# Defense Logistics

# From DoD Stovepipes to "Focused Logistics" [^1]

## Executive Summary

\"Focused Logistics\" is the capstone logistics concept of the Joint
Chiefs of Staff. The goal is to exploit information technology, business
process reengineering, and new transportation technologies to ensure
delivery of the right materiel and forces at the right place at the
right time. Four major trends will affect the realization of these goals
and shape their impact on the nation\'s transportation system:

-   Deployment timeframes are becoming more ambitious

-   The importance of peacetime DoD transportation business is declining

-   Defense and commercial supply chains are becoming more integrated

-   Sensitivity to some safety and security issues is increasing

Despite DoD efforts to shrink the size or footprint of its deployment
demand for freight transportation, the transition challenge from
business-as-usual will become more difficult. The greatest challenge
will be within the U.S., moving from Power Projection Platforms (forts)
to and through ports and terminals.

Vulnerability to asymmetric threats, such as terrorism and sabotage,
puts strategic mobility at risk. Although interdepartmental efforts
address direct vulnerabilities, insufficient attention is paid to
indirect vulnerabilities. The second order impacts of asymmetric threats
could be more disruptive to civil and military cargoes than actual
terrorist events.

Information technology is a two-edged sword: while adding robustness and
efficiency, it simultaneously increases deployment risks and fragility.

The paper identifies three major issues that face DOT and the nation:

-   Assuring that DoD has access to timely transportation capacity

-   Mitigating potential disruption to civil commerce and defense
    production caused by Defense deployment surges

-   Maintaining safety, improving security, and reducing vulnerability.

## Introduction

Defense freight transportation issues are important to DOT in at least
four ways.[^2] First, an effective transportation system is essential to
support national security and military deployments. Second, defense
deployments have the potential to disrupt the transportation system and
the economy. Third, defense freight transportation has important
business impacts on major transportation industry sectors. Finally,
safety is a continuing concern because DoD ships large amounts of
munitions.

Given the size of DoD, the history of the individual military services,
and the cultural drive of military commanders to own and control
resources necessary for their success, there is a strong tradition of
separate logistics "stovepipes." Separate supply chains exist for many
commodities, programs, and commands. Examples include medical and
muni­tions logistics; individual contractor support channels for separate
weapons systems; and direct purchase and shipment programs. Stovepipes
complicate coordination. They increase total costs, can lead to
over-consumption of scarce transportation resources, and often frustrate
the needs of combatant commanders.

Stovepipes reflect technology in addition to culture. The limits of
mainframe and mini­computer information technology (IT) in the past meant
that stovepipes, for all their problems, were often the best available
solution. Advancing IT reduces, if not eliminates, the need for and the
tolerance of stovepipes -- in industry as well as by DoD. DoD is
com­mitted to modernizing its logistics systems, making it one of the top
three acquisition pri­orities of the Under Secretary for Acquisition and
Technology.[^3]

"Focused Logistics," the capstone logistics concept of the Joint Chiefs
of Staff (JCS), implicitly demands the demolition of uncoordinated
stovepipes. *Joint Vision 2010,* pub­lished in 1996, is the "operational
template for the evolution of the Armed Forces of the United States*."*
Focused Logistics is one of four primary tenets of the joint vision,
along with Dominant Maneuver, Precision Engagement, and Full Dimensional
Protection.

"Focused logistics will provide military capability by ensuring delivery
of the right equipment, supplies, and personnel in the right quantities,
to the right place, at the right time to support operational objectives.
*It will result from revolutionary improvements in information systems,
... reengineered processes, and advances in transportation
technologies."*[^4] Focused Logistics has implications for DOT and
freight transportation providers.

##  Trends

There are four major trends related to the movement from stovepipes to
Focused Logistics. The first concerns strategic mobility. The second
trend reflects the absolute and relative decline of peacetime defense
freight business. The third trend concerns business processes -- the
inextricable linking of defense and commercial practices and systems.
The fourth deals with safety and security.

### Deployment Timeframes are Becoming More Ambitious

National military strategy posits significantly shorter timeframes to
deploy major military forces and their initial set of supplies from
their peacetime stations to theaters of opera­tions anywhere on the
globe. Today's goal is a timeframe less than half what the nation
achieved in Operation Desert Shield 10 years ago, and the goal for the
next decade is for about the same order of magnitude improvement yet
again.

Strategic mobility has three components. If *deployment* -- described in
the previous para­graph -- is the "front end" of strategic mobility,
*sustainment* is the central element: the ability to establish and
maintain sufficient and timely flows of all commodities needed by the
deployed forces to operate in the field. Fuel and munitions are the two
largest com­modities needed by forces in combat. *Redeployment,* which
usually occurs as operations are scaled down, concerns either return to
peacetime stations or relocation to another theater of operations.
Deployment and sustainment are the most salient features of strate­gic
mobility from the perspective of the total freight transportation
system.

Three factors affect the strategic mobility requirement: the mass to
move, the distances to cover, and the time schedule to meet. For all but
the most modest scenarios, strategic mobility depends on both commercial
and organic DoD-owned transportation assets.

During the past decade, U.S. national strategy shifted from forward
presence to power projection. The post-Cold War drawdown saw overseas
garrisons shrink and remaining forces concentrate in the continental
U.S. (CONUS). Other things being equal, power projection basing in CONUS
increases the ton-mile movement requirement of global deployments.

The transportation implications of the national military strategy have
been expressed in several *Mobility Requirements Studies.* *MRS 2005,*
nearing completion, seems likely to reaffirm the requirement to support
two nearly simultaneous Major Theater Wars (MTW). The most discussed
scenario involves the Middle East and the Korean peninsula.

A major lesson of the Gulf War was that the U.S. and its allies cannot
depend on adver­saries to grant unlimited time for a buildup of forces.
It is unlikely that a Saddam Hussein would again invade Kuwait and then
stand by patiently as U.S. forces gather in Saudi Arabia for six months.

Because of this lesson, defense leaders are driving to shrink
significantly the timeframe to marshal, move, and employ significant
military forces from the continental United States to anywhere in the
world. Figure 1 uses the U.S. Army as an example to illustrate this
trend. In 1990, it took six months to deploy six divisions and
supporting forces from the U.S. and Northern Europe to Saudi Arabia. The
target today is to deliver nearly as much com­bat power in two and
one-half months. The vision and goal of the Army Chief of Staff is,
within the decade, to deliver equivalent combat power in one month. If
Figure 1 were plotted as a curve with forces to deploy on the y-axis and
time on the x‑axis, each improvement would produce a steeper curve,
concentrated further to the left on the chart.

![](media/image2.wmf)Figure 1. Army Strategic Mobility Requirements

The Importance of Peacetime DoD Business is Declining

DoD is a less important customer to the freight transportation industry
in 2000 than it was in 1990, and its importance will continue to shrink
in relative terms, and perhaps in absolute terms as well.

