Advisory Committee on Supply Chain Competitiveness: October 2020 Meeting Transcript

Advisory Committee on Supply Chain Competitiveness (ACSCC)

Via Webex

Thursday, October 22, 2020
8:44 am CT
Moderator: Richard Boll

MEETING TRANSCRIPT

Coordinator: Welcome and thank you for standing by. Your lines have been placed on the listen-only mode until the question-and-answer session. At that time, if you would like to ask a question, you may press star 1. Today’s conference is being recorded. If you have any objections, you may disconnect at this time. And now I’ll turn the call over to Rick Blasgen, you may begin, sir.

Rick Blasgen: Thank you, thank you very much. And welcome, everybody really appreciate you’re taking the time to get on our call today. I want to thank the staff for putting together the agenda and all of the materials that we’ll go through, and of course, we have a great agenda with a lot of great guest speakers as well. So, with that, we’ve got a lot to cover. I’m going to turn it over to Rick Gabrielson (Rick) for any opening words. And then we’ll get over to Rich Boll.

Rick Gabrielson: Yes, thanks. Thanks, Rick, and welcome everybody, and I also want to make sure that we welcome over new members. I certainly wish that we were able to meet in person. This is our second virtual meeting that we’ve had. And I’m certainly hoping that going forward, we can begin to resume meeting together again. As (Rick) mentioned, we got some great presentations today. And we know that the COVID-19 is still disrupting, you know, our lives and our work and families and clearly supply chains. And - but we’ve got some great speakers today that’ll begin discussing, you know, what’s on the horizon. And that’s, hopefully, a vaccine very shortly that will get us out of this.

One piece I do want to cover, though, is at the end of each presentation, we’re going to allow questions and answers. And during that process, we’ll announce it, and what you do is you hit star 1 to be able to go and get into a queue and ask your question.

So, we’ll do that at the end of each presentation to make sure that folks have got the ability to ask their questions. So, with that, I will stop, and Rich, I’ll turn it over to you.

Richard Boll: Well, thank you, the two Ricks, appreciate it. And I’d like to welcome everybody to the 33rd ACSCC meeting. And if it was mentioned before, we do have a nice full agenda allowing us to discuss the important supply chain issues that we are currently facing.

Again, it’s being recorded. And as usual, our meetings are open to the public. And of course, we’re going to be having a question-and-answer session, as discussed before. I’d like to go over quickly kind of the dates for our upcoming 2021 meetings. Please put these down in pencil and or pen. They may change at some point due to different issues, as you can understand.

But at the beginning is going to be January 28. That will be virtual. And we have kind of thought we’re going to do that the week before. But that’s going to be the inauguration and a lot of the stuff that we’re going to be having to deal with in DC. We decided to push it back a little bit than our normal time. So January 28, virtual.

April 21, 22, you know, all depends if it can be virtual or not. And all these dates are a Wednesday and Thursday. If it’s going to be a virtual meeting, we will do it on the Thursday, the second date that I say on each of these dates I’m giving out.

So, April 21, 22, June 23, 24. And those were hoping to - we’re going to be in - if it’s going to be face to face, we’ll be in DC, and at our place here at Commerce. And then October 20, 21, if we get to that point, we may decide to go to Chicago for that one because I don’t think we’re going to be able to do much traveling with the April’s and June’s with stuff going on.

So, I think maybe we can do it even though it might be a little chilly. But we’re looking at the 20th and 21st of October for Chicago, which we tried to do last April.

Let’s see anything else. Also, would like to mention the new members and at some point during the meeting. We had to start a little late this morning, but maybe we can ask them to give a little bit - a short description of their company and what they do for their company.

And we do have six new members. We’ll welcome them. Glad that we were able to have some new members to the committee.

And the names are - in the company is a Doug Ceva with Prologis. Jason Craig, C.H. Robinson. Neely Mallory from Mallory Alexander International Logistics. Bob Sanders, Enterprise Products. Rick Tucker with the Port of Huntsville, and Brandon Unterbrink with BNSF.

So, those of our new members and at some point during the meetings, we may ask them to just come a little quick synopsis of their company, etc.

One of the last things I would like to mention is, you know, as many of you know, we’ve been trying to get new people on board at Commerce for our supply chain team. And, you know, thanks to Eugene ‘s hard work, we were able to get a new person for our supply chain team. And her name is Caroline Kaufman.

She started, give or take, about a month ago, you know, getting her involved with her responsibilities, which are going to include e-commerce, retail, blockchain, cold chain, and supply technology.

These are pretty much the same ones that John Miller did if the people remember when we used to have John Miller in our office; pretty much taken up his portfolio.

With that said, over the coming weeks and months, you know, Caroline may reach out to several of you just to be able to discuss, you know, her portfolio and kind of, I guess, pick your brain. And since you guys are the experts in it, she’d like to probably be able to talk to you guys and get a feel of what’s going on in the industry. And, you know, just to introduce herself, so that she’s available for you guys to talk to and discuss supply chain issues.

Very glad to have her on board. It’s a long time coming. And it’s been - it’s great that we have somebody new.

And probably the last thing that I really have to report on is at the point of the meeting, at around twelve o’clock, we’re going to be doing what’s called an administrative session, NSE ethics briefing along with a FACA briefing.

These are going to be more specific towards the new members, and the special government employees, and those being the ones in academia. They need to do this refresher course. We have two people from Commerce that will be doing that from our legal counsel office here at Commerce.

So, that’s going to from like 12:00 to 12:30. Well, not everyone has to be on that, but even if you have heard it before, and you want to want to stay on, that will be fine. And that will not be recorded, all the other parts to be recorded.

So, that should take about a half-hour till about 12:30. And then we plan on getting back at one o’clock, pretty much sharp. So, for that lunchtime, please try to be back on time. We’re going to try to start as sharp as we can at around one o’clock.

So, with that said, that’s pretty much all I have to add. Does anybody else - Rick, did you want to add anything?

Rick Gabrielson: No, I think we’re fine. We’ve got about - I think we’re good, five minutes for our first speaker. So, if you wanted to start on some of the new member introductions, or self-introductions, we’ve got about six minutes before the first speaker was set to start, if you wanted to.

Richard Boll: That’ll be great. Let me see on my view, well, I could probably just go down - oh, okay, we do have - and Shirley can you - I see Doug Ceva is on. He’s with Prologis. Can we allow him to speak and give a little background of his company and what he does for Prologis?

Coordinator: Certainly, and Doug, go ahead and just press star 1, and I’ll open your line for you. Again, just press star 1. You will have to record your name. And then I can open your line for you. So, it’ll be just one moment, please.

Richard Boll: Thanks, Doug, for being the first one out. Appreciate it.

Coordinator: I’m not seeing anyone pressing star 1. Again, Doug, just press star 1 at this time, and I’ll open your line for you.

Richard Boll: Yes, I see his name on here twice. Wonder if that’s…

Coordinator: If he’s joined the WebEx portion, I’m not sure if he’s joined the audio.

Richard Boll: Okay. Let me see…

Coordinator: Doug, if you’re on the line, just press star 1 at this time, and I’ll open your line for you.

Richard Boll: Okay, well, maybe Doug ‘s not on the…

Coordinator: I do have somebody pressing star 1. One moment, please. It did have somebody press star 1. So, ahead, your line is open.

Jason Craig: Rich I figured I’d help you out. Can you hear me? This is Jason Craig.

Richard Boll: Hey, Jason, good, you’re the next one out. That would be great. I’d appreciate it. Thanks for popping on. Jason Craig from C.H. Robinson. Thanks for popping on Jason. Appreciate it.

Jason Craig: Sure. Just, you know, briefly, my name is Jason Craig. I’m Director of Government Affairs at C.H. Robinson. I’m really excited to join the committee. I serve here in Minnesota. I’m based out of Minneapolis, Minnesota.

As people know - may know, C.H. Robinson is one of the largest third-party logistics providers in the country and the world. Offices all over, we span all the modes. So, many of you are either, you know, carriers or are otherwise partners with us in ocean freight, air freight, trucking, you name it.

So, I serve here in Minnesota as the Chair of the Minnesota Freight Advisory Committee. I’m about a third of the way into a two-year term. So, in addition, historically, I’ve been an election judge here.

I’m not doing it this year because of COVID, but if anybody wants to talk election issues, and, you know, stuff like that, mechanics, I’m always willing to do. I’m kind of an elections geek. Yes. So, that’s it. Anything else I should add Rich?

Richard Boll: No, I think that’s fine. We’re, you know, most hopefully, we’ll be able to all meet each other face to face at some point, and thanks for popping in on that. I appreciate it.

Jason Craig: If we do a Chicago tour, we’ve got a really large facility there. I’d be excited to show everybody hopefully next October.

Richard Boll: I appreciate that opportunity because I’ve been there. It’s really good. So, thanks, I appreciate it.

Jason Craig: You bet.

Richard Boll: And let me see - and I guess is Neely Mallory, I guess is also on the line. Is Neely available to be able to speak? Can you help us out with that Shirley?

Coordinator: Certainly. Neely, go ahead and just press star 1 at this time. Again, press star 1, then I’ll open your line for you, one moment.

Rick Gabrielson: And…

Coordinator: And Neely, your line is open at this time.

Neely Mallory: Thank you very much. This is Neely, and I’m very honored to be a part of this group. Sort of caught me by surprise when I was asked, but I look forward to participating with the group. I think keeping US goods competitive in the world market is paramount to the future of our economy.

We are - our company is focused on US exports of agriculture. And I guess the company started back in 1877. We’re still hanging in there. And that’s pretty - we’re based in Memphis, Tennessee, but we have offices around the world.

Richard Boll: Okay, well, thank you very much. It was good talking to - a couple of weeks ago, Neely, about what you guys are doing and stuff like that with COVID, etc., and I appreciate you, being on the committee. And I look forward to working with you guys all in the future. And thanks for giving us your little update on what your company does.

So, we’re all good. I think we’re going to have to stop for those…

Rick Gabrielson: Yes, I think we…

Richard Boll: …for those who are going to start at 10:20, I think we’re pretty much set. I think we have our next speakers in line. So…

Rick Gabrielson: I agree.

Richard Boll: …I think I’ll - Rick?

Rick Gabrielson: Yes, we’ll certainly grab it. Yes. First, thanks Jason. Thanks, Neely, for a short update. Good having you with the team.

I’m going to go through now and kick off our first set of speakers. And it’s really timely in that we all hope that there is a vaccine that’s on the horizon shortly. And of course, with that, there’s lots of questions people have about what do the distribution look like?

And there’s - in our subcommittee call, we talked about it a couple of weeks ago, and a number of questions surface as to how that would all work. And what does that distribution look like?

And so, today, like I said, we’ve got four speakers on it. We’re changing up the order a little bit. Dr. Kadlec was going to speak first, but he’s going to close it up for us. So, I’m going to introduce Adam Tewell to the group. He is the Special Assistant to the Chief of Staff, Assistant Secretary for Preparedness and Response for HHS.

So, with that, Adam, we’ll turn it over to you, and then as you’re done, maybe introduced to other members of your team.

Adam Tewell: Hi, this is Adam Tewell. So, actually, I may start by talking to Mr. Joe Figlio, who is the Branch Chief for Pharmaceutical Countermeasures and Infrastructure at the Biomedical Advanced Research and Development Authority, BARDA, within ASPR.

So, he can start off talking about ASPR’s work on COVID and the supply chain.

Joe Figlio: Okay, good morning. Can you hear me?

Richard Boll: Yes.

Joe Figlio: Yes, okay, great. Great. Thank you. So, good morning. So, let’s see we - I do want to mention first that if Dr. Kadlec does call in some time during our session that we will perhaps pause and go over to him, let him speak, and make the most use of his time.

I think he was supposed to start off our portion of our talk here, but he’s going to be coming in at the tail end. However, if he does - if he’s able to join, we’ll jump over to him, and then we’ll resume back to either my talk or Steve Adams. Okay?

Let’s see. So, first, a little bit about myself Joe Figlio. I work in BARDA. I’ll get to that in a minute. I have 21 years in industry, most of that was at Merck and Company.

Then a couple years for a supplier of disposables, single-use bags, and tubing for the pharmaceutical industry. And then I have about 11 years now at BARDA. I’m on my second pandemic. I started in BARDA in oh nine during the H1-N1pandemic.

And BARDA is the Biomedical Advanced Research and Development Authority. We exist within the ASPR office, the Assistant Secretary for Preparedness and Response, as part of HHS.

Within BARDA, we have a bunch of different divisions. We’re broken up in a similar manner to a pharmaceutical company would be. I’m in the Pharmaceutical Countermeasures and Infrastructure group.

We work on expanding domestic infrastructure and capacity to respond to pandemics, primarily flu pandemics, but other pandemics as well, such as, you know, Ebola, Zika, and other things that have come across over the past few years, but in doing so and preparing for flu pandemics, it does help in, you know, preparing for others, as well.

So, as far as the topics go, I was going to talk about a couple things here. One is, you know, trying to mix the supply chain issues with the vaccine distribution issues there. Obviously, there’s some overlap. But first touching on some high-level discussion on the vaccine distribution.

We have two basic paths. I’m not going to get into a whole lot of real detailed specifics on each, but we are working with the CDC and McKesson to do the majority of the distribution.

And how that’s working is that we’re piggybacking off of an existing program, a vaccine for children program that exists all year round, and we are supersizing, or we’re putting that on steroids to expand for the distribution of a much larger vaccine in a shorter amount of time frame.

The CDC has worked closely with McKesson for many years, including back well beyond the 2009 pandemic. So, that is one way that the majority of the vaccines will be distributed.

I say that we also know that, you know, there’s been some recent articles just this week. And we know that Pfizer is one of the leading candidates to come out and be available to the market. We have a lot of separate cold chain requirements with Pfizer. There were just some articles this week, in fact, that touched on that.

They have a special cold box that they’re using, which will incorporate dry ice to keep their product, ultra-cold temperatures minus 70, minus 80 range. And they’ll be distributed in that manner. So, there’s basically all the other vaccines, and then there’s the Pfizer vaccine, which will handle a slightly different path to get to the end-users.

Again, though, with all the vaccines, there’s cold chain considerations that we’ve been working on since the spring. There are some delivered frozen. Some delivered at plus four degrees, some delivered, well, I guess that’s the extent of it; minus 70, minus 20, plus four. So, we have a wide range of temperatures and cold chain considerations.

One thing that we’ve been doing along the way is to make sure each company that is making a vaccine has the capacity they need to store their bulk product, okay, before it gets filled. Sometimes they’re doing their own fillings. Sometimes we’re working with contract fillers. And we need to make sure those filling companies down the chain also have the ability to store enough material before filling and then after filling.

And then we take it from there to McKesson locations. So, there’s a large number of steps in between before this product will actually get into the end-users and not to just to include the end-users but also we have to think about the end-users whether it’s a CVS, a clinic, a hospital, they also need to be able to handle a product at the right temperatures to be able to store enough in the quantities that they’ll be receiving.

So, there’s many ways that’s being worked on every day. Some of it has to do with, as I said, two separate chains. If you’re receiving the Pfizer product, that will be in its own storage container and have its own requirements.

And if you’re receiving any of the other products when they become available, you know, the organization receiving the product will need to have confirmed that they are able to store the product that they’re receiving, so. These things are being worked on every day from the manufacturers, through the filling companies, to the storage facilities, to McKesson for distribution.

So, all this is going on, literally every day for many months now. And I’m going to leave it at that for now as far as the high-level distribution and specifics related to that, and we’ll see if there’s any questions that we’re able to answer later.

Jumping over to more of the supply chain issues. When you think of vaccinating the entire country of 600 plus million people, we have to consider needles and syringes for all those vaccinations. That is part of the process part of what we call the kitting process.

So, that the vaccines as they become available, there’ll be married up with the kits that are going to be used to do the vaccinations. So, we want them to arrive at the same location together. So, that is also being worked on now. And it has been for many months.

If you are familiar with the, I guess the supply chain and the capacity for needles and syringes in the US. It is pretty tight, kind of a just in time situation. So, I forget the exact numbers; maybe it’s 175 million in that neighborhood of those devices that are used per year in the US.

The system can only handle that plus a little bit more, and now we’re asking for 600 plus million to be provided in six months or less. So, we are currently receiving needles and syringes from 10 different companies. Some are being flown in. Some are being trucked in, to make up for the, you know, the lack of the, I guess the current capabilities of the industry, okay, in particular in the US.

So, similar situation exists with vials, okay, so most of your vaccines stored in vials as we know. You could have them either in multi-dose vials, single-dose vials, or prefilled syringes. Often the seasonal flu is delivered in a prefilled syringe, and a needle is attached to that syringe at the point of administration.

For a pandemic response, as we did in ‘09, vials are for more productive, more efficient, based on shipping, space available in trucks, space available, and capacity for filling itself.

So, to fill into roughly a ten dose vial or a five dose vial as a couple of vaccines might be, it’s just more efficient as far as space is concerned and capacity and speed. So, we are providing the vaccine in multi-dose vials.

So, each of the syringes and needles, as well as the vials, have their own constraints. There is a constraint on the vials in the whole world as well. I’ll be touching on that next.

As far as, you know, the ability to - the raw material for the vials is glass tubing for the most part. And that material is also in short supply, because as you can imagine, there are, you know, many companies working on a vaccine.

Some large companies, some newer small companies, many of them are, you know, attempting, you know, if they’re planning on supplying the United States as well as other parts of the world, they’re going to need a large number of vials. And so, all of the available vial capacity has been sucked up over the last six months or so, as well.

So, going back to some things we’re doing to alleviate these issues with the supply chain and, in particular, the domestic supply chain, we have awarded some technology investment agreements awards to different companies. This was in the spring timeframe roughly or maybe a little bit later by the time they were all awarded.

We have three domestic companies that produce needles and syringes that we have awarded capacity expansion projects for. Without getting into too much detail, I guess the total value of these contracts, which is public information, is about, let’s see, it’s $120 million to expand capacity at three different locations in the United States to be able to make more needles and syringes each year.

One, let’s say, and each one is being, you know, each company is managing this in a different way. For instance, one company was relying on a Chinese supplier. And now they’re going to bring that capacity back into the US.

Another company is simply expanding to the point they can and still maintain, you know, their equipment and supplies and not have an excess. And then another company is - relies on one of their plants in another part of the world in Asia to supply the US. So, by adding to their US capacity, we’ll be less reliant on their plants in other parts of the world.

The total for each of these projects takes us to an additional about 800 million units per year. So, we’re able to produce 800 million more needles and syringes per year to be ready for the next pandemic.

When I say next pandemic, we also have a few of them in some capacity, will have some things up and operational by, say, January, February of 2021. So, there may be some effects on our current response as well.

So, some of them, you know, just takes a long time to get this capacity in place. However, they should all be completed by next summer, 2021, and all their capacities should be in place and operational by then.

So, you know, I don’t think we all know exactly where this is going. Will this be an annual shot that is, you know, like a seasonal flu shot? What this is going to do to the market globally as well. So, with this added capacity available by next summer, we’ll be in much better position than we were right now.

And we were able to take advantage of this due to the coronavirus crisis, okay, you know, the awareness, additional funding that became available, we’re able to act on these things. And this will not only help us towards hopefully the tail end of this pandemic for the US, but we’ll also, you know, continue to provide capacity going forward for many years to come.

I’m going to jump over to the vials now. Similar situation there, the capacity for vials in the pharmaceutical industry is fairly strained. There was already a waiting time for some before the pandemic.

We have also awarded similar technology investment agreements with two domestic companies to increase their capacity to make more vials. Also, in doing so, these companies are making this sort of the next advanced vial.

So, for instance, one of them makes a glass-coated vial. It’s plastic, and it’s much more durable than your standard type one bore silicate vials, which is what the industry norm. And the other company is - has also made an improvement to their vials. It’s still a glass vial but is much more durable, prevents things like delamination, and actually speeds up processing time on the manufacturing line, which is also a key attribute for that vial.

So, the total investment there is proximately $350 million. Those projects will - let’s see, one of them, due to the fact that they’re different technologies, one of those companies will have their capacity online by the end of the year, which is outstanding. It’s just a lot to do with the different, you know, it’s a molded plastic-coated vial, different process than the other traditional glass vials.

And then the other company, a larger well known traditional company, they are - their capacity will start to come online in smaller quantities end of this year into next year, but their full capacity will be realized in two to three years. So, it’s a little bit longer timeframe for them.

