After weeks of negotiations attempting to find a fix for supply chain problems, the Biden administration announced that the ports of Los Angeles and Long Beach, as well as major retailers, will move to 24-hour, seven-day-a-week operations.
On Oct. 13, President Biden announced that the Port of Los Angeles will move to 24/7 operations, following a similar recent announcement from the Port of Long Beach. Some 40% of all the shipping containers imported into the U.S. come through these two ports, and the global pandemic scrambled normal supply chain operations. Dozens of container ships have been anchored offshore for weeks waiting to unload.
Noting that 24/7 operations are standard at large ports in most other large countries, Biden explained that traditionally, the ports are only open weekdays, and not overnight. Staying open 7 days a week, through nights and weekends, will open up another 60 extra hours a week – nearly double the number of hours the port is open for business. That means more hours for workers to move containers off ships and onto trains and trucks. And opening up those off-peak hours, he said, will also help speed operations. During off peak hours, he said, cargo leaves port at a 25% faster pace than during the day shift.
“Today’s announcement has the potential to be a game changer,” Biden said. “I say potential. All of these goods won’t move by themselves. For the positive impact to be felt, we need major retailers who order the goods, and the freight movers who take the containers … to step up as well. These private sector companies are the ones that hire the trucks and railcars and move the goods.”
To that end, Biden also announced that Walmart is committing “to go all in on moving its product 24/7 from the ports to stores nationwide. It is committing to as much as a 50% increase in use of off-peak hours.” Other companies, including Target, Home Depot, and Samsung, have also committed to ramp up the use of off-peak hours at the ports.
In addition, he said, FedEx and UPS are committing to significantly increase the amount of goods they’re moving at night.
“Operational details are being discussed and worked out with the supply chain stakeholders,” said Port of Los Angeles Executive Director Gene Seroka in a statement. “The significance of today's announcement is the commitment from industry leaders responsible for moving goods on behalf of American consumers and businesses to open up the capacity needed to deliver. It's a call to action for others to follow.”
Re-inventing supply chains
“This is a big first step in speeding up the movement of materials and goods through our supply chain,” Biden said. “But now we need the rest of the private sector chain to step up as well. This is not called a supply chain for nothing. This means that terminal operators, railways, trucking companies, shippers, and other retailers as well [need to step up.]
“If federal support is needed, I’ll direct all appropriate action,” Biden said. “If the private sector doesn’t step up, we’re going to call them out and ask them to act.”
“Because our goal is to not only get through this immediate bottleneck, but to address the longstanding weaknesses in our transportation supply chain that this supply chain has exposed.”
Before the pandemic, he said, we prided ourselves on our lean, efficient supply chains, on just-in-time production. However, those methods leave no buffer or margin for error.
“The world has changed,” Biden said, and those supply chains need to change as well. “We need to invest in building greater resilience to the kind of shocks we’ve seen, over and over, year in and year out, whether it’s the pandemic, extreme weather, climate change, cyber-attacks and other disruptions.”
Supply chains and the Biden agenda
Biden also used his address to push his administration’s agenda. For instance, he noted that his Build Back Better plan would provide massive investments in ports, highways and other infrastructure. His administration is trying to bring more manufacturing back to the U.S. so we can make more products from start to finish on our own shores instead of depending on cargo containers from oversees. He mentioned climate change, and talked about organized labor's place in the supply chain.
“A longer-term view means we invest in systems that have more time built in,” the president said. “It also means companies throughout the supply chain… reduce their carbon emissions and help to meet our climate change goals. It also means creating and supporting good paying jobs. It means more opportunities to join a union, especially for truckers.” Companies that have invested in their workers, he said, are able to pivot more quickly.
Following Biden’s address, the International Brotherhood of Teamsters issued a statement calling for the end of “misclassification” of port drivers as independent contractors.
“One of the major problems with the current state of logistics is the shortage of port truck drivers,” Teamsters General President Jim Hoffa said in a statement. “They are not paid a living wage and are largely treated as indentured servants. And that will continue until this country deals with the issue of misclassification which allows them to be subjugated by companies.
“If people can make an adequate wage with good working conditions, they will come to work. But that means they must be treated as employees who are allowed to organize with a union so they can negotiate proper compensation, benefits and workplace safety. Nothing will change until that happens.”
On the other hand, the Owner-Operator Independent Drivers Association issued a statement calling on the administration to deal with longstanding issues that affect the availability and productivity of both employee drivers and owner-operators, such as excessive detention time, truck parking, and difficulties in meeting regulations also affected by the pandemic and supply-chain issues.
“In recent months, global supply shortages have forced some truckers off the road,” OOIDA said in a statement. “Drivers are experiencing the domino effects of supply and staffing shortages which are preventing them from complying with federal regulations. Examples include drug and alcohol testing delays and difficulties finding replacement electronic logging devices, DEF filters, and CPAP machines. We encourage the U.S. Department of Transportation and other agencies to begin making some emergency allowances to keep safe, qualified drivers in business.”