Political leaders are becoming desperate over the threat that congestion in the logistics sector poses to their nation’s economies. The situation in the US is particularly bad, leading American president Joe Biden to make an appeal to major logistics providers to work harder to solve the problems.
At a special press conference at the White House yesterday at which the CEOs of the port of Los Angeles, port of Long Beach and a string of logistics service providers including FedEx and UPS attended, Mr Biden said an agreement had been made to help ease the crisis; “After weeks of negotiation and working with my team and the major unions, retailers and freight movers, the port of Los Angeles announced today that it is to begin operating 24 hours a day. This follows the port of Long Beach commitment to 24/7 that it made weeks ago. The 24/7 system that most of the leading countries of the world operate until now, except us…this is the first key step to moving our logistical supply chain nationwide to operating a 24/7 system”. It seems that the idea the politicians have is that by increasing the time available for ports, trucks and railways to work they will increase capacity.
However, remarks by the PR staff at the Whitehouse after the event suggested that they are not confident that the problem will be solved entirely, with Jen Psaki, the White House Press Secretary, stating that “we are not the Postal Service or UPS or FedEx. We cannot guarantee. What we do is use every lever at the federal government’s disposal to reduce delays”.
Of course, one of the problems is that supply chains are global. One region may, somehow, provide more truck drivers however that is not going to solve the problem of insufficient container ship capacity. What Joe Biden’s intervention does demonstrate is that congestion is becoming so severe that it is threatening macroeconomic prospects, something for which the politicians might be blamed.
Source: Transport Intelligence, 14th October 2021
Author: Thomas Cullen
GLOBAL SUPPLY CHAIN INTELLIGENCE (GSCi)