But again, that will greatly improve the industry’s availability to access vials in the future and not rely on other countries such as a Germany and Italy and Japan, which are some of the leading companies where the vials are currently manufactured.

One last thing I want to touch on, I realize I’m going a bit over here. Hopefully, Steve will be okay with that, is that this capacity we’re working on is the manufacturing operations, right. It doesn’t get down into the detailed levels of all the raw materials.

For instance, the resins that are needed for the plastic molding. The needles that are needed for the needles and syringes, those are surgical steel, most of those are still produced outside the country, as well as the resins.

So, we really need to look at that next step, to take it to the next level and increase, you know, capacity in the US for those raw materials, those chemicals, and things like that. And that’s something that should be an ongoing project that, you know, the US continues to work on. And hopefully, this will be just the start of it.

Okay, I’m going to stop there. I don’t know if we’re going to do - I propose we do questions and answers together with Steve and I afterwards. So, I’m going to jump in and introduce Steve.

Steve Adams is the acting director of the Strategic National Stockpile, and we’ll kick it over to him, and then we could perhaps both do some Q&A and still hopefully wrap up on time provided we are waiting on Dr. Kadlec to join us. Thank you.

Steve Adams: Thank you. So, good morning all again. My name is Steve Adams, Strategic National Stockpile. For those of you not familiar with us, some have heard of us in a prior context. The organization has been around since 1999.

The first 19 years of its existence was at CDC, and then, two years ago, we transferred organizationally to within the Assistant Secretary for Preparedness and Response within Health and Human Services, where we continue to reside.

The program has existed with a primary focus around chemical, biological, radiological, and nuclear scenarios. And we’ve maintained a portfolio of approximately $10 billion worth of medical material, pharmaceuticals, vaccines, antidotes, medical devices, all arrayed around a series of specific threats.

Our business model has long been not to use governmental facilities with HHS painted on the side but to partner with the commercial sector, and material is held on our behalf in a series of strategic locations by third-party logistics providers. It’s been a great model for us, bringing the private sector efficiency to the management of the material under very close federal oversight.

Now, having said all that, I think we all saw in February and March not only the broad challenges of the US supply chain but certainly the fact that this was not an area where we had any substantial capability. And we all saw that as a challenge.

We had some modest quantities of PPE that we had held from the time of H1N1 that we were able to push out as a bit of a stop-gap when the commercial supply chains were truly stretched. But an outgrowth of that was a directive from the White House in spring to re-envision, reinvigorate, and recast the Strategic National Stockpile moving ahead to expand on the previous chemical, biological, radiological, nuclear focus to encompass the broader range of needs, such as pandemics and certainly, such as COVID-19.

And to that end, the project was started, again at the direction of the President to replenish or recreate the stockpile. And it’s - the short form it’s been termed SNS 2.0. And I had the privilege of leading that effort from HHS, but with a broad interagency group, providing oversight and a broad interagency of technical teams working on five primary buckets of activity to help assure that the nation was better prepared.

Primarily, we had a focus around the potential for resurgence in the fall, and I’ll go into that effort. At the same time, capturing opportunities and requirements, with a longer view toward assuring that the stockpile was better positioned to be able to optimally sustain itself over time is as we move toward a post COVID world.

But the focus on a great deal of activity that was done over the summer by the interagency teams, five primary buckets of activity, the first replenishing the stockpile and in truth, it’s a bit of a misnomer, as a number of the items that were needed were really not previously part of the formulary.

But we identified a strategy not of providing all things for all people, but attempting to create what was viewed as a 90-day surge capacity, when we looked at the peak times in spring demand, and pushed that forward, looking at creating a buffer supply of material that we could hold to be able to augment the commercial supply chain if we achieve - the time where it was stretched again, and then spot shortages - occurred.

So, we acquired a series of PPE items. And just some examples N95 respirators are - we presently have about 115 million, which is more than eight times what we had going into February of last year and will have 300 million in hand by the end of the year. Half a million surgical masks, eye and face shields, gowns, gloves, other critical items of mechanical ventilators, we had one - maintain the portfolio focused around pandemic influenza. But we’ve dramatically expanded our holdings there from what was previously around 12,000, now to almost 150,000.

Our objective in going through these capabilities, though, was to attempt to create this buffer capacity to assure a federal ability to meet spot shortages without exasperating supply chain challenges by essentially draining the supply. So, we really did a balancing act in many ways to put contracts in place, many of them for things like N95s, with an 18-month delivery cycle, where our objective was to slowly build our capacity while not pulling it all out of the commercial market.

And in fact, the number of times as we’ve worked through the summer, where there have been areas of spot shortage, we’ve made the affirmative decisions to essentially hold off on taking scheduled deliveries, to allow product to flow to the commercial market, and move it to areas of critical need.

So, first bucket replenishing the stockpile, with the exception of gloves, we’re -we - I think, been, as a group, successful at creating capacity. Gloves have provided their own challenge. And that work is ongoing, working with our colleagues at Defense Logistics, who, in this case, are serving as an acquisition arm for us.

And we’re working towards as unfortunately offshore sourcing at this point, because that’s where the capacities are, but that it continues to be a bit of a challenge.

Second bucket of activity, refining the strategy and structure and truly looking not towards the fall in a potential ways, but looking at how we can optimize approaches to assuring access to capacity over time, and do so in the most cost-effective and efficient way.

I will say this bucket we’ve made some inroads, but largely, this is a future state at this point where we continue to work with partners across the range to understand their thinking to assure we’re using best practices and planning for best practice moving ahead. But the focus really continues to be on the here and now in the in the months ahead.

Third bucket of activity establishing distributor relationships; historically, our model for moving products from the stockpile to the end-users has been primarily through relationships with state and local public health and emergency management. And this is a model that has seemed to serve well in other smaller-scale scenarios. But I think we also have the challenges of asking health departments that aren’t in the business of moving material to take stuff to hospitals, as at best, a very uneven capability.

And so, we’ve put in place contractual relationships with primary distributors who, moving ahead, will be able to move product that’s federally owned or federally controlled, and either target regions cities or down to individual points of care where there’re critical needs. And this is a really fantastic capability. I think that we’ll - we’re already seeing benefits as we’re being able to use this as needed to meet spot shortages in a much shorter time period than we were in the spring.

But the fourth bucket of activity is supply chain control tower. And without getting too long-winded essentially, this was an effort to gain visibility of the supply chain for critical items, five categories of PPE, and 38 critical pharmaceutical categories, where I think we all saw challenges that really having that clear understanding of what true demand was, and what true supply was.

And for this group, I won’t go into the complexities of trying to get that picture, but needless to say, we all struggled with really understanding what supply looked like through the spring. And by establishing these relationships with distributors primarily, who are able to provide not only a daily view of all products flowing in but a daily view of all products flowing out.

This has really helped us to have a much clearer understanding of how these critical supplies are moving around the US and gives us the ability to take pre-emptive action as sometimes when we’re beginning to see a tightening of the supply chain around critical items before it becomes a bit of a crisis.

The last bucket I’ll hit on briefly is expanding domestic manufacturing, expanding rather, domestic manufacturing. And to this end, we’ve partnered with Department of Defense that has a number of authorities unique to this area. And it’s made at this point, more than $600 million worth of investment in expanding productive capacity for things like N95 respirators, melt-blown fabric, and gloves.

I will just point out that we’re very mindful that these investments are very modest relative to the broad supply chain for these items. And part of the ongoing dialogue in this area is the critical need to have a broader approach, not simply HHS, and certainly not simply the US government for some of these critical items, but the very forces that moved production of things like surgical masks and gloves offshore 20 years ago, will return very quickly in a post COVID world if we don’t have a broader approach to helping assure that our nation sources critical materials here and keep this productive capacity available.

I’m - I don’t want to go too long on time here. So, I will just add to the comments Joe had made on distribution. We have a vaccine - we have no direct role in the movement of the future vaccine. We have partnered very closely with Joe and other colleagues at BARDA to support the acquisition of needles and syringes and contract for the kitting of these critical items so that they will marry up eventually in the distribution with the vaccine.

But although we’re asked this often, we have no direct role in distributing either one. So, at that, and looking at the time, I will pause my comments and see first whether Dr. Kadlec was able to join, and I would then defer to his comments. And if he’s not been able to join yet. Go ahead with question and answers for Joe and I. Thank you.

Adam Tewell: Thank you, sir. Dr. Kadlec has - should be here shortly but has not been able to join. So, let’s go to questions, and we’ll let you know when he comes to the room.

Steve Adams: Okay, operator…

Rick Blasgen: So, (Joe), could you’re…

Joe Figlio: Yes.

Rick Blasgen: Do you guys have any comments, and then you guys want to open up to everyone if you guys have a few questions yourselves.

Joe Figlio: Well, I have some - let the team go through and ask questions first. So, if anyone here - just hit star 1, the operator will let you in, and if we’re done, then Rick and I can maybe jump in.

Rick Blasgen: Okay…

Coordinator: And again, just press star 1, unmute your line, and record your name clearly. Again, that is star one to ask you a question, and one moment, please. We do have a question from Norm Schenk. Your line is open. You may ask your question.

Norm Schenk: Yes, good morning, everyone. And thank you for both of the last two presentations. And I have actually got a long list based on our committee, but I’ll just focus on a couple of those - can jump in, and they’re there with respect to greater detail on the actual distribution of the vaccines.

And I was wondering if either you could comment with respect to - my understanding is that each of the 50 states were supposed to submit their distribution plans to the CDC last week. And we’re wondering the status of that.

And then also, you know, with respect to not just those plans, obviously, as a service provider that’s going to be moving more than a fair number of vaccines with respect to these plans there is concerned about, you know, the inconsistencies within states but also not just at the state level and the local level, in terms of who these are going to actually get delivered to.

Is it phases? Is it government to start with? Is it drugstores or hospitals, or that so, can either of you please comment a little more on the actual distribution plans? Thank you.

Joe Figlio: Steve - I’ll jump in if you have anything to add because I’m not sure that we do have much to add on that front. So, most of what you’re asking for there is - falls under the responsibility of the CDC. And as you know, you’ve heard of Operation Warp Speed. They’re working closely with all of us. We’re all kind of one team currently.

So, that decision, I know those things are being worked on now, as far as the states and their distributions. I don’t have visibility to the specifics of, you know, which states have supplied their plans yet, or any other specific details.

As far as, you know, of course, early on, there’ll be limited doses there, and we’re not going to have 300 million doses on day one. So, clearly, there’ll be a limited supply and the allocation of those doses to particular states, etc., or target populations that’ll be handled between the CDC and, you know, the OWS.

Steve Adams: This is Steve, and I would echo Joe’s words, I’m - very reasonable questions. But I would say our role is a supporting role. And I will have to defer to the CDC, or our Warp Speed colleagues to talk about the specifics of the current state of both the national plans and the integration with the state plans.

Again, very reasonable questions. I guess I can’t speak to it directly.

Coordinator: Thank you again. If you’d like to ask a question, press star 1. Our next question comes from Brian Hancock. Your line is open. You may ask your question.

Brian Hancock: Hello, this, Brian. Thank you very much for the presentation. I have a question around refrigerated capacity. I’m just trying to understand. We’re seeing a tightness there. And I’m assuming that you are working with the drug companies. But is there anything else that the private sector could do in that particular space?

We have a number of customers that have that type of capacity, but I don’t know if you’re working with them or not. So, just looking for some, some more insight into that refrigerated capacity in storing the vaccines so - whether it’s in the US or in other countries. Thank you.

Richard Boll: Also, when you guys mention questions, please state your name and your affiliation. That might help them to tone their answers to your questions as well.

Brian Hancock: Okay. Brian Hancock, Kansas City, Southern Railroad. Sorry about that Rich.

Richard Boll: No problem.

Joe Figlio: Yes, it’s Joe Figlio again. I can jump in here with a bit of information. So, yes, there’s a team that exists here within Operation Warp Speed. It’s got members from various groups that are involved.

They are, I think I, as I touched on earlier, they’re looking at, you know, each individual vaccine manufacturer’s ability to store their material before it’s shipped to the filling company if they’re not doing their own filling.

So, for instance, you know, their own work and process, inventory capacity, is being looked at closely, as well as then each of the filling companies that we’re working with, they are also closely, you know, looking at the capacity as well as adding to their capacity for that in-process work.

And that means, you know, bulk - the vaccines before they’re filled, as well as after they’re filled. And before they’re released, there is a time, you know, where we’ll be filling vaccines, and then they need to wait for release by the company as well as the FDA. So, there’s a process there where there’s materials need to be held at the right temperatures.

We are working with some industry such as UPS, FedEx, and others. I don’t even know the whole list. Again, that’s a different team that I’m not directly involved with, but they are looking at, you know, all kinds of solutions at minus 70, as well as minus 20, and plus four as far as where along each company - what amount of material may they need to hold at which point in the process? And what capability do they have to hold it, and where can we expand that?

So, that’s something that, like I said, is being worked on regularly. And, you know, it’s a - for each company, it’s a different scenario. And it’s a complex matrix that we’re tracking and expanding upon each day, so I don’t know if that’s enough of an answer, okay?

Brian Hancock: No, that’s perfect. Thank you.

Joe Figlio: Okay, thank you.

Coordinator: Thank you again. Press star 1 to ask a question. Our next question comes from Melzie Wilson. Your line is open. You may ask your question.

Melzie Wilson: Thank you. Good morning. This is Melzie Wilson. I’m representing the NCBFAA as well as FedEx train networks. Thank you for that presentation, very interesting material.

One of the questions I have is that while we are focused on the US, the vaccine will be of a global impact. How are we perceiving those materials or such as the vials, the syringes, the needles, and the vaccine itself? What is the impact that we’ll see for manufacture dedicated to the US versus going to other country? Are we looking at that impact?

Joe Figlio: Yes, I can touch on a few things, and then if Steve wants to jump in. So, for instance, with our using - taking our supplies first. So, with needles, syringes, and vials, the companies involved, you know, are building up their capacity now, as quickly as they can, to provide, you know, for any US need, but additionally, then they could supply their other customers as well going forward. We want them to stay productive and stay busy.

So, for instance, if we have a company making a new, high tech, heavy-duty, durable plastic vial down in Alabama, we want them to satisfy all of our Operation Warp Speed needs for the United States. Once they do that, then we want them to also supply other company’s needs to supply their vaccine to other countries as well.

So, we want them to stay busy. It doesn’t help anyone if they build up this capacity and have no use for it. So, again, these companies generally, I believe, yes, all of them do normally supply to other countries, whether it’s needles and syringes or vials.

And so, we do have as part of the investment, though, we have agreements that they will supply to our US Operation Warp Speed organizations first and at reduced pricing. So, priority access and priority pricing those things are built into their contracts.

And so, yes, they definitely, you know, we want them to stay busy. We want them to stay productive. We want them to supply us first in the sense that, you know, we’ve invested the millions of dollars, and I don’t know if there’s another, as far as the other companies making the vaccines, they are also as I think as far as we know, it’s pretty public that they are also going to be making vaccines for other countries, some of them have operations in other countries.

And that is also, you know, and that’s something that we’re preventing. However, if we have our initial investment with them for a certain amount of money in doses, then we’re closely tracking and working with them to get make those doses available to the US.

Melzie Wilson: Okay, thank you.

Adam Tewell: Hi, this is Adam Tewell. Dr. Kadlec has joined, so I will turn it over to him.

Dr. Kadlec: Good morning, and I apologize for being a little late. I’m kind of on the efforts of Warp Speed. So, conflicting meetings, but I do want to just acknowledge and thank you for the opportunity to participate. And certainly, thank Steve Adams and Joe Figlio for participating and certainly kind of filling in the gap here.

My comments are going to be very brief. I acknowledge the important role that you all play in terms of helping us think through and be a little smarter in these areas because, if anything, the pandemic was a rude awakening to something that we had an appreciation for but had not lived through other than through focal events, like during Hurricane Maria, when some of our supply chain was disrupted with critical products, medical products coming out of Puerto Rico, for example.

But what we, I think, have experienced is really just the tip of the iceberg of what we really need to be able to perform in the future. And that is, how do we secure our supply chains, particularly for vital health care products. I mean, everyone’s focused on the pandemic today. But I am also just kind of acknowledging the fact that we realized that there’s much more to the healthcare business than N95, masks, or rubber gloves and that there’s a whole suite of medical drugs and products that we are dependent on foreign supplies, particularly from Asia.

So, I hope that in the conversation that you have, and your consideration, and we can contribute to that, and certainly take questions is the idea that we’ve not been standing idly by waiting for the future to come. We’ve been trying to rectify what has been challenges and shortfalls in the immediate scope of this pandemic in terms of expanding domestic capacity for things like personal protective equipment for things like certain medical products.

And with that making investments both, I would say, operational and strategic, to use innovation, to use opportunities to advance emerging technologies, like for the production of sterile saline, that we can do it on demand in a distributed manner that would kind of reduce our vulnerabilities to at least our supply chains that happened to be in Puerto Rico, vis-à-vis, in other parts of the world.

And certainly, with the idea of on-demand pharmaceutical manufacturing, working with the Defense Department of, or DARPA, to basically advance and accelerate the development with FDA of capabilities that allow us to make essential drugs that we would need, not only in a pandemic but in future emergencies, where our supply chains could be threatened.

So, I want to leave plenty of opportunity for questions and comments. But I also wanted to let you know that we are certainly beholden on groups like yourselves to provide that kind of expert advice. Certainly, we’re in one small niche of a much larger set of niches, as it relates to vital capabilities our nation needs to not only live healthy but survive as a free democracy.

And so, I just want to say thank you to you all. And again, we appreciate this. And we appreciate a more enduring relationship with you because many of the things that we’re doing, things that Steve is doing particular, within our Strategic National Stockpile, and within our logistics domain, are really how do we build an onshore capability or near-shore capability to meet our most critical health needs, that allow us to respond to not only this pandemic, but the future of public health emergencies going forward.

So, with that, I’ll stop and again look forward to any questions or comments.

Coordinator: We do have a question if you’d like to take it.

Dr. Kadlec: I’d be delighted to take it.

Coordinator: Thank you. We do have a question from James Cooper. Your line is open. You may ask your question.

James Cooper: Thank you. Good morning. And doctor, thank you for the presentation and, you know, making available the key staff who are really neck-deep involved in all this. I’ve learned a great deal today.

First question I have is, is there any kind of longer-term process in place by which companies can either apply for funding or, you know, approach the government as a partner or a potential stakeholder and talk about certain ways that maybe the individual company could help alleviate some issues or has a specialty, or a technology that could, you know, help advance us in being able to return manufacturing back to the United States?

And the other part to this is, you know, I hear about masks gloves, you know, and syringes, things of that nature. Is the government also considering product lines that have to do with formulated products such as sanitizers, disinfectants, you know, because we know we face some critical shortages of those types of items, and especially some of the key ingredients when precursors even to those ingredients in the past? Thank you.

Dr. Kadlec: Well, thanks for the question, Jim. And I just want to say that with the idea that we have some broad area announcements that are out there for certain products, and for certain things. And there’s also work that FEMA has done in this domain.

I think to your point, though; however, I don’t think - I think we’re acting in more of a tactical, operational mode. And so, the - what I would say the strategic conversation that we need to start having with industry writ large in terms of how do we bring domestic manufacturing back, or what kind of other products we need to consider in this is probably work in progress.

So, I can’t point to anything specific right now as it relates; we had worked jointly with the Department of Defense with a list of identified products and product lines. We were looking at opportunities to expand domestic manufacturing and invest in domestic manufacturing through the Defense Production Act, title three.

But beyond that, I think there is much more work to do. And certainly, I think we need to kind of be connected with Department of Commerce, excuse me, to do that. Steve, or Joe, do you have any common to add on that, over?

Steve Adams: Well, this is Steve. I would say you hit the nail on the head, sir. A lot of activity has been going on for the last several months, but it really has been tactical, looking to getting capacities that could be brought to bear in the next 12 months.

But I think we all understand that the needs for on-shoring are much greater. And in order to have an enduring impact, it’s going to be - need to be a much broader effort to assure that we don’t, as a nation, end up in the same place we were in February, over.

Coordinator: Thank you. My next question comes from Doug Ceva. Your line is open. You may ask your question.

Doug Ceva: Yes, can you guys hear me now?

Dr. Kadlec: Yes, Doug.

Doug Ceva: Okay, great. So, it worked. Sorry for the confusion. My question is, what is the added security that private companies would have to ensure that they have when they’re in getting involved in the vaccine movement or peripheral products?

