West Coast Ports: Better Supply Chain Information Could Improve DOT's Freight Efforts
What GAO Found
Some infrastructure and operations at major West Coast ports are strained in the face of recent changes in global shipping, but port stakeholders are attempting to address these constraints. For example, as the shipping industry deploys larger vessels capable of delivering more cargo, some port terminals lack big enough cranes, or other infrastructure, needed to handle these vessels. All major West Coast ports have planned or completed port-related infrastructure projects and implemented operational changes. For example, in Long Beach, California, the Gerald Desmond Bridge is being heightened to enable larger vessels to pass underneath. Port stakeholders also noted that efforts to address constraints at ports can be hampered by competing priorities and limited data. For example, most state and local government officials said that having information on ports' performance and industry supply chains—the end-to-end process of producing and distributing a product or commodity from raw materials to the final customer—would be helpful to target efforts to address constraints at ports.
Selected shippers were impacted by and responded to one recent port disruption in various ways. In July 2014, the labor agreement that covers most West Coast port workers expired and was not renewed until February 2015. During this period, as widely reported, ports remained open, but vessels backed up in harbors, and loading and unloading of cargo were delayed. In response to this disruption, 13 of 21 selected industry groups representing shippers of some of the top commodities moving through West Coast ports said at least some of their members modified their supply chains by, for example, diverting shipments to ports outside the West Coast or to alternate modes of transportation. All 13 said shippers' costs increased or revenues declined. Six industry groups said some members had difficulty altering shipping plans because of commodity attributes, such as perishability or prohibitive costs.
The Department of Transportation's (DOT) freight-related activities are increasingly multi-modal and inclusive of ports, but gaps exist in the information available to DOT and state and local governments about important aspects of supply chains. For example, a 2015 DOT report notes that movements of international trade between ports and domestic origin for exports and domestic destinations for imports are not measured. This report further states that this information could help DOT to assess international trade flows within the United States and strengthen the role of freight transportation in U.S. economic competitiveness. Federal guidance and leading practices in capital planning emphasize that good information is essential to sound decision making and achieving agency objectives. A few current DOT initiatives may help address some information gaps, but they are in the early stages. DOT has also articulated the need for supply chain information in its draft National Freight Strategic Plan, but does not outline how DOT will obtain this information or how it will be used. Based on a 2014 GAO recommendation, DOT is in the early stages of developing a written freight data strategy to improve the availability of national data on freight trends, among other things. Broadening its freight data strategy to include supply chain information could help DOT to think more strategically about the specific supply chain information needed to support its freight efforts and advance national freight policy goals.
Why GAO Did This Study
U.S. West Coast ports are critical to the national transportation freight network and global supply chains. Changes in global shipping and disruptions at ports can create congestion and economic hardship for shippers with resulting effects throughout supply chains. The 2015 Fixing America's Surface Transportation Act provides freight policy goals, including increasing U.S. economic competitiveness; reducing freight congestion; and improving the safety, reliability, and efficiency of the freight network. The act also established new DOT freight funding programs.
This report addresses: (1) how major U.S. West Coast ports have responded to recent changes in global shipping; (2) how selected shippers have been impacted by and responded to a recent port disruption, and (3) how DOT's efforts support port cargo movement and whether they can be improved. GAO conducted case studies of the three major port regions on the West Coast; interviewed key stakeholders—such as port authorities and state and local transportation agencies—for each region and 21 industry representatives, and evaluated DOT's freight efforts relative to criteria on using quality information to support decision-making.
In developing a freight data strategy, DOT should identify: what supply chain information is needed, potential sources of that information, data gaps, and how it intends to use this information to inform freight efforts. DOT concurred with the recommendation.
Recommendations for Executive Action
|Department of Transportation||To inform DOT's development of its national freight strategy and associated freight efforts, such as states' development of freight plans, newly established freight funding programs, and advancing DOT's efforts to implement national freight policies, in the development of the freight data strategy, the Secretary of Transportation should include a specific plan to identify: (1) appropriate freight data sources, information, and analytic tools for transportation modes involved in the freight network and supply chains; (2) data gaps that could help both the agency and states and local governments in the development of their freight plans, and an approach for addressing obstacles to developing high-quality, reliable supply chain information; (3) current and planned efforts that can provide insights into supply chains and their impacts on freight networks; and (4) how DOT plans to use the supply chain information and analytical tools to inform freight planning and programming.||
Since 2012, DOT freight-related activities have grown increasingly multi-modal and inclusive of ports. DOT's draft National Freight Strategic Plan, issued in October 2015, noted the importance of ports to the freight system and acknowledged challenges ports face adapting to changes in global shipping, such as accommodating larger vessels. However, in 2016, GAO reported that there were substantive gaps in DOT's supply chain information. For example, DOT's most comprehensive source of freight data at the time was not able to support supply chain analysis because it lacked information on the end-to-end movement of cargo from origin to destination and across modes. DOT officials acknowledged that better information on supply chains would help DOT's freight efforts. While DOT had some ongoing efforts that could help provide information on supply chains, these efforts were in early stages and DOT had not specifically outlined in the draft National Freight Strategic Plan how DOT planned to leverage its ongoing efforts, or begin new ones, to identify information sources, improve supply chain data, and advance analytic tools. DOT officials told GAO that they planned to develop a freight data strategy in conjunction with the finalization of the National Freight Strategic Plan. Therefore, GAO recommended that in developing this strategic plan, DOT should include a specific plan to identify (1) appropriate freight data sources, information, and analytic tools; (2) data gaps and an approach for addressing obstacles to developing high-quality supply chain information; (3) current and planned efforts to provide insights into supply chains; and (4) how DOT plans to use this information inform DOT's planning and programming. In 2020, DOT issued the National Freight Strategic Plan that identifies ongoing actions that combined with additional actions described in other DOT documentation or by officials' implements GAO's recommendation. Specifically, the plan identifies data sources, addresses obstacles, and gains insights into supply chains. The plan also identifies several data and research initiatives to link freight activity and supply chains. For example, DOT identifies a cross-modal freight data working group to develop and implement a freight data investment and management plan as well as plans to conduct research to understand generators of freight activity and supply chains. The Federal Highway Administration has created tools to visualize highway freight bottlenecks and interactive "dashboards" that allow users to assess freight movement by truck. The Federal Railroad and Maritime Administrations has been working to identify data needs and data sources that can be leveraged in a similar way. Additionally, DOT's ongoing National Freight Fluidity Program represents an effort to measure a representative sample of critical supply chains from end-to-end, across modes. DOT also has been working with the Department of Agriculture on a report describing how the agriculture sector depends on highways to get its products to market, both domestically and internationally, according to DOT officials. Finally, DOT officials identified how the department will use the new data sources and analysis tools envisioned in the strategic plan to better identify problems and aid in prioritizing and planning infrastructure investments. DOT officials also explained how improved freight data on supply chains will enable them to better evaluate applications to discretionary funding programs. As a result of these efforts, DOT is in a better position to use supply chain information to think more strategically about the specific supply chain information needed to support its freight efforts and advance national freight policy goals. This information will also help the department's decision making such as by prioritizing freight infrastructure needs and achieving its freight policy goals.