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

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© 2019 National Academy of Sciences. All rights reserved. ACKNOWLEDGMENTS The research for this document was conducted through one or more programs administered by the Cooperative Research Programs (CRP) of the Transportation Research Board (TRB) of the National Academies of Sciences, Engineering, and Medicine:  Airport Cooperative Research Program (ACRP) research is sponsored by the Federal Aviation Administration (FAA).  Hazardous Materials Cooperative Research Program (HMCRP) research is sponsored by the Pipeline and Hazardous Materials Safety Administration (PHMSA).  National Cooperative Freight Research Program (NCFRP) research is sponsored by the Office of the Assistant Secretary for Research and Technology.  National Cooperative Highway Research Program (NCHRP) research is sponsored by the American Association of State Highway and Transportation Officials (AASHTO), in cooperation with the Federal Highway Administration (FHWA).  National Cooperative Rail Research Program (NCRRP) research is sponsored by the Federal Railroad Administration.  Transit Cooperative Research Program (TCRP) research is sponsored by the Federal Transit Administration (FTA) in cooperation with the Transit Development Corporation. COPYRIGHT INFORMATION Authors herein are responsible for the authenticity of their materials and for obtaining written permissions from publishers or persons who own the copyright to any previously published or copyrighted material used herein. Cooperative Research Programs (CRP) grants permission to reproduce material in this publication for classroom and not-for-profit purposes. Permission is given with the understanding that none of the material will be used to imply endorsement by TRB and any of its program sponsors of a particular product, method, or practice. It is expected that those reproducing the material in this document for educational and not-for-profit uses will give appropriate acknowledgment of the source of any reprinted or reproduced material. For other uses of the material, request permission from CRP. DISCLAIMER To facilitate more timely dissemination of research findings, this pre-publication document is taken directly from the submission of the research agency. The material has not been edited by TRB. The opinions and conclusions expressed or implied in this document are those of the researchers who performed the research. They are not necessarily those of the Transportation Research Board; the National Academies of Sciences, Engineering, and Medicine; or the program sponsors. The Transportation Research Board, the National Academies, and the sponsors of the National Cooperative Freight Research Program do not endorse products or manufacturers. Trade or manufacturers’ names appear herein solely because they are considered essential to the object of the report. This pre-publication document IS NOT an official publication of the Cooperative Research Programs; the Transportation Research Board; or the National Academies of Sciences, Engineering, and Medicine. Recommended citation: Meyer, M. D., S. McLeod, T. Fidell, H. Gajjar, D. Sood, M. Kamali, R. Wingate, D. O. Willauer, F. Southworth. 2019. Freight Transportation Resilience in Response to Supply Chain Disruptions. Pre-publication draft of NCFRP Report 39. Transportation Research Board, Washington, D.C.

Contents Part 1 Improving Freight Transportation Resilience in Response to Supply Chain Disruptions 3 Summary ...................................................................................................................................................................... 11 Chapter 1: Research Motivation and Approach ........................................................................................................... 17 Chapter 2: System Performance and Supply Chain Resiliency: Review of the Literature ........................................... 21 Chapter 3: System Resiliency Scenarios and Case Studies ........................................................................................ 39 Chapter 4: Synthesis of Results of Case Studies and Interviews ................................................................................ 43 Chapter 5. Analysis Tools and Models for Supply Chain Resilience ............................................................................ 61 Chapter 6: Guidance for Stakeholder Mitigation and Adaptation of Supply Chains to Disruption ................................ 75 Chapter 7: Implementing the Results of This Research ............................................................................................... 78 Chapter 8: Future Research ......................................................................................................................................... 80 Chapter 9: Conclusion .................................................................................................................................................. 84 Bibliography ................................................................................................................................................................. 86 Appendix A: Inland Waterway/Locks Scenario 5 .......................................................................................................... 94 Appendix B: Responding to Surge in Freight Traffic Caused by Military Deployments .............................................. 105 Appendix C: Case Study of Grain Supply Chain from Illinois to New Orleans ........................................................... 115 Part 2 Guidance for Stakeholders to Mitigate and Adapt to Disruptions on Supply Chains 122 Guidance for Stakeholders to Mitigate and Adapt to Disruptions to Supply Chains ................................................... 125 Introduction ................................................................................................................................................................ 125 Supply Chains and Resilience: Definitions ................................................................................................................. 126 Supply Chains and Resilience: Stakeholder Roles .................................................................................................... 129 Characteristics of Disruptions .................................................................................................................................... 130 Framework for Making Supply Chains More Resilient ............................................................................................... 133 Strategies for Enhancing Supply Chain/Transportation System Resilience ............................................................... 144 Bringing It Together ...................................................................................................................................... 153 2

Part 1 Improving Freight Transportation Resilience in Response to Supply Chain Disruptions 3