Dr. Kadleck: I guess I could lend a little context to this, which is I think regardless of whether it’s a vaccine product or something of an ancillary, I think, as we probably see the world going forward, they’ll probably be some kind of base-level requirement, in terms of a few things that we would think would be important for companies to be aware of.

And I think many of you are already adopting these approaches regardless, and that is in terms of cyber hygiene and cybersecurity, being an important one. It would also be subject to physical security, that may be a requirement depending on the product and the sensitivity of that product.

And oftentimes in good manufacturing, or GMP kind of activities, particularly with drugs or any kind of pharmaceutical, those two are inherent in any activity, that is, that companies are involved in.

There may be some unique, depending on the nature of the product or the activity, personnel security considerations. And what we’ve worked with outside entities, such as the Federal Bureau of Investigation and others, Department Homeland Security, is they make it a routine effort to work with companies.

And again, what we don’t ask for is anything extraordinary, is just ensure that there are existing practices and procedures in place that provide a level of competence that someone can’t enter your production space without maybe a badge or having been listed on a roster for access or that nature.

So, there are requirements. There are - we’re trying to make them more uniform across the board.

But I think that that is kind of like the way of the future as we look at evaluating not only our competitiveness in the supply chain but the security of our supply chains. And the risks that can ensue as a consequence of things like insider threats, outside cyber activities, or even risks to your supply chain in sourcing that you may have to put a little more scrutiny on as a consequence of working with us. And working with us, particularly not in this COVID event, but also potentially, in the future, as we try to ensure that we can sustain both not only public health essential, but national security essential products and activities.

Coordinator: Thank you. Our next question comes from Jason Craig. Your line is open. You may ask your question.

Jason Craig: Great. Thank you. Can everybody hear me, okay?

Dr. Kadlec: Yes.

Jason Craig: All right. I’m Jason Craig from C.H. Robinson. I would just like to make sure to get one detail on your radar in regards to transportation.

For most of this year, the Federal Motor Carrier Safety Administration has had an emergency declaration, suspending hours of service for delivery of supply - medical supplies, that runs out December 31.

And as you guys talk about vaccine distribution and the supply chain, one of the things to put on your to-do list is likely to extend that emergency hours of service declaration through December 31. So, just one little detail you might connect.

Dr. Kadlec: Yes, Jason, thanks. So, I mean, who’s got the responsibility? I’m assuming it’s DOT. If there’s a specific entity like DOT, I’d be happy to take that.

Jason Craig: Yes, it’s the Federal Motor Carrier Safety Administration within DOT.

Dr. Kadlec: Motor Carriers Administration, well, thank you very much for that. That’s a very pertinent relevant activity, and I’ll make sure that we raise that to the appropriate level and get that done. Thanks for that.

Jason Craig: You bet.

Coordinator: Thank you. Again, if you’d like to ask a question, press star 1 at this time, unmute your line and record your name clearly. And one moment, please. At this time, I’m showing no further questions.

Rick Gabrielson: Thank you. This is Rick Gabrielson. I have a question for the group. We talked a little bit about the transportation logistics. And since they’re still are a number of either key components or some of the products that will be likely imported into the country, and knowing that it could, you know, could be whether it’s coming in on a plane flying in or it’s coming in on containers, has any discussion taking place to connecting and adding visibility to how that’s moving through the network?

So, it gets priority either in the discharge of a vessel or the movement of through a, you know, to the airport facilities. So, it gets to its destination on time. So, to me, that’s products that we marry up with other products to ensure it doesn’t get delayed or lost in person, the supply chain. Has discussions taken place on that? Thank you.

Joe Figlio: Joe Figlio, I can jump in on that with what I know about that. There’s a team within Operation Warp Speed that is pretty much staffed by military that is actually actively working on any kind of issues, getting materials in from other countries, whether it’s through customs, etc., they have a system worked out, and things have been flowing pretty well.

That involves, you know, it could be equipment coming to a company that needs to, you know, use that equipment to make the vaccine. It could be supplies needed for the vaccine. All kinds of different items have been tracked very closely.

And I know that the team at Operation Warp Speed is working on that on a daily basis.

Rick Gabrielson: Great. Thank you.

Coordinator: Thank you. We do have a question. I believe it is from Gloria. Your line is open. If you press star 1, your line is open. Go ahead…

Gloria: (Unintelligible). Yes, good morning. My name is Gloria. I’m calling - I am from the University of Colorado, and I have a question. We have been discussing with all of the reason that the importance of distributing the vaccine when it is available.

I am wondering if there has been any discussion about also the reverse logistics because we have been talking about these large numbers. So, it’s going to be a lot of syringes and a lot of like tubes that are going to be around.

So, have been any discussion about how we are going to be like the disposing of these items?

Dr. Kadlec: Well, thank you. And I can answer a little bit of that. I do know that that kind of consideration is going on with reverse logistics. I can’t go into the particular status or give you more than the fact that I have knowledge that there’s an ongoing conversation.

But certainly, we can provide a little more feedback to the group in terms of what the status of that is and the like. But there is an appreciation for - to prevent wastage as well as be able to reallocate products, particularly if they’re not expired and/or available to ensure that we can optimize the use, and certainly maximize the benefit for all.

Gloria: Thank you.

Coordinator: Thank you. At this time, I’m showing no further questions.

Richard Boll: Anything else you guys want to add? Rick?

Rick Gabrielson: Anything on your end?

Rick Blasgen: Well, just wondering a little bit about timing. And, you know, I was listening to Norm’s comments around transportation, and how this distribution will tactically occur between states and so on.

When do we think we would know more about that as a matter of planning for the vaccines’ eventual availability? And then, the distribution system will follow that. And just - I was interested in Norm’s comments about the states and then how the states will distribute. Anything you can add on that?

Norm Schenk: I think I can just briefly. So, the intent is to work with the distributor, McKesson, to basically once the allocations are made by the states is to have that directly shipped by the distributor to those locations.

So, it really is a kind of a point and deliver kind of mechanism that is being developed. And with the intent that in at least the initial cases - the initial status of the vaccine, for which will probably be limited and directed towards certain critical vulnerable populations or subgroups.

And I’ll just give an example. Healthcare workers, some of that can be pre-identified. And so, then the question is, is how much would be allocated? But at least you would identify the places where those products would likely go? And so, they’re working through that at the present moment, over.

Rick Blasgen: Okay, thank you.

Rick Gabrielson: Any other questions from the group?

Coordinator: At this time, I’m showing no questions on the phone lines.

Richard Boll: Okay, well, thank you all very much for giving up the (unintelligible) with your organization here, your agency. I appreciate it. Any other comments want to have any before we move on to the next category?

Rick Blasgen: I just want to add my thanks as well. I really appreciate your time and direct answer to the group’s questions, very helpful.

Richard Boll: And kind of my last comment, I know we’ve had your presentations and stuff, and I want it to be - this is not a one of type thing, we’d like to be able to have constant communication between our group and the members of the group with you guys as well.

So, you know, hopefully, we can either have you for another call or maybe people can talk to you on an individual basis or be able to discuss with you the issues as well going forward. That would be great.

Rick Blasgen: Yes, group chat might offer up one maybe closing comment, you know, maybe for, you know, Dr. Kadlec and the team. You know, this group represents a very, very diverse group of industry professionals.

And they get - the answer they might have is that you know, as you’re going through continued process, you know, please feel free to reach out to this body and this group, because there are a large number of members that would enjoy being able to participate and support, you know, your activities.

Richard Boll: Okay, no further work, maybe later on. I appreciate it. And thank you all very much for your presentation. And thank you, Adam, for getting us all together. I appreciate it.

Adam Tewell: Thank you for the opportunity. Take care.

Richard Boll: Okay. Bye-bye. Okay, I know we have some - a couple more minutes to be able to go to our next discussion. I’d like to be able to go probably back to the - I know we still got a few of the new members that we have on the committee that I know Doug had an issue getting on earlier.

I’d like to be able to continue that and see what we can do from that. And then we also have other issues that we can talk about with a recommendation that’s coming down the pike as well. So, you know, maybe we can do that in between some of these spots that we have, but because we have Doug, Doug Ceva, from Prologis, could we, Shirley have him get on?

Coordinator: Certainly. I did go ahead and open up Doug’s line.

Doug Ceva: Okay, so, am I on?

Richard Boll: Yes, Doug.

Doug Ceva: Excellent. Oh, I love it when technology works. Hey, so, appreciate being a part of the committee: I - my history. I’m with Prologis right now. We’re the largest industrial developer and landlord of warehousing space in the world.

Actually, we’re just about slightly under a billion square feet and been with Prologis for about ten years. I’m on the customer lead development team right now. And prior to that, I was 30 years in the ocean carrier world, 28 years with Maersk, and then two years with CMA.

So, happy to be a part of the team. I look forward to meeting everyone face to face someday.

Richard Boll: Thank you, Doug. And it was nice seeing you at the CSCMP last year. It was good talking to you then too. So, appreciate it. Thank you…

Doug Ceva: Great.

Richard Boll: …and welcome aboard. I think we have Bob Sanders as well, Robert Sanders? I think he’s on the line as well. Could we open that line for him, please?

Coordinator: Certainly, Bob, just press star 1 so I can open your line. Again, that is star 1, sir. And one moment, please.

Bob Sanders: We open?

Coordinator: Yes, your line is open. You’re there.

Bob Sanders: Good morning, everybody. My name is Robert Sanders, and I’m the Executive Vice President of Enterprise Products.

Enterprise has been around about 50 years. We are a midstream energy company. What that means is we move product from A to B. We currently today move about 10 million barrels a day of oil equivalent. So, that’s natural gas, liquid hydrocarbons like ethane, propane, as well as crude oil. And I’ll give a brief shout out to Roger Gunther with support with the Port of Houston. Enterprise products exports more light hydrocarbons, ethane, and propane than any other country in the world. We move almost 350 million barrels a year of ethane and propane through the Houston ship channel.

Along with moving light crude oil on top of that total is about 450 million barrels a year is exported from Enterprise through the Houston ship channel as well as Freeport and Beaumont.

Pleasure to be on board.

Richard Boll: Well, thank you, Bob, and welcome aboard. Appreciate having you on the committee. I know we have another Rick, believe it or not, another Rick Tucker, from Port of Huntsville.

I don’t think he’s on. He was supposed to be on so. He’s not as of right now. I do not think, but I know we have Brandon Unterbrink from BNSF. Could we have Brandon?

Coordinator: Sir, just press star 1. And I’ll open your line out for this time. Again, press star 1. And I do believe Rick has joined also. So, if you want me…

Richard Boll: Okay.

Coordinator: …press star 1 also. And Brandon, I’ll go ahead and open your line at this time. Your line is open, sir.

Brandon Unterbrink: All right. Thank you. Yes, I’m Brandon, Unterbrink. I’m with BNSF Railway. I’m our Vice President of international and what that is, is a ocean carrier relationships on bringing in imports, mainly Trans-Pacific imports, into the West Coast and moving to inland.

And so, that’s one part of our business which is under the under intermodal umbrella which is about 50% of our volume. We also have industrial Ag and coal business units with BNSF. And our rail spans on the western part of the United States if you’re not aware. And so, that’s our primary line of business there.

So, excited to participate and look forward to this.

Richard Boll: Well, thank you. And welcome, Brandon. Appreciate it. And if we could get Rick, that would be great. Rick Tucker, he’s on the line. Could you help us out with that, please?

Coordinator: Certainly, and Rick Tucker, your line is open at this time.

Rick Tucker: Thank you very much. This is Rick Tucker. I’m the CEO of the Port of Huntsville and glad to be a part of this group and looking forward to participating in the future.

And the Port of Huntsville is an inland port. And we have three major operating entities, the Huntsville International Airport, which is a small hub airport for passenger operations. But we do have significant international air cargo operations, 747 service to Europe, Asia, South America, and Latin America. We - we’re this - actually the 17th largest international air cargo airport in the continental US.

We also have the Jet Plex Industrial Park, which is a 4000-acre industrial park. And we have about 25,000 people in and around our facility employed in that industrial park.

And the third is a rail intermodal facility that we own and operate. And we’re connected to the rail system through the Norfolk Southern Railroad. But I have over 42 years of experience, 26 of those as CEO of the Port of Huntsville, so.

Glad to be a part of this group and looking forward to participating in the future. Thank you.

Richard Boll: Well, thank you, Rick, and welcome. Welcome to the committee. Look forward to working with you in the coming weeks and months.

I think we pretty much got all the new members on the committee. We had a lot of applications that we had. So, it was a big process to be able to look through all the applications and be able to pick the six that we have here. And we appreciate having them on that committee. And we just look forward to working with them in the future and being a part of our group.

So, that said, I know we have a couple of minutes. I don’t know if our next people are on yet. It’d be John Meakem or Gary Stanley. I don’t know. I don’t - I didn’t see Rick Tucker on my list. So, I was wondering if we’re missing out on some people that might be on?

Anything on that Shirley?

Coordinator: And again, press star 1.

Richard Boll: Gary or John are either of you on?

Rick Gabrielson: Do you show them on the list or something (unintelligible)?

Rick Blasgen: It does look like they are on the attendee list. You know, you might have to unmute themselves.

Richard Boll: Shirley, do you see them at all? Gary Stanley, or John Meakem?

Coordinator: I don’t see Gary or John in the call right now. If you are on, please press star 1.

Richard Boll: And maybe it’s a minute or two before they come on, but just talked to John really late last night, so. This is the issues with these virtual meetings.

Rick Blasgen: I do see them on the attendee list, but maybe that’s…

Coordinator: Okay. Just a moment. Okay, John, your line is now open.

Richard Boll: Hello, John?

John Meakem: Can you hear me?

Richard Boll: Yes, we can hear you now John. This is Rich. How’re you doing?

John Meakem: Very well. Glad to be here. I did hear the last ten or 15 minutes. So, and I know Gary is in the process of joining as well. I’m happy to get started. If that’s all right, Rich?

Richard Boll: That would be great John. I appreciate it. And, you know, John’s one of our people we work with at the Department of Commerce. And he’s going to give us an update on the Federal Critical Mineral strategy.

So, I appreciate you guys doing it and carry on. Thanks.

John Meakem: Okay, well, very well. Again, my name is John Meakem. I’m in the Commerce’s Office of Materials Industries. We’ll be joined in just a moment by Gary Stanley, who’s my office director.

And I do hope this will be a conversation we welcome, well, after I give a few minutes of overview, questions. And afterwards separately, if you want to reach out to us, Rich has our contact information. We’re happy to have on or offline conversations.

With respect to critical minerals, this is an issue that, in one way or another, has been out there for a long time, which is US dependence on other nations for a number of materials, or as we say, critical minerals for a number of products. And increasingly for more forward-looking products and new applications.

The issue has been out there for a while. It’s often phrased in terms of rare earth elements. And there can be some confusion in terms there. But let me just simply say that in late 2017, the President issued an executive order calling for a federal critical mineral strategy.

The executive order asked for two things, one for the Interior Department to identify a list of critical minerals, and two, for the Commerce Department to work with other federal agencies and the White House to compile a federal strategy relating to critical minerals.
Well, in May 2018, Interior completed its work. It issued a list of 35 critical minerals. For a large number of the minerals, the US doesn’t produce them at all domestically, basically at this point. For all of them, the US is heavily dependent on foreign sources.

Commerce working out of Gary’s office then worked to put together the strategy. It was issued last year in 2019 and features a number of calls to action that are split up among the many federal agencies. There are six general categories.

One is to advance research and development. The second is to strengthen this country’s supply chains and defense industrial base. The third is to enhance international trade and cooperation related to critical minerals. Fourth is to better understand our domestic critical mineral resources, i.e., better mapping what we have within our own borders. The fifth is to improve access through reviewing and trying to - reviewing the regulatory processes and trying to reduce federal permitting timeframes.

The final call to action is to grow the American critical minerals workforce so that we have adequate numbers of workers who can perform in these areas.

Since that time, we at Commerce have been - have continued to work with other agencies and under the overall supervision of what’s called the Critical Minerals Subcommittee that is a committee chaired by the White House Office of Science and Technology Policy, and the Energy Department, and the Interior Department.

Muchmore recently, just few days ago actually, the President issued a new executive order on this topic, addressing the threats the domestic supply chain, from reliance on critical minerals from foreign adversaries.

And in this executive order, the call is to use national emergency authorities to direct the Interior Department to investigate and recommend additional executive action, tariffs, quotas, use of the defense procurement act, etc. to address the threats to the nation from reliance on foreign supplies of critical minerals.

The executive order asked agencies to prioritize and devote resources to promoting the domestic mining industry and domestic mineral supply chains, including processing and the production of certain finished goods. Such as, say, magnets made from rare earth elements.

The executive order directs the Secretary of Energy to identify funding that could be deployed. It directs all agencies to accelerate permitting processes for mining projects. And it calls for accelerated work to extract rare earth elements from coal mine and power plant waste sites.

It directs the Interior Department to use Defense Production Act Authority to support mining projects. It directs the State Department to report on current efforts and potential policy options to work with allies and partners to develop supply chains that do not have to involve China.

It directs the White House Office of Science and Technology Policy to coordinate federal research and development on private mining projects and identify future research and development needs. And it also directs the Interior Department to periodically update the list of what’s considered to be critical minerals.

As I said, the list issued a few years ago has 35 critical minerals. The revised list might have a few more or a few less.

Now, that’s a very quick overview. I’d be happy to take some questions and have some discussion. Gary, I don’t know if you’ve made it on the line if you want to add anything as well.

But this is a very dynamic area. Probably much of the equipment that comes into play for making this call this morning possible involves some of these elements. In any event, we welcome your questions.

Coordinator: Gary, your line is now open.

Gary Stanley: Hi, this is Gary. John, thanks so much. Can everyone hear me, okay?

John Meakem: Yes, Gary.

Gary Stanley: Good. When the executive order was first assigned to the department, back in 2018, this really was a very unique experience, not across just the fact that this was a topic that had really been in focus for really for quite some time.

This is not a new phenomenon. It’s certainly not a new competitiveness issue for many folks in the manufacturing and fabricating areas of our business in this country.

And so, what made this particular effort so unique is that for the first time, at least in my 37 years of government, seeing that there was a concerted effort at the White House level, to bring together the executive branch agencies, each of them having various stakeholders and responsibilities to put together a strategy that would address this, not from an episodic, singular à la carte kind of approach, but really more of a broader holistic approach.

So, the way the executive order was laid out, 13817, is it clearly sent a message that one, this is something that is a national as well as an economic security issue, but beyond that, that they will focus on the executive order.

It may have had several subplots associated with it, but the thing that it was clearly intended to do was to ease our import dependency on these critical minerals. And especially those that are, like a critical nature to our economic and national defense infrastructure.

So, the approach that we took as the coordinating agency, and many folks that have seen the strategy, were surprised that Commerce was the agency of focus here.

And whoever made that Solomon type decision over at the White House, really was looking at it from a very unique vantage point, because really, when you look at it, Commerce’s is a fairly, you know, I use this in quotes, fairly minor player when you look at the - not only the issue of critical minerals but frankly, the investment or the mandate of the agency, as far as what we do is relates to critical minerals.

The big guys out there, the interiors, the energies and the defense departments of the world, many folks thought that well, either one of the three of them was a logical place to have the executive order strategy coordination to be leveraged out of. But the decision was made at the White House is that Commerce, in many ways, is an independent broker. Right?

So, we, as an agency, see it from the vantage point of manufacturing services, as well as competitiveness. But we also can look at it from the vantage point of how these other areas are affected, such as energy, such as what’s going on with mining, permitting, and (unintelligible) determine the amount of the reserves that we have a lot of these.

Commerce has minor roles, but each one of those areas, even including the technology side, which energy has the lead on, but Commerce has missed. So, they’re a player on that particular dynamic.

You have NOAA that has responsibilities as relates to natural resources and critical minerals. As an item, for natural resource, they have a role to play there. And of course, Commerce has a role to play on the international trade side.

So, the decision to make Commerce as the - kind of like the honest broker of the strategy really gave us, in many ways - than what they, you know, what used to be known as the power of the pen. Right? We were able to actually look at the perspective across the spectrum of agencies, but not have easily one particular agency have the primary focus.

So, the way the strategy bounced around and actually came out with the Secretary Ross (unintelligible) in June of 2019. Really, in our view, was a document that didn’t demonstrate any singular influence or oversight or even responsibility, but that this really was something that would have to look across the federal executive branch agencies for roles and responsibilities.

And from our standpoint, it’s gratifying, and also, we believed was critical to have the White House as the organization, if you will, within the government that had responsibility for overseeing the execution of the strategy.

