Commentary: There are solutions for the supply chain crisis

Utah is known as the “Crossroads of the West” due to its central location and unique Golden Spike history. The convergence of an international airport, interconnecting interstate highways and an intermodal railroad create an unparalleled geographic positioning to become an epicenter of the global supply chain. This comes with both opportunities and challenges.

In 2021, a perfect storm seems to have formed across global supply chains. Stuck at home during the pandemic, consumers changed their buying patterns, at a time when worker and equipment shortages have placed more pressure on our fragile infrastructure than it could support. The result has been congestion at our ports and unprecedented maritime shipping costs.

It hasn’t been pretty. Businesses have seen increases in shipping costs upwards of 600% over the last year, and inconsistent supply has led to manufacturers operating below capacity. Not only is this hitting the profitability of employers, but it is creating inflationary pressures that affect us all. The urgency of the situation has the former CEO of Home Depot calling it a national emergency in need of an emergency declaration to allow the military to help transport cargo.

If nothing else, this crisis should be an important warning about the fragility of our supply chain. What is occurring is akin to finding yourself in a city with rolling blackouts, and you realize that an important aspect of modern life you have always taken for granted has become unreliable. Supply chain disruptions are like this. They threaten growth, stability and opportunity. In theory, they should be entirely preventable, but unforeseeable challenges followed by poor planning can result in diminished quality of life.

These issues are now getting deserved attention at the macro level. The Biden administration recently announced the ports in Los Angeles and Long Beach will begin a 24/7 operation schedule. And in Congress, the bipartisan infrastructure bill awaiting passage (fingers crossed) could provide needed infrastructure investment for our ports, railroads, and highways.

These steps will be helpful, but there is more to be done — both at the federal level and here in the Intermountain region — so that these challenges don’t lead to an economic sclerosis that hardens into permanency. That’s why initiatives like the inland port are so important.

The Utah Inland Port Authority is coordinating with coastal ports, as well as carriers and shippers, to innovate and create solutions that help alleviate the congestion and strengthen our connections. Shoring up the supply chain, improving access to goods moving to and through Utah and providing sustainable modes of freight movement will make the state a hub for innovation and economic opportunity. Utah is leading the way when it comes to highlighting innovation and creativity in supply-chain logistics.

We also need regulatory fixes. As an inland state and regional crossroads, we depend on trucking as much as any area of the country, but we are facing a crucial shortage of drivers. We need more flexible licensing that allows younger drivers to get high-paying jobs if they qualify. And for infrastructure funds to be deployed in a reasonable timeframe, we will need streamlined permitting processes.

Separately, to soften inflationary pressures, we believe the Biden administration ought to remove or at least suspend the Section 301 tariffs on most products from China. These tariffs in large part simply get passed on to the American consumer.

We believe there remains time to respond to the supply chain challenge that has been reported as the number one issue for Utah businesses right now. If we make changes like the ones we have outlined, we can secure stability for the Intermountain region for a generation to come.

Miles Hansen is president and CEO of the World Trade Center Utah.

Jack Hedge is executive director of the Utah Inland Port Authority.

Derek Miller is president and CEO, Salt Lake Chamber.