• Companies including Prologis, Johnson Controls, Sierra Northern Rail Company, as well as labor unions and port terminal owners, are teaming up in a trade group to focus on freight transportation issues.
• The Supply Chain Council will advocate for legislation that increases supply chain resiliency and domestic investment.
• The goal is to put the global shipping network in a better position to handle issues like the Red Sea attacks and Panama Canal drought, as well as tensions between labor and management over automation.

Labor unions, maritime shipping interests and other supply chain businesses have formed a new trade group to push for more domestic infrastructure investment to safeguard the supply chain. The Supply Chain Council includes Prologis, Johnson Controls, Sierra Northern Rail Company, SSA Marine, Laborers' International Union of North America, and the Pacific Merchant Shipping Association, as board members.

"We are bringing the links of the supply chain together," said Josh Wood, CEO of the Supply Chain Council. "We will be championing legislation to strengthen supply chain resiliency and jobs."

Wood said that before Covid, supply chain segments were most often viewed independently, and the need to focus on interconnectedness of freight segments has continued to increased with the supply chain experiencing major headwinds.

"There's been a lot of talk about the supply chain and its importance over the past few years but policy has certainly not met the moment," said Steven Hussain, senior vice president of government affairs at Prologis, and Chair of the council. "Effective policy should include all facets of the supply chain. Right now, policy only addresses parts like ports or just trucking. When you create policy for one entity, that policy could adversely impact another supply chain participant. There needs to be education on the interconnectivity of the supply chain."

The recent CrowdStrike IT outage is one example, he said, showing the impact of supply chain interconnectivity, with air freight in some cases expected to take weeks to recover.

"Creating resiliency in the supply chain is complex because of this interconnectivity," Hussain said. "None of us were thinking about CrowdStrike and the impact that it would have. That's just one challenge the supply chain is dealing with. You also have the Red Sea and the Panama Canal. There will always be challenges and we need to make sure we are not unintentionally weakening the supply chain that can stop investment and diversification."

Wood told CNBC there needs to be redundancy built into the system and data sharing amongst the supply chain is crucial. "This needs to be expanded, not reduced," he said. "It is critical not only to secure our data, but it must also be recorded and gathered in real time for resiliency."

Josh LaFarga, director of external affairs at the Southern California chapter of the Laborers' International Union of North America, tells CNBC the U.S. supply chain is a national issue and labor needs to be involved in supply chain resiliency discussions.

"You need to have conversations with opposing thoughts within the supply chain," LaFarga said. "It's not just the companies that benefit if we have a strong, resilient supply chain. Workers benefit as well. Consumers benefit. Everyone depends on a strong supply chain."

One of the contentious aspects of a strong supply chain is the introduction of automation. The International Longshoremen's Association, which represents the longshoreman working at East Coast and Gulf Ports, announced it had suspended negotiations over a new contract with the United States Maritime Alliance due to union concerns over the use of automated technology at some U.S. ports.

ILA President Harold J. Daggett has warned a strike is increasingly likely as the September 30 contract deadline approaches. "We haven't had a strike since 1977. It's time we hit the streets!" he said in a recent statement.

LaFarga said there is a fine line between automation investments that augment work and automation that eliminates jobs.

"We want to give a better quality of life for all workers. An example is labor once using sledgehammers and pick axes to demo and now using a jackhammer. Technology is something that you always have to be looking at. But you have to find ways to work with it. We need to prioritize human jobs over automated jobs," he said.

Wood said part of the trade group's focus will be to educate government officials on the impact of proposed legislation. "Ports in the United States are not only competing with ports here but we are also competing on a global scale. We need to be competitive and sustainable."