So, even though Commerce issued the study, the Office of Science and Technology Policy over the White House really has the oversight to make sure that the actual strategy itself is on track. And is, is basically moving forward with each of the six calls to action that John described.

Now, from our standpoint, we are again looking at this from the big picture, predominantly for our area in the area of either trade or in the area of manufacturing, and if you will, downstream supply chain development, and so forth.

So, you know, our - one of our roles is to engage with the private sector and to hear their thoughts and their concerns and really, to hear their recommendations, because to say that we’re coming with a blank slate is not an understatement by any means.

The reason why I say that is because, as John alluded to, you know, one of the things that is especially daunting for us is that for many of those critical strategies, we - about critical minerals. We have no strategy to develop singular to that particular mineral because there’s no industry to talk to. Right?

So, for rare earths, we have one end of the supply chain where we have the (MP) materials, and we have the folks that have identified particular reserves or if you will have, you know, areas where rare earths are located under the ground. So, there’s one end of the supply chain, and then you have to go all the way to the other end of the supply chain and find the consumers of the finished product.

So, anybody in the realm of it, or anything related to telecommunications and so forth, you’ve got those downstream consumers, but there’s very little infrastructure in between.

So, in some ways, we are kind of coming at this, from the commerce side is somewhat, you know, wide-eyed and, you know, interested in hearing what the private sectors concerns. What their issues are, and their thoughts on how we can continue to press the strategy forward.

So, appreciate Richard and his invitation. And obviously, as John said, we’re happy to hear your thoughts and your feedback. And any questions we will certainly do our very best answer.

Richard Boll: Okay, Shirley, can you help us with the question, please? Operator?

Coordinator: Yes, if you would like to ask a question, please press star 1.

Rick Gabrielson: If you don’t have any questions, Rich, I’ve got one.

Richard Boll: Oh, I do too, but yes, please go ahead.

Rick Gabrielson: Okay, I Rick Gabrielson. A question for you on the 35 minerals that you’ve developed in your list are there some within those categories that are not available in the US either in current mining or production operations, or they’re not here at all, that we are dependent on other countries or other markets?

Gary Stanley: So, when the list of 35 was put out there, our friends over the US Geological Survey really took the - well, the lead on that particular diamond dynamic, really, because they’ll be agency with equities and competencies in this particular area? I not sure if I’m - and John, you’ll have to correct me if this isn’t right, but I think we determined that there were, I think, there’s 14 of the 35, I believe that we are essentially 100% import-dependent.

And of those, there are some that we have no domestic reserves for the initial raw material, or if so, it has not been discovered.

One of the things that we found out during the process of that stage of this because what made the executive order strategy unique was that there was actually two reports that had to be completed. The first one that was the development of the list of critical minerals, which was led by interior, specifically US Geological Survey, and then there was once that particular report was completed, then Commerce had the responsibility of coordinating the strategy.

And so, when USGS put that list together, they use a very sophisticated, very highly technical model that they use to determine that list of exposure, if you will and that list of vulnerabilities. So, I believe it’s 14 out of 35, but the point is that there are a number of those where we either have absolutely no domestic mining capabilities, or we have absolutely no domestic infrastructure, either through mining, extraction, or processing.

Rick Gabrielson: Okay, and the follow-up question that I have too, that is, of those 14 or even of the 35, are there ample resources in other markets other than China or multiple areas of sources, I guess, is maybe the other way of putting it?

Gary Stanley: Well, your question is a good one. And part of that, actually, that’s part of our exploration, if you will. We have had some very interesting and very fruitful engagements with our friends in Australia, as well as Canada. A number of these are in existence in those - in both of those countries.

We have also been approached by John, again, if you’ll have to correct me, I think it’s nine other countries that - including the EU that have approached the US about, you know, engaging in conversation, so forth. So, the idea here is to, again, really look at it from not only what do we know is in existence, but beyond that, exploring the possibility of looking at new sources of supply.

And some of this we’ll simply have to take - it could take what some in people’s view is takes longer than they would like to see, but candidly, as we’ve said, in many of our, you know, interagency meetings, we didn’t get in this condition in, you know, a year or two. It’s certainly not something that likely is going to be resolved in that period of time. It will take a considerable amount of patience and diligence as well as hard work, so.

Rick Gabrielson: Okay, thank you.

Richard Boll: That kind of answered my question. As you mentioned about being the broker, I was asking to make sure we’ve been able to talk to Australia, China, etc. But I guess you kind of answered that question that was the main thing is maybe to get them involved to see (unintelligible) that type of thing?

Gary Stanley: Yes, I think I would add one comment that I think that the group might find of interest, was that you know, when the United States first got into this particular activity when the executive order was first launched, it really set up basically, a massive global attention to this particular activity.

Now, what I’m saying by that is that countries like Australia, Canada, and again, Brazil and a number of other countries, we’re very much aware that this strategy - that this executive order was out there. And I think the thing that absolutely, I think, surprised everyone, or at least I did a commerce was we literally were within days of the strategy being released, being reached out to by foreign governments, as well as foreign industry folks about collaboration in this area.

So, there is a high degree of interest. There’s a high degree of, shall we say, intrigue to see exactly how this unfolds from the US side of the ledger. But there’s no question, I think, given all that has happened globally, with this particular area, and about certain countries that have, shall we say, not been necessarily honest brokers, as far as critical mineral access is concerned. This is very much been elevated, not just among developed countries, but from developing countries as well.

So, some of this will be very - it will be interesting to see that once we start to see either trade or manufacturing and fabrication, extraction, and so forth take place if this is the in many ways, you know, it creates a brand new paradigm for supply chains around the world.

Other questions in the queue?

Coordinator: The next question, yes, the next question comes from Norm Schenk. Your line is now open.

Norm Schenk: Oh, thanks. Actually, Rick asked the same question as I did. So, I’m covered. Thank you.

Coordinator: Next question comes from John Meakem. Your line is now open.

John Meakem: Yes, I was simply - I seemed to have been cut off here. I was simply going to add to what Gary was saying. Yes, of the 35, we lack domestic production for 14 of them. For 25 of the critical minerals, we’re more than 50% import reliant.

I think I’d also just add the point that it’s not, with respect to trading partners, in particular, it’s not just a question of, say, Australia or Canada shipping us a lot of rocks. Very big issue here is processing of critical minerals. And overwhelmingly, the processing is not taking place in the US either. And so, that is a big part of the issue. It’s not just that rare earth elements, for example, are principally mined in Australia. They’re also overwhelmingly processed in Australia. And not just mined in Canada - in China - they’re also processed there.

So, that the issue for us as a country is yes, mining but also having the processing so that we can turn those rocks into useable industrial goods. In many respects, the U.S. used to lead in these areas but for a variety of reasons related to labor costs and environmental concerns we have ceded to other trading partners.

Man: You mentioned jobs or jobs were mentioned earlier. (Unintelligible) were mentioned earlier in the discussion. And if production of - I am sorry processing were to increase what are the types of jobs, you know, that would need to be created? And more importantly are there any emerging efforts towards beginning to train and develop people in those critical jobs that could step in and assist in that processing?

John Meakem: Well that is part of this - part of the strategy is Call to Action 6 which is developing the workforce. And that is an area for the Department of Labor and other agencies to work on.

But there are some initiatives out there to develop domestic processing. And so there is hope on the horizon though still at a relatively small scale compared to what exists in other countries.

Man: Yes, I would just probably add to that, I think that was part of the reason why the strategy itself expanded beyond the initial ask of the executive order. Because we - myself I have a manufacturing background and came into the workforce in the 80s.

And saw that even during at that time there had become in some ways a distancing of traditional manufacturing or even fabrication or advanced processing in a number of sectors. And this one I think is one that really does bear very close monitoring. And that is where the private sector we are hoping will be able to in some ways kind of leading the effort here.

Because at a certain point it does go beyond what the scope of what the government can do. The government consists of training. Through the defense production actually might be able to help system standing up production or at least contribute, you know, some funding support for it.

But really at a certain point that is where, you know, traditional manufacturing and processing will have to kind of step to the forefront. The strategy does look at programs that exist within the Department of Labor. And of course there are other avenues that might. That groups like Apple and Intel and some of these folks might be able to be a part of.

But that is where there really needs to be a broader conversation and more of a level of interest from the private sector. Because again at a certain point there just is a limitation to how far the government can go.

Man: Great, thank you. Are there any other questions?

Rick Blasgen: Well I just had one. This is Rick Blasgen. I was thinking about the role of the states in processing and what you were mentioning versus the federal government versus industry. Are there any role there that this group might benefit from hearing from one? Anything that makes sense within discussion.

Man: (John) I don’t know if you have anything there. I mean we have had some conversations with a few states. We had some conversation with Colorado School of Mines.

I know when you go, you know, west of the Mississippi and you start getting out towards the, you know, the western areas of the country. Where not only is the greatest reserves of many of these materials but that is probably where the best likelihood for success not only standing up extraction but processing there as well.

And that is where I believe the states themselves can be either through economic development or through other sources might be an ideal way to foresee this. Especially when it comes to the resources themselves. How many of these were public lands versus private lands versus state lands?

This is where the process itself in many ways I think has to get, you know, the breath and fresh air so that it really becomes more of a localized activity versus something that the government from D.C. is trying to execute.

Rick Blasgen: I mean the equivalent in Canada is that the government of Saskatchewan Province is putting money into setting up its own processing facility which I think would be first or one of the first in all of Canada.

So, there is room for initiatives. Of course in western land so much of the land is federal property. Either through Interiors Bureau of Land Management or the Agriculture Department’s U.S. Forest Service.

Richard Boll: Okay any other questions from the group here today?

Coordinator: Next question comes from Russ Adise. Your line is now open.

Russ Adise: Thanks very much. Just wanted to point out thanks John and thanks Gary. I wanted to point out a couple of things. And to thank you for all the work that you have done in that strategy.

We have actually based part of the last recommendation the committee passed on COVID economic response and near shoring off shoring the critical minerals strategy to look at how something similar could be done for critical products.

The second thing is as you know, China BRI has a major focus on acquiring ports and terminals (unintelligible) ports and terminals particularly where critical minerals - in countries where critical minerals are being produced.

Have you seen any major impacts on these countries’ shipments of those products of the United States as a result of the China BRI engagement in these countries?

Man: Well most of the countries in BRI are not currently big suppliers of critical minerals to the U.S. I would say that is a bit too general. I am when you have 35 minerals it is hard to generalize about all of them.

But I think one area where there has been a lot of tension has been Australia which is not formerly part of the BRI. But China is a major investor in Australia and there definitely have been some tensions related to Chinese efforts to acquire mines or mining sites in Australia.

And that is an ongoing saga. Even in Canada there are some Chinese interest and some prospective sites up very far north in Canada above the Arctic Circle.

So, Africa is an area where U.S. government is increasingly paying ports’ attention in terms of trying to push back a little bit on the Chinese efforts to invest there.

And the Chinese are thinking long term. But again, the actions and strategies we are trying to move on now is the right thing to be doing. And there are starting to be some - there are some interesting projects out there domestically within the U.S. and certainly with major trading partners in areas such as Australia and Canada we are having good conversations and good exchanges.

Man: (Unintelligible) that is an excellent characterization. I (unintelligible) ideal good characterization there.

Richard Boll: Okay, thank you.

Coordinator: No further questions on the phone at this time.

Richard Boll: Okay thank you. Hey, thank you very much Gary and John. I appreciate it. Members enjoyed it and I appreciate all your information here. Thanks a lot.

Man: Sure and if an opportunity comes to, you know, do a refresher later on at some point or particularly we start seeing some changes here, you know, some things developing. We would welcome opportunities to speak with you again.

Man: And we welcome individual conversations if members want to chat with us on their own risk and provide our contact information.

Man: Absolutely.

Man: Wonderful.

Richard Boll: If anybody is interested just give me an email or a call and I will give you their information. Perfect. Okay thanks again.

Man: Thank you.

Man: Thanks, Richard.

Man: Thanks guys. Bye. Thanks everyone.

Richard Boll: This is the administrative - or actually we have a little bit. Do you want to end up with anything Rick for the (unintelligible)?

Rick Blasgen: No I just wanted to thank our speakers and the great questions that we had. There was a lot of planning that went into that to give us fruitful conversations.

So, I know Jennifer is on. I believe Rich I will turn it over to you since we are just a little bit, five minutes behind schedule but thanks everyone for the participation.

Richard Boll: Okay. And thank all the speakers. I appreciate it. Yes I think we are moving to the administration section. Is Jennifer and Valeria on the line? Operator have you seen both of them?

Coordinator: If you are on the line please press star 0.

Richard Boll: Okay operator is this Shirley?

Coordinator: This is not Shirley. This is Erica. I am taking over for Shirley.

Richard Boll: Oh okay Erica. For this next session if we can I do not want to record this session between now until the end of it. Can we do that? I had mentioned that to Shirley.

Coordinator: Yes.

Richard Boll: So, the people who are on the call are the SGEs, the academics and also the new members. And of course any other ACSEC member that would like to get a refresher on the ethics and the FACA briefings. That would be great.

So, with all the other people we are going to be starting at 1 o’clock sharp or pretty close for our second half for the afternoon session. So, I appreciate everyone back. But for the FACA and the ethics briefing I will continue with Jennifer and Valeria.

Coordinator: All right I will get their lines open. Just a moment.

Richard Boll: Okay thank you. And just not about recording this session? Hello Jennifer and Valeria. Operator are they there?

Valeria: Hello?

Richard Boll: Hello who is that?

Valeria: Hi, this is Valeria calling from ethics.

Richard Boll: Hello Valeria, this is Rich. How are you doing? Is Jennifer going to be joining? I am sure they are probably trying to hook her in.

Valeria: She might be getting hooked in as we speak. I don’t know if you would like to wait for her.

Jennifer Chung: Hi, this is Jennifer Chung.

Richard Boll: Hey Jennifer. Thank you both for being on. Operator I want to make sure that this is not being recorded.

(BREAK IN TRANSCRIPT FOR ETHICS SESSION - CLOSED TO THE PUBLIC)

Coordinator: Rick Blasgen your line is now open. You may proceed.

Richard Boll: Rick? Hello Rick? Rick Gabrielson. Operator can you see if Rick Gabrielson’s line is open too?

Coordinator: Yes sir the line is open. And it looks like Rick is not on. Hold on. Okay Rick if you are on the line press star 0.

Richard Boll: Hello Rick? One of the Ricks?

Coordinator: Okay so he is. Press star 0. Just a moment I will open his line.

Richard Boll: Hello Rick?

Coordinator: Okay Rick your line is now open.

Rick Gabrielson: Thank you very much.

Richard Boll: Hey Rick. I don’t know where Rick Blasgen is on or not? Did you - he said he was on a second ago.

Rick Gabrielson: Oh okay.

Richard Boll: Do you - operator do you see Rick Blasgen is he on?

Coordinator: Rick Blasgen if you are on the line please press star 0.

Richard Boll: Hello Rick?

Rick Gabrielson: Yes do you want me to kick it off?

Richard Boll: Yes I guess so. Might as well. We will get Rick to come back (unintelligible). Okay.

Rick Gabrielson: Welcome back everybody (unintelligible).

Rick Blasgen: I am back.

Rick Gabrielson: Okay, go ahead Rick.

Rick Blasgen: No I am sorry, go ahead Rick, it is fine.

Rick Gabrielson: Next up on our agenda. Carl Bentzel will be speaking with us. He is the Commissioner for the FMC. Is Carl on yet, Rich?

Richard Boll: I do not know. I think he is going to be on - he should be pretty much on soon. I think he might actually be on. Operator is Carl Bentzel on?

Coordinator: Carl Bentzel if you are on the line please press star 0.

Richard Boll: Commissioner Bentzel. Do you see him on the line actually operator? Operator?

Eugene Alford: Rich I believe she is getting him on. There is usually a lag time.

Richard Boll: Okay.

Carl Bentzel: Richard or Rick?

Richard Boll: Yes.

Carl Bentzel: Can you hear me? This is Carl Bentzel.

Rick Gabrielson: Hi Carl.

Richard Boll: Hey, Commissioner Bentzel how are you doing? Thank you.

Carl Bentzel: Sure. How is everyone?

Richard Boll: Doing well, thanks.

Carl Bentzel: So how do you want me to proceed?

Richard Boll: Rick do you want to present him in? Okay, we got your PowerPoint presentation going. So I think we are all set. If you would like to start we would love to have you give your presentation Commissioner Bentzel. That would be great.

Carl Bentzel: Thanks Richard. This is a culmination of earlier discussions that I had with you and Russ and so I appreciate the fact that we have been able to put something together. And opportunity to participate in the advisory committee on supply chain competitiveness.

It is kindly a meeting that you are having given the efforts of the industry and keeping a sense of products moving and really continuing to work during the challenges of COVID-19.

And so I know there is a lot of industry participants out there and you have my thanks and support for all of the effort that you have done in continuing the movement of cargos.

Sometimes we look at aviation issues and other issues, communication issues and they seem to get a lot more press. But the events of COVID-19 really have illustrated the incredible importance of the maritime industry’s movement of cargo.

In fact, we have been able to move cargo through the system with all of the challenges of both supply and demand reduction and reopening and dealing with COVID-19 on how to operate.

So it really is a fantastic job. And so my thanks to all of those folks on the phone that have been doing what they have been doing.

Just a little bit of background. Well first off, disclaimer. This is the views of FMC Commissioner Bentzel do not reflect the views of the Commission. We have to say this every time we speak because of course FMC is a regulatory commission with five commissioners and so we all have our views.

And so that said, I am here to talk a little bit about the European inland waterway system and the potential that we should evaluate the greater use of our inner waterways for the transshipment of international cargos.

And essentially this is not an issue that the FMC has great jurisdiction over. We have potentially could help facilitate some of these issues if the industry were to propose agreements or opportunities to look to harmonize.

But it really is an initiative the FMC is traditionally involved in. But it is a personal issue to me as a result of time spent on Capitol Hill looking at intermodal policy, supply chain policy and evaluating the inland waterway system in Europe.

Specifically had a number of conversations with Dutch representatives and evaluated how they had - in history of the development of their inland waterway system for containerized cargo shipments.

And I thought it would be of interest. The United States is much further behind in this area and there are some issues that I would like to sort of bring out for consideration of committee members.

So, by way of background I started working, I am a maritime lawyer. I graduated and got a job on Capitol Hill in 1990 believe it or not. After the Exxon Valdez hit the rocks and they were looking for attorneys.

I worked both in the House and the Senate for close to 15 years working on maritime surface transportation policy. And I actually see that one of your next participants, David Wannenberg is going to be talking about the freight policy issues.

David and I used to work together on the - I was on a commerce committee so I am going to have to get off. So please extend my hello to David when he gets on.

Anyways, the - Richard could you turn to the next screen on the PowerPoint.

Richard Boll: Here we go.

Carl Bentzel: As I indicated there is a much more robust system of inland waterway delivery of containerized cargo that essentially started in the late 1960s. And there are some historical reasons why it evolved to a greater extent in Europe than it did in the United States.

But primarily, started in the great river systems and through the major ports as sort of one-off service operations. Primarily in the Rhine but also in Antwerp and Rotterdam basins. And also to a lesser extent in France and the Benelux countries.

Where, in the early 70s, a number of small operations started to ferry from these deepwater ports, containers on barge. Just putting them on the barge and moving them to places in the interior.

By 1975, only about 10,000 TEUs were really being utilized in this. But the industry started to evolve in a couple of ways that I would like to talk about further that have relevance to us here in the United States.

But by 1995, 800,000 TEUs were carried on the Rhine. And last year there were 2 million containers carried on the Rhine alone. That doesn’t include Antwerp, Rotterdam, the Rhine. But these were all inland waterway movements of containers.

And sometimes when you talk about the development of the system it sort of gets muddied in that the Europeans also consider inland waterways containers on barge transport pattern to be similar to what they characterize as short-sea shipping.

Which are international movements of cargo between countries, deep sea vessels of a smaller nature basically providing services around the coastal areas of Europe. But this system evolved in large part because of efforts to try to harmonize with the deep-sea shipping industry.

And with incentives that were provided by the governments because they were concerned about congestion in trucking. That they were concerned about environmental issues related to the use of trucking and to a lesser extent railroad options.

And because of the fact that existing waterway infrastructure had been built up, was there. And so, the cost of adjusting to movement of containers on barge were lesser than other modes.

