WASHINGTON – As supply chain bottlenecks around the world threaten to hamper the Christmas shopping season in the US, President Joe Biden will come up with a plan on Wednesday to try to ease the delays on the west coast in the ports of Long Beach and Los Angeles by expanding around the clock to decrease operations.
At the heart of this plan are pledges from some of the country’s leading retailers and mail order companies to increase night and leisure operations in Long Beach and Los Angeles.
FedEx, UPS, Walmart and Home Depot will announce their operating plans with extended hours during a virtual meeting with Biden on Wednesday, senior administrators who briefed reporters on Tuesday evening.
Officials were given anonymity to discuss unpublished private sector commitments.
The Port of Los Angeles will announce Wednesday that it will switch to 24-7 operations after a similar transition from the Port of Long Beach this September, the official said.
Together, the ports of Long Beach and Los Angeles account for about 40% of shipping containers entering the United States.
Another major player in the plan is the powerful International Longshore and Warehouse Union (ILWU), which represents thousands of workers in the ports. The ILWU has previously stated that its members are ready to take on these additional shifts.
White House officials said “port operators” are responsible for paying dock workers and actually keeping ports open longer.
For the Biden administration, night operations in ports on the west coast as well as along freight railways, in warehouses and shipping hubs are the fastest and most effective way of loading goods from the waiting container ships and relieving the entire supply chain.
But unloading more cargo in ports alone will do little to resolve US supply chain problems once the goods travel further inland. The United States is currently in the midst of a trucking crisis, with the shortage of long-distance drivers so great that some companies are looking for truck drivers overseas.
The situation in the California ports is dire.
On October 7, around 60 container ships were reportedly waiting in the open water outside of Los Angeles and Long Beach for berths to dock and unload their goods. Before the pandemic, it was unusual to see even a ship waiting for a slip.
In an aerial view, container ships lie in front of the ports of Long Beach and Los Angeles as they wait to be unloaded near Los Angeles, California on September 20, 2021.
Mario Tama | Getty Images
“Ordinary people and businesses are feeling the effects of these delays and bottlenecks. It makes it difficult to get products on shelves and goods to your doorstep,” the administrative officer said.
Experts say the massive bottleneck in the California port complex is the result of a combination of factors both domestically and globally.
These included a pandemic-induced surge in US durable goods demand, an outdated domestic freight and rail system, factory closures in countries like China and Vietnam, and a shortage of skilled dock workers on the west coast.
Bottlenecks in the ports have created a ripple effect within the larger economy.
For example, consumers are advised to buy Christmas presents in October if they want to be sure of getting a specific item.
Both large and small retail companies have an extremely difficult time securing freight containers to move goods from Asia to the US, where the lion’s share of consumer goods is manufactured.
Exploding costs are also part of the problem. Last year, the cost of shipping a container by freighter from China to the west coast rose from around $ 3,000 in August 2020 to more than $ 20,000 in September this year.
The global bottleneck in the supply chain presents the Biden White House with a uniquely complex challenge at a time when the president is under heavy pressure to address other key priorities.
These include bills to get Democrats to sign national laws in Congress, a bill to fund the government, another to raise the debt ceiling, upcoming rules to pass a far-reaching Covid-19 vaccination mandate for employers, and competing pressures from both sides and the law to curb a surge of migration on the southern border.
In contrast to these challenges, however, the federal government can do little to force private companies to move goods faster or more efficiently.
“The supply chain is largely in the hands of the private sector, so we need to step up the private sector to help resolve these issues,” the official said.
Below are the expected attendees for the meeting on Wednesday, which is scheduled to start at 1:45 p.m.
- Gene Seroka, Executive Director, Port of Los Angeles
- Mario Cordero, General Manager, Port of Long Beach
- Willie Adams, International President, ILWU
- James Hoffa Jr., General President, Teamsters
- Greg Regan, president, transportation trade division, AFL-CIO
- John Furner, President and CEO, Walmart USA
- Dr. Udo Lange, President and CEO, FedEx Logistics
- Nando Cesarone, President, US Operations, UPS
- Brian Cornell, Chairman and CEO, Target
- KS Choi, President and CEO, Samsung Electronics North America
- Matt Shay, President and CEO, National Retail Federation
- Peter Friedman, Executive Director, Agriculture Transportation Coalition
- Chris Spear, President and CEO, American Trucking Association
- Ian Jeffries, President and CEO, American Association of Railroads
- Suzanne Clark, President and CEO, US Chamber of Commerce
- Geoff Freeman, President and CEO, Consumer Brands Association
- Jim McKenna, President and CEO, Pacific Maritime Association