Every holiday season retail and commerce receive a notable uptick in business. The USPS is expecting to ship around 5 million packages per day from Thanksgiving until Christmas and FedEx projects that they will deliver 385 million packages. While many people may be excitedly waiting by the door for presents, holiday shipping could face delays if certain supply chain issues aren’t resolved.
In the United States supply chains bottleneck are occurring because of regulations, worker shortages, and increased consumer demand. While a few supply chain disruptions were bound to happen as global economies opened back up and demand for products increased rapidly, several government-imposed barriers have made the problem worse.
>>>Regulatory Improvement is a Win for Infrastructure, the Environment<<<
To address supply chain inefficiencies 15 Republican governors recently signed Operation Open Roads. Operation Open Roads aims to ease regulations that are impeding on economic progress and hamstringing supply chains. Under Operation Open Roads, governors will use their authority, when allowable, to reduce harmful regulations such as cargo size or load restrictions to “allow cargo to move more efficiently” and “adjust hours of service constraints to provide truck drivers more time and flexibility.”
Additionally, Governors will look to “deregulate education and occupational licensure barriers to get more commercial truck drivers on the road,” and will work with different state agencies and the private sector to increase data sharing and efficiency for distribution centers, storage facilities, and other intrastate corridors. Importantly, Operation Open Roads will also address port congestion by committing harbors to operate at full capacity and by accepting Panamax ships that are stalled and waiting to be unloaded along the west coast due to port congestion.
Inefficiencies in supply chains hurt businesses and consumers alike. According to a report from GEP, COVID-19-caused disruptions in the supply chain cost businesses in America and the EU up to $4 trillion in lost revenues. Consumers feel the impact of these disruptions through rising shipping costs, higher prices, or increased inflation.
Solving the supply chain crisis is good for the environment as well. Laws such as the Jones Act or Foreign Dredge Act have contributed to increased port congestion, hurt conservation efforts to restore natural barrier islands, and inflate shipping costs. Collectively, these laws increase road congestion and push businesses to use trucking or freight to transport goods—both of which are 3.4 to 4.2 times more carbon intensive than shipping.
Global supply chains delays have also impacted the clean energy sector with the Solar Energy Association saying that supply chain constraints, among other factors, “pose downside risks to near-term growth [of the solar industry].” Additionally, vehicles that are allowed to service offshore wind farms in the United States must comply with the Jones Act which delays project completion time and increases costs.
Easing supply chain constraints makes economic and environmental sense. Operation Open Roads looks to increase economic productivity by reducing several government-imposed barriers that hinder development. To be clear, the supply chain issues are a result of both global and domestic factors and also a result of supply and demand. But some government laws and regulations have exacerbated the problem, and Operation Open Roads provides a pathway forward for domestic and local policy makers to address supply chain backlogs.
The views and opinions expressed are those of the author’s and do not necessarily reflect the official policy or position of C3.
