Contact Us

Biden Steps In To Push West Coast Ports To 24/7 Operations As Supply Chain 'Disaster' Snowballs

President Joe Biden on the phone in the Oval Office of the White House in 2021.

With the global supply chain in unprecedented levels of disarray, President Joe Biden has stepped in to try and save Christmas for U.S. consumers and businesses alike.

Biden will unveil a plan on Wednesday to expand operating hours at the Port of Los Angeles and its neighbor, the Port of Long Beach, to 24/7 in an attempt to ease historic congestion of shipping barges and containers, CNBC reports. The plan is expected to be announced at a virtual meeting with shipping giants FedEx and UPS — which, along with the United States Postal Service, announced their ship-by dates for arrival by Christmas — as well as massive retailers Home Depot and Walmart, all of which are expected to go 24/7 with their own port operations. 

The two Southern California ports are responsible for 40% of the shipping containers coming to the U.S. from overseas, and each of them has dozens of ships waiting offshore for docks where they can unload their goods; in previous years, even one ship waiting offshore was rare. The situation is just one of several issues plaguing every company that ships either materials or finished products across the oceans.

Expanding the operations at those ports to around-the-clock hours requires buy-in from the International Longshore and Warehouse Union, which Biden is expected to secure, CNBC reports. The entities that operate the ports are expected to pay for the extra hours, but even a more efficient port operation won't affect factories shut down in Asia due to health measures and coronavirus outbreaks, nor will it alleviate the shortage of long-haul truck drivers who are crucial to moving goods from shipping nodes to regional and local distribution centers.

To this point, the most powerful companies had been able to wield their influence and pocketbooks to avoid the worst of the bottlenecks, but now even Apple has been forced to cut its iPhone production targets for next year, Bloomberg reports. Among the materials experiencing the deepest shortages are semiconductors, which are crucial for the chips that go in everything from smartphones to cars to refrigerators.

Logistics have become a headache or worse for virtually every company, as the supply chain has been mentioned over 3,000 times during quarterly earnings calls this year, a record by far, Bloomberg reports. Though many retailers have been attempting to secure goods for the holiday season for months now, the shipping backlog is severe enough that a significant number of companies still have anticipated holiday inventory waiting to be unloaded at ports. 

Based on the tenor of many recent earnings calls and the occasion of the president stepping in, the crisis is expected to worsen further over the coming months.

“Supply chain is taking center stage on earnings calls as the supply chain is a disaster,” R5 Capital analyst Scott Mushkin told Bloomberg. "Honestly, there's a chance the system breaks down during the holidays."

As the competition for shipping containers and space on barges has been feverish enough to keep prices rising for months, the average cost of consumer goods is rising enough to sound inflation alarm bells, Bloomberg reports. The issue runs deep enough to have a significantly negative impact on the overall U.S. economy.