(Washington Insider Magazine) -As the U.S. economy continues to open up in the aftermath of the COVID-19 pandemic, the global economy is facing historic supply chain bottlenecks that are impacting the availability of goods and services across a wide range of different industries from publishing to consumer goods. Surging demand has exacerbated this issue as consumers enter the holiday season, all while cargo ships remain in-port.
President Joe Biden has called on logistics and shipping companies to “step up” to meet the impending holiday demand. The President met with various stakeholders including executives from the ports of Los Angeles, Long Beach, and executives from the National Retail Federation, American Trucking Association and the Pacific Maritime Association.
Considering bottlenecks, the Port of Los Angeles is expected to expand to 24/7 operations. With 40% of all shipping containers imported to the US coming through either Los Angeles or Long Beach this expanded capacity is essential to improving the current situation.
The administration has also received pledges from major companies to intensify operations to expedite the shipping of goods across the country. Among these companies include Walmart, FedEx, and UPS. The estimated impact of these pledges is expected to be an additional 3,500 containers per week reaching their destination.
The bottleneck has been caused by a shortage of trucks and drivers to pick up the goods in port. This shortage coupled with high demand has resulted in most back-ups in all of the US’s largest ports in southern California, Seattle, and the New York area. The impending holiday season is expected to only exacerbate demand.
In addition to many goods not being delivered on time, the reduced supply is also impacting prices. According to one report, high inflation is expected well into 2022. Prices in essential industries such as food, energy, and housing continue to rise as wages remain constant causing Americans to tighten their budget. Some economists argue that this surge in inflation is temporary directly related to the pandemic and supply-chain bottlenecks. Others argue that this inflation is here to stay.
Whether or not surging prices are here to stay, the Biden administration is keen to address it by introducing a “supply chain disruption task-force” in June. Biden’s favorability is currently at an all-time low due to another wave of COVID in the delta variant, a criticized exit from Afghanistan and the current supply chain issue. The administration acknowledges that the government cannot guarantee a quick resolution to supply-chain issues but is committed to using all resources at the government’s disposal to make progress.
Major companies and the Biden administration will need a herculean effort to steward the country through this crisis. With a record number of cargo ships idling in port, essential goods and services are delayed as demand for those goods surges. Currently, wages are not growing relative to inflation worsening the country’s labor shortage. Meanwhile, a lack of truckers and workers maintains the problem causing the supply-chain bottleneck to begin with. Despite the complicated circumstances, the Biden administration will need to address this crisis to curb a falling approval rating.
