The world’s supply chain is facing bottlenecks on every level trying to keep up with consumer demand as the world rebounds from disturbances as a result of covid-19, leading to shortages and record-high prices for everything from gasoline to semiconductor chips. Some experts believe that conditions may not improve in time for the holidays, despite President Joe Biden’s efforts to mitigate the problems.
Right now, armadas of cargo ships are piled up at ports, unable to drop their loads due to record port delays. In a year that some have described as being as busy as the holidays every day, the real deal is right around the corner. On Wednesday, President Joe Biden announced that to ease congestion ahead of Christmas, the port of Los Angeles will join the port of Long Beach in operating 24 hours a day, reports ABC News. Retailers like Walmart and Home Depot will increase nighttime hours. Transport companies like UPS and FedEx will follow suit.
The ports of Los Angeles and Long Beach are responsible for handling more than a quarter of U.S. imports, so bottlenecks and port delays there have a huge impact. It should be noted that the port of Long Beach’s operations aren’t truly 24 hours, Long Beach Post reports. Only the Total Terminal International terminal on Pier T is operating 24 hours a day, and only between Monday and Thursday.
As Reuters reports, experts think that operating 24 hours a day may not be enough to ease shortages and high prices by Christmas. Steven Ricchiuto, chief economist at investment bank Mizuho Securities minces no words about Biden’s plan. From Reuters:
“What the president’s doing isn’t going to really hurt. But at the end of the day, it doesn’t solve the problem.”
Business Insider notes that 77 percent of the world’s largest ports are facing backlogs of some kind and that things will get worse before they get better.
The problem goes beyond ports not operating 24 hours a day, seven days a week. As the Reuters report notes, there is a shortage of port truck drivers. Some port drivers aren’t paid for the hours spent waiting to move cargo. It’s easy to see why someone wouldn’t want a job like that.
It’s a similar story in warehouses, where there are lots of goods to be moved but they struggle to hire and keep workers.
Joe Dunlap, supply chain advisory team global head at real estate advisory firm CBRE Group compares it to a boa constrictor, from Reuters:
“The analogy would be the boa constrictor that ate the mouse. There’s a lump in it and the lump is the constraint in the throughput of the supply chain, and it moves along each time you solve for a constraint.”
Another expert in the Reuters report says that easing congestion in 90 days is ambitious.
Shoppers should start going through their holiday wishlists now to have the best shot. But even then, as a White House official says, there will be things that people can’t get. So if you don’t want Christmas to suck, don’t wait for Black Friday because things may not be better in time for the holiday shopping season.