The Biden government has received pledges from Walmart, UPS and FedEx to extend their working hours to alleviate supply chain bottlenecks that are hurting the recovery in the US and the global economy.
According to a senior White House official, the three companies will announce a transition to a seven-day-week model, around the clock, on Wednesday as part of a wider effort to address the gaps between booming demand and lagging supply and alleviate bottlenecks .
The pledges from American companies were expected ahead of a White House summit convened by President Joe Biden, which will meet business leaders, port and freight carriers and union representatives to discuss the tense state of global supply chains.
“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,” said a senior official from the Biden administration.
“UPS and FedEx alone together shipped 40 percent of American parcels by volume in 2020. With these steps they are telling the rest of the supply chain, ‘You have to move too. Let’s step it up, ‘”the official added, highlighting commitments from Target, Home Depot and Samsung to move more containers out of ports.
The Biden government has also pushed rail freight companies, trucking groups and ports to increase their own capacity to meet increasing demand. However, many are struggling to find enough staff and the shortage of storage space near the ports has exacerbated the bottlenecks.
The senior administrative officer said the Port of Long Beach, California took steps to maintain 24/7 operations about three weeks ago, while the neighboring Port of Los Angeles decided to do so with the critical support of International Longshore and Warehouses Union.
“It’s up to the terminal operators to actually open these hours and book the freight movements during off-peak times, so the worker has promised they’ll be there. We know they have committed to it, ”said the officer.
The White House’s move to more aggressively urge American companies to increase working hours and capacity comes amid growing concerns that prolonged supply chain bottlenecks could hamper economic recovery, which also contribute to rising inflationary pressures could.
In an interview with CBS on Tuesday, US Treasury Secretary Janet Yellen said supply chains were “very stressed”, noting that “nearly 100 ships” were docked outside the ports of Los Angeles and Long Beach “to wait To unload goods ”. . But she was also confident that the problems would be resolved.
“In the coming months, there may be occasional bottlenecks in goods and services. But there is a sufficient supply of goods. And I think there is no reason for consumers to panic about the lack of goods to buy for Christmas, ”said Yellen.
According to a data sheet distributed by the White House, Walmart expressly promises to “significantly” increase the use of night hours and to increase its “throughput” – or its capacity – by “up to 50 percent” in the next few weeks.
UPS has promised to drive 24/7 operations and more data sharing with ports. FedEx said it will make changes that will allow it to double the volume of cargo it moves out of ports at night.
Biden’s focus on supply chains has gradually intensified over the year as it has become a vulnerability to an otherwise strong, stimulus-driven recovery in the U.S. economy and also a potential point of political vulnerability for the Democrats ahead of the mid-term elections next year.
In June, the president set up a task force to address supply chain problems in areas ranging from semiconductors to rare earths and pharmaceutical ingredients. But the supply chain crisis has now spread to other, simpler, consumer products, which has put additional pressure on American companies to clean up the backlog.
Additional reporting from Andrew Edgecliffe-Johnson
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