But the step that was vitally important was the integration of the deepwater seaports. And facilities that were set up outside of these ports to handle container on barge operations.

And so traditionally, barges operate as a private contract. They don’t have the same structure that is set up for deep sea shipping which authorizes a larger amount of harmonization, standardization and practices where the industry works cooperatively to facilitate the intermodal transportation of cargos.

And so, as they in Europe were able to sort of turn to the mode that had been provided in the deepwater ports for the international shipment of containerized cargo. They increasingly made market share advances with respect to the intermodal shipment of cargos vis-à-vis rail and trucking.

Richard, could you turn up one forward? Our inland waterway system is structured differently at present and it is more similar to what the European used theirs for.

As I mentioned, it has traditionally been the private shipment of bulk product. That is liquid products, energy, agriculture, coal. But it has been structured around moving it privately.

Most of the facilities on the waterways are privately owned terminals. Where the industry is shipping one, two or three different types of commodity. And they ship it for manufacturing or export for dissemination on larger vessels. We move 12% of our nation’s freight but the cost is only 2%. So, it is probably the most efficient of the modes of transportation.

And it is also probably one of the most environmentally friendly. One gallon of diesel fuel carries one ton of freight. Or 59 miles by truck, 202 miles by train and 514 miles by barge.

So, as we have been struggling with emissions issues in the transportation sector. We should be looking to a far greater extent at how we can maximize the inland waterways for whatever movements we can achieve.

The inland waterways system is confined by geographic regions as well. I mean it is not every place that you can get into the country using an inland waterway system. But there are substantial areas. The Gulf Coast, the Mississippi/Ohio River Basins, some intercoastal movements. The Columbia River system in the West Coast, Great Lakes.

So, there are substantial areas of delivery. And in fact, for the use of containers we will still have to have railroad and trucking issues regardless of whether or not the inland waterways is used as a delivery mechanism of containers.

But a greater use of the existing system could alleviate congestion. Maximize the ability of other surface transportation companies to be more productive in their own movement of intermodal cargo.

Richard could you move it one forward again? We are looking at some opportunities. Currently it is not - we are sort of in - I think they said there were four stages of development of the European system.

I say we are sort of in the second stage of development in the United States for container on barge. We do have some movements in different areas. For instance, there is a thriving market for the movement of resins down to the Mississippi, the Port of New Orleans.

There is other movement systems. For instance, the Port of Richmond is a transshipment site for the movement of barged cargos, container on barge from the Port Norfolk.

And so we are starting to see development opportunities. More of a one-off nature than common carrier services. There is a new proposal out there for self-propelled vessels to service inland waterways that is in the evaluation stage but that is an interesting proposal.

And it is tied to the creation of a new port facility, Port of Plaquemines - Plaquemines Parish on the lower Mississippi River. But the intent is to be able to harmonize the movement of these cargos coming in from international destinations to points inland. And facilitate to a greater extent transfer of cargo to the river system.

The benefits that could derive to some of these places on the inland waterway with the expansion of containerized cargo are substantial. And in fact, as a private sector consultant I worked for a little port on the Mississippi River that was trying to build Quincy, Illinois a containerized facility.

They were looking at it because they could establish foreign trade zones and enhance light manufacturing. Use it to attract industry. Of course servicing retail operations.

And it could be done at the same time that you could accommodate the existing services that are provided traditionally by the tug and barge industry. Agriculture and energy and the bulk commodities that they ship.

So, the value of being able to build into this market is that the market exists already for the movement of private bulk commodities.

And again, the cost of adjusting the infrastructure necessary to enhance it for container movements on the inland waterways would be substantially less than the cost of providing additional railroad infrastructure or even surface infrastructure.

So, when you evaluate the value of whatever funding we provide for our infrastructure and you assessed what would have to be made to accommodate capacity, substantial capacity enhancements.

You would probably conclude that the adjustments to provide more funding for container on barge operations would be the cheapest alternative in terms of enhanced infrastructure funding.

Richard, I guess we can go to the next one. Some of the challenges that were identified while I was evaluating this system, the European system and some of the challenges they went through are the same that we face here in the United States.

There is a big difference between deep sea common carrier business model and the private inland river business model. As I mentioned, the system is usually between the parties who are shipping their own cargos or export agricultural commodities.

In large part they have private terminals that they man and that they operate. They are not as reliant for instance on intermodal business coordination and integration that you have at a deepwater port.

FMC is there to regulate international liner shipping of cargos. And we do, are given the authority to authorize the industry to work together. And they have been effective in utilizing this authority which we review to see if it is truly intended to be an enhancement and an efficiency and a coordination or if it is a non-reasonable restraint on competition.

But they do that to set up common practices with the handling of intermodal equipment. To set up joint operations for chassis for instance to service the containerized cargo.

And this does not exist in the inland services right now. As I said, it just doesn’t follow the traditional common carrier model of service that we see on international shipping.

And also transparency of service. And that I mean that a vessel coming from Japan we know when it is going to be coming into the port. There is a maritime exchange there. There are freight forwarders there. There are third parties that have more or less been able to exactly when cargo would be coming in.

Most of the companies now provide services so you can actually see where your cargo is. And that just doesn’t exist to the extent in the private transportation that is provided on the inland waterways at present.

And that is not say that a person who is shipping a barge load of stone or rock doesn’t know where his barge is. But the public doesn’t know to where and to what extent we have capacity in the market.

Again, marshalling of cargo and cargo services at inland ports is a challenge area. And as I said, there is a mechanism to harmonize these practices and we have done that for international cargos before at the FMC.

But really it is going to be the industry coming together to determine whether or not they could establish business practices that could facilitate the use of the existing system for container movements.

And I know there always has been this discussion about the Jones Act. And really in Europe the system was a container on barge system that utilized the existing assets that there were there.

And I think that the same system could work in the United States if efforts were made to evaluate capacity, to harmonize practices, to look at how the industry could work with the deepwater ports and the ocean carriers to set up business models that could take advantage of the inland system.

Richard, I think we could move to the next. The advantages there is some strong public policy arguments on reduced congestion and carbons emissions. These have been utilized and employed in Europe.

For instance, Port of Rotterdam now is shipping 40% of the containerized cargo that comes into the port, close to 40% through container on barge operations.

And they pushed the policy of doing this because they believed that it provided the best bang on the buck with respect to reducing emissions, carbon emissions and also congestion through the European system.

You know we have tax credits for people to buy electric cars. I think it is $600 or $700. So every car that we sell on this system gets some sort of subsidy as a result of the emission standards.

I feel that if you ever evaluated the emissions reductions that could occur as a result of implementation of greater use of container on barge for instance. They would be far greater on a dollar for dollar basis than what you would get.

And I think the industry should look at trying to harness the tax code for reductions or incentives in this area because of the value of that. And that is something that they have been able to push in Europe.

As I said, relatively low cost of enhancements to infrastructure compared to other modes. And the capacity in the barge market is substantial. I mean they are serving their industry right now. But it is not difficult to add on additional barges to each sort of flow compared to the other cost.

And from the perspective of the American waterways operators. It should be all new revenue. So, we are not talking about displacement of revenue but in fact a system that would add on additional revenues to existing revenues with de minimis cost for that revenue gain.

The other advantage is frankly right now we have the technology to be able to monitor capacity on the inland waterways to demonstrate transparency of freight movement and demonstrate what service options could be made available.

You look at Uber for instance. Uber harnesses the existing driver market whether or not you support whether unregulated drivers should be competing against the cab market and the app market or not is irrelevant to the fact that they have been able to set up a business model that allows these private drivers to be made available for services and transportation.

The only thing that was really provided to them is an app, you know, is a cell phone. And so, the technology that we have both with respect to management of freight, intermodal freight and the ability to sort of quantify capacity and potential services are there with very low cost attended to that.

So Rich I think we can go to the next slide. So, I mean this is a concept. It is not really as I say, what we have traditionally done at the FMC but my own views based on my background in studying this issue.

But the thought is can we create a new network from existing infrastructure? Can we maximize the use of that infrastructure? From the perspective of the industry in the inner waterways. If they were to be able to add on a row of containers in front of the bulk commodities that are being towed up the river there.

The next time they go in to expand locks or dams or enhance the environmental impacts they would have done that by maximizing how we use that system to achieve the movement of containerized cargo.

So, it is an opportunity that is out there. I think when Richard and (Russ) and I were talking about this concept we thought it would be interesting to put to your group concept. Hopefully it can generate some discussion.

I had talked independently to American waterways operators and a bunch of different companies. And I think we are still very far in the developmental phase.

But I think there are some ideas that should be assessed in light of some of these new developments and technology and assessment of the cost and the availability of the existing infrastructure to accommodate new patterns of transportation.

So with that, Richard I will turn it back to you. I did want to bring up a couple of issues related to my work at the FMC as opposed to my presentation.

We are continuing to evaluate supply chain, the supply chain system. It has been an incredible challenge as I mentioned earlier with respect to COVID. And at first it was this depletion of cargo and cancellation, blank sailings on the vessel side.

And then an incredible surge right after that. And so how do we adjust? Rates are at all-time highs. The FMC continues to monitor this market to determine whether it has become unreasonable. And so, we are continuing to monitor the system for our statutory responsibilities.

And we are also looking in particular at LA Long Beach, some of the operational challenges of the huge surge of cargo that they are facing and what that means on the system.

In particular, the system of intermodal movement through the ports. The availability of chassis and such. So, I am sure you will probably get into that throughout the day as you discuss these issues.

But with that, what do you want me to do? Do you want me to take questions or do you need to go onto your next meeting? It is up to you. I am at your disposal.

Richard Boll: Well we can do some questions and see if people have questions. We can start with that and thank you for your presentation, Commissioner Bentzel. Appreciate it.

Operator, do you have any - can you set us up for a couple of questions please?

Coordinator: Yes, thank you. If you wish to ask a question, please press star 1 on your phone and record your name clearly. Stand by for questions.

The first question comes from Mr. Mallory. Your line is now open.

Neely Mallory: Thank you. Commissioner thank you for joining us today. Very familiar with the multiple attempts as a Memphian that we have tried to do container on barge out of here and very interested in the Plaquemine Port Initiative. And I was wondering have they broken ground on that project yet?

Carl Bentzel: I think they are still in the development phase. As I recall looking at it last time they haven’t done that but I haven’t checked on it really as much. You know the concept has - I used to work for Senator John Breaux from Louisiana and we were discussing the concept of a lower Mississippi River port when I worked for him in the early 2000 timeframe.

And so, it has sort of - I have gone through a number of iterations and I think the current effort in Plaquemine is probably the furthest along. But the feeling had been that if you could establish a containerized port much closer to the mouth of the Mississippi and transshipment of cargo on barge. That it would benefit all of those ports, Baton Rouge, Memphis, New Orleans.

And so that has continued to be the thought process. And I believe it is accurate and correct.

So, I am not positive. I think they are still in the planning process. I know that I think it is Patriot Holdings which is the company that is looking at the vessels is still working through securing financing and negotiating I believe with shipyards is the last press that I read on it.

Neely Mallory: As a second question you brought up the complexities of finding someone to regulate chassis providers at inland ports. And we sure appreciate the efforts that you and Commissioner Dye have lent to this effort. And we urgently need some regulation.

Carl Bentzel: So, I can’t speak to the existing lawsuit. But I will tell you that I have had numerous meetings recently with chassis providers, with terminal operators. I am very much aware of the challenges you have in Memphis with rail terminal and it is one of the hotspots.

It affects our ability to export. And so, I do think that there are some things that we can do with respect to technology and we are looking at it. So, it is something that I can’t tell you too much for fear of getting into areas that are being considered at the agency right now.

But it is something that we are actively looking at and to determine what can be done in some of these larger rail intermodal terms where you have international cargo in and out that is being - having a tough time getting chassis and also right now in LA Long Beach.

Neely Mallory: Thank you sir.

Richard Boll: This is Rich. If we have other questions we are probably going to have to move on. But if we have any questions if we need to pass onto Commissioner Bentzel just send them to me and I can forward them to him because we do have our next speakers ready to go.

So just pass that on and thank you very much Commissioner Bentzel. I appreciate it.

Carl Bentzel: No problem Richard.

Richard Boll: Okay.

Man: Thank you, Commissioner.

Man: Thanks, Commissioner.

Carl Bentzel: Yes.

Richard Boll: And I think we have David Wonnenberg. I think he is on the line or he is in the - in our meeting. Could we set to have him put in please operator?

Coordinator: Stand by please.

Richard Boll: Operator? Have you been able to…

Coordinator: I have not located his line. If you are the next speaker, please press star zero. Thank you.

Richard Boll: Mr. Wonnenberg, I think I see your name on the attendee list.

Man: Or Ryan Endorf, if Ryan is on.

Richard Boll: Ryan? I see him on the list. And Ryan is on it as well. Operator, do you see those two names, David Wonnenberg and Ryan Endorf?

Coordinator: They may be logged in to the WebEx, but they also need to dial in to the call to be able to be heard over the audio.

Richard Boll: Right. I would assume that they have. Let me see. Okay, well, I’ll try to get a hold of (Richard). If you guys can carry on, I’m going to try to get a hold of Ryan. Just wait and I’ll let you guys carry on. Just wait a sec.

Ryan Endorf: Hi. This is Ryan Endorf from COCOC. Can everyone hear me?

Richard Boll: Yes, we can hear you, Ryan.

Ryan Endorf: I think Dave is on the call. I guess there might be some connectivity issues with getting him on to the - locating his phone line. But I can start the presentation and then if they can locate him, then, then I’m sure he’ll jump in as well.

So thank you guys. Thank you all again for the opportunity, to present to you on the department’s National Freight Strategic Plan. I think back in January, we presented before this committee when we were soliciting input and formed the development of that plan. And we committed to finishing it later this year. And in early September we released it, in event with Secretary Chow. So can you move to the second slide please?

So again, this, this was a (Fast Act) requirement. Congress asked us to develop a National Freight Strategic Plan that defines a vision and goals for our national multi-modal freight system. the plan that we’ve developed evaluates the movement of freight and is meant to inform infrastructure planning and investments, at the state and local levels. It provides a framework for increased cross sector multi-jurisdictional and multi-modal coordination and partnerships, and it also identifies freight data needs to support decision-making.

As one of the major comments we got, through our public comment process was the need for, improved access to freight data, especially utilizing real-time data sources. So as part of the plan, we’ve identified a freight data strategy that we hope will help to advance the advance the data availability across, going forward for states and local governments, but also for the private sector and industry as well. Can you move to the next slide, please?

So consistent with the emphasis of the (fast act) and the direction that Congress has been focusing its freight policy, the national freight (unintelligible) plan is multi-modal. Freight movement depends on the interactions, the safe and efficient interaction of every mode of transportation. And so we focused our plan on covering the impacts of every mode and how they all rely upon each other.

Congress has also specifically asked us to look at these four industries, agriculture, manufacturing, energy, and natural resources. But as we all know that retail and e-commerce is a particularly important industry. So we’ve not limited ourselves to just these four industries. The plan is all is consistent with the administration’s priorities. Safety is the department’s number one priority, but we’ve also been focused on industrial productivity, global competitiveness, in meeting rural infrastructure needs. And then finally the plan is focused on the federal role for freight transportation.

Every state has developed a safe rate plan and those plans highlight important ongoing work at the state and local level. And this plan is meant to provide a national vision that can help all the public and private stakeholders with future planning and infrastructure needs, And something that can inform states as they update their state freight plans going forward, but that can also help Congress as it contemplates surface transportation reauthorization.

Dave Wonnenberg:Hey Ryan, this is Dave Wonnenberg. You keep going, because you’ve been doing (unintelligible). Thank you, guys. Sorry for the interruption. But I just wanted to let you know I’m here. But Ryan, please keep going.

Ryan Endorf: Thanks Dave. Can you move to the next slide please? So before I move to talk about the vision that we’ve laid out, I do want to highlight some of the feedback that we saw in some of the trails and challenges that this group helpfully suggested to us when we met with you back in January, but that we’ve also heard from many of stakeholders.

First, e-commerce is leading to rapid changes in supply chains that are increasing demand for air cargo, residential deliveries, and reverse logistics. We’ve seen how important, especially during this COVID-19 pandemic, how important e-commerce has been for millions of Americans to receive essential goods, especially groceries, while minimizing physical interaction.

Second, global supply chains are diversifying, and international trade is growing domestically. This means increased congestion at ports, at border crossings, and on the aging infrastructure that connects these trade gateways to the broader transportation system. In addition, whether it helps improve resilience, efficiency, competitiveness, or otherwise, advancing technologies and innovations are transforming how freight is delivered. And to keep up our workforce must obtain the skills needed to meet these exciting opportunities.

And then finally as I mentioned, freight planners at all levels of government rely on data to make informed decisions about infrastructure investment, and improving access to timely, consistent, and actionable freight data was a major area that our commenters highlighted for us.

So, the vision that we set forth here is as follows. The freight transportation system in the United States will strengthen the economic competitiveness and reliable supply chains that efficiently and seamlessly connect producers, shippers and consumers in domestic and foreign markets. We’ve also on this slide highlighted some of the areas that we see the federal role, so first modernizing and eliminating regulations that inhibit supply chain efficiency that reduce incentives to innovation or delay project delivery, and raise costs to shippers and consumers.

Second, to improve cross-sector multi-jurisdictional and multi-modal collaboration to enhance first and last mile connections and intermodal connectivity to streamline interstate policies and regulations, and to support multi-state investment.

Third, to provide targeted federal resources and financial assistance to effectively participate in the funding of freight projects that provide significant benefits and all economy. And fourth, to invest in freight data, analysis tools, and research that enhance the abilities of state regional local agencies to evaluate and address freight issues. Move to the next slide, please.

So, the three broad strategic goals that we’ve identified. First, safety. To improve the safety, security, and resilience of the national freight system. Second, infrastructure. Modernize freight infrastructure and operations to grow the economy, increase competitiveness and improved quality of life.

And then third, innovation. prepare for the future by supporting the development of data technologies and workforce capabilities that improve freight system performance. Importantly, the US Department of Transportation cannot do this alone. So this plan identifies the framework for the future, and we will depend upon those who use the freight systems to help us continually implement it. So to that end, we will continue, we commit to continue working with and relying on our partners in the public sector at the state and local governments, but also with private operators, railroads, ports, sports authorities, airports, the air cargo carriers, pipeline operators as well as the trucking companies.

In addition, we want to work with the nation’s producers and shippers that are moving the freight or producing the freight that is being moved along the network. And we think there’s many opportunities for partnership. So with that, I will turn it over to (Dave) if he has any comments that he’d like to add. But otherwise, I’d be happy to take any questions you might have.

Dave Wonnenberg:I had the chance to listen in earlier to Commissioner Benzel and just to throw it out there that I got my sea legs under me while he was one of my tutors back there. So I appreciate hearing from him earlier. I apologize for being a little bit late.

I think one of the big things that we took away from the development of this plan, which, I think it’s the data needs are one of the things we heard a lot about. How do we improve efficiency getting rid of the bottlenecks, that sort of thing. But when it comes to getting timely information and usable information to help execute decisions and not just put them into the decision-making process, but actually execute on the data that’s out there. Some of those are things that we think are going to be some of the major improvements that we see, already out of the box in development of the plan. Working with our federal partners, we identified various data sets and whatnot to help inform the product that we were able to put out.

So even just working through this process, we advanced our understanding of what the network looked like and had much more timely data than we otherwise would have had. So, I think as we move forward, we’re going to continue to use that as a focus to help improve what we’re doing. And then beyond that, open up to any questions that you all have and apologize for my technical difficulties.

Richard Boll: Operator, could you help us out with the questions please?

Coordinator: Thank you. If you wish to ask a question, please press star one. Stand by for questions. Thank you. Our first question comes from Leslie Blakey. Your line is now open.

Leslie Blakey: Hello. and thank you for taking questions. Thank you for the presentation, David and Ryan. I represent the Coalition for American Gateways and Trade Corridors, and we have had a very strong interest in the development of the National Strategic Freight Plan for a very long time. And one of the aspects of this, I appreciate your - particularly for this group, because it is a very diverse group, you’re talking the data needs. But it was because I do think that that concerns a lot of our members here in this group.

But I represent a substantial membership that is very concerned about the infrastructure needs that have lagged in development in the United States for quite some time. And the - one of the concerns that we have about the National Freight Strategic Plan is that we really need to identify and prioritize infrastructure needs around the country, and in particular, have a focus on areas of greatest needs due to volume congestion, the population served by the infrastructure located in those regions. And the breadth of the freight that moves through those hubs to get to other parts of the country.