Three factors combined to reduce the absolute and relative value of
defense business over the past decade: the size of the armed forces
shrank; forces deployed overseas shrank dis­proportionately because of
the shift to power projection strategy; and commerce and world trade
flourished. In the 1980s, for example, DoD was the largest single
customer of the U.S. flag container carriers, providing about 14 percent
of their export business. Today, although DoD is still the largest
export customer, the percentage appears to be about five percent.[^5]

Looking ahead, the absolute decline in DoD business is moderating, but
the relative decline is likely to continue. Barring major national
initiatives, military downsizing and the redeployment of overseas forces
to CONUS is largely finished, so peacetime DoD business levels should be
closer to level.[^6] However, as the economy and world trade grow, the
proportion of DoD business will continue to shrink.

Although the foundation of this trend is quantitative, its importance is
qualitative and sub­jective. The message is that profit-oriented
commercial carriers are less inclined to make special allowances for DoD
based on the importance of its day-to-day business.

### Defense and Commercial Supply Chains are Becoming More Integrated

There are at least three aspects to this trend. Computer-to-computer
links are growing quickly between defense supply and transportation
systems and the systems of their industry trading partners. Second,
supply chain business processes are becoming more integrated. Third, DoD
is moving away from military-unique and toward commercial business
processes for freight documentation, management, and payment.

The drive to improve efficiency is a major factor. The underlying
revolution in informa­tion and telecommunications technologies affects
all supply chain processes. Important organizing goals of the IT
revolution -- quality, customer service, responsiveness, and
profitability -- usually translate into greater efficiency. Greater and
more effective supply chain integration is a major route to improved
efficiency.

DoD logisticians are tying more supply chains together with industry
partners. The sim­plest steps involve more automated exchange of data
generated by operational transac­tions. Internet-based links will surpass
older approaches, such as Electronic Data Interchange (EDI). U.S.
Transportation Command's (USTRANSCOM) Global Transportation Network
(GTN) is an important example of this trend, building data links with
commercial carriers.

More profound integration mixes commercial and defense operations. For
example, in the growing Direct Vendor Delivery (DVD) and Prime Vendor
(PV) initiatives, commercial suppliers of items such as medical
equipment, subsistence, and repair parts ship directly to end users in
the armed forces. DVD and PV shipments generally bypass military depots
and PV shipments bypass the Defense Transportation System (DTS). The
Logistics Management Institute (LMI), in a recent study described by an
interviewee, estimated that DVD shipments grew quickly to \$310 million,
about 10 percent of the annual defense freight transportation bill.[^7]
Based on discussions with inventory managers, LMI expects the por­tion to
double by 2005. Another interviewee, a senior executive in the Army,
disagrees; he expects the trend for the less-controlled DVD program to
slow and be brought back "in house." This appears to be a minority
viewpoint, and the economic incentives of DVD will be difficult to
redirect.

A second example of mixed operations is the rapid growth of Contract
Logistics Services (CLS). CLS programs vary widely, but the core is
contracting out the maintenance and sometimes the parts supply for
individual weapons systems. Some of the contracts are performance-based,
with the contractor guaranteeing availability rates. CLS support is
delivered overseas as well as in the CONUS. Although contractors are
rarely expected to be in harms way, they will be part of large and small
deployments.

Because program managers regard CLS as flexible, responsive, and
economical, the programs are growing more common. The LMI study
mentioned about 45 weapon systems, scattered across the military
services, whose managers were actively considering CLS options. Fifteen
of those systems, most in the Air Force and the Army, were already under
CLS.

Looking ahead, one cutting edge in industry is processes that combine
operational data, simulations, and forecasting models. These tools and
processes, such as Collaborative Planning and Forecasting for
Replenishment (CPFR) and Collaborative Transportation Management (CTM),
are designed to better harmonize production, shipment, and inven­tory
levels throughout complex supply chains. It seems reasonable to forecast
that DoD logisticians will experiment with and come to use these
advanced forms of integration with selected suppliers.

Reflecting the tenet of Focused Logistics, supply chain integration is
taking place within DoD as well as between DoD elements and industrial
suppliers. The Strategic Distribution Management Initiative (SDMI), a
joint program of USTRANSCOM and the Defense Logistics Agency (DLA),
illustrates the trend. Using a define-measure-improve-iterate process,
SDMI innovations include synchronizing the operations among a DLA
consolidation depot, trucking companies, and USAF-managed airlift to
shrink Order-Ship-Time (OST) and Customer Wait Time. One target,
according to a senior level interviewee, is to reduce OST for
requisitions from Bosnia shipped via airfreight from an average of
15 days to eight-to-10 days.

SDMI is also useful to illustrate another facet of the integration
trend: the growing adop­tion of commercial supply chain practices.
According to several interviewees, SDMI grew out of the conviction that
the current DoD supply chain, both in the U.S. and overseas, is an
uncoordinated mix of inventory locations and distribution modes --
another way of saying that DoD's supply chain contains many stovepipes.
An unofficial copy of a major presentation to USTRANSCOM's Deputy
Commander-in-Chief illustrates the attraction of commercial practice.
The text asserts, "No competent business would tolerate such a
situation! ... Modern business practices emphasize scheduled and
synchronized flows to reduce wait time and enhance predictability.
Minimization of inventory levels and loca­tions based on planned
distribution patterns \[should be the goal\] (a la Wal-Mart model)."

**Accelerants of the Trend.** DoD budget pressures are a catalytic push
for the trends to greater integration and adoption of commercial
practices. "Warfighters" look to support elements, including
logisticians, to be billpayers for weapons modernization by working
smarter and leaner. "Smarter and leaner" often means "more like
industry."

Increased DoD exposure to the industry best practices is a catalytic
pull toward greater integration and adoption of commercial practices.
For example, even in the late 1980s, it was rare for government
logisticians to attend the Council of Logistics Management (CLM), the
premier professional group for advancing the practice of business
logistics. Now DoD personnel and support contractors are common at CLM
meetings. Greater awareness reinforces the trend toward adoption of best
commercial practices.

### Sensitivity to Some Safety and Security Issues is Increasing

The trend line in sensitivity to safety and security related to defense
freight transportation varies by segment from an already high plateau,
to significant increase, to very low atten­tion. In the first segment,
the integrity of munitions and other sensitive shipments, awareness
reached high levels some time ago and the trend line is flat. In the
second segment, direct vulnerability to disruption, sensitivity in
increasing. The third segment, indirect vulnerability to disruption,
hardly appears on any radar screen.

