How Supply Chain Health is Essential to Our Nation’s Economic Growth

In recent years, global supply chains have faced a staggering variety of disruptions. That's why Ford is focused on building a supply chain that is as durable and capable as our Built Ford Tough promise to truck customers.

What kind of disruptions? Best-known are probably the widespread pandemic-related shortages of everything from household paper products to semiconductors. But today's supply chains are grappling with other challenges as well.

These include global geopolitical tensions, including tariffs, more frequent extreme weather events and natural disasters, and rising costs for energy, fuel, and raw materials.

Meanwhile, Essential Economy industries - such as construction, manufacturing, utilities, logistics, and transportation - face an additional problem: severe shortages of skilled labor along their supply chains.

How severe? In July, the National Association of Manufacturers estimated that 437,000 manufacturing jobs were vacant, while Associated Builders and Contractors has estimated that the construction industry will need nearly 500,000 new workers in 2026.

Infrastructure Impact

Those issues extend to U.S. infrastructure as well. New research from the Aspen Institute highlights three major challenges for this sector:

• Reduced output: "Labor productivity in road, highway, and bridge construction has fallen 22 percent since 2017," Aspen Institute economist Luke Pardue writes in a new paper, citing 2024 figures from the U.S. Bureau of Labor Statistics.
  
  Other measures of productive capacity show a similarly worrisome decline in the building of new energy infrastructure, he continues: "For instance, despite rising power demand, the country now lays just one-eighth of the high-voltage transmission lines each year compared to two decades ago."
  
  When natural disasters or other supply-chain disruptions occur, road and infrastructure access are among the many barriers we must overcome to get back on track.
  
  
• Higher costs: U.S. infrastructure costs are often much higher than those in other countries. As one example, Pardue notes that U.S. transit costs are 2.5 times higher than the average for all member countries in the Organization for Economic Cooperation and Development (OECD), which, of course, carries significant implications both for Essential Economy industries and U.S. global competitiveness.
  
  
• Increasingly complex permitting processes: "The average time it takes to prepare an environmental impact statement has grown from 3.4 years in the 1990s to 4.8 years recently," Pardue notes in his research paper. Meanwhile, "the average length of such a report has grown from 414 pages on average in 1977-78 to 1,704 pages in 2013-2017."
  
  Litigation can dramatically increase the timeline. For instance, if an interested party files a lawsuit under the National Environmental Policy Act (NEPA), the median time for resolving such a case is 23 months, Pardue says. In addition, project sponsors must navigate through a network of federal and state agencies, each with its own requirements and timelines.
  
  At Ford, we will continue to encourage suppliers to embrace a dual-facility manufacturing strategy to reduce risk and build resilience. Lengthy permitting can hinder suppliers trying to stand up new facilities.

Together, those challenges add up to one big obstacle course for the Essential Economy, which depends on resilient supply chains that move reliably from raw materials to finished products.

In the bigger picture, supply chain health is essential to our nation's economic growth and resilience - and to U.S. competitiveness in global markets.

At Ford, we're playing an active role in developing solutions to address supply chain challenges by embracing best practices to boost resilience. We're adopting innovations and artificial intelligence to help monitor risk and prevent disruptions rather than reacting to them. We know we aren't alone.

New AI tools have already been reducing waste in trucking and optimizing freight routes. Now they're helping speed up approvals for new energy projects as well, Pardue notes.

The Federation of American Scientists has suggested using AI to automate the modeling of the impact of new interconnections on the energy grid, he writes: "Such a tool - the 'PermitAI' prototype - has been developed for NEPA review by the Pacific Northwest National Laboratory." Meanwhile, PJM Interconnection, which operates the nation's largest electrical grid, is partnering with Google and Tapestry to develop AI-powered tools for streamlining the addition of new generation sources to meet increasing power demands.

And in April, the White House issued an executive order directing agencies and departments to "make maximum use of technology in environmental review and permitting processes for infrastructure projects" with the goal of streamlining and accelerating such reviews "to 21st-century speeds."

Looking Ahead

While the supply-chain and infrastructure challenges are significant, they're not insurmountable. Pardue calls on the public and private sectors to collaborate on solutions in the same way they did during the building of the U.S. interstate highway system in the late 1950s through the 1970s.

Ford is proud of our vast U.S. and global supplier networks and the impact we have on the domestic automotive supply chain. We are committed to finding new ways to support small- and medium-size businesses that supply vehicle parts, with the goal of building the most resilient supply chain.

With long-term planning, new technologies, and a shared public-private commitment, we can strengthen supply chains and keep the Essential Economy moving forward.

For related research on productivity in the construction industry, see this companion Aspen Institute paper by Brian Potter, senior infrastructure fellow with the Institute for Progress.

Liz Door is chief supply chain officer for Ford.