Senior Biden administration officials said the Port of Los Angeles will begin operating round the clock as the White House threatens the holiday shopping season to ease supply chain bottlenecks and slow the country’s economic recovery from the global pandemic. done.
Similar steps have been taken at the Port of Long Beach in recent weeks. The two giant facilities together are responsible for nearly half of all imports into the United States, making them a vital part of the logistics network hit by the coronavirus crisis.
Administration officials said the plan, which is to be announced by President Biden on Wednesday, was touted by the White House as part of an effort to address supply chain problems that would be difficult for Americans to get electronics, cars, lumber and others. making it difficult. Consumer goods that depend on foreign manufacturing.
“This will help us address the backlog,” said an official who requested anonymity ahead of the announcement.
Under the plan, the Port of Los Angeles will nearly double the number of cargo to and from container ships on highways by having crew work during the night. According to officials, members of the International Longshore and Warehouse Union will fill the additional shifts.
In addition, major shippers and retailers — including Walmart, FedEx, UPS, Samsung, Home Depot and Target — will ramp up their operations to clear cargo from ports, freeing up more space at docks.
The target is to move an additional 3,500 containers during the night each week.
On Wednesday, Biden is due to announce the plan after a virtual conference involving industry executives and labor leaders. Among the participants are Jean Cerocca and Mario Cordero, executive directors of the Los Angeles and Long Beach ports, respectively.
The president will probably also use this opportunity to promote his infrastructure proposals, investing in port facilities and transportation networks to expand their capacity.
Supply chain problems first gained widespread attention earlier this year as US automakers struggled to obtain enough computer chips that are needed for modern cars to function. In February, Biden announced a review of the issue.
Since then, shortages and bottlenecks have proved more frequent and widespread than many, including those in the administration, expected. The problems pose a serious risk to the economy, driving up inflation and limiting spending, which is critical to recovery. With companies unable to obtain parts and supplies, many are not able to produce enough goods to meet growing demand, resulting in decreased sales and delays in hiring because companies have not been able to produce enough goods as soon as possible. You can’t grow as fast as you want.
IHS Markit, an economic forecasting firm, said the annual pace of US economic growth slowed to just 1.4% in the third quarter, down from the 6.7% growth rate in the second quarter due to supply chain problems. Fourth quarter growth looks weaker than before.
“I don’t know if anything can be done in the White House. I think the underlying cause is COVID-19, not just in America,” said Ben Herzon, an economist at IHS.
Speeding up operations at ports will take time. The Port of Long Beach recently launched a pilot program to offer 24 hours a day at one of its six terminals, but it could take weeks or months to get the facility working round the clock at all of its terminals – and its Only then do other important links of the supply chain come together.
For months now, container ships in Asia have been facing unusually long waits to berth and unload because there are not enough warehouse or warehouse workers, or not enough truck drivers to haul containers.
Noel Hecegaba, deputy executive director of the Port of Long Beach, said as of Tuesday morning, there were 58 container ships near the ports of Los Angeles and Long Beach. Although this is down from the peak of 73 two weeks ago, in normal times, there will be few, if any, waiting to dock.
To help ease the bottleneck, the Port of Long Beach recently made 65 acres of vacant land available to be used as a temporary storage site. But that’s not nearly enough to handle huge amounts, especially before the holiday season.
“The position we are in is this one system, and every link has to align,” Hesegaba said.
Hesegaba said he did not expect relief from the supply crisis until next summer. Other experts say it could be as early as 2023 before the hurdles are removed.
The magnitude of the shortage of drivers and warehouse workers is unprecedented. According to the Labor Department, job openings in the transportation, warehousing and utilities sector have been steadily increasing this year and have reached 537,000 in August, a 67% increase from February 2020 before the pandemic.
The Biden administration said it was working with states to expedite truck drivers’ licenses, but shortages have been increasing over the years as older drivers have left the field and fewer young people have come to replace them.
“As a country, we’ve reassured every young person that they need to go to college to be successful, and we don’t think that’s the case,” said Mark Allen, president of the International Food Service Distributors Association.
He said one way to address the shortfall is to lower the minimum age for an interstate commercial driver’s license from 21 to 18, but that would be required by law.
America cannot solve problems on its own. For example, China operates seven of the world’s 10 largest ports, and has recently suspended operations at some. The coronavirus infection has also disrupted operations in foreign factories.