**Integrity of Sensitive Defense Shipments.** Sensitive shipments
include munitions, weapons, classified materiel, and unusually
high-value cargoes. The absolute level of safety and physical security
is remarkably high. The best performance indicator, ironi­cally, may be
the absence of performance indicators. In 1999, a major study of the
muni­tions safety and security found only individual incident reports,
not statistics or trend data. That study reported that, "Munitions
transportation operations are conducted with few accidents or
incidents."[^8] "Physical security of DoD shipments of munitions,
classified material, and sensitive (high-value, pilferable) items
appears to be quite good -- we have no quantitative information
demonstrating the existence of a severe or growing problem in this set
of commodities. To our knowledge, no munitions shipments have been
stolen."[^9]

[Sensitivity to the safety issues]{.underline} leaped in the mid-1980s
after highly publicized incidents such as the spillage of torpedoes on
I‑25 in Denver. In 1990, first the Navy and then DoD as a whole required
munitions motor carriers to adopt then-new satellite monitoring
tech­nology to improve visibility and response times for safety and
security.

Given the generally excellent performance of the DoD and its carriers,
there have been no major shifts in safety sensitivity, procedures, or
apparent results. All have been on a high plateau for the last decade.

[Sensitivity to physical security]{.underline} has continued to increase
due to two factors. "The first ... is increasing terrorism, foreign and
domestic, which heightens concern about protecting explosives, weapons,
and devices that are particularly attractive to terrorist groups. The
second ... is increasing theft \[in the freight transportation
system\]."[^10]

**Direct Vulnerability to Disruption.** There is a perceived -- and
probably real -- trend of increasing security risks to the freight
transportation system, and this is a growing con­cern for defense freight
transportation.

The security community often refers to "asymmetric threats," including
terrorism and sabotage.[^11] The direct threats of most concern, beyond
weapons of mass destruction aimed at civil or military targets, are
aimed at critical infrastructure, including transportation. For example,
*The Clinton Administration's Policy on Critical Infrastructure
Protection: Presidential Decision Directive 63* estimated in 1998 that
the country had a three- to five-year window within which to prepare for
increased threats to physical and information infrastructures.[^12]

The perception of growing threat occurs in a context of declining
numbers of attacks. According to the Interagency Commission on Crime and
Security in Seaports, "Both within the United States and worldwide, the
numbers of terrorist attacks are decreasing, but the numbers of
casualties and the levels of property damage are on the rise."[^13]

**Indirect Vulnerability to Disruption.** Asymmetric threats seem to
present growing potential indirect or second order risks to defense
freight transportation in general and to strategic mobility in
particular. Indirect risks could include significant increases in
con­gestion and confusion that interfere with either critical defense
production or transportation operations.

One example of an indirect risk would be a successful terrorist attack
on the World Trade Center during a military deployment. Despite little
direct effect on critical freight trans­portation infrastructure, such an
incident could produce heightened security and slow­downs of airfreight
operations at Newark and JFK airports -- disrupting the internal supply
chains of defense contractors.

Another example would be the use of a commercial intermodal container to
smuggle a weapon of mass destruction, such as chemical or bio­logical
agents, into a large city. The resulting security scare could require
detailed manual inspections of all import containers, effectively
throttling commerce.[^14] Strategic mobility would be affected adversely
both by significant port congestion and by disruption of con­tractors'
supply chains.

There appears to be no trend indicators for secondary threats. However,
if the threat of asymmetric attacks against the U.S. is indeed
increasing, then the risk of second order effects is proba­bly increasing
too. Given that little attention appears to be paid to the indirect
effects, it is equally likely that vulnerability to these effects is
increasing even faster.

##  Implications 

### The Deployment Challenge is Becoming More Difficult

In the best of circumstances, the trends imply that the strategic
mobility challenge will increase for major deployments. DoD's
significant and productive strategic mobility actions, discussed below,
will merely ameliorate a growing problem. It may be that the aggressive
force closure goals, shrinking from an actual six months in the Gulf War
to two-and-one-half months today, and then to one month, will outweigh
all mitigation strategies.

Two factors explain this implication, *timeliness* and *transition*. The
aggregate lift require­ment is less important because, given sufficient
time, a resilient transportation system and a resilient economy will
accommodate new patterns of demand.

All else being equal, a more ambitious timeframe for deployment
concentrates demand, requiring higher levels of performance to provide
timely service. More important, a nar­rower timeframe steepens the slope
of the demand curve, sharpens the angle of the initial inflection point,
and reflects a more challenging transition from peacetime to power
pro­jection. Since the heart of transition is separating transportation
assets from tightly coupled commercial supply chains, more ambitious
time goals imply increased potential for both commercial disruption and
frustration for military plans.

#### A Shorter Demand Spike can be More Difficult if it is Steeper

Figure 2(a) is a useful template to illustrate this implication. The
chart summarizes an assessment at USTRANSCOM that asked, in effect,
"what could have been accomplished to deploy for the Gulf War if the
best technologies had been in use prior to the deploy­ment?" The area
under the right-hand triangular curve represents the actual mass of
materiel transported to and from the theater, with the peak volume on
the ground appearing to occur on day 215, after the end of the ground
war. Given superb logistics visibility, movement planning, and
synchronization systems, the analysts estimated that the war could have
been fought 100 days sooner with one million fewer tons of materiel.

Figure 2(a). Impact of Information Systems Technology on Force
Deployment

![](media/image3.wmf){width="6.1506944444444445in"
height="4.430555555555555in"}

*Source: USTRANSCOM briefing to the Army After Next -- Power Projection
symposium, August 1997.*

The relevant point is not the details of the chart, but the relationship
between the actual and the hypothesized curve. The area under the
hypothesized curve is much smaller -- it represents a smaller total
transportation demand -- but the curve is compressed and shifts to the
left. The slope of the ascent is sharper, representing earlier, more
sudden demands ![](media/image4.wmf){width="6.0in"
height="4.325694444444444in"}on transportation resources. Figure 2(b)
highlights the impact.

**Figure 2(b). Faster Transition Vs. Smaller Footprint**

The hypothesized curve in Figure 2 can be thought of as a rough
surrogate for today's deploy­ment goals, such as the Army's target of
five divisions worth of combat power on the ground in 75 days. The
future goal of delivering the same combat power in 30 days implies a
third hypothesized curve with less total mass, more compression to the
left, and a sharper vertical spike.

DoD's is procuring significant organic transportation resources to
address that sharper vertical spike demand. Those land, air, and sea
transportation resources will help, but they will not absorb the entire
burden. DoD will need significant commercial transporta­tion support, and
they will need access to it even more quickly.

The stress of transition has two facets: pressing to garner sufficient
resources to meet national security requirements; and trying to manage
the disruptive effects on the econ­omy. The ambitious timeframes of
emerging national strategy promise to increase the stress on both
facets.

#### Some Transportation Implications of a Major Military Deployment

Civil transportation professionals understand, in general, that military
operations imply significant transportation burdens. The next several
paragraphs provide concrete illustra­tions of that burden. The brigade
and division examples focus on unit *deployment,* not the requirement to
move *sustainment* supplies.

