There are many factors impacting inflation trends — including supply chain bottlenecks that reduce throughput and dampen efficiency. But according to a recent analysis, a public-private partnership launched two years ago by the U.S. Department of Transportation (USDOT) may be making a difference.
The Freight Logistics Optimization Works (FLOW) program aims to improve supply chain forecasting and planning by expanding data sharing among stakeholders. Although there were early skeptics, program participation continues to grow, with members citing various benefits linked to deeper insights about current and anticipated supply chain capacity.
In addition to its influence on inflation and other positive impacts, FLOW is playing a key role in effectively diverting traffic from a major U.S. port that was abruptly shut down and has recently expanded the type and volume of data available to fuel continued supply chain optimization.
What is FLOW?
USDOT describes FLOW as a “public-private partnership among industry and government to build a forward-looking, integrated view of supply chain conditions in the United States.”
According to the agency, FLOW data “helps forecast how current capacity and throughput will fare against future demand, helping participating companies anticipate changes in supply chain throughput and take proactive step[s] to mitigate previously unanticipated delays.”
The data collected includes purchase order (PO) information from importers, as well as logistics supply, demand, and throughput data from participants (e.g., beneficial cargo owners, ocean carriers, ports, terminals, railways). After the USDOT anonymizes, regionally segments, and aggregates the data, it is shared with participants — providing “a broad, daily view of the current conditions of the overall logistics network” that extends beyond their own operations.
In describing the benefits of FLOW data, the USDOT notes that importer POs drive the demand for logistics services. When future demand data like this is aggregated and coupled with regional supply and throughput data across different transportation modes, participants can forecast whether current capacity and throughput will meet future demand needs. Armed with these insights, FLOW participants can then “optimize operations and ensure healthy throughput.”
“By sharing aggregated regional data from multiple participants, FLOW provides a broad and timely level of transparency beyond the visibility and scope of any single company’s operations,” USDOT says. “Participants can use this data to better understand how regional logistics capacity can service current and future demand, as well as how demand fluctuations may impact their own utilization of assets and logistics throughput. Because demand data is shared in advance of when respective logistics services would be required, supply-side optimizations such as modifying supply capacity levels, service level mixes, and service expectations can be made by participants in a more proactive and responsive manner. This in turn can help the industry mitigate bottlenecks and service-level volatility.”
Growing momentum
As we noted in our June 2022 post about FLOW, there was a lot of excitement about the potential for this new program, as well as skeptics who doubted it could work.
Fast forward to today, when FLOW has blossomed from its initial 18 pilot participants to 75 members and counting (as of May 9).
And in its March 20 announcement that coincided with the second anniversary of FLOW’s launch, USDOT announced that the FLOW platform had begun to publish data on inland freight hubs, including rail terminal and warehouse end destination data, “that will enable FLOW members to have an enhanced view of future container import volumes and traffic. This data will help inform capacity decisions and avoid supply chain challenges, such as delays, for FLOW participants that will ultimately help lower costs for consumers.”
The announcement also highlighted a recent analysis from the White House Council of Economic Advisors that found that “supply chains normalizing in some form explain more than 80% of the disinflation the U.S. has experienced since 2022.”
“Two years ago, we launched FLOW, the first public-private platform of its kind to share data on supply chains in order to help goods move quickly and cheaply,” said U.S. Transportation Secretary Pete Buttigieg in a statement. “The Biden-Harris Administration’s efforts to strengthen American supply chains have helped reduce inflation from pandemic peaks – and today, with the expansion of FLOW, we expect to see even greater benefits to American families and businesses.”
In the announcement, USDOT underscored key points about FLOW, including the fact that its data is also being used to “better estimate port and inland network congestion and monitor cargo shifts due to the Houthi attacks in the Red Sea.”
FLOW testimonials
In the two years since FLOW’s launch, the program has experienced rapid growth, and participants have a lot of positive things to say about its impact. Here are just a few of the testimonials included in the USDOT announcement.
