Last March, the Biden Administration announced “the launch of Freight Logistics Optimization Works (FLOW), an information sharing initiative to pilot key freight information exchange between parts of the goods movement supply chain.”[1] The White House announcement noted:

“FLOW includes eighteen initial participants that represent diverse perspectives across the supply chain, including private businesses, warehousing, and logistics companies, ports, and more. These key stakeholders will work together with the Administration to develop a proof-of-concept information exchange to ease supply chain congestion, speed up the movement of goods, and ultimately cut costs for American consumers. DOT will lead this effort, playing the role of an honest broker and convener to bring supply chain stakeholders together to problem solve and overcome coordination challenges. This initial phase aims to produce a proof-of-concept freight information exchange by the end of the summer.”

Shortly after the White House announcement, journalist Jeff Berman reported, “FLOW has played to mixed reviews. While the 18 supply chain stakeholders from private business to ports are enthusiastic, feedback from [other] industry stakeholders about FLOW varied, for different reasons.”[2]

Data-sharing and Supply Chain Operations

For years, pundits have argued that supply chains need to become more digital in order to improve end-to-end visibility, improve optimization, reduce costs, and improve transparency. According to the White House announcement, those are also the aims of the FLOW initiative. The announcement states:

“FLOW is designed to support businesses throughout the supply chain and improve accuracy of information from end-to-end for a more resilient supply chain. Resiliency — the ability to recover from an unexpected shock — requires visibility, agility, and redundancy. The lack of digital infrastructure and transparency makes our supply chains brittle and unable to adapt when faced with a shock. The goods movement chain is almost entirely privately operated and spans shipping lines, ports, terminal operators, truckers, railroads, warehouses, and cargo owners such as retailers. These different actors have made great strides in digitizing their own internal operations, but they do not always exchange information with each other. This lack of information exchange can cause delays as cargo moves from one part of the supply chain to another, driving up costs and increasing goods movement fragility.”

Supply chain journalist Helen Atkinson (@baskerhel) writes, “Sound familiar? It should. Dozens of companies — from software vendors to ocean carriers and hybrid entities formed by acquisition mash-ups — have been putting a bead on exactly this idea for more than two decades.”[3] She adds, “They haven’t figured it out quite well enough to avoid the kind of freight bottlenecks that have put ‘supply chain’ in the mainstream news spotlight. But many supply chain technology aficionados are puzzled as to why the DOT has neglected to include these logistics tech vendors in its initiative.” As noted below, the lack of representation by several stakeholder sectors puzzles many experts.

Early Reactions to the FLOW Initiative

If experts agree that data-sharing is a good idea, you might wonder why some stakeholders have concerns about the FLOW initiative. As Berman noted above, early reactions to the FLOW initiative have been mixed. Ben Gordon, Managing Partner of Cambridge Capital, told Berman, “While the FLOW initiative is interesting and a great idea in principle, it leaves open the question of how it works in reality.” Gordon raised a few pertinent questions: “Why is the White House forming a supply chain data initiative but not including any supply chain software companies? Who is putting this initiative together? Where are the actual industry leaders in supply chain data?”

Dave Ross, Executive Vice President for Roadrunner Freight, believes some logistics stakeholders aren’t sufficiently represented in FLOW’s initial group. He told Berman, “I don’t expect it to gain much traction. Domestic freight transportation is significantly under-represented in that list of 18 initial partners. Truckload represents >80% of annual U.S. freight spend, and there is not one truckload carrier in the mix.” And Larry Gross, president of Gross Transportation Consulting, explained that stakeholders are loath to share proprietary data outside their own supply chains. He explained to Berman, “It is certainly true, in my opinion, that the supply chain difficulties have been exacerbated by poor information flow between the parties, which has tended to magnify the bullwhip effects. … Better information flow will only be helpful in such instances to the extent that the players are prepared to act. Having said that, I note the absence of both dray carriers and railroads. Both will need to be a part of this effort if it is to succeed.”

On the other hand, Brad Dunshee, Head of Global Marketing at CBX Software, sees signs of early buy-in — at least from port operators.[4] He cites U.S. Port Envoy John D. Porcari who stated he was “pleased with industry’s willingness to partner, share data, and develop new information that will help the goods movement chain operate more efficiently.” He also cites Port of Long Beach executive director Mario Cordero, who insists the port and its customers “are ready for a new era of data visibility that maximizes efficiency and minimizes delay in goods movement.” The Department of Transportation also published supportive comments from executives representing initial FLOW stakeholders.[5]

Some experts are wondering why the Biden Administration didn’t tap into ongoing digital supply chain efforts rather than create a new initiative. As Yossi Sheffi (@YossiSheffi), the Elisha Gray II Professor of Engineering Systems at the Massachusetts Institute of Technology, told Atkinson, “It does seem like they’re reinventing the wheel.” Other experts are simply grateful the supply chain is finally getting some attention. The staff at Shipping and Freight Resource note, “It took queues and queues of ships stuck outside global ports driven by surging consumer demand in the US, driven by a global pandemic for the US Government to sit up and take notice of the behemoth called Supply Chain.”[6]

Concluding Thoughts

As with most activities, whether FLOW proves beneficial will be in how it’s implemented. The devil is always in the details. Information sharing is always a delicate matter. Clearly, there is lots of room to improve data flow across the different segments of the supply chain. If it is to work, FLOW must respect and manage access to proprietary data and keep it secure. I know from experience that proprietary data isn’t shared easily. And, with blockchain technology potentially playing a significant role in the supply chain, data-sharing could become very problematic since all stakeholders must adhere to the same protocols. Additionally, we know that many (if not most) supply chains are global in nature. Will a U.S. data-sharing plan benefit or impede the global movement of goods? Fundamentally, I agree with the concept of FLOW. However, I think that the actual implementation is harder than the White House or Department of Transportation are willing to admit when it comes to access, sharing, and managing the data to achieve supply chain resilience without impacting market competitiveness and national security.

Footnotes
[1] Staff, “Fact Sheet: Biden-⁠Harris Administration Announces New Initiative to Improve Supply Chain Data Flow,” The White House, 15 March 2022.
[2] Jeff Berman, “FLOW initiative gets mixed reviews,” Supply Chain Management Review, 21 March 2022.
[3] Helen Atkinson, “Where Are the Tech Companies in Biden’s Supply Chain Initiative?” SupplyChainBrain, 22 March 2022.
[4] Brad Dunshee, “The Biden Administration’s New Supply Chain Data Sharing Initiative Finds Early Buy-In,” CBX Software Blog, 29 March 2022.
[5] Staff, “Industry Leaders Endorse Biden-Harris Administration Initiative to Improve Supply Chain, Increase Data Sharing,” U.S. Department of Transportation, 15 March 2022.
[6] Staff, “White House wants freight information to FLOW (Freight Logistics Optimization Works),” Shipping and Freight Resource, 16 March 2022.