Trade bodies call for Federal Office of Supply Chain

5 March 2021

Two US industry bodies have recommended the creation of a Federal Office of Supply Chain to replace a “disjointed system”.

In a report the Consumer Brands Association (CBA) and the Council of Supply Chain Management Professionals (CSCMP) said the office would provide expertise, facilitate coordination across federal government, and encourage collaboration with the private sector to boost economic stability and resilience.

Geoff Freeman, president and CEO of the CBA, said the pandemic had displayed just “how fragile and essential supply chains are, especially for vulnerable populations where access, affordability and availability are paramount”.

The report comes as the Biden administration launches plans to conduct a supply chain review of “critical and essential goods”.

The report looked at how extreme weather conditions, such as the polar vortex that recently caused freezing temperatures and failed power grids in Texas, impacted supply chains and how the disruption could be mitigated.

The report cited the Federal Emergency Management Agency’s 2019 Supply Chain Resilience Guide, which said the best way to deliver supplies to a disaster-impacted area was by re-establishing pre-disaster supply chains.

However for that approach to be feasible a roadmap to enhance supply chain competitiveness and resiliency needs to be created to remedy the current “disjointed” system.

The report said it was important to reform immigration policies to create a talent pipeline and develop new funding mechanisms to meet the long-term needs of freight transportation.

It also said it was vital to establish a framework to accommodate quickly emerging innovative vehicle technologies. 

Tom Madrecki, CBA’s VP of supply chain and logistics, said: “Between Covid-19, winter storms and more, there’s mounting awareness that we need to take action to shore up our supply chains. 

“Strategic policymaking and strong government leadership is a critical piece of that.”

The report pointed to a 2013 study by the World Economic Forum Enabling Trade: Valuing Growth Opportunities which estimated that reducing supply chain barriers could increase world GDP over six times more than removing all tariffs.

It said improving two key supply chain barriers – border administration and transport and communications infrastructure – could boost global GDP by nearly 5%.

The US government review, which will cover rare earth metals, semiconductors, car batteries and pharmaceuticals, follows shortages of key supplies and a growing awareness of dependency on foreign resources within the US.

The administration plans to launch a 100-day review into four key products, followed by an “in-depth” one-year review across the wider supply chain.

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