The Biden administration has unveiled an ambitious cross-government programme to tackle long-standing issues in the US supply chain.
The Department of Homeland Security’s Supply Chain Resilience Center (SCRC) is a cross-government partnership whose purpose is to collaborate with the private sector on mitigating risk.
In announcing the plan this week, White House officials said using both domestic and international partnerships “can help diversity and strengthen the US supply chain”, adding that the pandemic “taught us that hyper-concentration of supply can be a problem”.
The new body will publish an annual report on vulnerabilities at US seaports, as oversee scenario planning to help mitigate threats to the supply chain.
Another part of the SCRC’s work is to ensure CHIPS and Science Act funding is prioritised, to ensure the delivery of semiconductor manufacturing equipment.
The CHIPS for America Act was signed into law in January 2021, and provides funding and incentives to support semiconductor research, development, and manufacturing in the US. Its goal is to strengthen the country's semiconductor industry, and ensure its competitiveness in the global market.
Under Secretary for Policy, Robert Silvers, says: “The SCRC will bring government and industry around the table so we can become more prepared and coordinated for addressing these challenges.
“Our job is to cut points of friction, streamline lawful trade, address security vulnerabilities head on, and help ensure American consumers and businesses can access the products they need.
Jesse Rogers, an Economist at Moody’s Analytics told Supply Chain Digital that, although welcome, SCRC was “unlikely to resolve some of the more complex issues plaguing supply chains in one go”.
He added: “Supply chain stress has eased measurably over the past year and the Biden administration’s announcement is another step in the right direction.
“Measures targeting pharmaceuticals, climate infrastructure, data security and logistics will bolster resilience and get the ball rolling on smart infrastructure and global cooperation.”
Freight logistics programme gets shot in arm
In related news, the Biden administration also revealed advancements in the Department of Transportation’s (DoT) digital-information sharing system, the Freight Logistics Optimization Works (FLOW) program.
FLOW was born in March 2022, when the ports of Los Angeles and Long Beach were crippled with congestion.
The container backup created a massive imbalance of supply chain issues, which exacerbated supply and demand and pushed product prices higher.
At the time, LA port officials said that around 40% of the import containers on its terminals were idling for at least nine days – seven days longer than in pre-pandemic times.
FLOW’s goal is to reduce inflation by connecting all facets of the supply chain so logistics managers will be able to identify potential bottlenecks and track their goods from the dock to the doorstep.
These US supply chain developments follow recent news that The Biden administration is set to sink $653mn into funding 41 domestic port improvement projects, as part of the Port Infrastructure Development Program (PIDP).
It is part of President Biden’s Investing in America agenda, to increase efficiency at coastal seaports, Great Lakes ports, and inland river ports.
The investment is part of the largest dedicated funding for ports and waterways in US history – with a total of nearly $17bn being ring-fenced as part of the President’s Bipartisan Infrastructure Law.