Freight Transportation Resilience in Response to Supply Chain Disruptions (2019)

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110 allowing the DMC to control the density of military traffic at any given time on all state roads, freeways, and Interstates. SDDCTEA also uses the Intelligent Road/Railroad Information Server (IRRIS)33, a real-time, web-based tool that enables users to obtain timely information about road conditions, construction, incidents, and weather conditions that might interfere with the rapid deployment of people, equipment, and munitions. Within Port Operations and Uses of the Commercial Fleet As noted earlier in this report, upon receipt of military movement requirements, the USTRANSCOM’s SDDC oversees military deployments, assigning workload to military ocean terminals and contracted commercial port facilities, and taking responsibility for the “strategic flow of deploying and redeploying forces, unit equipment, and sustainment supply in the SPOEs” (JCSa, 2013). On the ocean side of such military deployments, USTRANSCOM’s MSC has the primary responsibility for ensuring that these vessels arrive to meet the deploying units at the selected SPOEs, by an arrival time specified in a port call order. Ships belonging to or leased from commercial carriers by MSC34 carry out the overseas transport of equipment and supplies. Sealift assets available to the DOD consist of ships belonging to the MSC; ships in the Ready Reserve Force (RRF), which are owned and maintained by MARAD; and commercial ships that have been committed to the VISA. This commercial fleet support is essential to rapid military deployments, moving, for example, 63% of all military cargo during Operations Enduring Freedom and Iraqi Freedom (Lyons, 2016). This commercial fleet also provides both container and break bulk ‘liner service’ on scheduled trade routes in support of sustained military (re)deployments.35 Loading times for ships vary widely, from as little as two days for a fast sealift ship to more than five days for some of the larger container ships (CBO, 2005, Table 2). “Last minute” disruptions to the scheduled arrival of either landside or waterside vehicles/vessels can further exacerbate such delays and increase the costs they impose on shippers and/or their commercial carriers. Issues Associated with Ensuring Force Package Integrity Ensuring force package integrity when staging and stowing a deploying unit’s cargo is a requirement that can impact all the above concerns. The need to deliver complete combat units to a theater of war can pose significant additional logistics problems for within-port commercial operations, requiring not only extensive staging areas and loading equipment suitable for moving large and heavy vehicles, but also a seaport labor force trained in handling such non- containerized freight, typically under heavy security. This is also a significant departure from the practice of maximizing available square footage on a vessel, as might occur during normal commercial operations, requiring suitable training as well as coordination with port labor and stevedore services and any commercial rail and truck carriers being used. This ensures that a specific force package finds its way intact onto a pre-designated ship (Army Logistician, 2004). Without suitable training, on-the-day congestion created by rapidly executed PPOs could lead to potentially expensive delays to commercial as well as military cargo movements. Communications and Informational Aspects of Supply Chain Resilience A good deal of communication, much of it in real time, needs to take place among the various military, civilian, and commercial agents involved in the mobilization of military units. During a national security emergency and depending on state law either the governor or his/her designated agency representatives may activate local, state, or regional EOCs. The EOCs provide continuous communication, coordination and resource support during the deployment process. This includes provision of resources in support of both the response and recovery phases of an emergency. Past supply chain-based communications and information-sharing deficiencies identified by MARAD (as reported in BTS, 2018) and Stribling (2009) included the need for an in-transit cargo tracking capability, and up-to-date 33 https://www.sddc.army.mil/sites/TEA/Functions/SpecialAssistant/Pages/IRRIS.aspx 34 MARAD may also supply ships to support MSC deployment activities. 35 Requirements for additional liquid cargo carriers may also be activated by MARAD, using Voluntary Tanker Agreements (VTAs) with contracted commercial shipping companies.

