'More ships than parking spots': What a stuck supply chain looks likeOctober 13, 2021
New York (CNN Business)The US government is stepping up its efforts to relieve the supply chain nightmare that has led to shortages of some goods, higher prices for consumes and now threatens to slow the economic recovery.
The White House will work with companies and ports on a “90-day sprint” to alleviate bottlenecks, according to a senior administration official. Some will start working 24/7 to address the backlogs.
The Port of Los Angeles will move to 24/7 service, bringing it into line with operations at the Port of Long Beach, which is already working on a 24/7 schedule, the official said. Those two ports handle 40% of container traffic in the US.
Around the world, ports are congested as a result of the rapid rebound in demand for commodities and goods as much of the global economy has recovered from the pandemic. Shipping costs have soared, and companies wanting to move goods around are struggling because there just aren’t enough ships or containers available. All the while prices are going up for consumers.
“To be clear, no matter what we do in the short term, we ultimately have an issue of capacity of our ports, our freight rail, our roads and bridges. Put simply much of the shipping and freight infrastructure was built decades or even generations ago, and Americans are importing and [exporting] far more than we did back then,” the official said.
“The federal government will be a strong and willing partner in this effort in the near term, but also in rebuilding a better system for the 21st century.”
President Joe Biden will meet with senior officials and stakeholders to discuss collective efforts to address global transportation bottlenecks and then deliver remarks on Wednesday. Port operators, truckers’ associations, labor unions and executives from Walmart (WMT), FedEx (FDX), UPS (UPS) and Target (CBDY)will attend the talks.
“The supply chain is essentially in the private sector so we need the private sector to step up to help solve these problems,” the senior official said, previewing the announcements.
“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, adding that the White House hopes these companies motivate other companies to follow suit in stepping up their operations.
Officials also said the federal government is working with state Departments of Motor Vehicles to help increase the issuance of commercial drivers licenses in an effort to boost the number of truck drivers in the country. They added that the White House hopes to see the trucking and rail freight industries expand hours as well.
A shortage of truck drivers has added to the supply chain constraints, making the delivery of goods to consumers even more costly and slow.
“If we can stabilize the pandemic, we know it will have a positive impact on global supply chains for a benefit economy,” the senior administration official said.
— CNN’s Jason Hoffman and Matt Egan contributed to this report
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