Biden administration addressing port congestion woes
U.S. President Joe Biden is meeting with public and private industry leaders on Wednesday, 13 October, with the goal of using federal action to ease shipping delays before the end-of-year holiday season.
The White House announced prior to the meeting a plan that will move the ports of Los Angeles and Long Beach, California – which have faced significant congestion through the past two months – toward 24/7 operations. The two ports account for approximately 40 percent of the shipping volume entering the United States, but had more than 80 vessels waiting their turn to unload as of 12 October, according to the Marine Exchange of Southern California.
In advance of the White House meeting, FedEx, UPS, Walmart, and major retailers committed to expanding their hours of operation to move more cargo off the docks so ships can come to shore faster, the White House announced.
“Unlike leading ports around the world, U.S. ports have failed to realize the full possibility offered by operation on nights and weekends,” it said. “Moving goods during off-peak hours can help move goods out of ports faster.”
Due to significant backlogs in California, as well as the port of Savannah, Georgia and other East Coast ports, retailers including Target, Home Depot, and Costco are chartering their own ships.
"Chartering vessels is just one example of investments we've made to move products as quickly as possible," Walmart U.S. Executive Vice President of Supply-Chain Operations Joe Metzger told Reuters.
But even those moves might not be enough to relieve congestion across the nation’s shipping supply chain. According to a senior administration official speaking anonymously Tuesday, 12 October, the federal government has limited oversight of ports and the shipping companies that use them. That has guided Biden's strategy of convening members ofthe private sector to fix the issues they face themselves.
“The supply chain is essentially in the hands of the private sector, so we need the private sector to step up to help solve these problems,” the official said, according to Politico.
The official said the White House hopes its efforts will prompt additional retailers, trucking firms, train operators, and unions to take additional steps to speed up the pace goods travel through their supply chains.
“By taking these steps, they’re saying to the rest of the supply chain: ‘You need to move, too. Let’s step it up,'” the official said.
In August 2021, Biden appointed John Porcari as port envoy to the administration's Supply Chain Disruptions Task Force, which was created in June to with the mission of finding solutions to ease congestion at U.S. ports.
“The strength of the U.S. economic recovery has tested the near-term capacity of our supply chains, and the administration is operating on all fronts to ease bottlenecks and facilitate the flow of goods across the country,” National Economic Council Director Brian Deese said in a press release. “Our country’s ports are the gateways for getting goods to market, which makes the appointment of John Porcari as ports envoy an especially important step forward in alleviating these disruptions that are impacting consumers, workers, and businesses alike.”
Biden has also called for the passage of the Infrastructure Investment and Jobs Act, the bipartisan bill negotiated that includes USD 200 billion (EUR 172.6 billion) in new spending on the improvement of ports as well as airports, railways, roads, and bridges.
With just around 10 weeks remaining before Christmas, supply-chain disruptions and delays are threatening to disrupt the holiday season in the world's biggest markets. Port congestion is a global problem, with China also reporting significant back-ups at its ports since April. In the United Kingdom, the country’s largest port, Felixstowe, is so congested supermarkets and other retailers are searching for alternative ways to bring food into Britain, according to The Independent. Further disruption to supply chains may be unavoidable, the British Retail Consortium said, after Maersk said that it was directing large vessels away from the country due to the backlogs.
The congestion was primarily caused by factors related to the COVID-19 pandemic, which created both a surge in consumer purchasing and bottlenecks in the global transportation infrastructure system. Extreme weather events - with tangential links to climate change - and electricity outages in China, have also contributed to shipping delays, product shortages, and higher costs, Politico reported.
Photo courtesy of Alan Goodwin Photo/Shutterstock