US opens West Coast ports 24/7 to solve supply chain bottlenecks

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The two main ports of Long Beach and Los Angeles on the West Coast will be working around the clock to clear record backlogs of cargo from China and Asia, delivering goods to empty shelves across the United States. This news was announced after an online conversation with California state authorities, unions, retailers and major logistics firms.

“We have some good news today. We are rapidly increasing the delivery of goods to stores across the United States,” President Joe Biden said on the evening of October 13.

The shelves of US food, consumer goods, apparel, footwear and electronics are empty as supply chains and transportation from China and Vietnam are disrupted. Photo: Bloomberg

“Goods cannot run by themselves”

According to Nikkei Asia, agreements with major corporations and carriers including Walmart, UPS and FedEx – which account for 40% of shipping capacity in the US – aim to increase deliveries during the night and during peak hours. This is also a measure to fill the shelves at supermarkets in the US before the Black Friday and Christmas holidays – the two biggest shopping occasions of the year.

The expanded capacity is intended to address growing concerns about cargo shortages and logistics bottlenecks, which have contributed to rising inflation in recent months. The trend has also dented consumer confidence in an economy recovering from the wreckage of the pandemic and the credibility of Mr Biden’s cabinet in recent opinion polls.

The Port of Los Angeles will operate at full capacity even at night and on weekends, while the Port of Long Beach is adopting a 24/7 working schedule. These two ports receive up to 40% of the containers imported into the US. Meanwhile, the ILAU Union – which represents warehouse workers at West Coast ports in the US, Hawaii and British Columbia in Canada – also announced that ILAU members are willing to work overtime.

“Today’s announcement has the potential to be a game changer. I say ‘potential’ by all sorts of goods that don’t have legs and run on their own,” Biden said. He emphasized the importance of the private sector in the transportation of goods.

Companies will make efforts to shorten the time of goods in port. FedEx is looking to double the amount of containers released at night with steps like changing the release rails. Hypermarket chain Walmart increased night-time productivity by 50%, while South Korean conglomerate Samsung pledged to increase its containers by 60% by operating 24/7 within the next three months.

The White House says these measures could free up an extra 3,500 containers a week at night. “For these short-term measures, we will be brokers, trusted partners. Those commitments really work when every private company in the supply chain actually does,” a senior White House official said.

President Biden is expected to introduce a variety of individual measures to address the chip shortage around the world.

Heal the broken global supply chain

The impact of the pandemic will be repeated on supply chains in the US and other regions. Two California ports were severely understaffed during the outbreaks. Supply chains in Vietnam and the US – the main producer of consumer electronics, toys, furniture and fashion – were also disrupted, in addition to the closure of seaports for a while.

These disturbances come at a time when a shift in consumer demand – from services to goods – has increased the demand for shipping. According to the National Retail Federation (NRF), imports at major US ports increased 6.7% in September. About 75 container ships were waiting at the ports of Long Beach and Los Angeles, tripling the figure of August.

Imports into the US in the first eight months of 2021 reached $1.850 billion, up 23%, according to data from the US Department of Commerce. Shipments from the main supplier China increased 21%, even with high tariffs imposed by President Donald Trump’s previous cabinet on goods from the mainland.

However, the measures outlined by the White House and its partners have not been enough to address supply chain tensions. Shipping lines and retailers are still short of workers. And the risk of an energy crisis in China also slows down the pace of production and shipping of goods in the country.

According to Saigontimes

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