FMI – The Food Industry Association Issues Public Comment on Agricultural Marketing Service Notice

WASHINGTON, June 26 -- Jennifer Hatcher, chief public policy officer and senior vice president of FMI - The Food Industry Association, Arlington Virginia, has issued a public comment on the Agricultural Marketing Service notice entitled "Supply Chains for the Production of Agricultural Commodities and Food Products". The comment was written on June 21, 2021, and posted on June 22, 2021:

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On April 21, 2021, the U.S. Department of Agriculture (USDA) posted a request for comment seeking public input on how to best increase durability and resilience within the U.S. food supply. FMI - The Food Industry Association (FMI) appreciates the administration's efforts to not only examine the impacts of the COVID-19 pandemic and key lessons learned for future emergencies, but also their interest in soliciting the feedback of industries that have dealt with these issues firsthand.

FMI advocates on behalf of a wide range of members within the food industry value chain. From food wholesalers and suppliers that create and provide goods available to consumers, to the grocery retailers that help stock and sell those goods, our members' collective reach and impact ultimately touches lives of over 100 million households in the United States and represents an $800 billion industry with nearly 6 million employees. Despite the significant challenges faced over the course of the past year and a half, our members have done everything in their power to keep their stores safe, open, and stocked for their local communities.

Historically, our industry has encountered and prepared for nearly every type of foreseeable emergency. From natural disasters, such as hurricanes, tornadoes, floods, fires, droughts, and earthquakes--to outside acts of violence and other forms of strife. Although the preparations we had in place for these potential emergency situations were tremendously helpful, none could have prepared us fully for the scope and duration of the COVID-19 pandemic.

With Americans flocking to grocery stores to stock up on essentials--oftentimes more than they needed--food retailers responded by ensuring their stores followed CDC guidelines to help protect their employees and customers, which included investing in plexiglass barriers, labels, masks, and other PPE and increased sanitation measures. Overall, the additional expenses incurred by the food retail industry to operate during COVID-19 amounted to nearly $24 billion, which we will outline further./1

From the very outset of the pandemic, we engaged in regular communications with our members, sharing the latest developments and guidance issued by the relevant regulating agencies. This not only included federal and state actions, but even municipal and county ordinances. As part of our nation's "critical infrastructure," our industry quickly took the steps necessary to identify and address the range of issues impacting the supply chain.

Health and Safety Was Job One

First and foremost, we knew our most important priority was protecting the health and safety of our associates and of our customers. We then had to ensure that those products critical to sustaining Americans were produced, transported, stocked, and delivered to those needing them as efficiently as possible. Both of these steps were complicated. First, we did not want to take away products necessary to the health care industry and first responders, many of whom struggled to reserve necessary N-95 masks, medical masks, and other protective equipment in the earliest days of the pandemic. We similarly had to reserve the use of spray sanitizer and sanitizing wipes for hospital settings initially and relied on either repurposed institutional products or using recipes to make effective substitutes.

Even today, customers will find that there are still lingering impacts on the types of soaps and sanitizers that can be found in retail locations around the country. Many of our members had warehoused masks after the H1N1 outbreak but donated them to hospitals due to the need and direction of CDC rather than giving them to associates. The N95 masks are still not at a production level in the United States where retailers can purchase a supply for associates to have on hand. This is an area where we would encourage additional government involvement to ensure adequate supply moving forward.

We also worked to provide barriers to separate associates from customers (like plexiglass), limited the number of persons per household allowed in the store, reduced store capacity, enforced social distancing with signage or other barriers, enhanced cleaning and sanitation, and increased the availability of hand sanitizer, wipes, and hand washing stations. In total, our industry has invested over $850 million on personal protective equipment and other safety expenses, $2 billion in increased cleaning and sanitation hires (or external partners), and more than $400 million on cleaning and sanitation products.

