WASHINGTON, D.C. – Shipping containers are piling up by the thousands, leading to port delays, higher shipping costs (both ocean and inland freight), and U.S. exporters – mainly of agricultural products – lacking the empty containers they need to send their goods abroad.
Thousands of containers filled with consumer goods from Asia flow into U.S. markets every day. But instead of returning filled with U.S. produced ag commodities, more of the containers are exporting air. Officials with the Port of Los Angeles, the largest container port in the U.S., said they shipped out a record number of empty containers in August.
In September, more than 70 national agricultural organizations asked the Biden administration to intervene.
Meanwhile, small businesses in the U.S. are being hit particularly hard because of bottlenecks in the supply chain, facing the decision to pay three times the typical shipping rate for products that are unlikely to arrive in months.
At a press conference Wed., Oct. 13 President Biden announced – along with industry representatives – measures being undertaken to lessen ongoing supply chain problems.
Industry leaders are announcing a series of public and private commitments to move more goods faster, and strengthen the resiliency of the supply chains, by moving towards 24/7 operations at the Ports of Los Angeles and Long Beach.
These two ports are the point of entry for 40 percent of containers to the U.S., and are on track to reach new highs in container traffic this year. Through August, Los Angeles has moved 30% more and Long Beach over 20% more containers to help U.S. exporters reach customers around the world and U.S families and factories get the goods they need.
These commitments will speed up shipments of goods throughout the country and include:
The Port of Los Angeles is expanding to 24/7 operation. The Port of Long Beach expanded operations in mid-September. The Port of Los Angeles is now joining them by adding new off-peak night time shifts and weekend hours. This expansion means the Port of Los Angeles has nearly doubled the hours that cargo will be able to move out of its docks and on highways.
The International Longshore and Warehouse Union (ILWU) has announced its members are willing to work those extra shifts.This will add needed capacity to put towards clearing existing backlogs. This is an important first step, now the private businesses along the supply chain need to move their operations to 24/7.
Large companies are announcing they will use expanded hours to move more cargo off the docks, so ships can come to shore faster. Unlike leading ports around the world, U.S. ports have failed to realize the full possibility offered by operation on nights and weekends. Moving goods during off-peak hours can help move goods out of ports faster. For example, at the Port of LA, goods move 25 percent faster at night than during the day. These commitments will help unlock capacity in the rest of the system—including highways, railroads and warehouses—by reducing congestion during the day.
The commitments being announced include:
- The nation’s largest retailer, Walmart, is committing to increase its use of night-time hours significantly and projects they could increase throughput by as much as 50% over the next several weeks.
- UPS is committing to an increased use of 24/7 operations and enhanced data sharing with the ports, which could allow it to move up to 20 percent more containers from the ports.
- FedEx is committing to work to combine an increase in night time hours with changes to trucking and rail use to increase the volume of containers it will move from the ports. Once these changes are in place, they could double the volume of cargo they can move out of the ports at night.
- Samsung is committing to move nearly 60% more containers out of these ports by operating 24/7 through the next 90 days. 72% of U.S. homes have at least one Samsung product, from appliances to consumer electronics.
- The Home Depot is committing to move up to 10% additional containers per week during the newly available off-peak port hours at the Ports of L.A. and Long Beach.
- Target, which is currently moving about 50 percent of its containers at night, has committed to increasing that amount by 10 percent during the next 90 days to help ease congestion at the ports.
Across these six companies over 3,500 additional containers per week will move at night through the end of the year.
Those boxes contain toys, appliances, bicycles, and furniture that Americans purchased online or at their local small business, and pieces and parts that are sent to U.S. factories for workers to assemble into products.
According to supply chain disruptions task forcee members, these commitments provide a clear market signal to the other businesses along the transportation supply chain—rails, trucks, and warehouses—that there is demand to move additional cargo at off-peak hours.
Soon after taking office, Biden signed an executive order kicking off a broad review of products that had been in short supply, including semiconductors and pharmaceutical ingredients.
Biden created a task force over the summer to address the most urgent shortages and then tapped a former Obama administration transportation official, John Porcari, to serve as the new “ports envoy” to help get goods flowing. Porcari helped broker the agreements with the ports and the union.
Secretary Buttigieg and Port Envoy Porcari will continue to work with all stakeholders to help more businesses access these expanded hours, and move the rest of the supply chain towards 24/7 operations.
