US President Joe Biden seems to have increased his efforts to ease the current congestion, transportation and supply chain blockages that are disrupting the US ports especially on the West Coast and avoid disruption of goods delivery through the ports especially for holiday shoppers.
Speaking at the White House on Wednesday, Biden said “The moves were a first step to pushing supply chains in the United States, the world’s biggest consumer economy, to operate faster.“
Biden announced a number of steps to achieve this objective including moves by the nation’s two largest ports Los Angeles and Long Beach to expand to 24-hour operation, and also to ramp up efforts by big conglomerates like Walmart, FedEx, UPS, Samsung, Target and The Home Depot for quicker cargo clearance.
These companies were joined by powerbrokers from ports, terminals and labour unions to discuss how to speedily address a backlog of cargo sitting in thousands of containers on ships outside the ports of Los Angeles and Long Beach waiting for a berth.
The main cause of the congestion is said to be the increased demand from US consumers as e-commerce increased by 39% in Q1 2021 compared to Q1 2020 as more and more Americans seemed to have stayed indoors due to the COVID-19 pandemic and found the “buy” button on their computers.
Suppliers couldn’t keep up with the demand and experienced several difficulties getting the goods to USA amid soaring freight rates, extreme space and equipment crunch only to face congestion at the ports caused by a combination of factors including inadequate and insufficient port infrastructure.
Biden announced on Wednesday that the Port of Los Angeles has committed to joining the Port of Long Beach in stepping up its round-the-clock operations while customers like Walmart have also committed to picking up their cargo on a 24/7 basis to assist in clearing the ports of the congestion.
“I want to be clear. This is an across-the-board commitment to going to 24/7. This is a big first step,” Biden said. “But now we need the rest of the private sector chain to step up as well. This is not called a supply chain for nothing.“
Biden further requested the terminal operators, truckers, shippers and the rest of the supply chain to step up as well while he committed to all Federal support stating that “strengthening the supply chain will be my team’s focus“. He also indicated that the administration will be calling out the private sector to act in case they don’t step up.
He added that USA should address the long standing weakness in the transportation supply chain that the pandemic has exposed and it is time to improve the infrastructure. Biden further alluded to the fact that the time of cheering for the lean and Just In Time supply chains and leaving no buffer prior has gone as the world has changed adding that supply chains needs to be more resilient.
The fact sheet on the Biden administration’s efforts to address bottlenecks at the Ports of Los Angeles and Long Beach can be viewed here.
Close on the heels of the meeting, Port of Los Angeles Executive Director Gene Seroka issued a statement regarding President Biden’s announcement regarding 24/7 operations for the Port of Los Angeles.
“Operational details are being discussed and worked out with the supply chain stakeholders. The significance of today’s announcement is the commitment from industry leaders responsible for moving goods on behalf of American consumers and businesses to open up the capacity needed to deliver. It’s a call to action for others to follow.
We have heard directly from the President, the Vice President, Secretary Buttigieg, National Economic Council Director Deese, and Port Envoy Porcari. We have a lot of work ahead. The Port of LA is called America’s Port because cargo we handle reaches every corner of the country. In the days ahead, we are committed to continuing to be the convener to ensure the supply chain delivers for the American people.”
Last month, the Port of Long Beach had already commenced its pilot program for 24 hour cargo pick up at its Pier T Terminal becoming the first terminal to start making it easier for trucks to access the facility for cargo pick up during the overnight hours with their program aimed at widening access and achieving speedy deliveries amid the ongoing cargo surge.
Is there a port surcharge levied for the vongested US ports by shippers ?