Maintaining Existing Supply Chains Was Key

At the same time, manufacturers and retailers worked to ensure critical products were available by reducing SKUs, modifying packaging, repurposing products intended for other sectors, and suspending production of certain non-essential items. We worked with federal governments, state governments, and municipalities to waive rules to allow commerce to move as efficiently as possible--including suspension of hours of service, truck heights and weights, licensing requirements, packaging restrictions and delivery hours. We also worked to identify alternate suppliers of products including repackaging or repurposing items intended for institutional use and securing the necessary approvals to make these modifications. We worked daily with local health departments to keep them updated on the latest science on cleaning and sanitation protocols and other health and safety recommendations grounded in science.

FMI has been tracking grocery shopper trends for nearly 50 years, and during these challenging times, FMI continues to keep its pulse on the consumer. Throughout our stretch of pandemic-related consumer research, we tracked the consumer level of concern with COVID-19, with our first survey registering a 69% level of concern (41% extremely and 28% very). Concern spiked in April of last year, and we witnessed a slight dip in early June, but then started to rise again during the fall of 2020. Concern about the pandemic has remained consistently high with the scores registered weeks ago close to the levels recorded at the outset. Consumers may have adjusted their behaviors, but the anxiety has been a steady factor characterizing the pandemic experience./2

To express empathy and encourage the public to purchase only what they need from the grocery store, FMI participated in national interviews and even produced its own public service announcement to assure the nation's shoppers that the United States is a country of plenty, and our food supply chain is a beneficiary of this abundance. Leslie Sarasin, FMI President and CEO, and Doug Baker, Vice President, Industry Relations, served as the association's spokespeople and educated audiences on how certain products may be out of stock, but that the supply chain was not broken, and it would remain resilient if we worked together by only purchasing what we needed--not stockpiling.

Moving forward, we recognize the tremendous value of frequent communication and very much appreciate the focus of this information request at this critical time. We hope that the following information will be beneficial in helping show both where the current strengths and weaknesses in our supply chains exist.

Critical Infrastructure Designation Truly Made the Movement of Commerce Possible

One of the most important and earliest actions taken by the federal government included the issuance of the Essential Critical Infrastructure Workers Guidance on March 19, 2020 via the Cybersecurity and Infrastructure Security Agency (CISA)./3

Although advisory in nature, this proved instrumental in helping prepare states, localities, and territories for knowing which key industries should be considered "critical infrastructure" in order to ensure the "continuity of functions critical to public health and safety, as well as economic and national security." For the food and agriculture sector, there is little doubt that the supply chain would have been severely impacted without this designation.

For context, during the outset of the pandemic, lockdowns, stay-at-home orders, and quarantine requirements varied heavily across the country. While all but one state had states of emergency in place by March 16th, only California had stay-at-home orders in effect by the time of CISA's initial guidance. Over the course of the next two weeks, that number would grow to 34. In addition, a number of city and county governments had similarly put into place various orders of their own. Having this guidance in place beforehand helped provide these governments with invaluable direction. Although it was certainly challenging for many of our members who were forced to navigate emergency rules and restrictions that varied at city, county, and state levels, most of these at least followed some fundamental points established by CISA's guidance.

While safety precautions were widely and rapidly adopted by the industry, grocery stores and supermarkets remained among the few retailers permitted to remain open during this time due to these designations. In addition, operations further up the supply chain were also permitted to continue operating due to the adoption of this guidance. This meant that production facilities key to the manufacturing and restocking of stores could also continue functioning in response to the significant uptick in demand.

In order for these essential items and goods to be manufactured and distributed as unfettered as possible, the federal government will need to ensure that access to critical raw materials remains a top priority when establishing critical industry designations. This not only includes materials needed for the safe packaging of foods and other goods, such as papers and plastics, but materials such as fuel, metals, and chemicals, which are needed to run production facilities. Although many of these are able to be produced here in the U.S., it is imperative that considerations are made to the access of raw materials abroad as well.

