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On 15 March, the Biden administration and U.S. Department of Transportation launched a pilot program to have ocean carriers, ports, and retailers share data with each other to improve the flow of goods, speed up delivery times and ease supply chain congestion. The initiative is called Freight Logistics Optimization Works (FLOW) and includes eighteen participants, including port authorities, warehousing, and logistics companies. Big names such as the Ports of LA and Long Beach, MSC, CMA CGM, Target, FedEx, UPS and C.H. Robinson are among the companies that have already signed up to the initiative.

While it is certainly a positive thing that the U.S. administration continues its efforts to tackle supply chain congestion, the success of the initiative is dependent on several factors. Scale is important for ventures of this type and therefore more participants are needed to build out the data exchange. It is also necessary to bring on board companies with physical assets, such as trucking and railroad companies, as well as software companies, which can provide deeper insights into supply chain data and visibility.

But Biden’s administration seems determined to block mergers it views as anticompetitive and that harm the supply chain. Earlier this week, Cargotec and Konecranes, both listed Finnish makers of cranes and other cargo handling equipment, abandoned a $5bn merger just hours before the U.S. Justice Department was set to file suit. The merger would have eliminated competition for shipping container handling equipment used by port customers, stated the Justice Department’s Antitrust Division.

Overall, the most recent initiatives demonstrate the strong commitment of the U.S. administration to strengthen critical supply chains. It is stepping up investments in both digital and physical infrastructure, but also its scrutiny on container shipping alliances. It is attempting to regulate an industry that has been allowed to operate without any intense regulation for a long time in order to bring down shipping costs, when in reality, bigger economic forces, such as soaring consumer demand and persistent bottlenecks, are at work.

Source: Transport Intelligence, 31 March 2022