors have typically recovered quickly (within 2–3 days) following a major hurricane. However, damage to wharfs in some major storms has caused disruptions of several months in rare instances. Private companies tend to cooperate when a channel is blocked. All parties share the common goal of reopening it as quickly as possible. An example was cited of using nearby barges to remove obstruction material and providing a “barracks barge” to allow workers to stay on site overnight in order to stay close to the blockage they were working to remove. Lessons Learned USCG collaborative efforts prepare industry and public agencies for port disruptions through information sharing, providing input on emergency operations and recovery plans, and facilitating regular exercises/drills. Terminals For marine terminals located in low-lying areas, respondents described preparedness and recovery plans based on personal experiences, as well as the experiences of others. Many of the

Interviews with Supply Chain Experts 37 respondents have incorporated lessons learned from Ike, Katrina, and Sandy into their planning efforts. USCG and NOAA coordinate with vessel operators and terminal operators to protect against cargo losses on the docks by adjusting vessel schedules, either slow sailing or increasing speed. Accordingly, the railroads and drayage drivers must respond to these schedule changes. Additionally, respondents identified damage to terminal equipment as a significant issue. Salt water is particularly troublesome for battery-operated terminal and warehouse equipment. Lessons Learned • Identify alternative, higher ground locations for storing terminal and warehouse equipment (which may, however, increase cargo loading costs). • Identify temporary, higher ground storage locations for cargo. • Extend gate hours of operations and coordinate with truck companies and railroads in advance of a disruption (if known event) to facilitate moving cargo off terminals. Temporary Housing and Office Space Hurricane Katrina prompted the thinking of many ports and other key agencies to go beyond emergency preparedness to business recovery/continuity planning. During Hurricane Katrina, entire sections of New Orleans became uninhabitable. The Port of New Orleans implemented a detailed emergency preparation plan upon first reports from the NWS that New Orleans could be impacted and had fully implemented their plan in advance of the storm; however, the port did not have a recovery plan. Housing workers to repair the port proved to be a significant chal- lenge. Even key personnel were forced to vacate, prompting the Executive Branch of the federal government to implement a plan to use USDOD vessels. Within a few days, Port of New Orleans staff had set up administrative functions in Atlanta, Georgia, and some top-level staff returned to the port and lived on the USDOD vessels during recovery. Another Louisiana port, Port Tangipahoa, located 25 miles north of New Orleans, provided temporary administrative space. During the recovery effort, on-site portable buildings, USDOD vessels, cruise vessels, and other temporary housing provided shelter for port workers and first responders. Lessons Learned • Prepare and constantly update a recovery plan that includes temporary housing for first responders and key personnel. • Identify long-term temporary office space. • Develop back-up systems for all business functions, in particular, information systems and servers, call centers, and payroll functions (most public and private entities have one or more back-up servers with at least one located in another state). Railroad Facilities The Class I railroads have experience with a variety of disruptions along their facilities. Therefore, they have plans in place to expeditiously react to service disruptions, including derail- ments, inclement weather, port disruptions, labor disputes, etc. One Class I railroad noted that it had contracts throughout the country to address disruptions quickly and minimize revenue losses. For example, after Hurricane Katrina, reconstruction of the collapsed rail bridge over Lake Pontchartrain was expedited by having existing contracts with construction companies in the region, leading to a resumption of bridge operations just 12 days after it had collapsed. The freight railroads make provisions for hurricane season. They identify safe storage locations, particularly in areas of the country where their rail yards reside in low-lying areas. During both

38 Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains Hurricane Katrina and Superstorm Sandy, the freight railroads moved as much equipment as possible to higher ground. For equipment that could not be moved, the railroads took significant steps to protect assets, such as removing engines from locomotives. Freight railroad representatives described damage to public rail assets and the need for public agencies to emulate the freight railroads’ plans. When labor disputes arise, the railroads work closely with customers to move up delivery schedules or identify alternative routes. During the 2002 West Coast Lockout, a lack of railcars proved to be a difficult problem due to the sheer volume of goods that had accumulated at the West Coast ports over the 10-day duration. The railroads indicated that changes to shipping resulting from labor disputes are led by their customers. The railroads provide service options and accommodate the changes but generally do not play a role in prompting the changes. Lessons Learned • Disruptions to passenger rail systems impact freight railroads. Damaged equipment on the tracks causes recovery delays. Respondents suggested that public agencies should develop asset protection plans and identify funding to implement the plans in advance of an imminent storm. This would not only benefit resiliency, it would also reduce recovery costs. • Railcar shortages following a major disruption have prompted some shippers to consider operational changes to avoid delays in receiving cargo (e.g., early delivery and rerouting of goods to warehouse/distribution centers not impacted by the disruption). Trucking/Warehousing A limited number of port drayage drivers coupled with limited driver hours of operation resulted in significant delays in moving cargo in and out of the West Coast ports after the 2002 West Coast Lockout. Respondents indicated that bottlenecks at the gates and inside the marine terminals resulted in turn times of three to four hours per transaction. The ports provided storage fee relief for goods on the docks during the Lockout, but on the first day after the Lockout, storage fees went into effect. With major delays at the gates and a lack of drivers, trucks, and chassis to move the containers, respondents of some small warehousing companies stated that they nearly went out of business. One such respondent decided to purchase trucks and provide drayage services to mitigate the impacts of future port disruptions on his warehousing business. Following Hurricane Katrina, an overall shortage of port industry workers quickly became a barrier to supply chain resiliency. Nearly all residents with the ability to vacate the region had done so. The Port of New Orleans utilized media releases to solicit truck drivers from across the country to come and help. As drivers began to arrive, the port realized the need for housing them and worked with the federal government to locate temporary housing. Trucks generally waited at sites located some way from the impacted port until it reopened. (If a shipping channel is officially “closed” insurance picks up some delay costs. If not, carriers usually shoulder the added cost burden and so the landside carriers want to be ready to start work as soon as the port’s channel is declared open.) Similar to the railroads, the trucking industry participants stated that they are “nimble,” meaning they can quickly respond to changing market needs. The experience from recent events, such as hurricanes and labor disputes, exemplifies this point in that drivers have reacted quickly to rerouting requests. However, respondents in California indicated that a labor disruption similar to that in 2002 would be more impactful today because of the Clean Truck Program and the California Air Resource Board’s stringent truck emissions standards, both of which have resulted in fewer overall trucks in the system.

