Biden Administration Aims to Correct Supply Chain Delays
Most of the attention of the global supply chain throughout the Covid-19 pandemic has been on the port congestion seen in China, however, as the holiday season draws closer, the focus is shifting towards backlogs in the United States, especially in the Southern California ports of Long Beach and Los Angeles. The congestion at American ports has reached such a critical point that President Biden’s Supply Chain Task Force, initiated in June as a temporary stopgap, has directed the Port of Los Angeles to move to 24/7 operations. In addition to a night shift being implemented at the port, President Biden announced Walmart, FedEx, UPS, Samsung, Home Depot and Target will be adding shifts in order to help decrease the backlog.
The Biden Administration is working with a Supply Chain Task Force and floating the possibility of invoking the Defense Production Act to ease port congestion. Photo Credit: Rene Deanda
Trucking companies are hiring foreign nationals and lowering age minimums to combat staffing shortages. Photo Credit: Mat Napo
Blockages in Southern California Ports
It is not hard to see the effects the current port congestion is having across the country—from an inability to stock products on store shelves to an increase in average delivery times. Some experts even forecast that goods currently on ships will not reach stores by Black Friday on November 26th. The exact cause of these delays is impossible to pinpoint, simply because there are so many places where the supply chain has broken down. Examples worldwide include the power crunch in China and re-emergence of Covid-19 as a threat in Asia.
The problems continue in the United States; as of October 7th, 60 ships are waiting in open water to enter the Ports of Los Angeles and Long Beach. This led, in part, to the Biden Administration’s decision to institute a night shift at the Southern California ports. This strategic decision goes farther than an attempt to increase hours, because ports and trucks can operate more officially, by avoiding standard traffic, while working overnight and during off-hours.
Shortage of Long Haul Truckers
As the Biden Administration attempts to alleviate some of the pressure at the ports, they are finding themselves on the receiving end of pushback from the long haul trucking industry. For years now, the supply of truckers has been on the downswing, with employers lobbying to lower the minimum age for interstate drivers from 21 to 18 and attempting to source drivers from amongst foreign nationals. When factoring in hesitation from trucking unions at the potential of a vaccine mandate, there simply are not enough truckers to staff three shifts round the clock.
The delays continue through every single aspect of the supply chain with a shortage of trucks. Administration officials have floated the possibility of using the Defense Production Act in order to combat the shortage of OEM chips and other parts necessary to build more trucks.
A Global Solution Required
Despite the effort and attention to supply chain issues by the Biden Administration, it is clear that they alone will not be able to solve the problem overnight. This is a global issue, not one faced by the United States alone, but it does appear that global companies, such as the aforementioned Walmart and Samsung, are working to alleviate the supply chain issues. This does not come a moment too soon, as consumer prices are rising at a time of the year when stores generate a third of their annual revenue.
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