**One Light Brigade.** As discussed earlier, the Army's goals are to
deploy combat power of up to five divisions anywhere in the world in 75
days in the near term and in 30 days in the longer term. In both cases,
the first brigade -- roughly one-third of one "light" division, probably
the 82^nd^ Airborne -- is to be in place within 96 hours. The initial
brigade alone, interviews stated, would require 60 percent of all U.S.
Air Force strategic lift capability for three days.

**One Mechanized Division.** The maneuver brigades of a mechanized
division are roughly two-thirds armored infantry and one-third tanks. A
mechanized division today is about 17,000 people; 1,686,000 square feet
of materiel; and 8,160 vehicles, of which 3,700 are self-propelled,
2,300 are trailers, and 1,700 are tracked.[^15]

Moving this division from fort to port would require 1,722 89-foot
flatcars; 534 60-foot flatcars; 214 heavy-duty flatcars; and 524 20-foot
containers. The ocean movement would require 9.6 Fast Support Ship
voyages or 5.9 Large Medium Speed Roll-On/Roll-Off (LMSR) ship
voyages.[^16]

**Operation Desert Shield/Desert Storm.** This was a single MTW.
Deployment plus sus­taining supplies required 500 shiploads and 9,000
aircraft loads. Among the cargoes were 12,400 tracked vehicles and
114,000 wheeled vehicles of all sizes.[^17] Roughly, 500,000 U.S.
personnel were moved to the theater.

**One MTW Impact on Airlift.** An interviewee in the USTRANSCOM aviation
community reported that a single MTW scenario would require roughly
50-55 percent of the U.S. long-range international (LRI) cargo fleet.
This would be in addition to the most of the effective inter-theater
capacity of the USAF Air Mobility Command.

**Current National Strategy.** As noted earlier, current strategy calls
for supporting two nearly simultaneous Major Theater Wars. All
indications from the interviewees were that the *Mobility Requirements
Study, 2005* will endorse this strategy. The *MRS 05* scenarios probably
envision less than twice as much mass to be moved compared to the
require­ment of the Gulf War, but the notional *MRS 05* scenario would be
more complex, since it probably envisions redeploying combat units from
MTW I to MTW II.

#### DoD Efforts to Ease the Deployment Burden

In 1995, the Chairman of Joint Chiefs of Staff said "If we do not build
a transportation system that can meet our needs tomorrow then it doesn't
matter what kind of force we have because we won't be able to get it
there." This section describes six DoD initiatives that are designed to
improve the strategic mobility situation.

**Prepositioned Equipment and Materiel.** The Army and the Marines,
which generate major portions of the strategic mobility burden, have
loaded ships with unit sets of equipment and supplies. The Army has
equipment for one of its five target divisions stowed in this manner.
The ships are stationed overseas, in locations such as Diego Garcia in
the Indian Ocean, ready to sail on short notice to deployment sites, for
example, in the Middle East or East Asia. Units of soldiers or Marines
would be flown in to marry with the sets of equipment.

The "prepo afloat" programs have two major advantages: first, they avoid
the movement to and through ports in the CONUS, saving time and
minimizing congestion. Second, they may reduce steaming time to the
designated theater, permitting earlier deployment.

**New Strategic Lift Equipment.** DoD-owned assets under USTRANSCOM's
control are the core quick response capability. The USAF C‑17 program is
a major investment in long-range international airlift, capable of
carrying outsized equipment and landing at less than ideal airports.
Sixty-nine of 134 programmed C‑17s have been delivered. Even a skeptical
interviewee agreed that the C‑17s, together with Civil Reserve Air Fleet
(CRAF) Stage II augmentation (similar to the Gulf War), could support a
single MTW scenario.

The Navy's program of 20 LMSRs, 13 of which have been delivered, is
another major strategic mobility investment. The Navy also invested in
several crane ships, designed to work non-self-sustaining containerships
in undeveloped or non-existent ports.

The Army, with smaller investments, added several thousand leased
containers to its fleets of Army-owned containers. These containers are
prepositioned at troop installa­tions and some plants and depots. The
Army is also purchasing 349 COFC railcars for containerized munitions,
sufficient to handle about two days of supply in a crisis.[^18]

**Revitalizing Essential Civil Sector Support**. DoD transportation
leaders are aware of the declining peacetime business they provide to
commercial carriers and their dependence on those carriers. There are
several initiatives to assure timely and economical access to
transportation service. The principal venues, however, are CRAF and
VISA.

The Voluntary Intermodal Sealift Agreement (VISA) was established with
the ocean carri­ers in the mid-1990s. VISA addresses availability of
containerships. CRAF is the focus of two efforts. The Select Working
Group, which includes industry executives, is focusing on short-term
improvements. USTRANSCOM also contracted for a longer-term assessment of
CRAF, and the study should be delivered by July 2001.

**Exploiting Information Technology.** This is a major element of
Focused Logistics, with at least two major thrusts. The first is making
operations more transparent. Examples include Total Asset Visibility,
Intransit Visibility, and greater use of Automated Identification
Technologies. The second thrust is greater use of advanced modeling,
simulation, decision-support, and visualization tools. The goals are to
improve the quality and timeliness of actionable information, leading to
more optimal logistics operations.

**Lightening the Footprint**. If combat forces can succeed and survive
with lighter and less materiel, then the forces will be easier to
project and sustain. One interviewee, an astute observer of strategic
mobility issues, believes that the Army and the Marine Corps are serious
about reducing the weight of unit equipment. "There is a clear
understanding that the status quo will not work." The Army's goal is to
develop a main battle platform com­parable in lethality and protection to
today's 70-ton Abrams tank, but weighing only 20 percent as much.
Further, all of the new equipment is being designed to fit the cabin
tem­plates of the intra-theater C‑130 and the Boeing 747‑400F.

Developing and fielding new combat vehicles is not a speedy enterprise.
An interim bri­gade, using wheeled battle platform(s) is to be ready by
2003. However, the target for the first division to be equipped with the
new generation battle platform is 2012.

Lightening the logistics footprint extends beyond unit equipment.
Munitions and fuel are the largest volume consumables in an active
theater of operations. The armed forces are pursuing precision munitions
because, in addition to improving combat effectiveness, they can help
lighten the footprint. When munitions provide reliable first round
kills, logisticians can ship fewer rounds.

DoD and DOT interests converge in fuel efficiency. DoD is pursuing
drastic improve­ments, even beyond the benefits of lighter combat
vehicles. The director of an R&D center described the 21^st^ Century
Truck projects in the Army and the Department of Energy. Using fuel
cells and hybrid technologies, they are forecasting three-fold
improvements in both fuel efficiency and emissions.

**Advanced Transportation R&D**. Thoughtful leaders in the DoD, abetted
by the Congress, DOT, industry, and academe, are investing resources to
define, design, test, or launch advanced systems that would improve the
deployment of forces. The top priorities of DoD transporters appear to
be high-speed sealift and agile ports. There is also interest in 150-mph
heavy lift cargo airships.

