The White House unveiled a series of commitments from key private sector players aimed at easing massive supply chain backlogs ahead of the holiday season rush.
Senior administration officials made the announcement ahead of President Joe Biden’s Wednesday meeting with industry stakeholders at the White House. Officials from the country’s top transportation and shipping unions will all be present at that meeting, in addition to port envoys and top officials from Walmart, FedEx, UPS, Target, and Samsung. Biden is also expected to detail the initiative in a televised national address Wednesday afternoon.
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The administration has scrambled in recent months to smooth out supply chain deficiencies, but Wednesday’s announcement marks the largest steps toward alleviating the problems causing major delays in the shipping of domestic goods, both to retailers and directly to consumers.
The Port of Los Angeles, hampered by coronavirus mitigation strategies and California’s labor shortages, currently has a backlog of several hundred thousand shipping containers on freighters anchored off the coast and will begin operating on a 24/7 basis, senior administration officials told reporters late Tuesday night. The Port of LA and the Port of Long Beach, which was already operating on a 24/7 basis, account for roughly 40% of all U.S. imports. Administration officials say that the International Longshore and Warehouse Union will pick up the overnight shifts at the port.
The senior administration officials estimate that the off-hours operations will be able to operate 25% faster than standard shifts, and they also announced 24/7 commitments from a host of other major players in the space, including:
- UPS will scale up to 24/7 operations and share enhanced data with the ports, which officials estimate will produce a 20% increase in offloading shipping containers
- Samsung will operate at 24/7 for the next 90 days, which officials estimate will move nearly 60% more of the electronics giant’s goods
- Walmart and Target will scale up off-hours operations, producing an estimated 50-60% increase in the coming weeks
- FedEx is scaling up off-hours driving, which they hope will “double the volume” of cargo shipped from ports during off-hours operations
- The Home Depot committed to moving 10% additional containers per week on the Port of LA’s new off-hour schedule
Wednesday’s announcements come as top administration officials have suggested that, although the administration has prioritized supply chain issues, they are seen primarily as a private sector problem. Officials do not expect the administration’s efforts to eliminate shipping delays before the holiday season arrives.
A number of White House officials, speaking anonymously, told the Washington Examiner that consumers should expect to see some product shortages in stores this holiday season.
“We have record traffic at some of these container ports,” Transportation Secretary Pete Buttigieg added in a recent interview. “Part of what’s happening is as people’s incomes have returned, they’re spending less on things like going to crowded theaters or restaurants, compared to on physical goods, which puts a lot of pressure on our shipping supply chain resources. So these challenges are going to continue in the months and years ahead.”
Commerce Secretary Gina Raimondo suggested that while the administration’s efforts have yielded some results, their ability to fix holiday delays has been “limited.”
“We were all so obsessed with the healthcare response,” she told CNN of the administration’s policy focus to date. “We were obsessed with jobs. I don’t think anyone predicted how disruptive it would be to the supply chain.”
Jason Furman, an economics professor at Harvard University and chairman of former President Barack Obama‘s Council of Economic Advisers, was much more blunt in his assessment.
“My guess is it doesn’t add up to very much, but it’s absolutely worth doing regardless,” he explained. “They should be trying.”
It’s worth noting that the Biden administration has taken significant action to address the long-term supply chain issues exacerbating the current delays. The White House launched a supply chain task force in June, whose most recent recommendation involved standing up an “early alert” system for key semiconductor producers and the companies that use them.
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“The Biden administration has had our embassies and our ambassadors personally in key countries in Southeast Asia engage with semiconductor plants to make sure their COVID protocols and operations are up to par and to engage with local and national governments to make sure,” one senior administration official said. “Government can then enable plants to operate in a COVID safe manner and minimize the duration and extent of shutdown. We’re going to be taking these efforts a step further and trying the foundation that we’ve laid with increased interagency coordination.”
