Associated Press/Evan Vucci
- The White House announced the Port of Los Angeles would move toward 24/7 operations.
- Major companies like Walmart and UPS also agreed to extend hours to help move goods.
- Experts told Insider Biden’s plan doesn’t address the entire issue.
President Joe Biden wants to clear traffic jams at US ports and save the holiday shopping season, but experts say his current plan won’t completely solve the problem.
The White House announced on Wednesday that the Port of Los Angeles would start processing ships 24 hours a day, seven days a week to help ease a near-record backlog of over 60 container ships waiting to unload. It also said that six companies, including Walmart, UPS, and FedEx had committed to extending their hours to help move the goods as a part of a 90-day sprint.
But Biden’s plans may sound more impressive than they actually are. Logistics experts told Insider the changes will have little impact on the supply-chain crisis and, if anything, could push the issue further down the supply chain.
“It’s great that they’ve chosen to do something, but we’re talking about a less than 1% to 2% change here,” Brian Whitlock, a supply chain analyst at Gartner, said. “The work that they’re talking about here is going to be immaterial. It probably won’t even be visible.”
Former US trade negotiator Harry Broadman told Insider the administration’s plan addresses the more “glamorous” aspect of the supply chain – hulking cargo ships stuck at sea – while failing to look at the issue “holistically.” Backlogs at US railroads and warehouses are also contributing to the delays. Shortages of warehouse workers, truck drivers, shipping containers, and chassis are also major issues that the White House failed to address.
Under the White House’s plan, the Port of Los Angeles will follow in the footsteps of its neighbor in Long Beach, which has been piloting a 24-hour program Monday through Thursday. Since it launched in September, the port has seen zero uptake in the added hours between 3 a.m. and 7 a.m., according to Bloomberg.
Everyone needs to get ‘on the same page’
At the time, Port of Long Beach executive director Gene Seroka said longer hours will do little to address the backlog when truckers and warehouse operators have not similarly extended their hours. It’s not ideal for truckers to pick up loads at night when they’d have to find alternative places to store the goods when the warehouses are not open at night.
Plus, the terminals are run by private companies which port officials are still working with to create timelines for extending hours and coordinating with importers to pick up their cargo. Seroka said the issue will not be solved until everyone within the supply chain gets “on the same page” – a near-impossible proposition, considering warehouses and trucking companies are fractured into a multitude of small to mid-sized companies.
“The issue is non-linear,” Mike Tran, RBC’s managing director for digital intelligence strategy, told Insider. “It’s not just about getting people to work or extending hours. The issue has spread throughout the entire supply chain, each leg of the journey is delayed.”
What’s more, the added hours will not make a significant impact on the backlog. It will help the ports move about 3,500 more containers a week – a small fraction of the more than 950,000 containers moved in August and the 500,000 waiting to dock and unload.
It’s up to individual companies to solve the problem
Broadman said the supply-chain crisis is mostly out of the president’s control, unless the government began regulating or penalizing companies within the supply chain.
“There’s nothing much that the Biden administration can do in the short or even medium-term,” he said. “The logistics industry is run by private actors and these private actors need to solve it.”
It will be crucial that private companies that power the supply chain work together. Whitlock said securing commitments from companies like Walmart, Target, and Home Depot could be the first of many steps toward this.
White House officials have admitted that addressing the backlogs will not be like “flipping a light switch.”
“This is a big first step and it’s feeding at the movement of materials and goods through our supply chain,” But now we need the rest of the private sector chain to step up as well,” Biden said Wednesday. “And if the private sector doesn’t step up, we’re going to call them out.”
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