Biden Supply Chain Mess: Will Holiday Shopping Still Work?

President Biden wants to save Christmas – but he may not be able to.

He is set to announce Wednesday that the Port of Los Angeles will work round-the-clock to ease a logistical bottleneck that has left dozens of container ships unattended off the coast of California and the U.S. to get products manufactured overseas. waiting for a long time.

The agreement to let longshoremen unload cargo during the night is intended to accelerate the flow of toys, electronics and other goodies to American doors during the holiday season.

However, the plan addresses only one link in the global supply chain that is largely outside of Biden’s control, meaning he faces a potential setback from unhappy shoppers, while also lacking the power to fix the mess. Is.

Biden can’t force foreign factories to churn out products. He can’t afford to hire more truck drivers to pick up the goods when they arrive. And that cannot stop the pandemic that is disrupting operations all over the world.

Bottom line: Americans want their stuff, and there’s little Biden can do to get them.

Matthew Sherwood, a global economist at the London-based Economist Intelligence Unit, described the White House’s actions as “quite limited”.

“I think the administration is doing what it can, but the reality is that there is not much beyond what they are announcing,” he said.

Whether or not there are supply chain problems, Biden’s fault doesn’t matter to voters, who express their displeasure to the man in charge.

Biden faces a similar challenge with the coronavirus. His administration has provided enough vaccines for every American, but millions are still unprepared to get their shots, prolonging the deadly COVID-19 pandemic – and presidential elections slashing the numbers.

White House press secretary Jen Psaki recently said that souring public opinion is “a reflection of people being sick and tired of COVID” but the president understands that “the buck stops with them.”

When it comes to the flow of goods around the world, Saki said on Wednesday whether the administration can ensure that holiday packages arrive on time.

“We are not the Postal Service, UPS or FedEx,” she said. “We can’t guarantee that.”

Saki was also cautious about promising Americans that the situation would improve rapidly, especially at a time when analysts are suggesting problems could continue into the next year.

“I don’t want to make any predictions because it’s not just an issue,” she said.

The current impasse reflects a confluence of challenges. Over the past few years, supply chains have been increasingly vulnerable to disruption as companies have compressed and accelerated times for sourcing and transporting goods.

Then the pandemic turned the global economy upside down, plunging the world into recession and a boom in demand for some goods.

For Biden, one of the biggest economic threats is supply chain bottlenecks and various shortfalls leading to high inflation. Inflation rose last month, with consumers paying 5.4% more for goods and services than a year ago, the highest rate in more than a decade, the government said on Wednesday.

White House economists and policymakers at the Federal Reserve see the recent jump in consumer prices as tentative, but inflation has been operating well above the Fed’s comfortable levels since spring. Persistently high inflation can create complications for the Fed’s interest rate policies, and it can affect consumer spending and wage growth. Already, analysts have sharply downgraded economic growth for the second half of this year, and 2022 is likely to bring slower growth.

The supply chain snarls have given Biden another chance to advance his infrastructure plans, which have stalled on Capitol Hill as Democrats figure out how much money they want to spend on expanded safety net programs. The legislation, which has passed the Senate but is awaiting a vote in the House, includes $17 billion to modernize and expand port facilities.

But even if the measure arrives on the president’s desk for his signature, the benefits will likely be years away.

“In the long run, there are infrastructure investments that can expand system capacity, but that’s not a quick fix,” said Phil Levy, chief economist at Flexport, a San Francisco-based freight shipment and customs brokerage company.

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