Interviews with Supply Chain Experts 39 Lessons Learned • Marine terminal storage fees should be revisited. Respondents suggested a longer grace period following a disruption coupled with a reduced sliding scale storage rate schedule commensurate with the backlog of goods. • Respondents throughout the supply chain suggested (quite emphatically) longer gate hours following a major port disruption until the backlog is resolved. • Utilize media to solicit truck drivers before and after event. • Move chassis to higher ground out of the danger/any flooded areas. Water/Sewer During the Hurricane Katrina recovery, water and sewer service disruptions created significant impacts to the entire region. Use of the vessels at port helped to mitigate the impacts by providing workers with appropriate facilities so that they could repair the damage to the water and sewer lines. The importance of water and sewer to business continuity is not limited to major disasters. One respondent described a water main issue that resulted in loss of water to marine terminals which, in turn, led to longshoremen refusing to work. Business continuity planning based on the Hurricane Katrina experiences mitigated the impact of this particular event because the port’s plan contained an emergency response for such an event. Within hours of the water disruption, the port provided portable restrooms and water facilities to all impacted port facilities and work on the docks resumed. The communication protocol and response planning activities aided in the swift response. Lessons Learned • Maintain a list of vendors and contractors that can quickly respond to water and sewer dis- ruptions, and if feasible, maintain on-call contracts to ensure quick response to emergencies. • Collaborate with port water/sewer users and incorporate their needs into the emergency response plan. • Maintain and regularly verify an emergency contact list of terminal operators and other port water/sewer users. 3.5 Regulatory Issues Respondents discussed various regulatory issues that could be considered to either avoid a port disruption or recover from one more quickly, as follows: • Adjacent track rules, • Credentialing, • Weight restrictions, • Truck driver operating hours, and • Adequate regulatory agency staffing and responsiveness. Adjacent Track Rules Two respondents referred to the adjacent track rule as a lesson learned for other ports to consider in preventing a potential disruptive event in the future. This rule restricts labor from working on a track adjacent to a track with an active train. This rule evolved from a tragic accident that resulted in the death of a worker. In all but a few terminals at the Ports of Long Beach and Los Angeles, this rule has been expanded from the adjacent track to an entire terminal so when- ever a train enters or exits a terminal, all labor stops work.

