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Statement on Supply Chains Made by Secretary Buttigieg to the U S US Department of TransportationLock; Department of Commerce Advisory Committee on Supply Chain Competitiveness


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    Washington, DC - Earlier this week, Secretary Buttigieg provided an update on the Department's work to strengthen supply chains and lower costs for consumers. A transcript of his remarks to leaders is below. Read more from the U.S. Department of Commerce about the meeting here.

    Thanks very much. And thanks for bearing with me on having to shift gears and join you virtually, but I didn't want to miss a chance to spend a little time with you, and most importantly to thank you, as well as my colleagues, at the Commerce Department and Secretary Raimondo for your leadership. You said it just right in the intro.

    You know, I think a lot of us took on the supply chain questions, just in our case at the Department in regard to our new activities just slightly before and in your case, sometimes years before they became a household term. Supply chains used to be a term of art for industry insiders and transportation buffs, now it's very much on everybody’s minds, mainly as consequence of all of the ways that our supply chains were subjected to such upheaval during COVID. The big part of our focus is to make sure that even if the worst of the upheaval, at least that particular flavor of upheaval is behind us, that what we shouldn't put behind us is the attention and the sense of urgency around strengthening our supply chains, around shoring them up, and for that matter shoring them a little closer to home where possible.

    And I think in this moment right now where it feels like so many things are on fire around the world, and in our domestic situation, it's that much more important to pay attention to the fundamentals, not least because there are so many indications that one of the main things that we need to continue to do in the fight against inflation is to ensure that supply chains are smooth and work well for Americans. So I want to thank everyone on this committee for your service and your contributions, especially knowing the kinds of claims that are being made on your time, they really are helping to shape really important, and in some cases once in a lifetime decisions that we're making on everything from infrastructure development to long term macroeconomic policy.

    I do think it's worth pausing for a moment, just to think about how much has changed in a year or two years or three years with regard to our supply chains. And part of that is something that I think I will be reminded of for the rest of my life anytime the month of October comes near, because it was in October of 2021—exactly two years ago—that we started to see proclamations that Christmas was going to be canceled because nobody would be able to get anything that they needed. Small businesses were struggling to get supplies that they needed. Large industry obviously was feeling the pinch. We had a bow wave about 100 ships bearing down on the West Coast having all pretty much left China or Asia at the same time. And every part of the system from trucking, to warehousing, to ports was under strain.

    Importantly, as tough as that season was, Christmas wasn't canceled. Matter of fact, by that very same winter that followed that very same fall, what we experienced was an all-time record high in this group of goods through America’s Ports. And what it took to weather that particular strain included of course, a lot of work in the administration, a lot of work from you and organizations like those that you lead, and a lot of work from the workers who make it all happen. So, I’m thankful to everybody who’s part of that.

    And again, I want to make sure that even if the acuity of that particular moment has left us, what shouldn’t leave us are lessons of that moment and the discovery because I think it was a discovery for much of the American public and even for a lot of the policy world, of just how vulnerable or fragile or susceptible to disruption so many of our supply chains were. But I will say the work that has been done has gone a long way, economists believe one of the main reasons why inflation is down so much compared to a year ago is the work that has been done to reduce shipping costs and other supply chain inefficiencies.

    So now the point obviously is very much not to get American supply chains to look like what they looked like just before the pandemic—2019 status quo is not attractive, it was fine on a good day, but not able to handle a disruption. Our goal is to strengthen these supply chains and bring more of their elements home to American soil so they are not just fair-weather supply chains but one’s that can withstand everything that's coming at them.

    Let me very briefly update you on a few things that DOT is doing towards that. Hopefully you will find that these steps rhyme with the work of your committee and some of the recommendations you’ve made.

    First, we are thrilled to show that we have stood up and open the doors of our new freight office in the Department of Transportation. It's since within OST, the Office of the Secretary, which means it has a direct line to me and the visibility that's needed across the different modes. And it's an office we're committed to growing. We’ve already brought on experienced Deputy Assistant Secretary for Multimodal Freight, and we're going to continue to keep you updated on everything that's going on there and keep you plugged in because we got to continue to make sure that that work is being informed by your experience and we have good and nimble feedback.

    Second, we’re continuing to develop what we call FLOW. Freight Logistics Optimization Works is what it stands for. We have gotten more and more numbers of participants in this. It's about making sure that you all have access to a data infrastructure to make the most of America's fiscal infrastructure. It was built out of the insight that a lot of different players, from ocean shippers, to beneficial cargo owners, to port operators, to trucking companies, turned out not to have as much information as people might assume that they did about the movement of goods. And without a massive budget or very particular authorities, but really on a handshake, we were able to bring together parties who are now helping to share the data to make this really operational and really useful, I continue to be a big believer in what we’re doing with FLOW.

    Third, we're working with the State Departments of Transportation to inform a better national understanding of freight needs and investment opportunities. Obviously, most freight networks don't end at a state line. But the work of the states, which at the end of the day are deploying the majority of the funds, even federal funds that are going out, are always fitted to a sense of the national policy or national big picture. So, we're working with states to use those insights to try to make sure that we're making great investments and that they are thinking about each other in a more integrated way when they're making their decisions.

    Fourth, we are continuing to advance really exciting supply chain beneficial investments through the discretionary funding that is in our control, that doesn't just go out to the states. And it's incredibly rewarding when I get to go out on the road and go to places like PortMiami where I was [last] week,

    where we're increasing capacity and resiliency there. Or a freight rail project we're doing in Elkhart, Indiana close to where I grew up that not only enhances fluidity of goods movement in that spot, but also makes that no longer a place that trains back up directly in the path of hundreds of students walking to a high school. So there are community benefits and obviously major macroeconomic benefits to the thousands of projects we have underway, so many of which are improving freight rail, or roads, or bridges, or ports, or waterways, or any of the other elements that we count on, all part of the President's Infrastructure Law.

    And just the fifth thing I want to mention, the Trucking Action Plan. I was just in South Dakota a few weeks ago where we're funding new truck parking. That's something we're also doing in Texas, Florida, and Louisiana, a lot of other places. Truck parking is a great example of an unglamorous issue that has actually proven to be a life safety issue. And, ultimately, a supply chain issue because it's becoming a factor in our ability as a country to recruit and retain kind of truck drivers we need, who sometimes will leave the career, because of issues like the inability to find convenient, reliable, predictable access to safe parking.

    And speaking of recruiting and retaining. Another thing I've been doing visiting community colleges where we're funding training for veterans to get CDLs. I think about some of the people that I occasionally had to recruit to volunteer to join me when I was leading a ground movement between Bagram and Kabul that was notorious for IEDs. Obviously, these are the kinds of people who can be relied on, I think they can handle I-95. I think many of them are looking for good careers that are available to them when they come off active duty. So we've been able to buy down the cost of CDL training for a lot of veterans and it's an exciting pipeline into a really important career.

    So those are just five things I wanted to make sure you had a sense of. The big picture is that we have both policy attention and almost unprecedented hard dollars going into these supply chain issues and opportunities.

    And the last remark I'll make is that of course, what most of our supply chains have in common is that they're not owned and operated by the federal government. And so we are working from the outside in with the resources and policy tools we have, but knowing that it is players like you, like the folks at this table and the different constituencies and communities that you're helping give a voice to that are actually going to rise and fall on this work, and that to do so much work, which is why we count on the insights of this body to make sure we're getting it right and to quickly flag things that we need to either tear out of the way or double down on in order to help everyone succeed. Let me stop there. I think we have time for questions but again, really appreciate the chance to fill you in on some of our work.

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