The Importance of Strengthening Supply Chains

Our national and global economy rely on the efficacy of supply chains. Supply chains are found in every industry, sector, and market, and include all actors involved in creating and bringing a product from start to finish. Farmers and ranchers, manufacturing facilities, retail, and the transportation in between, are all critical to the success of this multi-pronged system. Over the course of the last year we have seen just how much we as consumers have taken for granted supply chains and the logistics behind them. The resiliency of our supply chains impact more than just the producers and manufacturers creating the goods and transporting them to their final destination, it also impacts the price and availability of the product for consumers.

The coronavirus pandemic caused entire industries, including agriculture and manufacturing, to be squeezed by bottlenecks and delays along their respective supply chains. In Nebraska we saw firsthand how the cattle and beef supply chain was impacted as processing plants slowed production and even temporarily closed, meaning fewer animals were being processed. This resulted in a price hike of meat at the grocery store and forced livestock producers to bear the costs of holding on to their cattle and hogs longer than they should have. Every logistical step in supply chains from the initial producer, the intermediary processors, and the consumer, was interrupted this past year. This disruption reinforces the important role an operational and free-flowing supply chain plays in the economy of our state and nation. While disruptions to supply chains can occur naturally, competition laws also exist to ensure parts of the supply chain do not use disruptions to their advantage, facilitating anti-competitive behavior. The U.S. Department of Justice (DOJ) was already investigating cattle market disruptions following a 2019 processing plant fire in Kansas, and has since expanded its work to cover COVID-related supply disruptions. I continue to support these investigations and urge the DOJ to share its findings as soon as possible.

It is not just supply chains confined to the United States that are suffering. U.S. agricultural commodities intended for export are currently facing massive delays at our coastal ports while shipping companies are declining to ship these goods to our foreign markets. Some of the exports that do make it to their final destination are perishable items, like meat, that begin in states like Nebraska and lose value or expire by the time they arrive due to the delays caused by these supply chain constrictions. I addressed these concerns in a bipartisan letter I led with over 100 of my colleagues to the Federal Maritime Commission, the agency overseeing these shipping companies, voicing concern over the troubling reports and urging an investigation take place that will result in consequences if misconduct is revealed.

Ensuring supply chains are resilient nationally and globally was especially highlighted this past month when two cyberattacks took place resulting in a clear and immediate impact on the American consumer. First, the U.S. pipeline Colonial Pipeline halted their systems following a ransomware attack that led to a large shortage of gasoline. Pipelines, like the Colonial Pipeline or the Keystone XL Pipeline, play a key role in supply chain operations and must operate without interruption. The second event occurred this week when the meat producer JBS suffered a cyberattack impacting their U.S. beef plants. According to the U.S. Department of Agriculture, prices for choice cuts of beef sold in boxes rose by $5.60 on Wednesday, marking the biggest increase in at least a month as a direct result of this attack. Cyberattacks such as these do not just target our military, they attack our way of life and disrupt the intricate multi-level system of our food supply chain, which in turn increases prices for consumers.

This past year has shown us that we need to strengthen the mechanisms overseeing and supporting the economic flow of goods so that our supply chains can better withstand the inevitable market disruptions that occur. As we have seen, a major component of that is recognizing the various linchpins – including competition and labor, transportation hubs, and data security, that are critical to the flow of these networks. Thank you to every Nebraskan who plays an integral role in our nation's various supply chains, the value of your work cannot be stressed enough.