And the National Freight Strategic Plan doesn’t really address that. Now, I understand that you all are doing a additional study that will come out, I believe the last time I heard a presentation on this is in December of specific freight locations needs. And can you talk a little bit about that, please?

Dave Wonnenberg: Sure. Thanks for the question, Leslie Blakey. We do intend to introduce the National Multimodal Freight Network at the end of the year. And that’s going to be, per congressional direction, laying out what the map, the freight network looks like, highways, airports, ports, rail, and whatnot. And so it will be a snapshot of - we anticipate it to be a snapshot of what’s out there.

We, I think Ryan can tell me kind of the correct date, but we did initially put out an interim model that went out for comment, and we’ve received over 120 comments on that proposal through a couple of different requests in the federal register. So based off of the information and the comments that we’ve received there, and in advancing our data understanding, we hope to have that out by the end of the year.

I don’t want to prejudge, what the secretary’s final decision will be on that. So I can’t dive too much into it, but we do expect, we’re pushing to get it out by then.

And then when it comes to identifying - when the dollars hit the roads, so to speak, we are anticipating as much as we’ve seen before that freight will be a continued element in funding grant decisions and funding decisions that the department makes. And we are already seeing some progress in many of the modes, incorporating the freight, National Freight Strategic Plan, into their planning.

And while we may not have the, okay, you do A, B, and C as a part of and include freight as a part of your proposal that then yes, you are then in a higher tier, a lower tier, or anything along those lines. But we do anticipate that much like freight has already been included in a number of grant proposals and selected projects. We do anticipate that the freight plan will help inform decisions going forward, but we’re not quite there yet. Ryan, anything else from your end?

Ryan Endorf: No. I think that covers it.

Richard Boll: Any other questions, operator?

Coordinator: Next question comes from Walter Kemmsies. Your line is now open.

Walter Kemmsies: Can you hear me okay?

Dave Wonnenberg: Yes, sir.

Walter Kemmsies: Okay, great. I was wondering if, as you guys were doing the analysis, you were looking at the worsening truck driver shortage. The scope we’re seeing is, I know this from personal experience, we’re seeing (unintelligible) long haul trucking and shifting over towards the intermodal handling. And embedded in that is some increased investment by the railroads into critical yards and turning on new locations.

So I was just wondering if you (unintelligible) analysis and work you’ve been doing.

Dave Wonnenberg: Short answer, yes. We do take into account some of the evolving workforce needs that are happening as part of the system. And it is something that we are keeping an eye on. You see it during the current pandemic. Initially, unfortunately, the volumes went down, so there was, you know, lower rates at the time, but now it’s back up. So there’s a strong need for trucking to continue. And so we are aware of it and keeping an eye on it. (Ryan), anything else?

Ryan Endorf: Yes. I think just with the changes that are happening with respect to advancing technologies and innovations, the workforce challenges associated with those, I think is something that we’ve highlighted in the plan and something that we will be paying attention to over the next five years. This freight plan requirement we were required to update every five years. So that’s why I mentioned five years as kind of something to monitor, in advance of us updating this five years from now.

Dave Wonnenberg: And then in addition, they are updating it for every five years, the states also were anticipating that they also will be updating theirs. And so this will kind of be a continuous evolution as we learn more about the system, and data is back to data. But back to - the states had a heavy - their state freight plans, we were wanting to get all of their input into this before we were able to execute on ours, and we anticipate doing the same and being informed as we move forward to the states also have an important element in notifying us about at what they’re seeing on the trucker side of things as well.

Leslie Blakey: Okay, that’s great. Thank you very much for your (unintelligible) and your time today.

Dave Wonnenberg: Thank you.

Coordinator: Next question comes from Jason Craig. Your line is now open.

Jason Craig: Great. Can everybody hear me good?

Dave Wonnenberg: Yes, sir.

Jason Craig: All right, well, this is more of a comment and a thank you. I think during the January meeting that we actually had in person, you guys set me up with your colleague, Tiffany Julian on the freight advisory committee side. And we were able to put together a session at the virtual conference of CSCMP. I’m the Chair of the Minnesota Freight Advisory Committee. And I just want to thank you for that. It was a great session with County MPO as well about the freight advisory committees and how they roll up into the national strategic freight plan.

One thing I’d encourage you to do is continue your work, not just with the state freight plans, but also, put together some information directly for the freight advisory committees to have them understand how we roll up into that National Strategic Freight Plan. I think connecting all those dots can only make each entity better.

Dave Wonnenberg: Thanks Jason, very much. And before I forget, too, we do appreciate the committee’s time in January for taking, listening to us. And if you had, at that time, Janine Miller was with us and she was pushing us. She is now back at one of the (states) in Georgia, working for the DOT in a role that she was very familiar with.

So we will definitely be continuing to work with the States, but then understand the input on the, making sure that that’s also what we’re doing here. And Ryan will tell you this is kind of our keep it sold effort. It’s out there, and we want to actually have an impact.

And so we’re encouraged by the fact that our modes, including federal highways are continuing to be integrated into their system. But we’re definitely out there, trying to make sure folks are aware of what this is and the importance that the department will - it will have in the department going forward. So appreciate that comment. Thank you, Jason.

Jason Craig: The only thing I’d emphasize in tweaking that is that the next step for you isn’t just to draw awareness of the process, but also the importance of how private business can participate in the formation through the Freight Advisory Committee. (Unintelligible).

Richard Boll: Any other questions on the line for us, operator?

Coordinator: No further questions on the phone at this time.

Richard Boll: Okay. Any other questions…

Rick Gabrielson: Rich, I’ve got one quick one, maybe more of a statement than anything. And some of it’s already been addressed by both (Leslie) and (Walter), but there’s a real shift that’s beginning to take place as companies begin to either re-shore or near shore product as a result of COVID-19. That could see some significant shifts in markets that they couldn’t see substantial growth, and that (unintelligible) needs to be factored into that whole entire infrastructure planning, the prioritization that needs to take place. And that could likely happen much faster than five years. So I guess my comment would be, find ways of taking a look at those types of shifts that will take place and what that means from a freight planning perspective.

Dave Wonnenberg: Yeah, that’s, that’s absolutely a great point. It’s something that we’ve considered. As you know, we’re trying to do a, incorporating all the information that we’re getting from the states, from the shippers, one of the key focuses that we had was as Ryan had mentioned in part of his presentation, focusing in on what the shippers, the people that are actually producing the freight that’s going out there, what’s going on with them.

And our perspective was very much informed by their experience, by the shipper’s perspective. And so it’s a very, it is aligned with sort of our underlying thinking about how we approach the freight plan. Now, as a strategic plan, you know, it is kind of longer term, look and thankfully we are going to be revisiting it along the way, so it’s not going to be a static one-time only effort.

But we are definitely cognizant that the economy, as the economy changes as things do come back, near or re-shored that that will have an impact and we will definitely be keeping an eye on how to advance our thinking when it comes to it.

Richard Boll: Okay, great. Thank you. I think we’re - I don’t think we have any more questions yet. I appreciate it, David and Ryan, for continuing our cooperation with the public transportation. We’ve been long standing, working together with our advisory committee, etcetera. So I appreciate it. And thank you for continuing it with us.

Dave Wonnenberg: Appreciate your time, and thanks for having us back and look forward to the next time.

Man: Okay. I just have, Richard, I just have two quick updates from Katelyn Hughes, from the federal highway side, Katelyn typically presents at these. First, FHWA is doing a state freight plan guide and workshops highlighting noteworthy practices. And then second, she wanted to mention that the National Truck Parking Coalition Meeting will be on December 1st in the afternoon. And there will be more registration information to come on that. So just a couple of quick updates from federal highways.

Richard Boll: Thank you. Okay, thank you. Do we have our CBP people on by any chance? I think we’re fine. Operator, do we have, was it Craig Clark and Adam Sulewski?

Coordinator: Craig and Adam, if you are on the line, could you please press star one?

Richard Boll: Operator, do you see their names by any chance?

Craig Clark: Good afternoon, everyone. I hope you can hear me. This is Craig Clark. I am the trade outreach coordinator with the Office of Trade Operations. I’ve got on the line with me, Adam Sulewski, but he is still trying to get his audio working properly. But I’ll see if I can do a quick introduction.

Richard Boll: This is Rich. I just sent him an email saying he can use the same call in line as you did. Can be the same (unintelligible).

Craig Clark: Yes, He’s - he just sent me a message saying he’s hitting the star one and he’s not able to be heard.

Richard Boll: Okay. And he can’t be heard?

Craig Clark: He cannot be heard (unintelligible).

Richard Boll: Let’s see. Operator, can you work on that for me (unintelligible).

Coordinator: This is the operator. Star one will put him into the queue. Star zero will notify me that he needs my attention. I have not seen a star zero or star one.

Craig Clark: Okay. Let me send him a quick message. But in the mean time, I’ll just introduce who he is. He’s telling me now he’s hit star zero. So hopefully you see him. But Adam is the Branch and Chief Trade Policy and Programs over in the Office of Trade and he is hoping to be able to provide audio here, but he was going to be updating on (CVPNCA) implementation.

You know, this is something, entered into force on July 1st. They are still in this restraint enforcement period, which of course means that there’s no enforcement actions for the first six months, which would put the data in that concludes being the end of the year, December 31st of this year.

I’m sorry for the clumsy technical issues that we seem to be having, but he’s still trying to get on. But in the meantime, providing info for you guys. So we will be entering in to Phase 2 on the very next day, on January 1st of 2021. And this is the time that enforcement actions are going to begin, and that’s going to be things, you know, verifications, audits and the like. And in between, the Office of Trade and CBP is focusing on compliance guidance.

There is going to be a push for the first FRN regulation that was pushed out in July. It was July 1st of 2020. And I’m sorry, we are operating as best we can here. And then the second package on - the (unintelligible) package is pending to be published in early winter of 2021. And Adam’s office will alert the public as soon as the FRN is ready.

Okay. Adam, I know that you are struggling to type as quickly as I can possibly speak. But I will say that his office has been extremely open to USMCA discussions and presentations if there’s information. But anyone who needs, you can come through my office, the Office of Trade Relations to coordinate or update our presentation with the Office of Trade if you need that.

And I’ll give you and email address (unintelligible) if you need to be in touch with my office. You can mail trade events — T-R-A-D-E-E-V-E-N-T-S@cbp.dhs.gov. There are - a lot of CBP are partnering (unintelligible) resources on CBP.gov that you can go to in the meantime. (unintelligible) we are able to get Adam on here. Adam, I appreciate your time and attention to try and get me the information as we go here. (Unintelligible) apologies for (unintelligible).

So the USMCA resources include webinars that have been prerecorded, very important to, of course, implementing instructions. There are fact sheets and FAQs that are constantly in development. Okay, sorry. (unintelligible) while Adam is trying - yes, I’m sorry. While Adam is transmitting some more information to me about USMCA updates, I will let you know that he’s also open to questions. But we are (unintelligible).

Richard Boll: And I talked to him (unintelligible) operator, they can look for him. He did the star zero. And just didn’t seem to work. I don’t know if he needs to do it again or not.

Craig Clark: I will pass on if you have inquiries, you can contact the (Ace) client reps for (Ace) issues. The Centers of Excellence and Expertise for (unintelligible) specific issues. And if all of that fails, the USMCA, that office had set up and email address to get info. And that is USMCA@cbp.dhs.gov. And Adam, I apologize that we are not having ideal communication, but perhaps we were in the USMCA update portion of this now, and I’ll just jump into some of the CBP updates and we’ll go from there because I know it’s a struggle to type the information you’re trying to provide.

So to those of you on the line, apologies that this wasn’t ideal, but please reach out to my office or Adam through the USMCA@cbp.dhs.gov address for more information on USMCA.

So in the - what I can do now is just provide some updates to some of the high activities that CBP has been involved lately. Our (COAC) expert (unintelligible) working group, which put together just sort of developed an updated export strategy that would incorporate 21st century processes and procedures to enhance export enforcement and also to facilitate exports.

This group has been meeting for a long time, for the spring of 2019. And I’m jumping ahead because I was trying to save (Adam) from (awkwardness), but he is telling me that he is possibly going to join just now for questions. But I won’t take his time if he’s able to do that. Apologies. Just give him a second.

Richard Boll: And operator, if you can just keep an eye out for that one, if you could, please.

Coordinator: Adam is on the line.

Richard Boll: Adam? Adam? Goodness. I’m sorry about this. He says he’s on hold now. Operator, do you need him to do star zero?

Coordinator: There he is. He’s here.

Richard Boll: Adam, Adam, can you hear us? Can’t hear him.

Craig Clark: Okay. Perhaps just in the interest of time, we will just record any questions and Adam will be, of course, very happy to answer them and we can get them back to the group. I’m sorry that that didn’t work out, guys.

Richard Boll: That’s fine. Are you okay with taking questions from our members that are on the call now?

Craig Clark: Of course, I can take questions. My ability to answer questions related to USMCA may be limited, but I certainly can process you that (unintelligible) responses.

Adam Sulewski: Hi (unintelligible). Can you hear me?

Richard Boll: Ok, Adam. (Unintelligible).

Adam Sulewski: I’m sorry. And…

Richard Boll: You just saved Craig. You just saved him now.

Adam Sulewski: Yes. I have to jump off unfortunately in about five minutes, but if there are any questions, I’m happy to answer them while we have everyone assembled. Apologies for the technical problems.

Richard Boll: Okay. Let’s ask some questions of people in the committee. Operator, could you take care of that for us, please, and make the questions short and sweet so we can answer as many as we can.

Coordinator: Yes, sir. If you have a question, please press star one.

Adam Sulewski: And while she’s doing that, I’ll just add, we also have our inbox, USMCA@cbp.dhs.gov. Anyone and everyone is encouraged to utilize that and we can get you connected to the right CBP office equity or get you the right information. USMCA@CBP.dhs.gov.

Richard Boll: Perfect, thank you.

Coordinator: (Unintelligible) comes from Norm Schenk. Your line is now open.

Norm Schenk: Yes. Good afternoon, guys. Actually, I don’t have a USMCA question. I know I’m having trouble getting on. I had several other comments. So I don’t know if you want me to go ahead and record those or if you want to defer until after the USMCA questions?

Richard Boll: Go on.

Norm Schenk: Okay. I’ll go ahead. Adam and Craig from regulatory trade committee, obviously the focus of the primary focus of this meeting was on the vaccine. So we really weren’t having discussing (unintelligible) on the customs stuff. But I just really wanted to touch base more to get something out there and more for our January meeting.

One is with respect vaccines, I was curious if at some point there’s going to be importation of vaccines in the US and I was wondering if you had specific dialogue, either with NCVP or with the food and drug administration on that to make sure there’s no bottlenecks in the border for legitimate shipments.

I know there’s some concern about the validation of that. And also with respect to not compromising the packaging. So for example, a package with dry ice, it could be open for one minute, but it takes like 60 minutes to recover on that. So that was my first question. I’ll just go ahead and rattle them off. And then, the second one was with respect to CBPs data pilots. To get a little update on that without getting too much into the weeds. I think the type 86 entry was a good solution with respect to other government agencies.

At the same time, I know for a number of our members some of the proposals that are being considered within CBP are quite alarming. And one is the potential requirement for an HTS number for de minimis shipments.

One is additional data elements for marketplaces even though it wouldn’t be required to the other service providers. And quite frankly, it would undermine the legislation that authorizes de minimis shipments under $800. And then the third part of that is with respect to the potential collection of duties or for 301 shipments.

And then, the third thing is with respect to the stop act and the stop act legislation for those who aren’t aware, it was the opioid legislation that requires all shipments from foreign posts coming to the US to transmit to advance the electronic data.

Since our next meeting is in January and it’s supposed to be electronic data. Since our next meeting is in January, and it’s supposed to be a hundred percent implemented by January 1st of 2021. If you could provide us an update on what the status is of foreign post providing advanced electronic data as well as the implementing operational regulations that are supposed to be done.

And I don’t believe I’ve seen any draft on that one. And then last but not least is, possibly if we can get an update from the 21st century team. You know, there’s a lot of good things going. Most of them are on a tactical perspective, and I think our members would like to see how some of these things connect the dots. So thank you very much.

Adam Sulewski: Thank you, sir. In terms of the FDA question, I will check with my colleagues who manage the border interagency executive council. I don’t work directly on that subject, but happy to follow up and I can get an answer back to you and my Craig Clark can (unintelligible) trade relations.

Thank you for the compliment on the data pilot. In terms of any kind of enforcement 301 (unintelligible) and any kind of waiver of the de minimis session, there isn’t enough of that that’s being considered. I can acknowledge that it’s being considered. But beyond that, I can’t get it, share anything more at this time.

So thank you for your thoughts. And Craig, I really apologize. I have to jump off. I have to leave to a meeting. But if you would, also if there are any additional questions from this meeting, please do ensure they go to Craig Clark, (unintelligible) my colleague at NCR and we can get back to this group. Thank you.

Craig Clark: Understood Adam. Thank you. So Norm, that was a lot of questions. And you just tell me if I miss a few of them. I can hit on a few where we can talk about, like, I know similar to Adam not working directly on any of the FDA issues, but we do work very closely with FDA on those types of shipments.

I do have, in a generalized update, I’ll talk to momentarily about, the 321 data pilot and then give you a little bit of an update there along with the Type 86 tests. We are, I know, having discussions, I think I was jotting down. You mentioned something about the duties for 301. I know that there are some internal discussions and cooperative discussions with our trade industry partners on that very issue. Also regarding the HDS numbers and additional data elements, there’s some discussions going on there.

The (Stop Act) is something that if you want to reach out to me separately, I can help arrange a single issue discussion call with committee on the (Stop Act) and we can make sure that we have our Office of Field Operation personnel who can be on the line there to help out with that.

Did I miss any big wins or anything that you couldn’t circle back to me?

Norm Schenk: The last one was just a request for January, if it’s possible to get an update from the 21st century (unintelligible).

Craig Clark: Yes, thank you. I’m glad you said that. Thank you. Yes, in fact, we had intended to have a 21st century update today. But there were just too many conflicts, too many calendar conflicts to have a 21 CTF expert here. But same thing. I can help arrange a discussion on that point as well. And that group has been very active in reaching out and involving the trade (unintelligible). So certainly, I can’t provide really a solid update for you just now. But that office, I can definitely put you in touch and we can get something organized for the committee.

Norm Schenk: Thanks Craig. You probably thought I was gone, but I’m like a bad penny. I keep going.

Craig Clark: No, I know, it’s so strange to talk to you outside of my (OFO) experience. But it’s very good to hear your voice. I’m happy you’re still around.

Norm Schenk: Okay, thank you. So let me just very quickly then, I know our time is limited. So I’ll just give some very quick updates on, sort of what some of these co-ed groups have done and the progress that they’ve made. That export group that I was talking about, the export modernization group has done a very heavy lift in identifying data elements, pain points, you know, regarding the transmission and updating of the data elements, the major documentation on all of the elements and parties involved in transmitting the data. And what that’s done has given us a much clearer path to develop a strategic, a new strategic document that will sort of help modernize our export piece.

They have that group, that (monetization) working group has started drafting a document. It’s only literally just started drafting that process, and that will include recommended changes to regulations and policies that fit in line with our monetization efforts similar to - the monetization efforts are the remote and autonomous, the work of the remote and autonomous cargo processing working group.

They have been focusing on each mode of transportation and are now working to define which trade and CBP processes need to change in order to facilitate autonomous conveyance technologies, including the costs, the benefits, risks that might be associated with automated entry and conveyance processes.

The inbound working group has developed a white paper that’s available on our website. It outlines a proposed future state for inbounds that includes some solutions that the group identified in the regulatory technical and policy arenas that are related to inbound processing.

That is a living document, but it’s also aligned with CBPs automation goals and is intended to be incorporated into the 21st century customs framework reporting. That group, I think, is going to be providing an update in the next few weeks. So you can find that in the stakeholder engagement section of our website. The bond working groups, been cooperating, the public private cooperation there, has led CBP to some plans to implement the risk-based bonding initiative and doing that in phases.

CBP is going to go after some regulatory changes through the ordinary rule making process and is going to, well, I won’t say it’s going to, but intends to publish an advanced notice of proposed rulemaking by the end of this year, by December 31. Public comment period is going to be opened up when that NRPM is published.