Going forward, the federal government should ensure that these critical infrastructure designations remain automatic and broad for future emergencies. These designations should also include industries necessary to the harvesting and development of raw materials needed for essential goods. Furthermore, this prioritization should permit the expedited review and approval for import and export permits for critical raw materials sourced globally. These steps will ensure that our nation's food supply chains can continue operating efficiently in the earliest stages of a crisis.

Credentialing of Associates Was an Added Complexity

One of the immediate needs was credentialling for associates and their personal and commercial vehicles. This was needed in order to permit the delivery of goods in and out of lockdown areas. It also has helped in areas with emergency after-hours restrictions and other prohibitive boundary designations, many of which negatively impacted the efficient work of critical infrastructure workers. FMI worked with outside counsel to design a template that employers could use to provide associates with a credential that they maintained to secure their ability to move people and supplies to support the emergency.

Although CISA's guidance proved extremely helpful for identifying critical infrastructure, it ultimately did not carry legal authority due to its advisory nature. With states being left to go at their own pace, situations arose in which our industry and others faced confusion from governing bodies on whether the transportation of goods into certain areas was legal or not. An example of this centered around New York City's emergency entry and exit limitations that followed New York Gov. Andrew Cuomo's Executive Order 202.6 on March 18, 2020./4

Confusion arose from a broad order for all businesses to adopt telework and establish mandatory quarantines for those traveling in and out of the city. Commercial motor vehicle (CMV) operations were delayed or forced to divert due to confusion on whether the order applied simply to residents and/or critical delivery operations going in and out of the city. Although the CDC issued a statement on March 26th clarifying it to focus on residents (while offering safety precautions for drivers)--even just a few days of delays can cause substantial issues up and down the supply chain./5

In addition, this was not an isolated incident, as drivers in all corners of the country encountered similar situations on a regular basis even into the summer.

Moving forward, FMI believes a national template should be provided to those entities working in support of the emergency. This would offer clarity not only for companies and organizations working in support of the emergency, but for state and local governments as well. In addition, it would add much-needed flexibility in times of crisis. The USDA is in a unique position of understanding just how complex our food and agricultural supply chains are. Having these credentials in place would help ensure the sector remains nimble and capable of adapting to potential emergencies in a quicker and more efficient manner.

Trucking & Transportation Waivers Proved Critical

Our nation's supply chains cannot operate their best--no matter the situation--unless we continue to ensure that our various forms of freight transportation remain as open and unhindered as possible. For our industry, while this mostly means a reliance on road transportation through CMVs, we also rely heavily at various stages of the food supply chain on port shipments, railway freight, and other waterways in the delivery of raw materials and goods.

From the earliest days of the pandemic, we have had to closely monitor and utilize orders and emergency regulations issued from federal agencies such as the Department of Transportation (USDOT) and Federal Motor Carrier Safety Administration (FMCSA) down to state governors' offices and State Driver Licensing Agencies (SDLAs). The most important and beneficial changes have focused on the following areas: 1.) hours of service relief, 2.) truck size and weight increases, and 3.) the extension of expired and expiring commercial driver's licenses (CDLs) and other certifications.

With a significant uptick in demand in the earliest weeks and months of the pandemic, our members' fleet operations were often stretched to their limits in attempting to keep store shelves stocked as much as possible. A key instrument to this success were the hours of service waivers issued by the FMCSA through their national emergency declarations in accordance with 49 CFR Sec. 390.25./6

While numerous safety requirements remained in place, this provided much-needed flexibility for truckers and fleet managers as they tried to adjust their schedules to help meet this increased demand. Well into the summer, many stores were still seeing overall shipments 20% above their normal intake. These waivers proved critical to ensuring groceries remained as available as possible to customers, particularly as lockdowns varied from state to state.

