This cargo ship, photographed on October 6, 2021, was forced to wait offshore due to delays at the ports of Los Angeles and Long Beach
New York (AFP) - The Port of Los Angeles and its longshoreman union will provide 24-hour service to alleviate backlogs that have exacerbated global supply chain problems, the White House said Wednesday.
US President Joe Biden announced the commitments at a meeting with the leaders of the giant West Coast port and the International Longshore and Warehouse Union.
The White House said it also won commitments from companies including Walmart, FedEx and UPS to work extended hours and move towards a 24-hour-a-day schedule in some operations.
“The commitments being made today are a sign of major progress,” Biden said. “And now we need the rest of the private sector chain to step up.”
While more costly in terms of providing overtime pay, there are benefits to companies providing round-the-clock service. For example, truckers working overnight will encounter less traffic, an administration official said.
The announcements come as myriad supply chain and logistics problems pose fresh challenges to the global economic recovery from the worst months of the Covid-19 pandemic.
On Tuesday, the International Monetary Fund warned that supply chain disruptions are driving price increases as it trimmed its growth outlook in an increasingly uneven global recovery.
US Treasury Secretary Janet Yellen urged Americans not to panic despite the rising prices and shortages of some goods, adding that price increases are not likely to last.
However there were few signs of a break in Labor Department consumer price index data released Wednesday, which showed inflation increasing 5.4 percent in September from the same month last year.
There are several factors behind the shortages of key raw materials and finished goods now plaguing retailers, including factory outages in countries that have imposed lockdowns due to Covid-19, unexpected demand spikes for some goods as behavior changed during the pandemic and a nationwide labor crunch.
US President Joe Biden speaks about efforts to address global supply chain bottlenecks at the White House in Washington on October 13, 2021
But the backlog at US ports has been a major contributing factor to the problem, with the neighboring ports of Los Angeles and Long Beach at times having 60 or more vessels offshore unable to anchor. The California ports are a key gateway for goods made in Asia.
Officials said that Long Beach had already shifted to 24-hour service and that Los Angeles was now committing to the same.
Administration officials said they understood that almost all of the supply chain is controlled by the private sector, and Biden said, “If the private sector doesn’t step up, we are going to call them out and ask them to act.”
“We need to take a longer view and invest in building greater resilience to withstand the kind of shocks we’ve seen over and over.”