And so of course we would encourage you to read that and comment away. The CBP’s Office of Finance, Office of Field Operations, and Port Management have discussed some other bond issues including the consistency in FTC operator bond amounts. And they’ve issued interim internal interim guidance. Public guidance is going to be forthcoming. So keep your eyes open for that, probably by way of the CSNS mechanisms.

And the working group, the bond working group is working on external guidance for pipeline operator bonds and is continuing its review of the customs directive 3510-004, called monetary guidelines for setting bond amounts. Getting to some of Norm’s points, earlier is in the e-commerce space. The Office of Trade has also been running that section 321 data pilot and the entry Type 86 test. The 321 data pilot is of course the first time that we’ve accepted advanced data directly from some of these non-traditional e-commerce players, like, some of the platforms and marketplaces.

So far we’ve received, over 70 million shipments through that 321 pilot and the Office of Trade is reporting that the data is improving the field’s ability to accurately assess risk, which, speaking directly to part of (Norm)’s concern is especially useful now with concerns around the importation of potential counterfeit test kits, medical devices, PPE, you know, this items related to COVID-19.

And then, something that I know everyone loves to hear is that there have been some trade facilitation that’s realized some of the 321pilot participants have experienced 80 and 90% decreases on hold, which is of course, always good news. So I’ll leave us some time for questions and to, you know, related to the general CBP updates I’ve provided as well as USMCA, that I can take back to (Adam) if you would like.

But I will one more time give you the email address that you can reach us through its tradeevents@cbp.dhs.gov. So T-R-A-D-E-E-V-E-N-T-S@cbp.dhs.gov. And (unintelligible) for questions.

Richard Boll: Operator, can you set us up for questions?

Coordinator: Thank you. To ask a question, please press star one.

Man: Leslie left his hands up. That might be from the last group. I don’t know if you had a question or not.

Richard Boll: No, I don’t have any questions per se. I thought there was someone in queue, but I guess not. Operator, nobody in the queue?

Coordinator: No questions on the phone at this time.

Richard Boll: Well, okay. Well, I appreciate it, Mr. Clark and I guess Adam is not on it right now, but we appreciate your giving us an update on everything going on at CBP. I appreciate it, and with that email or that email address, hopefully someone will be able to pop into that and maybe carry on the conversations later.

Craig Clark: Well, thank you very much. I appreciate you giving us the time, I hope the rest of your meeting goes very well.

Richard Boll: Okay. Thank you very much. Appreciate it.

Craig Clark: Thank you.

Richard Boll: Have a good day. And thanks again.

Craig Clark: Thank you.

Richard Boll: Let me see. I think I saw the next speaker actually on the line. I’m not sure if he is still. It would be Brian Peretti at DHS. Brian, are you out there? You’re willing to start your presentation? Just do star zero, operator?

Coordinator: Yes. He would have to press star zero.

Richard Boll: Are you there, Brian?

Brian Peretti: Hello. Can you hear me?

Richard Boll: Brian?

Brian Peretti: Yes.

Richard Boll: Hi Brian. Well, thank you. This is Rich Boll. How are you doing? Thank you very much for being on the line. I thought you were. So it would be great if you could do your presentation. I appreciate it, and thank you and thank Jim Cooper for getting us in contact with each other and so you should be able to brief our committee. I appreciate it.

Brian Peretti: Yes. Thank you very much. Thank you for having me here, too. I really appreciate it. I think what you’re doing is really interesting, especially from what I’m doing over here at Homeland Security. So what I wanted to do is kind of talk a little bit about what, where I’m at within Homeland Security and what we’re doing out here, and then talk a little bit about what we’re doing on the special (unintelligible) project tied to information communications technologies, supply chain, risk management, and then try to figure out how we may be able to work together because I think what you’re looking at (unintelligible) is really interesting to us.

So just a little bit of background. My name is Brian Peretti. I’m a Senior Risk Advisor for Security and Economy in the Cyber Security Infrastructure Security Agency, which is part of the Department of Homeland Security, and I’m in the National Risk Management Center. I’m actually on detail over from Department of Treasury where my function over there is to coordinate the activities, the financial services sector, sector specific agency. And so what I want to do is kind of talk a little bit about what we are. So hopefully most of you know, but maybe just kind of give me some background might be helpful. So I’m in the National Risk Management Center.

And what we try to do is help, federal, state, and local partners to understand the all-hazards consequences, to nation’s critical infrastructure, through integrated analysis, infrastructure, privatization, and modeling and simulation. So this background, in November of 2018 is just the Act of 2018 was signed into law established the first federal government agency responsible for protecting and enhancing the resilience of the national, the nation’s fiscal and cyber infrastructure.

Think of CISA as the nation’s risk advisor. And CISA’s mission is leading the national effort to defend critical infrastructure against threats of today, working with partners in the private sector and across all levels of government to secure evolving risks for tomorrow. So CISA is the pinnacle of the National Risk Management and Cyber and Physical Infrastructure.

And since no single stakeholder has all the information necessary to detect and comprehensively manage systemic risk, CISA’s information sharing and coordination role and ability to engage policy and decision makers are essential to success in our shared Homeland Security mission. CISA’s second strategic goal is secure tomorrow, which means to enhance the resilience of our nation’s critical infrastructure and address long-term risks. If we’re always just putting out fires today, that we’ll never be able to get ahead, which is why we’re working to build capacity and our partners and drive change in the long term.

And this is where the National Risk Management Center comes in. So the NRMC is within a system, brings together government and industry to collaborate, to reduce cyber and other systemic risks to national and economic security. Through our cutting-edge analytic capabilities and partner framework, we were able to identify, analyze, and prioritize and manage the most strategic risks to our nation. This involves working with our partners to navigate complex threats, create shared awareness, and provide the necessary resources to keep an organization strong, resilient.

The NRMC an analysis of CISA prioritizes operational activities and maximize operational effectiveness through more efficient use of resources to support DHS leadership, operational components and shield personnel during crisis, these emerging threats or incidents impacting the national infrastructure. So I want to talk a little bit about what we do tied to information and communication technology related to supply chain, which I think might be interesting to this group and would be interesting to get some feedback from all of you.

So over the past few years, we’ve seen a steady but significant shift in governance, resources and frameworks and approaches to managing cyber, physical, and other risks to the nation’s critical infrastructure. Notable shifts include the integration of supply chain, risk management, greater understanding of cross sector risks and a greater focus on resiliency, a greater understanding that risk management efforts can exist in silos and the increasing role of C-suite executives that they have in networked protection efforts.

We live in a system of systems where ICT components, those foundational building blocks of Harbor Software and Services underpin a broad range of critical infrastructure and government functions that the American people depend on. We must have trust in those components.

They must be secure by design and their manufacturers should operate without risk of subversion or manipulation by adversarial regimes. Vulnerabilities and supply chain either developed in intentionally for malicious intent or unintentionally through poor security practices can enable data and intellectual property theft, loss of confidence in the integrity of a system, or exploitation to cause system and network failure.

Increasingly many of the many or most discussions around cybersecurity and critical infrastructure protection include some risk calculation around supply chain, third-party, or vendor assurance. Recognizing this reality, managing risks of the ICT to include 5G security and resilience is a top priority for CISA.

At CISA, we understand that there is a lot of risk out there and to effectively manage these risks, we need to prioritize our approach and nowhere is risk more apparent than in managing supply chains. Just so our government partners and the private sector engagement strategic and unified approach to improve our nation’s defensive posture against malicious cyber activity. Just as path forward to make ICT supply chain more resilient has three (unintelligible) tenants — partnership, framework, and analysis.

On the partnership and collaboration, tenant assist actively works, I believe supply chain risk management efforts in both industry and government, for our role of the IT supply chain risk management task force, or the IT (unintelligible), which is industry focused and the federal acquisition security council, FASC, which is government focus.

The IT (unintelligible) formed by the Federal Under Agency and the communication and information technology sectors is a public private partnership that identifies and develops consensus risk management strategies to enhance global ICT supply security. Focus areas of the task force included developing policy and operational recommendations.

The information sharing, threat evaluation, the development of qualified bidder lists, and qualified manufacturer lists and vendor attestation frameworks. In July 2020, a new working group was established to analyze the impacts of COVID-19 to the ICT supply chain and to produce recommendations to strengthen supply chains against similar events in the future.

The FASC is intended to harmonize supply chain risk management choices across government to work on acquisition regulation and to create a mechanism by which we can more reliably identify exclusions or major threats to supply chain activities. CISA has been named as the lead information sharing agency. On the second tenant of frameworks, resources such as supply chain, risk management essentials helps illustrate activities that reduce risk and complement existing sources of best practices.

SCRM essentials, which is complimentary of (unintelligible) and maps to the existing great body of work across miss special publications in CIS controls translates underlying security controls in the best practices, a roadmap of sorts that executive level decision makers can understand. It means to provide top level direction, but not be overly prescriptive in the implementation of decisions that should be made by organization by organization. SCRM essentials have laid out six key pillars.

First, identify the people. Second, managing the security and compliance. Three, assessing the components. Four, knowing the supply chain. Five, verifying the assurance of third parties. And six, evaluating your SCRM program. And finally analysis. This is building a best in class supply chain, analytic regime. We ultimately plan to support inter-agency activities like the FSAC and also (ASIPIUS), the committee on foreign investment in the United States and also team telecom.

And also service the critical infrastructure community on the private sector, as we are able to provide risk judgments to them. Additionally, CISA partners with the Department of Commerce to support analytical efforts in response to executive order 13873, securing the information and communication technology (unintelligible) supply chain.

Put these three layers and you have a comprehensive understanding of ITT risk. Our goal here is not to replicate work. It is to leverage the productivity activity or productive activity happening across the inter-agency. It is this approach of partnership, framework and analysis that’s going to guide CISA’s working going forward.

So speaking specifically about the task force, it’s a partnership between DHS, the inner agency and the communication and (unintelligible) sectors. It’s the federal focal point of a (unintelligible) private partnership around supply chain, risk management. There’s great power in bringing together the key inter-agency and private sector partners to the table.

Now more than ever, we must lean into these structures. Through the critical infrastructure partnership and advisory council, or (CPAC) or DHS has chartered the ICT supply chain risk management task force in the fall of 2018, which is led by the National Risk Management Center, in partnership with the information technology and communication sector coordinating councils.

This task force is the center of gravity for public and private supply chain risk management partnership. It features 40 of the largest companies in the IT and communication sectors and 20 federal partners across the inner agency. The task force allows government and industry subject matter experts to jointly examine and develop consensus recommendations and policy initiatives to address key strategic challenges, to identify a managed risk associated with global information and communication strip technology, supply chain, and related third party risk.

The first year of the task force was focused on four priority areas, concern for a supply chain, risk management, including information sharing, threat evaluation, qualified bidder list, and qualified manufacturer lists and polished their recommendations to incentivize purchase of ICT from the original equipment manufacturer and authorized resellers.

In September of 2019, the task force released an interim report providing a status update on activities and objectives of the task force. This report outlined the overall structure of the task force, as well as four work groups, areas of discussion and relevant key findings.

The interim report serves as an important building block for the second year of the taskforce, including strategic priorities and recommendations. The task force year two progress report is underway and will be published in November within the next month.

In late 2020, the task force will release a report by working group, adopting an attestation framework around various aspects of supply chain risk management, best practices.

The goal of the framework is to help organizations address key focus areas, including supply risk, product lifecycle management, product process controls, (unintelligible) security, data security, and product cyber security. The task force launched and runs a coordination (tiger) team to eliminate the landscape of supply chain risk management activity and harmonized risk management effort including compiling and maintain inventory of SCRM related policy and program efforts and the like from across all of government.

There are five working groups that are contained within the SCRM. The first, the information security, the information sharing working group. It’s developed its report and recommendations on reducing private security litigation risks arising from the sharing of supply chain information, which was shared with the task force in August 2020. The task force voted out - voted to approve working group one, its objectives and closed the efforts for the year.

The second working group is a threat evaluation working group built upon a bulleted threat list, which is validated and expanded through continued action with taskforce mender members, subject matter experts and continued engagement. It created a phased set of deliverables. So on May 2020, we released the risk management for suppliers drafted down into phase one report. In July 2020 we (unintelligible) the risk mitigation for suppliers’ final draft amendment to the phase one report. In August 2020 products and services, threat evaluation draft report, and it’s September 20 products and services threat evaluation final report.

(Unintelligible) these assessments of impacts and mitigation controls to each of those supplier threats scenarios released in year one, expanding the existing scenarios by adding potential threat mitigation strategies and SCRM activity controls to reduce the threat impact.

The third working group has the qualified bidder list qualified manufacturer lists working group. And this group conducted use case reviews of five qualified list programs currently underway in various parts of the federal government allowing the group to refine information regarding when and how to use a qualified list and begin developing its evaluation criteria and align these criteria to kind of control categories.

It created a following deliverables. An analysis of five case studies that led to the development of an overarching set of common ITC SCRM evaluation control categories to be considered when building a qualified list program in whole or in part, seeking to manage supply chain risks.

A year two report that includes in-depth description of identify control categories and related foundational information regarding when and how to use a qualified list to manage supply chain risks. The vendor, a working group four is the vendor from the template working group. And that group built out its final template product to be a resource for ICT stakeholders and to help improve the vendor SCRM compliance decision-making and awareness.

The template is a standard framework that will help users identify when supply chain risk management compliance and walks through key questions that can be used to inform SCRM security and resilience discussions. The final group is working in group five, which the ITT ICT SCRM COVID-19 impact study.

And in June 2020, the task force established this supply chain risk analysis study working group in response to the pandemic. The working group and partnership with industry partners and trade groups released the study that analyzes the impact of COVID-19 on ICT supply chains so that organizations can increase their supply chain resilience during potential future events.

The study found that the most pressing issues that companies faced under the (unintelligible) related to inventory management, single source, single region of suppliers and transparency of junior (cheer) suppliers. But just to talk about the executive order, which many of you may know about, our information and communications infrastructure is foundational to the American way of life and our nation’s prosperity and security depends on how we balance economic benefits with security risks.

This is why President Trump signed the Executive Order 13873 (unintelligible) security information and communications technology and service supply chain. The EO empowers the Secretary of Commerce to prohibit transactions involving information and communication technology or services designed, developed manufactured, or supplied by persons owned by control by or subject to jurisdiction or direction of a foreign adversary.

And that one, pose an undue risk of sabotage or subversion to an information and communication technologies and service. Two, pose an undue risk of catastrophic effects on the security and resilience of our critical infrastructure or digital economy, or three, otherwise pose an unacceptable or risks to the national security of the United States or the security and safety of the United States persons.

Video is another tool to enhance the security and information and communications technology and services in the US including the work of the ICT screen task force.

This task force plays a central role in providing industry feedback to the implementation of the supply chain EO. The EO requires DHS to produce a written assessment within 80 days of EO signature that assesses and identifies entities, hardware, software, and services that present vulnerabilities in the United States and pose the greatest potential consequence to national security,

As part of the implementation of the EO to assess the national security risk (unintelligible) from vulnerabilities and telecommunication entities, hardware, and software and services, including components, enabling 5G communication.

This builds off existing engagement with IT and communication sectors to assess elements, whether it be hardware, software services across the entire ICT supply chain. (unintelligible) a completed the EO-driven analysis by first identifying and validating with industry and government partners, a standard taxonomy of these ICT elements to (unintelligible) performed criticality assessments on the ICT elements with appropriate stakeholder input, productivity and collectively this analysis to the Department of Commerce to narrow the scope of where the application of its authority from their EO is likely to target most critical ICT.

This assessment was delivered to Commerce in August 2019. CISA will continue doing critical assessments on ICT elements as their type and activity aligns well with the overarching agency priorities. We look forward to working with this group to better understand how each of your organizations think about the issue of supply chain, risk management, both at the organizational level and national level. I look forward to a robust discussion. And with that, if there’s any questions, I’d be more than happy to enter into the discussion. Thank you.

Richard Boll: Thanks, Brian. I appreciate the briefing and (unintelligible). I’m sure we have some questions here. Let me see. Do you want to start with the (unintelligible), or do you just want to go to the rest of the group first?

Rick Gabrielson: Just open it up, Rich, with folks first.

Richard Boll: Okay, okay. Operator, could you help us with the questions, please?

Coordinator: If you have a question, please press star followed by one.

Man: (Unintelligible). Hello?

Coordinator: I have a question. Just a moment.

Rick Gabrielson: Brian, this is Rick Gabreielson and I’ve got one for you. Maybe I’ve missed it, so please tell me. But does the agency also monitor active threats? And maybe you can, or you can’t say this, but if you are measuring active threats on an ongoing basis, you know, is the number fairly large, and maybe you can’t share it, but (unintelligible) fantastic. A number of active threats that you see within the US on a regular basis. Can you comment anything on that at all?

Brian Peretti: I can’t say a specific number. We continue to see across the board, many active threats going on, trying to exploit different parts of supply chain, organizations, right. Hacktivists and hackers, nation states are trying to do this periodically. And so I think we just saw yesterday in the news regarding, I think it was Iran and Russia, with election type stuff.

So there are always adversaries and always have to keep our guard up to be able to make sure we continue to stay strong and robust wherever that may be. And of course it can come from either physical or even physical cyber threats, either one. You know, it’s never a place where we can really let our guard down.

Rick Gabrielson: Normally is it bad actor states or is there an increase more of hacking to, you know, for ransomware, that type of thing?

Brian Peretti: There’s definitely been an uptick in ransomware. And if your question is that coming from nation states or individuals, not really quite sure on that. But you know, we have heard there’s an uptick on ransomware. You open the paper every day, there seems to be another attack.

Rick Gabrielson: Somebody. Yes, exactly.

Brian Peretti: Yes. Public private, right. You see school systems, other ones getting hit too. So it’s something that continues to go on.

Rick Gabrielson: And maybe last one for me and maybe the others are thinking of questions, but there’s and we had some discussion even today. There’s a push in a number of sectors for a lot more automation. Whether it be through autonomous trucks, ships, cars, etcetera.

And what’s the position, you know, from a cyber-attack standpoint that takes over that activity, you know, from DHS perspective and what’s your response of that? Is it, it’s great and yes there are improvements, but because of what’s happening in this space, it’s something that we shouldn’t do or is there is there a position that you take on that.

Brian Peretti: I think, you know, industry is going to move where it’s going to go, right. And there seems to be that push through that way. We don’t necessarily tell anybody how to manage their risk. We just try to do the best information for them to have a better understanding of the risks they face. So I’ve gotten (unintelligible) do they understand the risks and challenges that may be imposed based upon using or deploying different technologies or different risk management strategies and how they thought about that.

So it’s that active conversation we’d like to have with the private sector to understand how they’re looking at risk, what piece of information and data they need to get better, what are they missing, and how can we increase that information (unintelligible) bidirectionally so that, you know, we understand how you’re looking at managing your risks.

We can better understand are there pieces of data or other information that maybe helpful and that robust dialogue is where you’re going to get to a positive place at the end of the day. Automation is just, of course, one of many different types of risks out there. But understanding what your calculus is, is important as we look at it from the national risk management side.

Rick Gabrielson: Thanks.

Rick Blasgen: Hey Brian, this is Rick Blasgen. And thanks again for addressing our group. Do you have a perspective on blockchain? I think we’ve gone through a whole day here, and I don’t know that I’ve heard that word yet. But anything you can comment on with regard to that or its potential feature.

Brian Peretti: No. I think we hear about it the same as everybody else, right? There’s definitely some benefits out there, there’s some challenges based upon where we are. I don’t think we have an official position on that, but we’re really interested in to enter into a dialogue with anybody who likes to, to kind of better understand, you know, what it is, how you expect to deploy it. What do you see the challenges and risks are and how we can work together on that.

From our side, everything, risk is never good or bad. It’s just risk, but it’s how you manage it. And so how do we better understand, you know, what you see as the benefit out of it and you know, how can we help inform that going better and better help you manage that or think about it going forward. And the more we can align our resources to what you’re doing is probably going to be better at the end of the day for the community as a whole.

Rick Blasgen: Okay, thanks.

Brian Peretti: Thank you.

Coordinator: We also…

Richard Boll: Any other questions?

Coordinator: We also have a question over the phone. It comes from James Cooper. Your line is open.

James Cooper: Thank you. Hey Brian, thanks again for agreeing to do this. Appreciate it very much, especially on such last notice. A couple of questions I have more towards the physical part of this, not necessarily as much cyber, but basically it sounds like, you know, you’re looking at this from an all hazards perspective and not just focusing on security or just focusing on, you know, a response to a pandemic.

