Frédéric J. Brown / AFP via Getty Images
President Biden will address lingering supply chain issues on Wednesday, as major retailers warn of shortages and price hikes in the upcoming holiday season.
Biden is expected to blame the pandemic, which has shut down factories and disrupted ports around the world, for the problems, but also the vanity deals the White House has negotiated with private sector entities to re-circulate the issues. merchandise.
“The supply chain is essentially in the hands of the private sector, so we need the private sector to mobilize to help solve these problems,” a senior administration official told reporters on Tuesday evening.
The White House announces that the Port of Los Angeles has agreed to essentially double its hours and move to 24/7 operations. In doing so, he joined the Port of Long Beach, which launched similar night and weekend shifts a few weeks ago.
Together, the two California ports handle approximately 40% of the container traffic that enters the United States.
The White House has also helped secure commitments from three of the largest freight carriers – Walmart, FedEx and UPS – to take steps to move to 24/7 operations.
“By taking these steps,” the senior administration official said, “they are telling the rest of the supply chain: ‘You have to move too. Let’s go further.’ “
The overall goal is to move more goods through ports faster. Members of the International Longshore and Warehouse Union have said they are prepared to work additional shifts, according to the White House.
Once ashore, of course, the cargo still has to be transported to the rest of the country, which means a much higher throughput by truck and train.
This is the last step in supply chains
Supply chain issues are one of the many economic challenges facing the Biden administration. Job growth has also slowed sharply over the past two months. And forecasters have lowered their expectations for economic growth this year.
White House press secretary Jen Psaki said resolving supply chain issues requires cooperation between the private sector, including rail and trucking, ports and unions.
“Supply chain bottlenecks go from industry to industry, but we certainly know that port bottlenecks could help resolve what we’re seeing in many industries across the world. countries and, frankly, lead people getting ready for the holidays, for Christmas, whatever they can celebrate – birthdays – to order goods and get them to people, “she said on Tuesday.
This is not the first time the administration has attempted to tackle supply chain issues.
Shortly after taking office, Biden signed an executive order launching a broad review of what products were missing, including semiconductors and pharmaceutical ingredients.
Biden created a task force over the summer to deal with the most urgent shortages, then brought in former Obama administration transportation official John Porcari to serve as the new “port envoy.” to help move goods. Porcari helped negotiate agreements with the ports and the union.
The role of recovery aid
During the call with reporters on Tuesday night, the White House also pushed back concerns that Biden’s relief bill direct payments in March exacerbated the problems, fueling demand for goods and possibly discouraging the hand. -work necessary.
The administration says the supply chain disruptions are global in nature, a challenge that has been compounded by the spread of the delta variant of the coronavirus.
Two of the world’s largest ports in China have experienced partial closures aimed at curbing COVID-19 outbreaks, the White House notes. And in September, hundreds of factories closed due to lockdown restrictions in Vietnam.
The administration agrees that part of the current problem is related to increased demand, but sees it as a positive indicator of how the United States has recovered from the pandemic faster than other developed countries.
As for the impacts on labor supply, the official said it was more complicated.
The direct payments and additional unemployment benefits from the stimulus package were a “lifeline” for many struggling families, the administration official said.
“And to the extent that it allows people to think more about when, how and what offer they choose to reconnect to the job market, it is ultimately very encouraging,” added the official.