One focal point for these efforts is the Center for the Commercial
Deployment of Transportation Technologies (CCDoTT), using earmarked
federal funds in cooperation with USTRANSCOM and MarAd. CCDoTT reflects
a strong preference in DoD for dual-use solutions in these new R&D
programs. The goal is to minimize DoD investments and proliferate the
widespread commercial adoption of militarily useful technologies.

Another R&D interest, which seems to receive less direct effort, is
increasing traffic man­agement capacities in air and land modes. However,
several interviewees were skeptical that IT and ITS-like technologies
could provide significant breakthroughs in infrastructure capacity.

#### DoD Perspectives on Modal Availability for Surges

The first leg in the deployment process is \"from fort to port.\" DoD
refers to the major origin forts as \"Power Projection Platforms\" and
designates their corresponding ocean terminals as \"Strategic Ports.\"
Some of the interviewees and sources regard this leg of deployment as
the most difficult, because it combines large amounts of heavy and
outsized equipment with the earliest movement requirements.

**Railroads.** The Military Traffic Management Command (MTMC) is
responsible for orchestrating the movement from forts to ports. The MTMC
commander testified to the Surface Transportation Board that \"our
nation\'s military goes to war on rails.\"[^19] Timely access to
sufficient railroad capacity is a major concern. In a two MTW scenario,
the DoD would require 2,840 flatcars in the first four days and 8,345
flatcars in the peak week.[^20] The totals include heavy-duty flat cars
that can carry 70-ton main battle tanks and 89' and 60' chain tie-down
flatcars, needed for lighter equipment. These cars are of shrinking
commercial value, and the fleet has been aging and in long-term decline.
The total inventory includes 741 DoD-owned and 6,626 carrier-owned
flatcars, not all of which may be serviceable. MTMC and the AAR are
completing a joint study of this challenging problem.

Intermodal capacity is also a railroad issue. Given the preponderance of
containerization in international liner trades, DoD recognizes it must
prepare to deploy forces using con­tainers. In addition to non-trivial
internal issues of training personnel to out-load in con­tainers, there
are intermodal capacity problems. The biggest challenge is timely access
to intermodal railroad equipment, such as double-stack and flatcars, and
to intermodal rail terminals. Containers do not appear to be a major
problem for the deployment phase because DoD owns or leases a
significant fleet of intermodal containers, most of it pre­positioned at
important installations. Challenges may develop for the sustainment
phase for some equipment, such as 20' containers, especially in a strong
economy.

Timeliness is a challenge because the best commercial equipment is in
use, hopefully under load, not marshaled close by major DoD unit bases.
Railroads must locate needed equipment, possibly off-load it, then route
it to military installations. That takes time.

Underlying rail equipment and terminal concerns is a broader
infrastructure question. DoD requires connector lines, in good
condition, to its major deployment installations. Rail mergers and line
abandonments can undercut service and disrupt deployment plans.

To ensure adequate service, MTMC's Transportation Engineering Agency
(TEA) manages the Railroads for National Defense program and publishes
the Strategic Rail Corridor Network (STRACNET) report.[^21]

**Motor Carriers.** Despite DoD's heavy reliance on railroads for unit
deployment, there is also an important role for motor carriers. The
first challenge is heavy equipment tractor-trailers, capable of hauling
tanks and other tracked equipment. Since much of this equip­ment supports
the construction industries, not transportation common carriage,
visibility and access are more difficult. MTMC and TEA try to monitor
this fleet.

The second highway challenge is for munitions carriers. This specialized
business requires excellent equipment and specially trained drivers;
general highway van trailers and drivers are not immediately
transferable to the munitions business. DoD is a much bigger customer
for the munitions carriers than it is for other motor carriers.
Conse­quently, the downsizing of DoD has had a disproportionate impact on
the munitions car­riers, which tailored their capacity to the current
demand. The remaining fleets are less able to accommodate a major
deployment surge. One response has been movement toward a Munitions
Carrier Readiness Program to enhance the industry's ability to respond.

**Port Staging Capacity**. Aggressive deployment timelines and masses of
equipment and materiel that will move by ocean form a significant
challenge in sequencing flows to and through ocean ports. The challenge
is greater because ships must be loaded to preserve unit integrity and
meet military requirements on the far shore. The planning and
coordi­nation burden is greater too because DoD is using fewer, larger
ships.

The port staging challenge is compounded because the major military
ocean terminals on the east and west coasts closed as part of DoD's
downsizing. Another complicating factor is the dominance of intermodal
operations, which reduces the proportion of available commercial port
staging space for breakbulk and RO/RO cargoes.

Our interviewees are concerned about the timely availability of staging
capacity in and near ocean terminals, particularly if commercial
terminals are actively engaged with pri­vate cargoes at the start of a
deployment. The interviewees are also concerned about the DoD's ability
to orchestrate the flow of unit and materiel movements to the ports. For
example, senior officials in the Navy and Army agreed that it would be
easier to get suffi­cient ships to loading ports for a major deployment
than it would be to sequence and marshal the Army forces for optimal
ship loading. (That conclusion reflects, in part, the rail and highway
difficulties addressed above).

**Air Freight**. USTRANSCOM and others in DoD seem to think that the
combination of USAF organic aircraft and commercial aviation can support
most deployments.

A concern at USTRANSCOM, as expressed in research for this paper, is
more on handling outsize cargo than on sheer volume. Since the holds of
commercial freighters cannot accommodate the same dimensions as large
military aircraft, some interviewees see com­mercial air cargo as best
suited for sustainment supplies, not unit equipment.

Even if CRAF were not activated, its constituent aircraft and crews
would be the main source of commercial aviation support for a
deployment. The most important segment of CRAF is the Long-Range
International (LRI) fleet, about 532 passenger and cargo aircraft in
January 2000.

The cautious optimism about airlift capacity seems concentrated on
supporting a single MTW; some interviewees were careful to make this
qualification. If, as indicated in an earlier section, a single MTW
requires roughly 50-55 percent of the entire U.S. civil long-range
international cargo fleet plus most of the USAF international fleet, it
seems reason­able to question the capacity to support deployments to two
nearly simultaneous MTW.

**Ocean Shipping.** A senior official in the Navy, in discussing this
paper, said that the ves­sels currently available to DoD and MarAd can
support current *deployment* plans. These vessels, available on five
days notice, include eight Fast Sealift Ships, 13 LMSRs, and other
five-day ships of the Ready Reserve Fleet (RRF).

A senior civilian in the Army logistics community agreed with the Navy
view, although he questions the utility of the RRF vessels because they
are too slow to load and unload. The Army prefers to depend on the FSS
and LMSR RO/ROs.

If the interviewees are correct, available capacity for sealift is more
of an issue for *sustain­ment* shipments than for initial deployment.
However, the availability of organic sealift eases, but does not
eliminate, the challenge of transition to deployment.

