By Sourcing Journal
This article was published in Sourcing Journal October 13, 2021. We're sharing because it highlights efforts being made by the White House to combat supply chain slowdowns, notably a move to 24/7 operations at the Ports of Los Angeles and Long Beach.
The ports had announced new measures to improve freight movement and reduce delays last month. The changes, made after consultation with the U.S. Department of Transportation, were framed as “the first step” toward a 24/7 supply chain. A week later, the Port of Long Beach unveiled a new pilot program to widen access and speed deliveries during the overnight hours.
Retailers like Walmart and Target and shipping giants UPS and FedEx have already committed to increasing their use of night-time and off-peak hours, and the International Longshore and Warehouse Union (ILWU) has indicated its members are willing to work the extra shifts, according to White House intel.
President Joe Biden plans to formally announce the news Wednesday afternoon in a meeting that will include the CEOs of Walmart U.S., Target, FedEx Logistics, Samsung Electronics North America, the National Retail Federation (NRF), the American Trucking Association, the American Association of Railroads, the U.S. Chamber of Commerce, the Consumer Brands Association and the Pacific Maritime Association. Leaders from the ILWU, Teamsters, AFL-CIO, the Port of Los Angeles, the Port of Long Beach and the UPS are also expected to attend.
NRF President and CEO Matthew Shay praised the administration’s leadership on port congestion and emphasized the long-term need for a more reliable global supply chain.
“We thank President Biden, Vice President Harris, Secretary [Pete] Buttigieg, [National Economic Council] Director [Brian] Deese and Port Envoy John Porcari for their leadership to address the ongoing global supply chain disruption,” Shay said in a statement. “It is critically important that we all come together—business, labor and government—to address the current issue regarding port congestion, and the long-term need to create a more reliable supply chain globally and within the United States. The retail industry greatly appreciates President Biden’s personal commitment to marshal the power of the federal government behind efforts to reduce the disruptions our members are currently facing, and retailers remain committed to working with all stakeholders to ensure consumers have access to the products and services they want and expect. NRF has been urging more focus and resources to address supply chain failures for many years, and we look forward to continued efforts that result in sustainable solutions for this growing problem.”
In a fact sheet released ahead of the meeting, the White House revealed Walmart has committed to increasing its use of night-time hours “significantly” and projects it could raise throughput by up to 50 percent over the next several weeks. Target, which currently moves about half of its containers at night, committed to increasing that amount by 10 percent over the next 30 days. Samsung plans to move nearly 60 percent more containers by operating 24/7 through the next 90 days, while The Home Depot expects to move up to 10 percent additional containers per week during the new off-peak hours at the two ports.
The UPS, meanwhile, committed to an increased use of 24/7 operations and enhanced data sharing with the ports—moves that could allow it to move up to 20 percent more containers, the White House said. FedEx plans to both increase night-time hours and make changes to trucking and rail use. With these efforts in place, it estimates it could double the volume of cargo it moves out of ports at night.
“Just UPS and FedEx alone, combined, shipped 40 percent of American packages by volume in 2020,” a senior administration official said. “By taking these steps, they’re saying to the rest of the supply chain, ‘You need to move, too. Let’s step it up.’”
Together, the six companies’ commitments will translate to more than 3,500 additional containers moving through ports at night per week through the end of the year, the White House said.
The administration attributed the extended port hours and business commitments to the ongoing work of the Biden-Harris Supply Chain Disruptions Task Force. Established in June, the task force is led by Transportation Secretary Pete Buttigieg and includes input from Agriculture Secretary Tom Vilsack and Commerce Secretary Gina Raimondo. In August, the White House appointed John D. Porcari the group’s port envoy—a move welcomed by the National Retail Federation.