111 information sharing protocols among trucking firms, railroads, port operators, USTRANSCOM and its deploying units, and the non-DOD federal agencies involved in port regulation and monitoring. This information sharing was needed on the composition, scheduling, port access requirements, cargo staging area locations and special handling needs associated with specific military unit moves. All this activity can place a burden on the IT resources used to move commercial cargos. Inter-Agency Coordination and Cooperation Keever and Soutuyo (FHWA, 2005) reviewed in detail (and stressed the importance of) DOD/DOT coordination activity, producing an FHWA-supported guide for state and local government agencies involved in military deployments. They identified six “key agencies” or agency types that need to be involved in such deployments: the state DOT; state and local departments of public safety and law enforcement; the SPOE; the military units deploying; state, regional and local emergency management agencies; and the state’s DMC. The DMC is housed within the National Guard and helps to plan, permit, and provide Convoy Movement Orders, and coordinate overland convoy movements to and from the seaport of embarkation. This includes obtaining the necessary permits for hauling oversized and overweight vehicles and equipment over public roads.36 In addition to direct contact between a DMC and a state’s civil agency officials during an emergency or other abnormal situation, the seaport and other civil authorities may also need to have contact with a Port Support Activity (PSA) officer, who is a member of the deploying unit’s originating military installation. Within the port, this onsite PSA representative reports to the SDDC and is responsible for, among other things, ensuring that equipment to be shipped out is properly marked, labeled, and prepared for loading, and for communicating any changes in port status back to the TBNs. On notification of a deployment, port officials and civilian support agencies will also meet with PSA officers to establish joint military/civilian/federal EOC priorities and communications channels, coordinate convoy operations including use of port labor and cargo staging areas and confirm port security requirements. In-Transit Visibility of Cargos and Cargo Handling Assets With almost 90% of military cargo lifts provided by commercial carriers, both inter-agency co-coordination and ITV of both surface lift and sealift assets is needed to ensure an efficient and sustainable supply chain. The efficiency of this supply chain necessarily impacts the commercial cargo traffic passing through the port at the same time, with both on-dock and within channel traffic congestion a concern. USTRANSCOM maintains and updates detailed procedures for moving these cargos into and through seaports (USTRANSCOM, 2014-2016) and attempts to resolve transportation or logistics conflicts during deployments with ITV reporting via its IGC system, including communication with deploying units, port and terminal operators, commercial transportation service providers, and service/supply depots. A variety of AITs are used to keep track of both in-transit as well as scheduled cargo details, “such as bar codes, magnetic strips, integrated circuit cards, optical laser discs (optical memory cards or compact discs), satellite tracking, and Radio Frequency Identification (RFID) tags used for marking or “tagging” individual items, equipment, air pallets, or containers” (JCS, 2013a, page IV-14). Kramek (2013) provides the following example of using AIT to improve the in-transit visibility of military cargo movements within the Port of Beaumont, Texas: 36 See https://ops.fhwa.dot.gov/publications/fhwahop05029/chapter_2.htm NB. Some information in this report is dated.

112 “The USNS Red Cloud, a 950-foot large, medium-speed roll-on/roll-off military cargo ship that spans the length of nearly three football fields, has just crossed through the Sabine pass and is transiting northbound for the Port of Beaumont. In the port, the Army’s U.S. SDDC 842nd Transportation Battalion is feverishly working with stevedores, Port representatives, its interagency partners to ready the more than 1,650 trucks, heavy tracked vehicles, and helicopters, as well as a port opening package that enables the landing of all the equipment for an infantry brigade that will be loaded aboard Red Cloud. Also working to organize this outload, though much less visible, is the Army’s global logistics management system (LMS), which allows the Army an ITV on all its equipment from the depot to the field. LMS information is entered with handheld wireless scanners and via passive scanners for shipments containing RFID tags, which is all made possible by the 842nd’s wireless network.“ The report also cautioned: “A cyber disruption here would impact almost 50 percent of all military cargo bound for overseas contingency operations and impact the U.S. military’s ability to respond to crisis or conflict. Infiltration of the Army’s LMS network would impact not just the Port of Beaumont but the Army’s worldwide logistics operations and allow adversaries to gain visibility on the movement of Army cargo at all modes of the supply chain, from truck to rail to ocean carriers.” Should such a disruption occur it would necessarily also impact the commercial operations within the port, whether such operations were directly or indirectly involved in the military moves. Regulatory and Institutional Aspects of Supply Chain Resilience The process of military supply chain operation and management is highly orchestrated, subject to extensive rules and regulations to support efficient, technologically-advanced, and closely monitored activity. Within the DOD, the USTRANSCOM has the overall responsibility for managing the movement of military personnel, equipment and supplies