With more than 80 container ships at anchor and 64 at berths across the Ports of Los Angeles and Long Beach, congestion at the nation's top ports continues to snarl supply chains. To alleviate bottlenecks threatening the holiday shopping season, the White House has released a memo stating the twin ports will be operating on a 24/7 basis to counter the backlog.
The shipping industry is in complete chaos, and bottlenecks at Ports of Los Angeles and Long Beach, a point of entry for 40% of containers, continue to experience massive backlog that is disrupting the time it takes goods to reach store shelves, creating price inflation for consumer goods and shortages.
President Biden is expected to meet with "business leaders, port leaders, and union leaders to discuss the challenges at ports across the country and actions each partner can take to address the delays and congestion across the transportation supply chain," according to the White House.
"The President will meet with the leadership from the Ports of Los Angeles and Long Beach and the International Longshore and Warehouse Union (ILWU) to discuss the actions they are each taking to address these challenges in Southern California," the White House continued.
To solve such a crisis, it appears the Biden administration, businesses leaders, and port officials will "announce a series of public and private commitments to move more goods faster, and strengthen the resiliency of our supply chains, by moving towards 24/7 operations at the Ports of Los Angeles and Long Beach" at a press conference this afternoon.
Snarled supply chains first became an issue earlier this year for the administration when automakers began to experience production difficulties because of the lack of semiconductor chips. This forced Biden to announce a review of the problem in February.
Since then, the administration has done very little to alleviate shortages and bottlenecks as they push for more fiscal stimulus, one of the culprits of a massive demand-pull of overseas goods from Asia, straining logistical networks. The problem continues to worsen and adds inflation to the economy that is becoming more persistent than transitory. There's also the issue of consumer goods shortages ahead of the holiday season.
Here are the White House's commitments to resolve the shipping crisis:
The Port of Los Angeles is expanding to 24/7 operation. The Port of Long Beach expanded operations in mid-September. The Port of Los Angeles is now joining them by adding new off-peak night time shifts and weekend hours. This expansion means the Port of Los Angeles has nearly doubled the hours that cargo will be able to move out of its docks and on highways.
The International Longshore and Warehouse Union (ILWU) has announced its members are willing to work those extra shifts. This will add needed capacity to put towards clearing existing backlogs. This is an important first step, now the private businesses along the supply chain need to move their operations to 24/7.
Large companies are announcing they will use expanded hours to move more cargo off the docks, so ships can come to shore faster. Unlike leading ports around the world, U.S. ports have failed to realize the full possibility offered by operation on nights and weekends. Moving goods during off-peak hours can help move goods out of ports faster. For example, at the Port of LA, goods move 25 percent faster at night than during the day. These commitments will help unlock capacity in the rest of the system—including highways, railroads and warehouses—by reducing congestion during the day.
The commitments being announced today include:
- The nation's largest retailer, Walmart, is committing to increase its use of night-time hours significantly and projects they could increase throughput by as much as 50% over the next several weeks.
- UPS is committing to an increased use of 24/7 operations and enhanced data sharing with the ports, which could allow it to move up to 20 percent 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, they could double the volume of cargo they can move out of the ports at night.
- Samsung is committing to move nearly 60% more containers out of these ports by operating 24/7 through the next 90 days. 72% of U.S. homes have at least one Samsung product, from appliances to consumer electronics.
- The Home Depot is committing 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 percent of its containers at night, has committed to increasing that amount by 10 percent during the next 90 days to help ease congestion at the ports.
Across these six companies over 3,500 additional containers per week will move at night through the end of the year.
Those boxes contain toys, appliances, bicycles, and furniture that Americans purchased online or at their local small business, and pieces and parts that are sent to U.S. factories for our workers to assemble into products. And this is just a start—these commitments provide a clear market signal to the other businesses along the transportation supply chain—rails, trucks, and warehouses—that there is demand to move additional cargo at off-peak hours.
Secretary Buttigieg and Port Envoy Porcari will continue to work with all stakeholders to help more businesses access these expanded hours, and move the rest of the supply chain towards 24/7 operations.
This effort is part of the ongoing work of the Biden-Harris Supply Chain Disruptions Task Force to continue to identify emerging bottlenecks to the economic recovery and take action to clear them to help families, workers, and businesses get the goods they need.