40 Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains Credentialing In the case of Superstorm Sandy, truck drivers tasked either with collecting cargo that was diverted to other East Coast ports or with trucking it to the Port of New York and New Jersey experienced credentialing issues. All drivers entering a port must have a TWIC card, but most ports also have their own registration system for drivers. Ports typically have a process for handling new long-haul drivers from outside of the area, but this process was developed to handle relatively few drivers per day and may involve fees (e.g., for the port-specific credential and, in some cases, a port-specific RFID tag. Respondents suggested improving communication between ports when cargo is diverted and sharing truck driver registration data during these events. Similarly, recovery workers without a TWIC card must be accompanied by a TWIC cardholder. During a major cleanup effort, such as Superstorm Sandy, this may cause delays in the recovery process because of the lack of available TWIC cardholders. Weight Restrictions Respondents stated that truck weight restrictions are waived for trucks delivering FEMA relief supplies, and suggested similar relief for certain commodities to off-set impacts to the supply chain. Truck Driver Operating Hours Some respondents suggested allowing drivers to exceed the maximum allowable hours of driving for drayage drivers following a major disruption. One respondent described drivers sitting idle for 3 or more hours at marine terminals after a major port disruption. This respondent suggested that the driver fatigue concern not apply when a truck is idle. A few respondents stated that truck driver hours of operation are not restricted for FEMA supplies or for certain agricultural products and suggested that temporary relief from this regulation be applied for a set time following a major port disruption. Adequate Regulatory Agency Staffing and Responsiveness Respondents described backlog and unnecessary marine terminal storage charges that occurred due to a lack of regulatory staff available to conduct inspections at ports handling diverted vessels. For example, some of the respondents noted CBP had adequate staffing but identified U.S. Department of Agriculture staffing shortages at the Virginia Port Authority when Superstorm Sandy resulted in the diversion of several ships, and U.S. Environmental Protection Agency staffing shortages at the Port of New York and New Jersey related to off-loading petroleum. Respondents suggested that these agencies identify a means for quickly determining staffing needs, develop emergency deployment plans, and participate in port disruption drills conducted regularly by ports throughout the country. Lessons Learned • Develop a mechanism for sharing truck driver registration information between ports during major port disruptions, or simplify/automate the registration process to speed up the processing of diverted cargo. • Review truck weight restriction rules and heavy weight corridors; identify scenarios that may warrant temporary relief from regulations and implementation of short-term heavy weight corridors. • Review truck driver hours of operations and identify scenarios that may warrant relief from regulations.

Interviews with Supply Chain Experts 41 • Include all regulatory agencies involved in goods movement through ports in the emergency preparedness and recovery planning exercises conducted at ports throughout the country. Respondents in general indicated that preparedness and recovery/business continuity planning has greatly improved over the past 10 years. A common theme echoed throughout the interviews is that the USCG provides significant support, particularly when the ports carry out emergency drills. Respondents indicated the need to continue to share information and experiences from major port disruptions locally, regionally, nationally, and internationally. They also mentioned repeatedly, the importance of communication and information sharing before, during, and after a port disruption. 3.6 References Bonney, J. (2013) “Maher Says It’s ‘Turned the Corner’ at NY-NJ,” Journal of Commerce, July 30, 2013. USCG (2008) Maritime Transportation System (MTS) Recovery. State of the Coast Guard Address. http://www. rrt1.nrt.org/production/nrt/rrt1.nsf/Resources/rt1Presentations_September2008/$File/MTS%20Recovery %20Overview.Sep08.pdf. Accessed 12/2/2013. Appendix 3A: Interview Guide 1 Represented Participants • Port of Long Beach, • Port of New Orleans, • Port of Houston, • Three U.S. Class I railroads, • APL, • Moran Shipping Agency, Inc., • Horizon Lines, • Maersk Sealand, • World Shipping Council, • Chamber of Shipping Americas, • National Retail Federation, • Kroger, • UPS, • Golden State Logistics, • TTSI, • ATRI, • NFI Industries, • AET Inc., Limited, and • Coppersmith. Sample Questionnaire Key Questions 1. What disruptive events have occurred in the past at a U.S. [your] port most impacted your company’s operations and/or services you provide? [Question could also apply to their experience at previous companies] 2. How did the disruptive event(s) impact _____ [company/port] and for how long? 3. What were some of the biggest surprises from the disruptive event(s) that you faced? How did it influence your reactions?

42 Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains Plans and Strategies 1. What plans or strategies previously put in place by your company were helpful in responding to the disruption(s)? 2. What aspects of the recovery effort were not in your plans or strategies that should be con- sidered in the future? Coordination/Communication and Decision Making 1. Who were the most important individuals (roles) involved in responding to the disruption(s)? 2. How did you coordinate with external partners and governmental agencies (e.g., FEMA, DHS)? 3. How did you communicate with your customers? 4. What do you consider the strengths of your organization with respect to coordination and communication during and after the event(s)? 5. Would you improve your communication and coordination process for future situations? If so, how? 6. Would you change the decision-making process? If so, how? Continuity of Operations and Service In considering how to maintain service and cargo flow in times of disruption: 1. What are the most important considerations? 2. What are the major challenges or obstacles? 3. What would you do differently to enhance freight movement and service for future disruptive event(s)? Big Picture Based on the actions taken during and after the disruptive event(s): 1. What were the steps that were “done well”? 2. What were the “lessons learned”? 3. Are there any overall “improvements” that you would suggest? Conclusion 1. Are there any other individuals or organizations in the private industry that you think we should contact with respect to port resiliency and the extended intermodal supply chain?

Next: Chapter 4 - Case Study: Response to and Recovery from Superstorm Sandy »
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TRB’s National Cooperative Freight Research Program (NCFRP) Report 30: Making U.S. Ports Resilient as Part of Extended Intermodal Supply Chains focuses on identifying and elaborating on the steps needed to coordinate freight movements through ports in times of severe stress on existing operating infrastructures and services.

This report builds on NCHRP Report 732: Methodologies to Estimate the Economic Impacts of Disruptions to the Goods Movement System to provide a set of high-level guidelines to help seaport authorities with minimizing lost throughput capacity resulting from a major disruption.

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