Is the intention here to like prioritize specific products at some point to deem actual products that are critical? I know you do that for infrastructure right now and things of that nature, but actually trying to map out and say, oh, and not necessarily even make public. But just to know, okay, what do you all consider to be critical, and then create an actual map of what do the supply chains for these products look like, and you know, where are those ingredients or precursors or intermediates, where are they produced and actually mapping out the supply chain for all this stuff?

Is there any intent to go through an exercise like that at DHS?

Brian Peretti: Yes. That’s a great question. Thank you very much for that. So, about a year ago or so, in partnering with, the private sector, the (unintelligible) agencies and other partners, we were able to create a list of 55 national critical functions.

And there’s basically the function you have to work in order for the country to work. So you know, provide drinking water, provide wastewater, provide power, it’s across all the different sectors. And so those are nominated by industry and our partners to be able to say these are what things we should be looking at.

And so our role is to kind of look deeper at those, understand why they’re critical, what pieces and parts go into making those so that we can better understand what’s happening in going forward. Another area which may not be connected directly to MCS, but a general issue is, you know, where are we seeing potential challenges in the supply chain generally, which are important and critical for the country to work.

So as we’re looking at some of these issues, we had a lot that came up during the initial stage of the COVID, right. You probably all saw the issues related to meat packing in the Midwest, right, in which I think it was Swifts, or one of the big meat providers that we may be running out of meat.

And so we’ve tried to figure out what we could be doing to think about how to be able to, you know, make sure that didn’t happen. And you know, from that, we’re trying to get a deeper understanding of a lot of those supply chains. And that’s why I really like the partner with this group, and with all the members individually, as a group, whatever, to whatever makes most sense to really understand, you know, what are your biggest thoughts and challenges. What are the things that keep you up at night, from a supply chain issue?

Because I believe you probably all understand your supply chains really robustly. How do we get that information over to our (unintelligible) so that we can start doing some work to kind of think about those areas because if they’re critical to you, they should be critical to us, right? Government should be aligned as closely as possible with you all.

So you know, as we then look at that, how do we then tackle that issue going forward? So one of the things that CISA did, hopefully everybody saw this would be, critical workers list, right? We heard a big desire from industry to coordinate with government at the state and local level of who are the critical workers who have to get through who have to be able to be in the process so that they can do what they need to do to keep the economy going, health and safety going, right?

So we were able to partner with industry and created that list and that was published. And I think it’s on its fourth or fifth iteration right now. And it continues. Is there a process to be able to understand, you know, what are you seeing as critical? What should be on that list, but what do we have to do to make things, make the ability for the economy and people to continue to move forward? So, you know, that’s one area of supply chain, right?

What are the other areas that are concerned by you that we should be thinking about? And what are the things we don’t know about? You understand your supply chain probably better than we could ever understand because you’ve lived it.

How do we then build that out and get that information so then we understand where you believe the pressure points are, and the pinch points are, right, as we did the ICT SCRM COVID working group that we identified, the single entity or single region of a supplier is critical and it can cause major problems.

But it’s how you address that and should we be working on the tactics and techniques to address that. So I guess the short answer is yes, we’re trying to get a better understanding how we can partner with you better to understand where to put our energy, and the first order is going to be helpful.

The national critical functions is where we’re kind of focused right now, but happy to coordinate, however we need to go forward. And if you may remember, I’m not sure how many people attend, but there’s a ESF-14 call. that happened, I think it was like three times a week in the beginning and kind of, is now I think a once every other week meeting, in which we get the feedback from industry over and over again.

And so we can understand where the problems are, what we can be doing to address them, right. Your challenges should be stuff we should be understanding so we can work better. So hopefully that answers the question, (Jim)?

James Cooper: Thanks very much, Brian.

Brian Peretti: But we don’t want to make work for ourselves, right? We need inputs from you and everybody else to make sure we’re coordinating right away.

Coordinator: Next questions comes…

Richard Boll: Operator?

Coordinator: Yes. Next question comes from Brian Hancock. Your line is now open.

Brian Hancock: Hi Brian. This is Brian Hancock from Kansas City Southern. Today we’ve listened to a couple of presentations. One talking about the vaccine distribution, some of the risks and opportunities that people have. Then we talked about critical minerals that the government is looking into and that they’re trying to understand how does the supply chain fit into. We’ve talked about the risk in the food distribution world. Is there anything else? It just seems like there is - we are an industry fraught with risk. And I’m wondering if there’s a - is there a task force? Is there, I mean, I realize your organization is, is looking at it all the time, but it’s very simple thing we can do to participate. We participate on so many different committees, but there are very specific risks that we participate in, right.

We have the automotive supply chain. We have the construction world supply chain. I’m just wondering, is there anything else out there that maybe it just seems like today’s the day to really look and understand the risks that our customer are facing. But I’m just wondering, is there anything we can do as assistance to the government to help people become more active and aware, especially our customers on the risks that they’re facing? Is there anything else we can do?

Brian Peretti: I think a couple things, and thanks for that, volunteering to help us go forward. I think that’s how we’re going to get to a better place, right? We continue to set up public private partnerships and try to figure out how we can knock down the barriers to information sharing.

So what can we be doing to work together so that what you’re seeing as a risk today is something that could be shared with us before it manifests itself in a problem, right? You are all on the front lines. You’re all very sophisticated and very knowledgeable in this space, but you all have a lot to offer in a way, which we’re sitting wherever we’re sitting from the government side, whether it’s in the regions or Washington, don’t have our hands on the same way.

So what I would suggest is, you know, we have this sector coordinating councils, feeding information that way, if it’s through this group and you know, you all want to start a chain to be able to connect with us, happy to take that, too. But I would say however you want to share, whatever is the best way to get it moving, please don’t hesitate to reach out, right?

If you see a problem, we would like to know it before other people can spot it, right? And I think that’s a challenge. You have professional judgment, you know what you’re doing, we need to be able to lean on you so that we can kind of understand what you’re seeing is those challenges. And also why you think it’s a challenge and really some suggestions on what we could be doing to make it better. Right?

So when we, when I was talking about the ICT supply chain risk management task force, the purpose was not just for us to sit on the other side of the table and listen to people, talk about what their risks are. It is actually the work to develop solutions and what we can do to partner together to get to the place in which we’re going to be able to come out with some, I want to say guidance, right?

Because we don’t want to tell you what to do. We want to be able to share that best information based upon, you know, the way in which companies work and the way in which they’re addressing these challenges to a place in which we can get to a more resilient nation as a whole.

So if there’s nobody listening to you in government, give me a call or we’re happy to take your call to work through that and get you to the right person. But if you’re seeing people not being responsive, let’s hear about it, too. Let’s figure out how we can align as close as possible to make sure that we’re in the right spot.

So you’re right. There’s lots of different risks. There’s lots of different challenges out there that we have to pay attention to every day. The environment is not getting simpler and it’s getting more complex. The adversaries are trying to figure out what to be able to do to mess us up, and to cause havoc and other panic and problems out there. So whatever we can be doing in partnering those places, happy to do that. So hopefully I volunteered back to you enough.

Brian Hancock: Okay. Thank you very much.

Brian Peretti: Yes. If it’s a one-way dialogue, we don’t get anywhere, right. Nothing gets solved. But if we could figure out how to make that work the right way, and you know, if there are challenges you see out there, let us know, whether they’re legal regulatory or, you know, other things, you know, happy to work on them.

Brian Hancock: Thanks.

Richard Boll: Any other questions?

Coordinator: No questions on the phone at this time.

Brian Peretti: Once again, thank you for inviting me here. Oh, I’m sorry. Was there another question?

Richard Boll: I don’t think there’s any other questions as far as I know. I appreciate it very much, Brian. It was great hearing what you guys are doing and what you’re doing as well. I appreciate it. And you know, hopefully we’ll be able to keep in contact as we go forward.

Brian Peretti: Yes. Whatever we can be doing together. It’s a big challenge. You all have a big challenge in front of you. We have it on our side. The more we can partner together, the more beneficial it will be at the end of the day. So once again, thanks for inviting me. Really appreciate your time and attention to this. And thank you.

Richard Boll: Thank you, Brian. Well, I think, the last on the agenda is the Tiffany’s USMCA subcommittee recommendation letter. The USMCA Committee worked on this letter for a couple of weeks and we sent it out to the full committee. It was voted out to the USMCA. They voted it. So they would go to the full committee and the full committee got it, I don’t know, four or five days ago. I can’t remember how long it’s been and asking for comments back.

And I’m not sure what Tiffany got. I know she got a few comments and made some changes to them, which is great. And I think Tiffany is on the line. I know she’s been going from here to there. So I’m assuming she’s on. But Tiffany, if you could, if you want to talk about the recommendation letter, that would be great.

Coordinator: Tiffany, if you are on the line, please press star zero.

Richard Boll: I thought she was going to be on the line as she was going around. Send her a quick email.

Tiffany Melvin: Hello?

Richard Boll: Tiffany?

Tiffany Melvin: Yes. It’s quite a process. Once you say hit star zero, it takes a little bit to get through. Okay. I’m hoping this will be a very fast wrap up to great day of informative session. Basically, like Rich said, you got the letter. This really happened like a week and a half ago. I started getting some phone calls from a lot of different North American organizations that are there — some from the Southern border, some from the Northern border — wondering if I knew anyone or knew anything about the four re-openings and what was going on there and all this kind of stuff.

And it became very obvious that there needed to be a higher level of coordination and discussion. And at this time, the reopening of the border safely and securely, reducing travel restrictions and in coordinating quarantine policies on accepting, you know, testing and screening standards across the continent, really needed to get some more attention at the highest levels of government.

So we have a bunch of North American organizations and think tanks and research institutions that are coming together on this issue to go kind of, to a call to action, to the three federal governments, to make us a top priority, to get the businesses, the business travels back in business, and to reopen safely and securely.

But, you know, we’ve got the essential travelers, quote, unquote essential travelers that are crossing the border now, but a lot of the business travelers that generate the trade and investment in the three countries are not traveling because of restrictive quarantining policies. And so it’s just, it’s got to be giving more attention to businesses. The border towns are just dying off.

They’re being devastated by this. and you know, we’ve got some, you know, businesses going out of business, retail, restaurant, right and left. It’s just kind of a ghost town to a lot of these border towns. And so when we do finally reopen the borders, there’s not going to be businesses to support the travelers. And so it’s a huge issue.

And I know that there’s work going on about this in kind of a patchwork way at some of the lower levels, but it’s really just time to elevate this to a super high level and have a coordinated approach of the government consulting with industry that know what needs to be done.

And so this letter is an attempt to bring that to their attention. And because we had our (ACSCC) meeting coming up today, I thought it was an opportunity if the committee wanted to sign on to such a letter and make recommendations to Secretary (Ross), it would be very good timing because a lot of organizations are going to be weighing in on this in a major way very soon. So that’s really the point. I did get some comments back from you. I appreciate those that did that. So I’ve made the changes. Really it was like a wording on industry or government reporting to industry and more of a, of a government involvement with industry just to kind of make it a little more open and not so demanding of the government to report to us.

So I made that change in the letter and I think it’s good to go. And I’m just looking for the committee to vote on it so we can get it into Secretary (Ross).

Richard Boll: Okay. Does anybody have any questions for Tiffany?

Coordinator: As a reminder to ask a question, please press star one.

Tiffany Melvin: How long do we wait to see if there’s questions?

Richard Boll: Well, it seems like you went through a black hole, too, and yet when you star zero. So (unintelligible) takes a little longer. (Unintelligible) just a little bit.

Coordinator: We do have a question over the phone. It comes from Jon Gold. Your line is now open.

Jon Gold: Hi guys. Not a question, just Tiffany, thank you for doing a letter. We very much support the letter. And I think it’s even more important to do it now. The DHS announced the beginning of this week that they’re doing an extension of the ban for another 30 days to November 21. So I think getting this letter out now is just incredibly important. So just want to thank you and we fully support the letter.

Tiffany Melvin: Good deal.

Coordinator: Next question comes from Brian Hancock. Your line is now open.

Brian Hancock: Hi Rich. I would like to, I don’t know if this is necessary, but I would like to recommend that the whole group approve that we send a message, send the letter as it was edited.

Richard Boll: Is that the motion?

Brian Hancock: That’s a motion. I am moving.

Richard Boll: Okay. Do we have a second? I’ll second it.

Man: (Unintelligible) star zero. Rich, I can second it.

Richard Boll: Okay, so that’s a second.

Coordinator: Next question comes from Leslie Blakey. Your line is now open.

Leslie Blakey: Thank you. This is not a question. Just and I did not mean to interrupt the voting process, but because I’m voting yes. But the letter on my screen is coming up with a number of strange spaces. And I just want to make sure (Tiffany) you’re aware of that and that somebody goes through with a good scrub, to, you know, correct any weirdnesses that may have gotten, you know, occurred in the electronic transmissions.

Tiffany Melvin: Can you guys still hear me or do I get put on, okay.

Richard Boll: You’re still there.

Tiffany Melvin: Okay. Well, I’m in my car, so I can’t see anything and was in my car before I started talking. But yes. I have, the first letter I sent out was not even on letterhead, but I put it, I mean, not letterhead, but was not formatted properly. I tried do that.

So I think it’s been taken care of, but if it hasn’t been, yes, I’m sure Rich and Eugene can help clean it up.

Leslie Blakey: It’s in correct format it looks like now. But what comes over on the screen is things like in the word and there’s a space between the A and the D. And together is T-O-G space E-T-H-E-R. I think it’s just an electronic transmission thing. But that’s what showing up on my screen. I just wanted to let you know.

Tiffany Julian: Okay, cool. Thank you. We’ll fix it. So do we need to take a vote now or that just happened.

Richard Boll: I guess we need to vote on how we’re going to do that.

Man: There was a question, Rich. I think there was a question.

Coordinator: Yes.

Richard Boll: Oh, another question?

Coordinator: Next question comes from Robert Sanders. Your line is now open.

Robert Sanders: Yes, guys. I’m in favor of the letter. Why don’t we just because of this mechanism we’re working under, where everybody’s got to get star one to vote yes, just ask if anybody wants to vote no. And if you don’t hear anything, it will approve, and let’s go to work.

Richard Boll: I like your style. I like it. I used to do one of these out here that you can actually do your hand, but I don’t see any hand on there. So okay. So (unintelligible)?

Tiffany Julian: Okay. Well, hopefully is voting no. I did want to make an announcement. It’s something hot off the press that happened a couple of hours ago. The province of Alberta is starting a pilot project on November 2nd. It’s going to reduce their quarantine time from 14 to 2 days if people that are traveling test and have a negative result. And then for folks who have traveled abroad and are coming back and or I’m sorry and require a negative COVID test to enter another country, they can pay $150 to get results within 72 hours from (Dialyze) (unintelligible). So that’s a pretty huge reduction in quarantining from 14 to two days at the province of Alberta.

And so that’s an exciting thing to watch and hopefully if it works and is successful and safe and secure, it can be used as a model for the rest of the provinces in Canada. But again, we also don’t want to start kind of a patchwork thing either. But I just wanted to get that it has nothing to do with the letter. Well, it has to do with the letter, but it has nothing to do with the vote. I just wanted to announce that because it’s a pretty cool thing that’s happening starting November 2nd. I’m finished now.

Richard Boll: So do we have anybody on the line that’s voting no? Hit your star zero I guess.

Coordinator: We have questions in the queue.

Richard Boll: Oh, okay.

Coordinator: Yes, comes from Melzie Wilson. Your line is now open.

Melzie Wilson: Oh, I was just saying, we could vote via chat. I think it’s a great letter. I think that with what is in the content of the letter, either, you know, there could be some type of presidential proclamation or just simply a directive between CBP and the other CBP areas in order to support. So it’s something that doesn’t need legislative action and something that, you know, can be done from a directive standpoint without a lot of pomp and circumstance.

Richard Boll: If we do something like that where going to have to change up the whole letter I think.

Melzie Wilson: No, no, no, no. I’m saying it’s a great letter. It gives enough leeway that it can be taken and shared and implemented without a lot of, you know, (unintelligible), a lot of regulatory input or legislation.

Richard Boll: Okay. Next?

Coordinator: The question comes from James Cooper. Your line is now open.

James Cooper: I was just going to suggest something similar to what’s already been suggested. So I’ll shut up now.

Richard Boll: Next.

Coordinator: Next question comes from Norm Schenk. Your line is now open.

Norm Schenk: I’m sorry. I thought I was hitting star one to vote yes. And I didn’t mean to (unintelligible).

Richard Boll: I knew that was going to happen. I knew it. Okay. Any other questions?

Coordinator: No further questions on the phone at this time.

Richard Boll: At this time, if you say no, hit star one, I guess. If not, we will be all set. (Unintelligible). Is it all open, all set, operator? Nobody there?

Coordinator: Nobody in the queue.

Richard Boll: That’s fantastic. Okay. I think we’ve got it. We’ll fix it up and clean it up. We’ll get it up as soon as we can to, to Secretary Ross. And we’ll go back with you, Tiffany, on it, just to make sure we (unintelligible) when we look at it.

Tiffany Melvin: Okay so…

Coordinator: We do have someone in the queue. Just a moment.

Richard Boll: Hello?

Coordinator: This is the operator. No one was on the line.

Richard Boll: Oh, no one was, okay. Whew. I thought that’s it. Okay. I think we’re pretty much set. Well, there’s some final notes I think that did you want to go over with, Rick, or?

Rick Gabrielson: Yes. Rick Blasgen and Rick Gabrielson here. We just wanted to first of all, welcome the new members and thank everybody for their participation today. And it’s encouraging to see everyone participate in this way, and hopefully we’ll be able to see each other sometime soon. But Rick and I just wanted to do that. And also, encourage the members to join one of these subcommittees. You can email Rich and Eugene to connect with them on one of the five subcommittees. So Rick, let me turn it over to you for closing comments as well.

Rick Blasgen: Thanks, Rick. I would also like to thank the new members, especially those new members who, jumped in and to ask questions and participate today, which is great. This is what it’s all about. As Rick mentioned, we have a number of subcommittees and we really want at least everyone to participate in at least one of the subcommittees to make it meaningful, we can move the initiatives forward. The groups are, and this will be in the notes. So if you’re not writing everything down or you’re driving in your car, it will be in the notes for you.

There’s a trade and regulatory group, there’s a freight policy and infrastructure group. There’s USMCA. I think that one is still active, and workforce development. Those are the present groups. And sometimes along the way we find that there’s a need for either changing of the existing subcommittees or sometimes we end up adding one based on the elements or the events that are taking place, I should say.

So I would encourage everyone to think about those, sign up, and we’ll put that in the notes. And then we’ll have the subcommittee heads began to go through and get their groups active this fall and early spring. In fact, I was just going to thank everyone for participating today. I know these are tough when you’re doing virtual, but I do appreciate everyone taking the day and spending time with us. Thanks. (Unintelligible) Rich.

Richard Boll: Well that’s great. Well thank you, Rick. And echo all those comments. And I know we had issues with the working virtually, but I think we’ve worked through it and stuff like that. I know we’ve got those committees that you’re talking about, the subcommittees, I think I have somewhere in my file, somewhere, kind of a description of each of them. So maybe I’ll try to dig that up and maybe get that out to people first thing on Monday so people can get an idea of what those subcommittees are. And also, the new members or actually any member that wants to give me a call afterwards to discuss what was going on or they’re a little unsure what’s going on or how that they can be more active or to participate more, that would be fine.

Just give me a call. I’ve given it. You should have that on several emails that I’ve gotten out to everybody. But and I thank everyone for showing up. It seemed like we got a really good turnout and I think we got a pretty good presentation. So I think there’s something to work for.

And then also some of those speakers said earlier, if you want to get in contact with them, you know, I have most of those emails or phone numbers. So if you want to just send me an email and I can pass that onto you, and then you can work from there. So with that said, I think we’re all set, unless anybody has anything else to say? All set, (Russ) and (Eugene)?

Man: Yes. I just want to thank everybody again. Appreciate it.

Man: Same here, thanks.

Man: Same here. Thanks.

Man: Same for me. Thank you.

Richard Boll: Well, that’s good. Well, thanks to everybody. And the next one will be in January. And we’ll talk about the time, remember it was moved back a little bit. So I’ll also send that in an email, too, to everyone. So if can have those, the dates of those meetings, they can put that in pen or pencil in their calendars. With that, goodbye and thanks for everybody being on the call today. Thanks much.

Coordinator: This does conclude today’s conference. You may disconnect at this time. Speakers, please stand by.

END TRANSCRIPT