during large scale military deployments. Under the USTRANSCOM umbrella, the SDDC handles cargo movements overland and within ports, and the MSC handles cargo movements by sea. However, as specified in the US DOD’s 2013 publication “The Defense Transportation System”, numerous other government agencies, including non-DOD agencies, may play a part in a military deployment, requiring significant coordination among different branches of federal, state and local governments. This includes roles for various branches of the DOT and DHS. Each of these agencies needs visibility of action and asset utilization plans involving the nation’s seaport and terminal operators and mode-specific (road, rail, water) commercial carriers. Example Case Study: Port of Philadelphia, PA The Port of Philadelphia, PA (re-branded as PhilaPort in May 2017, and previously named the Philadelphia Regional Port Authority, or PRPA) has operated as one of the nation’s strategic military seaports since 2002. The port is located close to two of the U.S. Army's largest repair sites at Letterkenny Army Depot in Chambersburg, PA, and Tobyhanna Army Depot in Mount Pocono, while the Susquehanna depot just outside Harrisburg, PA is one of the largest DOD distribution warehouses in the world. The seaport is also part of the effort by the federal government to develop what it calls “Agile Ports”, which house terminals that can handle major military cargo surges without disrupting normal civilian business. Physical Processes The seaport’s Packer and Tioga Terminals have been used in past deployments/re-deployments (returning cargos), with up to three berths assigned to handle military cargo, along with 45 acres of staging area space set aside between these two terminals (June 2017 interview). The first big Army shipment was in May 2006 – some 700 pieces of heavy military equipment, including 20 helicopters and scores of fuel tank trucks and other vehicles of the Army's 10th Mountain Division, based in Fort Drum, NY. This was followed in July of 2006 by a series of shipments from the

113 Army National Guard's 42d Infantry Rainbow Division (headquartered at the Glenmore Road Armory in Troy, NY), consisting of helicopters, trucks, weapons, heavy equipment and supplies bound for Iraq. Workers at the port’s Packer Avenue Marine Terminal in South Philadelphia working simultaneously on a military vessel and three commercial ships, with cargo loading of the military vessel handled by some 150 members of the International Longshoremen's Association. In September 2009 the port authority’s Packer Avenue Marine Terminal supported the deployment needs of the 10th Mountain Division, headquartered at Ft. Drum, NY to Southwest Asia; and in October 2009 the port authority’s Tioga Marine Terminal in Port Richmond handled military cargo heading back from Iraq to the Pennsylvania Army National Guard facilities at Fort Indiantown Gap, PA (JOC, 2009). More recently, on November 8, 2011, the SDDC’s 841st Transportation Battalion performed the final leg of a major re-deployment mission from Afghanistan: discharging 258 pieces of U.S. Army cargo, including 33 helicopters, 225 containers, and various rolling stock from the commercial vessel M/V FREEDOM, at the Packer Avenue Marine Terminal (AJOT, 2011). Logistical Processes To accommodate deployment cargo surges, the port can stay open to handle military cargo arrivals and can handle some re-scheduling on a day-to-day basis. During contingency-initiated surges in overland military cargo movements the military shipments are given Level 1 priority. During less critical/immediate movement needs, such as force sustainment periods, military movements may be assigned a Level 2 priority by commercial carriers. Regular day-to- day communications are by Internet and cell phone. The Army National Guard sends its engineers to cargo marshalling areas to ensure/help with correct equipment use. (An example was given of needing to use an old railcar as a cargo ramp to handle large load items). Reported or expected delays at a port or elsewhere may lead to convoys being parked, with state and local traffic authority notifications issued, and close coordination with state (New York and/or Pennsylvania) Mobility Coordinators is needed here during rapid, multi-sourced deployments. Truck size (including vertical bridge clearance limits) and weight issues are common during a highway-supported mobilization. Request for rail shipments comes via an SDDC/USTRANSCOM bid, which establishes an RDD with the railroad. CSX, for example, ran unit trains from New York’s Fort Drum into the port’s Greenwich rail yard in South East Philadelphia, with offloading adjacent to the seaport in support of OIF. CSX usually requires two weeks’ notice to arrange empty railcar availability for similar military equipment moves, with moves typically occurring in unit trains. Track inspectors go out to make sure a rail route is suitable to handle such train movements. Railcars may be specialty cars provided by US DODX (e.g., to transport tanks using 6-axle specialty cars)37, or by commercial cars (open top cars and gondolas, box cars, TOFC/COFC, and specialty cars38, arranged via TTX railcar pooling company). Within the seaport, military ships also get priority at pre-assigned berths. Emergency re-berthing of vessels may also need to be accommodated. Some 30 military SDDC personnel have entered the port in the past to assist with military cargo handling. Helicopter-to-ship loading, for example, requires the presence of military personnel.39 Experience in handling military vehicles among the port’s commercial labor force is also an important requirement, and returning ships may need to have their equipment cleaned of any sand or organic matter, as an environmental safety concern. Some assistance with moving military cargo had been provided in the past by labor from the Port of Charleston, SC. However, to bolster the port's effort to get more military business, the Delaware River Maritime Enterprise Council, a nonprofit agency created by the state legislature, arranged for union members to be trained to “drive the equipment, 37 See, for example, Defense Transportation Regulation – Part II 28 October 2016: Chapter 202. Cargo Routing And Movement: ‘Defense Freight Railway Interchange Fleet (DFRIF)’ 38 See, for example, Defense Transportation Regulation – Part III. Mobility. Appendix AA. Rail Operations. June 2016: ‘multi-level, caboose, heavy-duty, and trailer/container on flatcar’ 39 Mentioned during an interview was a one-off instance of a tank needing to be transferred from a barge to a railcar.

