Large U.S. companies promise to extend working hours to mitigate supply chain backlog

Joe Biden has secured a pledge from Wal-Mart, UPS and FedEx to extend working hours to alleviate supply chain bottlenecks that are squeezing the recovery of the US and global economies.

On Wednesday, the three companies promised to move to a 24/7 model as part of a broader effort to close the discrepancy between demand surges and supply delays and alleviate shortages.

The move from American companies was announced at the White House Summit hosted by Biden. Biden met with business leaders, port and cargo executives, and union officials to discuss tensions in the global supply chain.

“I think you’ve heard a lot about what’s called a supply chain. How hard it is to get everything from toasters to sneakers, bicycles to bedroom furniture,” Biden said after the event. “Today’s announcement could be a game changer.”

Biden’s senior executives said UPS and FedEx combined to ship 40% of US packages in quantity in 2020, driving the move to do the same for others. They also picked Target, Home Depot, and Samsung for taking steps to move more containers out of the port.

The Biden administration is urging rail freight companies, truck groups, and ports to build their own capabilities to meet growing demand. However, many are struggling to find enough staff, and the lack of warehouse space near the port exacerbates the bottleneck.

A senior official took steps to operate the Port of Long Beach in California on a 24-hour, 24/7 schedule about three weeks ago, while the adjacent Port of Los Angeles is the International Longshore and Warehouse Union.

“It’s up to the terminal operator to actually open those hours and book the cargo movements off-hours, so the workers promised they were there. They’re committed to doing this. We know that we are, “said officials.

The White House’s move to push more time and capacity to U.S. companies raises concerns that a prolonged supply chain bottleneck, which could also contribute to rising inflationary pressures, will hinder economic recovery. It happens while you are.

In an interview with CBS on Tuesday, U.S. Treasury Secretary Janet Yellen said “nearly 100 ships” were “waiting for goods to be unloaded” outside the ports of Los Angeles and Long Beach. “It’s very stressful,” he said. .. But she was confident that the problem would be resolved.

“In the coming months, we may run out of products and services on their own. But the products are well-supplied, and I don’t think there’s any reason to panic that consumers don’t have the products they want. increase Get on Christmas“Yellen said.

Some analysts warned that the measures announced on Wednesday were not sufficient. Logistics specialist Gartner research analyst Brian Whitlock said it was too little and too late to alleviate retailers’ holiday season concerns.

“Christmas is over because sitting in the harbor today takes 60 days to get out,” he said. “Sure, it helps a little, but it’s a drop in the ocean in terms of what you need to do.”

According to Whitlock, IHS Markit data, which measures the speed at which ports process containers, shows that ports in North America are one-third as efficient as ports in Asia.

“Because of the blockade of these Covids, these highly efficient ports are sending these big ships in waves,” he said. “They are unloading these huge ships … to one-third efficiency ports. After all, they have to do a better job of getting containers out of the port.”

According to a fact sheet distributed by the White House, Wal-Mart is particularly committed to “significantly” increasing nighttime use and increasing “throughput” or capacity “up to 50% in the coming weeks.” “.

UPS is committed to promoting 24-hour operation and more data sharing with ports. FedEx said it will make changes to double the amount of cargo leaving the port at night.

Biden Focus on the supply chain A year as it is a source of weakness in the U.S. economic recovery, supported by strong stimuli elsewhere, and a potential point of Democratic political vulnerability ahead of next year’s midterm elections. Is intensifying.

In June, the President established a task force to address supply chain problems in the following areas: semiconductor For rare earths and pharmaceutical ingredients. However, the supply chain crisis is now spreading to other, more basic consumer goods, putting additional pressure on US companies to clear their outstandings.

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Large U.S. companies promise to extend working hours to mitigate supply chain backlog

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