One of the more lasting images of the beginning stages of the pandemic included significant runs on toilet paper and bottled water. The latter of these posed considerable challenges for fleet operations--particularly in the first several months. The primary issue was not necessarily supply, but rather the substantial weight increases associated with shipments whose contents are mostly liquid. For bottled water, companies were not able to rely simply on the hours of service waivers to keep more truckers on the road. On April 7, 2020, the Federal Highways Administration (FHWA) issued a letter to the American Association of State Highway and Transportation Officials, notifying them that the FHWA would allow states to issue size and weight permits to CMVs operating in interstate travel./7

Although this letter was a welcomed aid, it did not represent a clear top-down solution for a problem that ultimately was handled on a state-by-state basis. Industries of many types (including our own) encountered the challenges of navigating the complex differences between various state orders. These orders were constantly altered and updated, meaning a week-old list was often not current enough to ensure legal compliance when crossing into different states. As the USDA is quite familiar, a significant number of products within a grocery store come from all corners of the country as well as of international origins. While many states ultimately did increase these size and weight limits, the federal government would promote more reliable food security in our nation's supply chains by establishing a more comprehensive set of regulatory actions to head off these challenges in any subsequent crisis.

One other area that provided numerous challenges for our distribution operations included the delayed and varied state-by-state approach to licensing and permitting for truck drivers. This included not just CDLs, but commercial learner's permits (CLPs) and medical waivers as well. Due to stay-at-home orders and work-from-home policies, nearly all SDLAs were severely impacted by the spread of the virus. This meant drivers were often unable to renew any of these documents or certifications due to either significant backlog or complete closure of their local SDLA offices.

Beginning with their first iteration on March 24, 2020, the FMCSA issued waivers for drivers with expiring CLS, CLPs, and medical certifications./8

According to the agency, they determined that the "...waiver is in the public interest because it would allow drivers covered under this waiver to deliver essential supplies and persons across State lines to address the national emergency." They cited not only the lack of availability at SDLAs, but that it would also give those with limited operations to focus on issues more tangential to the pandemic. We believe that any subsequent emergency should consider replicating a similar approach at the outset of an emergency in order to ensure that drivers can remain on the road without concern for such challenges.

And lastly, FMI understands the importance of extending such considerations to other modes of freight transportation. The Federal Railroad Administration, numerous port authorities, U.S. Customs and Border Protection, and other agencies have introduced guidance and regulatory relief to address other challenges facing workers and companies supporting emergency efforts throughout the pandemic. Any examination of lessons learned from over the past fourteen months should include a close examination of the best practices utilized in these endeavors for purposes of better preparing both public and private responses.

Although it is impossible to fully predict what a future emergency event might look like, these transportation-related actions would likely remain critical foundational pieces to ensuring our nation's supply chains remain as open, flexible, and efficient as possible. This unified approach would not only bolster local and regional food systems and agricultural bases, but also ensure a smoother and more reliable transition into any emergency response for the broader freight industry.

Frequent, Transparent Communication Between Governments and Businesses Had an Extraordinary Impact

There was not a single day during the emergency when we did not have communications with both government agencies and member companies on a multitude of issues. FMI established daily calls that often extended into the evenings and over weekends, updating members on the latest guidance, resources, and developments relevant to their operations. At various times during the pandemic, we offered the platform to officials from the CDC, USDA, FEMA, CISA, the FMCSA, NIOSH, and other federal and state agencies, giving them a direct link to discuss these issues with our industry. In addition, FMI also participated and listened in on countless stakeholder calls held by these agencies.

While these sessions proved to be incredibly beneficial, we believe it would be helpful to establish a regular sector call that would include all agencies supporting the food and agriculture sectors rather than relying on a siloed approach. Even today, the USDA and other agencies continue to work in cooperation with one another on pandemic-related programs and understand all too well the importance of collaboration between organizations. Establishing a more formalized system for this would help provide a solid foundation by which to unify our nation's response to any emergency.

