Supply Chain Frontiers issue #23. Read all articles in this issue
Governments must be able to respond to disasters both natural and man-made, but what about their responsibilities during the economic recovery phase of calamities when freight and transportation systems could be crippled? New research carried out by the MIT Center for Transportation & Logistics (MIT-CTL) and the Washington State Department of Transportation (WSDOT), shows that state plans for returning freight systems to normality after a disaster are seriously lacking. The research team has created a framework that will help states fix this critical flaw in their approach to disaster preparedness.
At the heart of the issue is a misunderstanding about emergency situations. Emergency response can be defined as all the actions taken prior to, during, and just after an incident with the onus being on saving lives, minimizing damage and recuperation over the long term. Recovery involves the post-event actions taken to return vital economic systems to minimum standards of health in the short term and to full health over a longer period. The two phases are distinct and require different types of skills and resources, yet they are also interdependent because the nature of the response has a direct bearing on the success of the subsequent recovery operation. For example, a fire at a computer chip manufacturer caused less damage than the contamination caused by the response teams that entered the company’s clean facilities. Even so, response is usually associated with government agencies; economic recovery tends to be labeled as a private-sector responsibility.
A review of emergency response plans in all 50 states in the US reveals that recovery has received scant attention. Yet the long-term economic consequences of a disaster can be devastating and, if not effectively addressed, can permanently damage regional communities. The near-term disruptions can weaken local businesses. For example, in the six-month period following the Nisqually earthquake in Washington state on February 28, 2001, the Small Business Administration paid out $77 million in loans. Thirteen percent of all the businesses in the strike area reported long-term revenue loss. Eighty percent of the enterprises paid for their losses out of their own pockets – an expense not reflected in the loan totals.
WSDOT decided to partner with MIT-CTL to create a plan for restoring the integrity of the freight systems that support the state’s commercial activity. Called a Freight System Resiliency Plan (FSR), the plan - which did not exist prior to the project - helps government and businesses bring damaged trade arteries back up to speed in the aftermath of a disaster. Reviving these vital links as quickly as possible promotes economic recovery. For example, an analysis of the 1994 Northridge earthquake that destroyed portions of the I-5, I-10 and other highways near Los Angeles found that road closures caused approximately 4,400 truck hours of delay each workday during reconstruction.
An FSR plan has three general phases. The first one, called Identification, defines the economic objectives and usage patterns that guide the development of a state-specific FSR. WSDOT identified three distinct user groups: global gateways that channel goods through ports and across the state, the state’s freight-dependent industries that generate inflows and outflows of goods, and retail channels that distribute goods to consumers. The second phase, Assessment, determines the current state of the network in the context of the objectives and customer segments delineated in Phase One. The final phase is Implementation, which tests whether the plan can be implemented. These phases follow an eight-step road map.
The team garnered some important insights about freight recovery planning from reviewing the FSR and interviewing various stakeholders and customers. Here are some examples.
- Creating a freight recovery plan means much more than simply modifying or enhancing an existing emergency response plan. These plans do different jobs and require different approaches.
- The public and private sectors need to work together on recovery plans. The roles of these two sectors are complimentary during the recovery phase, even though they support different and complex sets of relationships.
- A credible and reliable communications platform that is readily accessible is essential to an effective recovery plan. Inaccurate or out-of-date information and communications channels that are not widely available hamper recovery and undermine even the best-laid plans.
Each state requires its own FSR plan to reflect its particular risk profile and economic demands. However, the framework built by the MIT-CTL team can be used as a foundation for any state-owned FSR. The work also points out two areas of future research. The development of quantitative models that show the impact of infrastructure loss is one area. Secondly, there is a need for a better understanding of how innovative technologies and processes can be used in the allocation of scarce infrastructure. Congestion pricing and automated road signs are two of the options available to increase the flexibility of existing freight networks.
A report on the FSR project by MIT-CTL and WSDOT is available to MIT-CTL partners through the online Partner Gateway. The findings of this freight resilience research project will also be shared at the Freight Resilience and Economic Recovery Roundtable on November 28, 2007 in Cambridge, MA, during which MIT-CTL researchers will facilitate discussion amongst industry, government and academic leaders on creating freight system resilience plans. For more information contact Chris Caplice or Jim Rice.