Biden announces 24/7 port operations in Los Angeles.
The Biden administration announced the Port of Los Angeles will now operate 24/7, adding 60 hours to port operations per week. The administration also said that Walmart, FedEx and UPS are voluntarily moving toward 24/7 operations, while companies like Samsung, Home Depot and Target would ramp up off-peak work hours to alleviate the backlog of freight. Several companies had already been trying to take actions to help alleviate backlogs that have accrued. Strong consumer demand coming out of the pandemic via billions of dollars pumped into the system via COVID aid packages have resulted in a demand surge and virus-linked shutdowns in ports around the world have exacerbated the impacts on supply chains and have dramatically raised shipping costs as a result. The actions announced by the administration were as expected and will have to rely on the ability of the port to bring in more workers but also to get goods away from ports more quickly. The actions will not clear all of the backlogs and some expect it will reveal other issues that permeate the supply chain such as a shortage of truckers to haul goods.
IHS Markit comments: While the 24/7 push is laudable and brings the United States into alignment with other competing countries, many other questions emerge. As part of the 24/7 push, will the administration relax trucker hours of service rules? Will truck length and weight limits be expanded to allow more cargo to be moved with fewer truck drivers? Will longshore labor unions at the nations' ports perform at commensurate levels as competing countries? There are many other similar questions but without each part of the supply chain doing its part, the problem is passed along to the next link of the chain. Addressing supply chain issues is complex, with many vested and interested participants looking to protect their role and function. Also, the focus by the administration is unloading ships with goods US consumers buy. An equally and important effort needs to focus on assuring US produced commodities and manufactured goods are also able to work through the supply chain as well toward export channels.
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