Jim McCullen, Chief Information Officer with Century Supply Chain Solutions: “…The U.S. supply chain infrastructure consists of myriad players that create either the supply or demand components. For the first time in history, we have a common channel, a single source of truth that collects, organizes, and presents information that can help each of those players deliver a higher quality of service to their customers.”
David Vaisberg, Managing Director, Data Science with Elion Partners: “After learning of the FLOW initiative, we instantly recognized its potential and aspired to be part of the team tasked to enhance the U.S. supply chain. Our experience to date has been extraordinary. …”
Yone Dewberry, Chief Supply Chain Officer with Land O’Lakes, Inc.: “…I am incredibly proud of how this groundbreaking public-private partnership is ushering in a new era of data-driven, responsive, and agile decision-making to strengthen the supply chain ecosystem. The FLOW initiative is a testament to the power of collaboration, where the public and private sectors have converged to equip stakeholders with the insights and tools to solve the supply chain issues of tomorrow. … I look forward to the influx of new companies joining our ranks, recognizing that their participation not only enriches the perspectives and expertise driving FLOW forward but also enhances the depth and accuracy of the data informing our decisions.”
Dr. Noel Hacegaba, Chief Operating Officer with Port of Long Beach: “… We commend USDOT for its vision and thank the staff for their leadership in bringing the supply chain community together to holistically and collaboratively close the gap on one of the industry’s most glaring challenges – the lack of visibility. FLOW is a game-changer.”
Gene Seroka, Executive Director with Port of Los Angeles: “FLOW provides participants with unprecedented access to supply chain data, empowering our port users with the ability to anticipate potential bouts of congestion. FLOW has become an invaluable tool to cargo owners seeking to manage their supply chains, and importantly, FLOW has become a safe and trusted repository of supply chain data, opening up possibilities for additional applications to support supply chain resiliency. …”
Jesse Whitfield, Director of Global Ocean Freight with UPS: “FLOW members are getting more granular views of their supply chain allowing them to consider not only alternate routings but also potential shifts in their distribution networks. That directional insight is invaluable when it comes to being able to pivot during times of disruption. …”
FLOW at work
Speaking of disruption…
When the Francis Scott Key Bridge collapsed after being struck by a containership on March 26, access to the Port of Baltimore was blocked, worrying supply chain stakeholders about the impact.
Although officials initially couldn’t predict when the port would reopen, USDOT confirmed in an April 22 meeting with East Coast port leaders that the entire channel should be “reopened by the end of May, when all vessels will be able to access the Port again.”
Also during the meeting, port leaders shared how operations at their ports had been affected by the need to absorb Baltimore’s maritime traffic during the disruption.
“Those ports have so far been able to accommodate the increase in container, breakbulk, dry bulk and RoRo traffic, and have worked to make sure Maryland-based truck drivers can access their facilities,” a readout of the meeting said.
A key factor that helped optimize diversions and limit disruptions? FLOW.
A readout of an April 2 meeting between USDOT and affected stakeholders provides more details.
“As part of the Biden-Harris Administration’s ongoing work to identify and mitigate potential supply chain disruptions caused by the closure of vessel traffic in and out of the Port of Baltimore, the U.S. Department of Transportation (DOT) held a call today with shippers, ports, ocean carriers, railroads, trucking companies, and others participating in the FLOW initiative to discuss changes in container traffic into East Coast ports,” the readout explains. “…DOT staff discussed an analysis of FLOW data on how inbound container traffic has changed over the past week at the Port of Savannah and Port of New York and New Jersey and what is expected over the next five weeks. Current FLOW data does not show signs of bottlenecks at the two ports in the near term. DOT committed to providing weekly data updates to FLOW participants throughout the closure of the Port of Baltimore as diversions continue.”
Although two years may seem a relatively short amount of time to get a public-private partnership up and running enough to make a difference, it looks like FLOW is doing exactly that — with no signs of slowing down.
