White House task force formed over summer to ease supply chain constraints announcement several initiatives on Wednesday that would keep key West Coast ports open longer to encourage blue-chip retailers, including Walmart, Target and Home Depot, to ship more products through these points of entry.
The Supply Chain Disruption Task Force made the announcement ahead of a meeting between US President Joe Biden and several business and union leaders that took place at the White House on Wednesday.
To tackle maritime congestion, the Port of Los Angeles is moving to a 24/7 operation, nearly doubling the number of hours that cargo will be able to exit its docks and onto highways, the said. White House. This announcement follows the port of Long Beach, California expansion its operations in mid-September.
Private business partnerships
Congestion at these key ports has prompted major retailers to divert their shipments to other locations to avoid bottlenecks.
For example, Target said in a blog post last month that it urges ships it charters to avoid particularly safeguarded ports. Indeed, imports through the ports of Seattle and Tacoma increased 40.6 percent from 2019 figures and imports through the East Coast ports increased 36.1 percent over the same period, according to the S&P Global Market Intelligence supply chain research unit called Panjiva.
With the ports of Long Beach and Los Angeles now open 24/7, Walmart has agreed to increase night-time usage to 50%, Samsung will move 60% more of its containers via These ports, Home Depot has committed to shipping 10% more containers per week through the ports, and although Target is already moving 50% of its containers overnight, the company has committed to increasing that amount by 10%.
By moving goods during off-peak hours, the White House has said goods can leave ports faster. For example, the Port of LA moves cargo 25% faster at night than during the day.
“These commitments will help unlock capacity in the rest of the system – including highways, railways and warehouses – by reducing congestion during the day,” the White House said in its press release.
Partnership with shipping companies
To get shipments from ports to their final destinations faster, UPS and FedEx are also committed to improving night-time operations.
UPS said it would take advantage of the new 24/7 operations and improved data sharing with ports to increase the number of containers moved from ports by 20%. Likewise, FedEx has pledged to increase nighttime hours, which could double the volume of cargo they leave ports at night.
In the six White House partner companies, more than 3,500 additional containers per week will move at night until the end of the year.
Other supply issues
Of course, it’s not just the blocked ports that cause supply bottlenecks.
Retailers are grappling with plant closures overseas due to the Covid-19 outbreaks and are sourcing the materials needed for production. Not to mention that the White House initiatives do not tackle congestion in overseas ports.
Apple, the world’s largest tech company, is expected to cut iPhone 13 production by 10 million units by the end of the year due to chip supply issues.
RaphaÃ«l Bostic, President of the Atlanta Fed said during a speech this week as price pressures spread beyond sectors affected by the pandemic and measures of inflation expectations are gradually increasing.
“It is becoming increasingly clear that the feature of this episode which has fueled price pressures – primarily the intense and widespread supply chain disruptions – will not be brief,” said Bostic.
Read more: Apple to cut iPhone production ahead of new hardware event
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