**Impact of Growing Demand and Congestion.** Forecasts prepared as part
of the FHWA\'s Multi-Modal Freight Analysis Framework Project estimated
the physical volume of freight movements in 2020.[^22] Regional growth
rates over 20 years vary from 79 percent in the Northeast Region to 100
percent in the West Region.

The forecasts imply significant challenges for infrastructure capacity,
condition, and congestion. The challenges relate to each area addressed
above: rail and rail terminals; highways and connecting roads; port
marshalling and throughput; airfreight adequacy and terminal capacity;
and sealift. More crowded highways, for example, can impede military
convoys; and a surge in military convoys can disrupt already congested
roadways.

If economic growth is close to the WEFA forecasts, DoD may find that
future modal availability for surges is more of a challenge.

### More Integration Will Increase Efficiency, Effectiveness, and Collaboration

Integration of military and civil freight transportation and logistics
systems affects the productivity and effectiveness of defense freight
operations in peace and war. Although there are some counterproductive
impacts on force deployment, which will be addressed later, most
implications of the trend toward supply chain integration are positive.

DoD has become more flexible and experimental, which implies that
business practices and relationships with suppliers are likely to keep
changing and improving. For example, there has been great progress in
shifting from DoD-unique freight documentation -- Governments Bills of
Lading -- to commercial documentation. Freight payment practices have
been streamlined and carrier cash flow improved with third-party payment
proc­esses. There are also 3PL experiments in freight shipments.

As in industry, DoD inventory reductions reflect efficiency improvements
from better supply chain management. Recently a senior official reported
DoD's success in reducing inventories from \$67 to \$52 billion while
cutting logistics response times in half.[^23]

Effectiveness, quality, and customer service are likely to keep
improving. DoD adopted Customer Wait Time (CWT) as an overarching metric
and, since improvements tend to follow measurement, the CWT metric seems
likely to yield continuing improve­ments in pipeline velocity and reduced
variability.

As DoD becomes more integrated with and attuned to commercial practices,
it is likely to become an even more energetic policy collaborator with
DOT and a helpful partner in a national freight productivity program.
Two illustrations are that DoD and its carrier part­ners are likely to
become more vocal about addressing congestion; and DoD is likely to
become more active in pursuing effective supply chain standards.

### Sensitivity to HAZMAT Safety and Security is Subject to Sudden Change 

The safety and physical security of sensitive defense shipments are
critical for three rea­sons: meeting mission requirements, protecting the
public, and keeping the public's con­fidence in the freight
transportation system and the public sector leadership. Public
confidence can change rapidly in response to highly publicized
incidents, with significant impact on policies and procedures.

The reaction to the Denver torpedo incident, discussed earlier,
illustrated the latent public and official intolerance for major
breakdowns in defense freight transportation safety, especially
concerning munitions. The response to that incident was constructive,
but focused on highway shipments.

DoD "micro-manages" sensitive highway shipments.[^24] All approved
munitions motor carriers must use a system comparable to Qualcomm's
OmniTRACS satellite monitoring service, augmented with an emergency call
"911" button. The carriers grant DoD com­mercially unprecedented direct
access to real-time data on sensitive DoD shipments.

The concentration on highway shipments seems linked to two factors:
public pressure from the mid-1980s incidents and the timely availability
of a cost-effective monitoring service. No other mode has had the
combination of incidents and feasible tracking alter­natives -- factors
that are subject to change over time.

The focus on highway shipment safety yields collateral benefits for
physical security through closer monitoring. As noted in the trend
discussion, DoD's security experience for sensitive shipments is
excellent in all modes. Of course, one or more publicized thefts,
especially connected with a terrorist incident, could cause a strong
public reaction.

Given DoD's special concern about munitions, weapons, and classified
shipments, plus the growing concern about terrorism, one can draw
several conclusions. One should expect that defense freight
transportation and security managers will collaborate with commercial
shippers and carriers to mitigate theft problems and improve safety.
Further, given DoD's positive experience with satellite monitoring of
highway munitions movements, DoD is likely to encourage freight shippers
and carriers to adopt promising new monitoring tech­nologies. Finally, it
is possible that an incident could precipitate sudden action to improve
protection.

### Vulnerability to Asymmetric Threats Undercuts Strategic Mobility

Risks such as terrorism and sabotage directed at the freight
transportation system could seriously aggravate the difficulties of
strategic deployment and sustainment. The direct and indirect risks also
extend to general freight transportation.

**Direct Vulnerabilities.** Terrorism is an exogenous factor that could
suddenly and seri­ously disrupt both general and defense freight
transportation capabilities. Specific risks include targeting
transportation system physical infrastructure, supporting
infrastructures (information, communications, and power), or
transportation operations.

DoD, on its own and in cooperation with other agencies, works to
understand and miti­gate these risks. For example, the Critical
Infrastructure Protection (CIP) Team at the MTMC's TEA performs
"Transportation Infrastructure Criticality And Vulnerability (TRI‑CAV)
assessments for all of the major Power Projection \[bases\], ammunition
depots, and 'other' key sites of interest to DOD. TRI-CAV will produce a
summary of the nation's transportation infrastructure and assets along
with recommendations for remediation, mitigation, and consequence
management activities where warranted."[^25]

**Indirect Vulnerabilities**. Indirect or secondary impacts could be
more disruptive to civil and military cargoes than actual terrorist
events. As in one of the examples given earlier, political leaders could
react to a terrorist incident delivered via intermodal container by
disrupting the processing of all containers.

Very little is written or discussed in the public domain about potential
indirect effects. The Interagency Commission on Seaports reports that
"consequence management" is one of three fundamental activities of
combating terrorism. "Consequence management involves the aftermath of
an attack. ... the Federal Emergency and Management Agency will lead the
consequence management phase, utilizing the Federal Response Plan."[^26]
The Federal Response Plan may not fully ascertain how it addresses
disruptions to freight flow. Few of the interviewees commented on
indirect effects, although senior offi­cials in the Army and the research
community did endorse the hypothesis about simulta­neous increases in
robustness and fragility, which is discussed in the next section.

**Crosscutting Implications.** The safety, security, and vulnerability
risks imply that there may be significant value in aggressive R&D and
deployment of remote monitoring and related technologies to improve
security. One or more highly publicized incidents could result in sudden
political pressure to deploy such technologies, as happened with airport
security screening devices. Investing more R&D funds in remote cargo
monitoring tech­nologies may be a prudent way to prepare for political
pressures, should they arise.

### Information Technology Also Increases Deployment Risks

Although information technology is a powerful positive force, there is a
back edge to the sword: greater efficiency increases some risks for
defense deployments and the economy.

**The Drive to Squeeze Out Excess Capacity.** In the last two decades,
deregulation and IT combined to increase dramatically the efficiency of
the U.S. transportation system. Glob­alization and competition
intensified the effect. Waste and costs were wrung out of the system,
reflected in growing intermodalism and shrinking empty back-haul rates.