4 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

5 CONTENTS SUMMARY .................................................................................................................................................. 11  CHAPTER 1: RESEARCH MOTIVATION AND APPROACH ................................................................... 17  1.1 INTRODUCTION ........................................................................................................................................................... 17  1.2 PROJECT PURPOSE ...................................................................................................................................................... 18  1.3 RESEARCH APPROACH AND METHODOLOGY ..................................................................................................................... 18  CHAPTER 2: SYSTEM PERFORMANCE AND SUPPLY CHAIN RESILIENCY: REVIEW OF THE LITERATURE ............................................................................................................................................. 21  2.1 INTRODUCTION ........................................................................................................................................................... 21  2.2  DISRUPTION TYPES AND CHARACTERISTICS ..................................................................................................................... 21  2.2.1 Lead Time ............................................................................................................................................. 22  2.2.2 Geographic Scope ................................................................................................................................. 24  2.2.3 Disruption Impact – Level of Loss ......................................................................................................... 25  2.3 MILITARY SURGES ....................................................................................................................................................... 26  2.4 DISRUPTION CLASSIFICATION ......................................................................................................................................... 27  2.5 SYSTEM RESILIENCY FACTORS ........................................................................................................................................ 29  2.6 POTENTIAL MITIGATION STRATEGIES .............................................................................................................................. 30  2.6.1 Commercial Operations ........................................................................................................................ 30  2.6.2 Military Operations .............................................................................................................................. 35  2.7 CONCLUSIONS ............................................................................................................................................................ 37  CHAPTER 3: SYSTEM RESILIENCY SCENARIOS AND CASE STUDIES ............................................. 39  3.1 SUPPLY CHAIN SELECTION METHODOLOGY AND CRITERIA ................................................................................................... 39  3.2 OVERVIEW OF CANDIDATE SUPPLY CHAIN FLOW SCENARIOS ............................................................................................... 41  CHAPTER 4: SYNTHESIS OF RESULTS OF CASE STUDIES AND INTERVIEWS ............................... 43  4.1 OVERVIEW OF FINDINGS ............................................................................................................................................... 43  4.1.1 Location ................................................................................................................................................ 44  4.1.2 Disruption Type ..................................................................................................................................... 44  4.1.3 Commodity ........................................................................................................................................... 45  4.1.4 Transportation Mode/Asset ................................................................................................................. 46  4.2 PRIORITIZING STRATEGIES ............................................................................................................................................. 47  4.2.1 Pre‐disruption ....................................................................................................................................... 47  4.2.2 During a disruption ............................................................................................................................... 48  4.2.3 Post disruption ...................................................................................................................................... 49  4.3 INFORMATION STRATEGIES ........................................................................................................................................... 49  4.3.1 Internal Communication ....................................................................................................................... 50  4.3.2 External Communication ...................................................................................................................... 50  4.4 LOGISTICAL STRATEGIES ............................................................................................................................................... 51  4.5 INSTITUTIONAL STRATEGIES ........................................................................................................................................... 54  4.6 PHYSICAL STRATEGIES .................................................................................................................................................. 55  4.7 REGULATORY FACTORS ................................................................................................................................................ 56  4.7.1 Jones Act ............................................................................................................................................... 56  4.7.2 Stafford Act........................................................................................................................................... 56  4.8 BARRIERS TO QUICK RECOVERY ..................................................................................................................................... 57  4.8.1 Organizational Culture ......................................................................................................................... 57  4.8.2 Collaboration ........................................................................................................................................ 57  4.8.3 Resources .............................................................................................................................................. 58  4.9 CONCLUSION ............................................................................................................................................................. 59  CHAPTER 5: ANALYSIS TOOLS AND MODELS FOR SUPPLY CHAIN RESILIENCE ......................... 61  5.1 INTRODUCTION ........................................................................................................................................................... 61 

6 5.2 TRADITIONAL TRIP BASED FREIGHT PLANNING MODELS ..................................................................................................... 62  5.3 BEHAVIORALLY BASED, SUPPLY CHAIN MODELING OF NETWORK DISRUPTIONS ....................................................................... 63  5.4 CASE STUDY: THE PHARMACEUTICAL SUPPLY CHAIN FROM FLORIDA TO TEXAS ....................................................................... 65  5.4.1 About FreightSim and the Florida Statewide Model............................................................................. 65  5.4.2 Base Case .............................................................................................................................................. 67  5.4.3 Disruption Case ..................................................................................................................................... 68  5.4.4 Results of the Analysis .......................................................................................................................... 69  5.5 EVALUATING FREIGHT FLUIDITY ..................................................................................................................................... 71  5.5.1 Freight Fluidity Measures ..................................................................................................................... 72  5.5.2 Freight Fluidity Case Study ................................................................................................................... 73  5.6 CONCLUSION ............................................................................................................................................................. 74  CHAPTER 6: GUIDANCE FOR STAKEHOLDER MITIGATION AND ADAPTATION OF SUPPLY CHAINS TO DISRUPTION ......................................................................................................................... 75  CHAPTER 7: IMPLEMENTING THE RESULTS OF THIS RESEARCH ................................................... 78  CHAPTER 8: FUTURE RESEARCH .......................................................................................................... 80  CHAPTER 9: CONCLUSION ..................................................................................................................... 84  BIBLIOGRAPHY ......................................................................................................................................... 86  APPENDIX A: INLAND WATERWAY/LOCKS SCENARIO 5 ................................................................... 94  APPENDIX B: RESPONDING TO SURGE IN FREIGHT TRAFFIC CAUSED BY MILITARY DEPLOYMENTS ....................................................................................................................................... 105  APPENDIX C: CASE STUDY OF GRAIN SUPPLY CHAIN FROM ILLINOIS TO NEW ORLEANS ...... 115