Successful Adaptation of Emergency Benefits

During the pandemic, FMI and our member partners worked with states and the federal government to secure waivers for the Supplemental Nutrition Assistance Program (SNAP), the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) and the Pandemic Electronic Benefit Transfer (P-EBT). This work helped keep products available at the lowest possible prices to many of the customers that needed it most.

As lockdowns, quarantines, and closures began to take place early into the pandemic, online shopping grew at a rapid rate. In order to help ensure this practice remained available to some of our most vulnerable communities, USDA helped expedite the transition to online SNAP benefits. FMI and our grocery members invested heavily in developing the necessary resources and training to better facilitate those newly eligible for SNAP. Through our combined efforts, we were able to expand the availability of these benefits to almost every state in the country.

In addition, this setup helped greatly with the introduction of P-EBT, which provided benefits for families whose children typically participated in the federal school meals program. This was also extended to children in schools or daycares that were closed or are operating on reduced-hours schedules. Since P-EBT runs on the SNAP platform, no additional programming or investment was required for retailers beyond their existing SNAP licensing requirements. P-EBT utilizes the same protocols, restrictions, and security measures as SNAP and has proven to be a very useful tool to ensure children remain fed, especially in some of our most vulnerable communities.

Given the success of these programs, we believe they should serve as a model response for future emergencies where food insecurity remains a top concern. Even today, millions continue to utilize these services in order to help put food on the table. We applaud the work of the USDA on this and encourage them to keep these programs' successes in mind as they seek to support and promote consumers' nutrition security, particularly for low-income and at-risk communities.

Summary of Recommendations

Given these experiences and lessons learned from the pandemic, we believe the following recommendations should be considered by the USDA:

In the event of a regional or nationwide crisis that impacts our food and agricultural supply chains, the federal government and corresponding agencies should:

1. Immediately activate the critical infrastructure industry designations previously outlined by CISA.

2. Simultaneously implement a national credentialing program made available to these critical infrastructure workers in order to transition more seamlessly to work in support of the emergency.

3. Depending on the scope of the emergency, the USDOT should issue national and/or regional waivers for hours of service regulations, weight and size restrictions, and licensing and permitting requirements.

a. For regional disasters and emergencies, the USDOT should consider that fuel, bottled water, food, and other supplies will often require transit from states that may not be directly impacted.

b. The federal government should also adopt similar steps for the transport of essential freight and raw materials through ports, railways, and other waterways.

4. Establish immediate and regular sector calls made available to any impacted industries and those that will be supporting emergency response.

5. Be prepared to alter the distribution of food and nutrition programs in order to accommodate the conditions on the ground.

Although this has been a challenging year and a half, we know that the lessons learned from the pandemic will only strengthen our responses to any potential future crises. We would like to thank the USDA for their consideration on these recommendations and at any point would be happy to discuss our industry's perspectives in greater detail.

If you have questions on these comments or would like additional information, please do not hesitate to reach out directly at [email protected] or (202) 220-0734.

Regards,

Jennifer Hatcher

Chief Public Policy Officer & Senior Vice President

FMI - The Food Industry Association

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Footnotes:

1/ FMI Receipts From the Pandemic (2021)

2/ FMI U.S. Grocery Shopper Trends 2021

3/ Identifying Critical Infrastructure During COVID-19, Cybersecurity and Infrastructure Security Agency

4/ Executive Order 202.6 - No. 202.6: Continuing Temporary Suspension and Modification of Laws Relating to the Disaster Emergency

5/ CDC Statement on Self-Quarantine Guidance for Greater New York City Transportation and Delivery Workers,

6/ Expanded Emergency Declaration Under 49 CFR Sec. 390.23 No. 2020-002 (Relating to COVID-19)

7/ US Federal Highway Administration letter to the American Association of State Highway

8/ Waiver in Response to the COVID-19 Emergency - For States, CDL Holders, CLP Holders, and Interstate Drivers Operating CMVs

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The notice can be viewed at: https://www.regulations.gov/document/AMS-TM-21-0034-0076

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