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

Chapter: Chapter 2 - Supply Chains and Resilience: Definitions

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Page 121
Suggested Citation:"Chapter 2 - Supply Chains and Resilience: Definitions." National Academies of Sciences, Engineering, and Medicine. 2019. Freight Transportation Resilience in Response to Supply Chain Disruptions. Washington, DC: The National Academies Press. doi: 10.17226/25463.
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Page 121
Page 122
Suggested Citation:"Chapter 2 - Supply Chains and Resilience: Definitions." National Academies of Sciences, Engineering, and Medicine. 2019. Freight Transportation Resilience in Response to Supply Chain Disruptions. Washington, DC: The National Academies Press. doi: 10.17226/25463.
×
Page 122
Page 123
Suggested Citation:"Chapter 2 - Supply Chains and Resilience: Definitions." National Academies of Sciences, Engineering, and Medicine. 2019. Freight Transportation Resilience in Response to Supply Chain Disruptions. Washington, DC: The National Academies Press. doi: 10.17226/25463.
×
Page 123

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121 Conclusions The modelled disruption can represent many possible scenarios that cut off the waterway transportation of cereal grains from Chicago to New Orleans, including flooding, drought-lowered water levels and lock closures. The results of the model match the expected outcome. These results imply that when waterways are not available, railways would be the most likely used substitute mode. Rail transportation itself is prone to types of disruptions that, in some cases, might be the same as those affecting the waterways such as massive flooding. In such cases, shippers would have to decide whether to store the grain (something as noted that could be a feasible consideration) or to find alternative transportation via more circuitous routes (for example, still using rail but using network paths that bypass affected regions). A recurring theme in using the CMAP model was the appropriate use and application associated with the model itself. The CMAP model is mostly a long-range planning tool, verified and validated to movements as close as possible to what exists currently (or to some base year). Then, projections for the future, such as the increase or decline in commodity volumes, are combined with other projections, like employment changes and expected changes to land use, to approximate future flows based on extrapolation of the present conditions. It is designed to forecast freight flows moving to, within, and out of the Chicago Metropolitan Area. It must be used with care and caution when used for short-term planning such as disruption modelling. The other limitation to the model, as used in this study, is that it only modelled transportation mode shifts. In developing the final trip tables, an equation is used employing constant parameters based on empirical research. It seems likely, therefore, that using the model for such things as changing flow destinations or origins (one possible response strategy to a disruption) could require changes or extensions to the model that would require a new verifiable and validated model calibration. Such an effort was beyond the scope of this task. Other possible responses to a disruption, waiting and storing the grain, switching ports and waterways to detour around the waterway disruption, or changing buyers and subsequently shipment destinations, cannot be modelled without considerable additional work or by essentially developing a new model. Each of these other possible responses have complications that are related to firm behavior economics. It is also likely that the CMAP model does not capture all aspects of response behavior to shocks to the system. For example, without competition from water transportation, railroads would likely raise prices thus increasing the transportation costs to agricultural shippers (studies have shown that not surprisingly rail prices are lower in areas where the railroads compete on rates with the waterways). If the waterways were not available, the railway prices would be predicted to rise, which could make switching to railways no longer an attractive option. Since the model is not structured to show rail rates increasing in response to loss of a competitor, this aspect is not automatically represented in the model (although such could be modeled with more study of how much higher rail costs would likely rise).

Part 2 Guidance for Stakeholders to Mitigate and Adapt to Disruption on Supply Chains 122

123 Acknowledgments The following individuals contributed to the research as members of an Expert Working Group:  Erik Stromberg, Executive Director, Center for Advances in Port Management, Lamar University  Anne Strauss-Weider, Freight Planning Director, North Jersey Transportation Planning Authority  Rick Calhoun, Retired, 41 years in the grain and transportation industries, most recently served as President of Cargo Carriers  Katherine Touzinsky, Research Physical Scientist, ERDC Coastal and Hydraulics Laboratory, USACE Headquarters  Caroline Mays, Director, Freight and International Trade Section, Texas Department of Transportation

Next: Chapter 3 - Supply Chains and Resilience: Stakeholder Roles »
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Guidance to public and private stakeholders on mitigating and adapting to logistical disruptions to supply chains resulting from regional, multi-regional, and national adverse events, both unanticipated and anticipated, is provided in NCFRP (National Cooperative Freight Research Program) Research Report 39: Freight Transportation Resilience in Response to Supply Chain Disruptions.

The report makes a significant contribution to the body of knowledge on freight transportation and system resiliency and also includes a self-assessment tool that allows users to identify the current capability of their organization and institutional collaboration in preparing for and responding to supply chain disruptions.

Disruptions to the supply chain and their aftermath can have serious implications for both public agencies and companies. When significant cargo delays or diversions occur, the issues facing the public sector can be profound. Agencies must gauge the potential impact of adverse events on their transportation system, economy, community, and the resources necessary for preventive and remedial actions, even though the emergency could be thousands of miles away.

Increasing temporary or short-term cargo-handling capacity may involve a combination of regulatory, informational, and physical infrastructure actions, as well as coordination across jurisdictional boundaries and between transportation providers and their customers. For companies, concerns can include such issues as ensuring employee safety, supporting local community health, maintaining customer relationships when products and goods are delayed, and ultimately preserving the financial standing of the company.

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