The principal mode of IT improvement has been and continues to be more
extensive and effective integration of information systems and
operations. This applies within and between carriers and shippers, and
it is the essence of supply chain integration.

Efficiency in supply chains means eliminating excess capacity --
shedding underutilized equipment, infrastructure, and other resources.
Long-haul irregular route truckload carri­ers have been arguably the best
surface mode at exploiting information technology to manage their fleet
operations. These firms excel at matching customer demand and fleet
availability, leaving little excess capacity. Carriers also use
long-term customer partner­ships, built on tightly linked systems, to
reduce variability in demand and thus the need for excess equipment
capacity.

Manufacturers and distributors apply IT to reduce total inventories and
inventory vari­ability. Inventory improvement is a major benefit of the
IT supply chain revolution and, as illustrated earlier, DoD benefits as
well as industry. Less inventory volatility in the manufacturing and
distribution sectors also helps transportation carriers because it
damp­ens further the variability of demand imposed on them.

**Less Excess Capacity Implies Less Elasticity for Defense Surges**. One
person's excess capacity is another person's slack capacity and buffer.
Greater transportation efficiency implies less excess capacity available
to meet the surge of a significant deployment.

There is more to the equation than numbers of assets. In many cases,
carrier capacity has become more tightly coupled to customer operations.
The carriers are less able -- and cer­tainly less willing -- to abandon
customer loads and commitments. They could incur sig­nificant damage,
such as performance penalties and lost customer confidence. This implies
a growing "stickiness" of commercial business that could slow carriers'
responses to DoD in anything short of a declared national emergency. The
trend toward diminished DoD peacetime market power reinforces this
stickiness.

Economic prosperity is another contributor to the loss of elasticity. In
general, fully employed capacity is harder to re-deploy to defense
surges than temporarily idle capacity. Several observers and
interviewees commented on the country's good fortune to be in or near a
recession at the time Operation Desert Shield/Storm.

The net of these factors is the implication that the real surge capacity
in each mode is less favorable than the portraits sketched earlier in
this paper. The business and operating dynamics of each mode have
changed, and traditional gauges may be misleading.

One could argue that tighter systems integration would mitigate these
impacts because it permits better coordination between DoD, carriers,
and other commercial customers. However, there are limits to the
argument because, to some extent, the value of those improvements has
already been harvested by divesting excess capacity. The argument has an
element of double counting, of having your cake and eating it too.

A growing number of observers are concerned with -- and paying attention
to -- the risks that less slack capacity create for military
deployments. The Transportation Research Board's (TRB) Military
Transportation Committee is a leading forum for the debate, as reflected
in the title of its session at the TRB January 2000 Annual Meeting:
"Shrinking Excess Capacity in the U.S. Transportation System and its
Impacts During a Military Crisis."[^27] The committee and its friends
were sources of interviewees for this paper.

**Less Excess Capacity Can Also Increase Risks for the Economy**. The
combination of a military surge and less excess capacity generates risks
for the economy as well as for military planners. Further indirect
dangers for DoD are also buried in these risks.

Wrenching commercial lift from commercial customers is never easy. Even
in the Gulf War when, as one interviewee commented, the carriers showed
great flexibility in pro­viding support and USTRANSCOM showed restraint
in calling on them, there were anec­dotes of business penalties incurred
by the supportive carriers.

In an era of tighter, leaner supply chains, it seems reasonable that
transportation diver­sions and disruptions would cause wider, deeper
impacts sooner than historical experi­ence would suggest. The trend of
increasingly sophisticated supply chain coordination began with
Just-in-Time deliveries, grew in complexity to Vendor Managed
Inventories, and matured even further to Make-to-Order manufacturing.
The trend implies fewer buffers before widening circles of factories
shut down.

**Airfreight Illustrates Increased Risks for the Economy**. Interviewees
in the USTRANSCOM community and the aviation industry were relatively
sanguine about the impact of CRAF activation on the economy. To
summarize their reasoning, CRAF activa­tion's main impact will be on
long-range international aircraft. This is unlikely to affect domestic
aircraft and service. According to one industry observer, in the extreme
event of a CRAF Stage III activation, the domestic impact would still be
manageable because DOT would take over priority allocation for remaining
domestic air service.

In the view of other interviewees and observers, including the author,
this assessment misses an important dynamic. CRAF carriers are obligated
by contract to provide four crews for each activated aircraft, so the
activation may have an impact disproportionately greater than the number
of aircraft. More to the point, express carriers such as FedEx are part
of the program. Pulling their LRI aircraft and crews may disrupt their
total network, not just the international legs.

The most important factor is the degree to which global air express and
airfreight services have become essential sinews in time-sensitive
integrated supply chains. The degree of dependence on them to produce
high priority items is largely invisible, and the macro impacts may be
an accumulation of many small cuts, some of which cause large problems.

These problems will affect DoD, not just industry. A defense surge
implies a jump in high priority requisitions. Supplier flexibility will
be essential. Defense contractors will depend on express services to
gather components and respond to some of those requisi­tions. For
example, what would happen to Raytheon's ability to *produce* high
priority DoD parts if Raytheon's *internal* supply chains were disrupted
because CRAF reduced FedEx service? Because of the trend to supply chain
integration, disruption of the air express and airfreight system is more
likely to cause unanticipated problems for DoD today than it would have
10 years ago.

**"*Wolfe's Paradox*."** The paradox is a hypothesis that builds on the
arguments of the pre­ceding subsections: "Overall logistics systems
capabilities are growing *simultaneously* more robust and more
fragile."[^28] The defense corollary would be that "supply chains
essential for strategic mobility are becoming *simultaneously* more
robust and more fragile."

Highly efficient systems are supple and robust in handling relatively
small variations in supply or demand -- variations within their
competence and design capacity. However, those same systems can be
brittle and fragile when confronted with large, sudden spikes in demand
(such as a military surge) or plunges in supply (such as a United Parcel
Service strike). Given reduced excess capacity, these systems cannot
respond effectively far beyond their normal operating circumstances.
Fragility also increases with unanticipated failures in information
infrastructure such as GPS, the Internet, telecommunications, or power
supply.

The defense corollary seems to be more potent than the basic paradox.
Risks and pres­sures are greater in part because national security
impacts can so exceed those of com­merce. Lean inventories and JIT
distribution in support of military engagements imply that the costs of
transportation disruptions or logistics failures can be much more
severe -- measured in blood and mission failure, not just dollars. The
risks and pressures may be greater still if, as some senior observers
believe, future adversaries direct asymmetric attacks, such as
infiltration or sabotage, against U.S. logistics lines of
communication.[^29] The direct and indirect vulnerabilities noted
earlier in this paper only increase the power and importance of the
paradox and the defense corollary.