114 load it on a ship and lash it down” at the United Defense Ground Systems Division plant in York, PA. (Holcomb, 2006). Communications and Information In past deployments the military has informed the seaport about the need for deployment support approximately one month ahead of time. As a ‘landlord port,’ the port authority then develops a cargo-handling plan within 48 hours of receiving a PPO and informs its terminal operators of the need to process a scheduled deployment. Daily communications among SDDC, the railroad and seaport were mentioned as being important to avoid any fort-to-port delays, as well as ensuring the availability of stevedore labor to unload the trains upon arrival next at the seaport. Regular day-to-day communications are by Internet and cell phone. The seaport has a 900 MHz radio system that might be used as a backup if these technologies went down. Institutional Processes A Port Readiness Sub-committee meets periodically and prepares quarterly readiness reports dealing with the port’s ability to handle military cargo deployments. The port has also participated in National Port Readiness Network meetings in the past.

115 APPENDIX C: CASE STUDY OF GRAIN SUPPLY CHAIN FROM ILLINOIS TO NEW ORLEANS A supply chain model was used to simulate the disruption of the shipment of cereal grains by barge between Chicago and New Orleans. The origin is the Illinois "Remainder FAF Region" (the portion outside of Chicago) and the destination is the New Orleans FAF Region. The grain industry is highly price-driven as farmers work with narrow profit margins and search for the best transportation costs possible. Cereal grains are the fourth largest tonnage in the U.S., and exports are a significant part of the cereal grains produced. Major competitors to the U.S., such as South American countries like Brazil and Argentina, have lower production costs, but the U.S. can compete in the global market because its efficient transportation infrastructure keeps shipping costs low. If a supply chain disruption causes the shipping costs to increase, U.S. grain suppliers could lose global market share, leaving a surplus of grain in the domestic U.S. market. A grain surplus would drive prices down significantly, and lower prices of grain could result in a loss in profits by producers. Therefore, minimizing the negative effects of a disruption in the supply chain is an important part of securing the nation’s global market share. Modelling a disruption can provide useful insights into how the supply chain responds to such an interruption. A disruption in this analysis was defined as an event, natural or manmade, that interrupted the flow of grain from its origin to its destination. Examples of a disruption event include natural disasters (e.g. flooding, drought) and infrastructure failures (e.g. lock failures). As before, the assumption in this analysis was that the distributor can only change the transportation mode and not the route or business partner. Vital to keeping down shipping costs for cereal grains is the efficient operation of the U.S. inland waterway system. The waterways overall have the greatest cost advantage for long-hauls, over both rail and highway (truck) long hauls. Trucks are useful and efficient at moving cereal grain short distances (less than 250 to 400 miles), with railroads possessing a cost advantage over truck for longer distances, but barges overall have the greatest cost advantage for long-hauls. The Agent-Based Supply Chain Modeling Tool is a computer code developed for the CMAP to simulate the transport of freight into, out of, and within the Chicago metropolitan area. In this study, certain parameters within the CMAP model were manipulated to simulate a disruption in the flow of grain between Illinois and Louisiana. Grains are shipped between Illinois to New Orleans mainly by barge and truck. Using information gathered through industry outreach and internet research, the outputs from the freight model simulations were validated. When waterway transportation was removed as an option, the model showed that the barge traffic shifted to rail. The railways replacing the waterways is consistent with the literature and with our interviews with industry officials in this market. About the CMAP Model The Agent-Based Supply Chain Modeling Tool developed for CMAP is a travel demand model that simulates the transport of freight between supplier and buyer businesses in the U.S., focusing on movements in the Chicago metropolitan area. In this study, certain parameters within the CMAP model were manipulated to simulate a disruption in the flow of grain between Illinois and Louisiana. The CMAP model uses FAF3 data, unit costs and times by mode per origin and destination pair, and other data such as county employment data as inputs. FAF3 provides origin-destination commodity flow data by SCTG2 for all the country. Cereal grains are represented by SCTG2 #02 in the FAF3 dataset, consisting of wheat, corn, rye, barley, oats, grain sorghum, rice and other cereal grains including seed, but not including sweet corn, soy beans or other oil seeds.

