White House Steps Up Fight Against Supply Chain Woes
WASHINGTON — In an ideal economy, the nation’s supply chains work something like this: raw materials, finished products and ready-to-assemble merchandise like cars and trucks flow into the nation’s ports.
The largest of these ports, those blessed to sit on deep-water harbors, typically have rail tracks extending right out to the dock, so cargo containers can be offloaded directly onto trains and sent on their way.
They and other, smaller ports, also rely on truck drayage to carry the 20-foot long containers to inland ports and distribution centers, where loads are broken down for delivery to Main Street and where some manufactures take advantage of designated Foreign Trade Zones to assemble their finished products and send them to market in the U.S. without paying exorbitant duties.
Five major railroads move cargo across the nation, and a succession of trucks — ranging from large to ever smaller — carry consumer goods the last mile to their destination.
Lately, however, the nation’s supply chain hasn’t been working quite so seamlessly. In the wake of the global coronavirus pandemic, shortages of one kind or another have frustrated consumers and businesses alike.
On Wednesday morning, the Labor Department announced the snarled supply chains across the globe had pushed inflation to 5.4% in September, the highest rate since 2008.
According to the department, consumer prices rose 0.4% in September from August as supply chain disruptions kept many goods scarce. The costs of new cars, food, gas, and restaurant meals all jumped.
Excluding the volatile food and energy categories, core inflation rose 0.2% in September and 4% compared with a year ago. Core prices hit a three-decade high of 4.5% in June.
On Wednesday afternoon President Biden is scheduled to announce his response to the bad news and try to allay fears that the current difficulties will extend into the fast-approaching holiday shopping season.
In a conference call with reporters Tuesday evening, senior administration officials said the president’s Supply Chain Disruptions Task Force, an entity established in June, has secured several key commitments to speed up shipments of goods.
These include the Port of Los Angeles expanding to around the clock operations seven days a week, a step the nearby Port of Long Beach took in mid-September. Both ports typically rank as the first or second busiest ports in the nation and are key ports of entry for goods from China and other manufacturer hot spots in Asia.
The expansion of hours at the Port of Los Angeles will nearly double the hours that cargo will be able to move out of its docks and on to highways, the administration said.
In addition to the commitment by the port itself, the International Longshore and Warehouse Union has announced its members are willing to work those extra shifts.
Several large companies are also expanding their hours of operation to move more cargo off the docks, so ships can come to shore faster.
The nation’s largest retailer, Walmart, told the task force that by increasing its night time shipments, it could increase throughput by as much as 50% over the next several weeks.
In addition, the White House announced the following commitments in a statement:
- UPS is committing to an increased use of 24/7 operations and enhanced data sharing with the ports, which it said could allow it to move up to 20% more containers from the ports;
- FedEx is committing to work to combine an increase in night time hours with changes to trucking and rail use to increase the volume of containers it will move from the ports. Once these changes are in place,the company said it could double the volume of cargo that can be moved out of the ports at night;
- Samsung is committing to moving nearly 60% more containers out of these ports by operating 24/7 through the next 90 days. An estimated 72% of U.S. homes have at least one Samsung product, from appliances to consumer electronics;
- The Home Depot said it plans to move up to 10% additional containers per week during the newly available off-peak port hours at the Ports of L.A. and Long Beach;
- Target, which is currently moving about 50% of its containers at night, has committed to increasing that amount by 10% during the next 90 days to help ease congestion at the ports.
Across these six companies, the administration said, over 3,500 additional containers per week will move at night through the end of the year.
The Ports in Los Angeles and Long Beach, California, account for 40% of all shipping containers entering the United States.
As of Monday, according to the Associated Press, there were 62 ships berthed at the two ports and 81 waiting to dock and unload, according to the Marine Exchange of Southern California.
The White House said Transportation Secretary Pete Buttigieg and Port Envoy John Porcari will continue to work with stakeholders to help more businesses access the expanded hours, and move the rest of the supply chain towards 24/7 operations.
Dan can be reached at email@example.com and at https://twitter.com/DanMcCue.
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