The paradox does not imply a Luddite response of turning away from
advanced informa­tion technology or supply chain integration. It does,
however, imply two needs. First, rigorous efforts to understand the
boundaries -- the scenarios -- that tip the balance so the risks of
fragility outweigh the benefits of robustness. Second, equally serious
efforts to prioritize and mitigate the risks.

Simple adoption of best commercial practices may not be the best
response within DoD or in collaboration with its business partners. For
example, Direct Vendor Deliveries may be counterproductive without
implementing a process to integrate DVD shipments into the Defense
Transportation System in times of crisis. Similarly, Contract Logistics
Services may also be counterproductive in a crisis if DoD does not
rationalize parallel and poten­tially competing organic and contractor
supply chains.

##  Issues

### Assured Access to Timely Transportation Capacity

DoD must be able to acquire timely and cost-effective transportation.

National strategy, reasonably enough, calls for significantly faster
schedules to deploy massive combat power. Private industry is squeezing
slack capacity and excess invento­ries out of the system. Supply chain
integration is tying carriers more closely and inextri­cably to
commercial customers. Global competition focuses carrier and supplier
managements on customer relationships and stockholder value. DoD's
commercial mar­ket leverage has declined in absolute terms and will
probably keep declining in relative terms.

Because of these trends and considerations, the freight transportation
system seems unlikely to provide some essential services for major
deployments in the timeframes called for by military leaders. This will
become more of an issue as deployment time­frames become more ambitious.
The critical factors are *timeliness* and the *transition* from
commercial business to defense deployment.

For the initial deployment, transportation from CONUS origins to ports
of embarkation appears to be more of an issue than inter-theater lift.
The domestic freight system has tremendous capacity and flexibility, but
there are concerns about the ability of the rail­roads to provide
sufficient numbers of standard and heavy-duty flatcars when they are
needed at power projection installations. Beneath the operational
concerns, there is also a continuing need to assure adequate connecting
lines to those DoD installations. On the highways, it appears that
munitions-qualified trucking capacity has declined along with peacetime
defense shipments, and that there is insufficient elasticity to support
a major surge. Finally, there are concerns about port staging capacity.

DoD and the Congress are making important and productive investments in
organic airlift and sealift, which has eased the inter-theater unit
deployment problem. However, avail­able capacity would remain a challenge
if large military operations were to require mas­sive sustainment
shipments. This implies continuing issues with the VISA and CRAF
programs and their industry constituencies.

The surge problems with rail, munitions transport, and port staging, if
true, present a greater challenge in managing perceptions and
priorities. Rail flatcars and munitions trucking lack the media appeal
and spending constituencies of airlines, aircraft manufac­turing, and
shipbuilding.

Peacetime policy and day-to-day transportation practices have profound
implications for both surge and sustainment. The issue may begin with
power projection problems, but solving it will require creative and
effective solutions to assure DoD's routine access to cost-effective
transportation.

### Potential Disruption to Civil Commerce and Defense Production

DOT and DoD must be able to support major deployments with minimum
impacts on the economy and on defense production. However, there appears
to be an increasing likeli­hood that marshalling civil transportation
assets for a major deployment would unleash unanticipated problems in
critical commercial supply chains. Those problems imply growing risks
for both civil commerce and critical defense production.

This issue is another product of the trends and considerations
summarized for the pre­ceding issue. Increasingly aggressive deployment
timeframes plus the impacts of supply chain integration and global
competition imply that lift capacity diverted to DoD will have greater
effects on the economy, and cause them sooner than experience would
indi­cate. The direction of all three trends -- faster deployment goals,
greater supply chain integration, and globalization -- implies that the
importance of this issue and its risks will continue to grow.

Removing imbedded transportation from lean, just-in-time supply chains
will disrupt more production, in more places, more quickly. Diverting
significant numbers of long-range international civil aircraft and crews
from cargo and package express services may be especially disruptive.
Critical defense production is likely to be an unintended and
unanticipated casualty as disruption to the commercial economy upsets
the internal sup­ply chains of defense manufacturers and maintenance
providers.

This issue reflects the paradox that "overall logistics systems
capabilities are growing *simultaneously* more robust and more fragile."
However, there is no clear picture of the dimensions and dynamics of
these problems, nor any known systematic study of them. Addressing this
issue will require a rigorous effort to understand the dynamics of the
paradox and alternatives to mitigate its impact. Relevant tools may
include creative macro/micro economic modeling and case studies.

Grappling with this issue could produce wider benefits. For example, DOT
could use knowledge about dealing with the economy's response to demand
spikes to plan for and deal with sudden plunges in supply, such as major
strikes or natural disasters.

### Maintaining Safety, Improving Security, and Reducing Vulnerability

This is a set of four related issues.

DoD, working together with DOT and industry, must maintain and reinforce
its excellent safety record for transporting munitions and other
hazardous materiel. One approach would be to encourage development and
deployment of technologies to provide other modes with detailed
real-time monitoring comparable to CONUS munitions motor carriers.

A related issue is to improve the physical security of munitions,
weapons, classified, and high-value shipments. Although there is no
indication that this is a significant problem for defense shipments
today, the legitimate concern with terrorism implies it would be prudent
to address the issue. In most cases, efforts to improve the monitoring
of shipment safety would also improve shipment security. Collaborating
with industry to control cargo theft should also contribute to the
security of defense shipments.

A pressing interdepartmental issue, one already receiving increasing
attention, is to understand and reduce direct vulnerabilities of the
freight transportation system to asymmetric attacks, and to mitigate the
effects of such attacks. This issue goes beyond threats to classical
transportation features and includes supporting infrastructures, such as
communications and electricity, which are critical to transportation
operations. Given the complexity and extent of the risks, this issue
demands interagency cooperation to assure meaningful progress.

The final issue is to better understand the indirect or second order
vulnerabilities to asymmetric threats -- where congestion effects or
unintended consequences of security countermeasures may disrupt freight
system operation. In the language of the security community, this issue
is about broadening the scope of consequence management. One task
related to the issue is assuring that the portions of FEMA's Federal
Response Plan that address transportation are responsive to the freight
transportation second order concerns.

[^1]: This working paper was prepared by Michael Wolfe of The North
    River Consulting Group, a member of the Battelle  Team  providing
    research and analysis support to the Federal Highway
    Administration  Office of  Freight  Management and Operations. It is
    one in a series of working
    papers  providing  initial  analysis  and  discussion of the trends
    and issues affecting freight
    transportation  productivity  in  the  United States and North
    America. The series is available at
    http://www.ops.fhwa.dot.gov/freight/adfrmwrk/index.htm. The working
    papers were prepared under contract DTFH61-97-C-00010, BAT-99-020.
    The opinions expressed in the working papers are those of the
    authors, not the Federal Highway Administration. The working papers
    are being circulated to generate discussion about emerging freight
    issues and may be updated in response to feedback from public and
    private sector stakeholders.

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