116 The model is built in the “R” programming language, a computer programming platform with robust statistical analysis capabilities. The model consists of 13 major parts that work sequentially. These parts, called “steps” in the model, include (based on the order of use): 1) firm synthesis, 2) supplier selection, 3) FAF flow apportionment, 4) business location assignment, 5) distribution channel, 6) shipment size, 7) mode path selection, 8) vehicle choice tour pattern, 9) stop sequence, 10) stop duration, 11) time of day, 12) preparation of trip tables, and 13) CMAP zone trips. Steps must be run sequentially. For this study, only steps 1 through 7 were completed. Step 7 is the ""mode path" choice portion of the code. This step allocates commodity flows among the minimum logistic cost paths, based on input variables such as unit cost and time between specific origins and destinations. Inputs that are important for developing the base case are the annual FAF commodity flows, as well as transportation cost and time estimates. The CMAP model uses FAF3 data, unit costs and times by mode per origin and destination pair, and other data such as county employment data as inputs. FAF3 provides origin-destination commodity flow data by SCTG2 for all the country. Cereal grains are represented by SCTG2 #02 in the FAF3 dataset, consisting of wheat, corn, rye, barley, oats, grain sorghum, rice and other cereal grains including seed, but not including sweet corn, soy beans or other oil seeds. The model is built in the “R” programming language, a computer programming platform with robust statistical analysis capabilities. The model consists of 13 major parts that work sequentially. These parts, called “steps” in the model, include (based on the order of use): 1) firm synthesis, 2) supplier selection, 3) FAF flow apportionment, 4) business location assignment, 5) distribution channel, 6) shipment size, 7) mode path selection, 8) vehicle choice tour pattern, 9) stop sequence, 10) stop duration, 11) time of day, 12) preparation of trip tables, and 13) CMAP zone trips. Steps must be run sequentially. For this study, only steps 1 through 7 were completed. Step 7 is the ""mode path" choice portion of the code. This step allocates commodity flows among the minimum logistic cost paths, based on input variables such as unit cost and time between specific origins and destinations. Inputs that are important for developing the base case are the annual FAF commodity flows, as well as transportation cost and time estimates. The model produces a list of commodity shipments by mode and converts them to daily vehicle truck trip tables that can be assigned to the national and statewide networks. The model forecasts the allocation of commodities among competing supply chains. The freight generation modeling step is based on the mesoscale40 freight model, using FAF3 data, and can only model movements that originate (or terminate) in the counties defined by the model as falling within the Chicago area. Error! Reference source not found.1 shows the counties in the Chicago Metropolitan area. The CMAP model area consists of 15 Illinois counties, three Wisconsin counties, and three Indiana counties. In defining the study area for modelling the cereal grain supply chain disruption, the origin study area was limited to the 15 Illinois counties in the CMAP model area (shown in blue in Figure C-1). Error! Reference source not found.Figure C-2 shows the parishes in New Orleans that served as destination zones. 40 Mesoscale means only mode choice and FAF serves as the surrogate for Trip Generation and Trip Distribution.