Big U.S. businesses promise to increase working hours to simplify supply chain backlogs

Joe Biden has confirmed pledges from Walmart, UPS and FedEx to extend their working hours to put pressure on the U.S. and global economic recovery.

The three companies on Wednesday pledged to move towards a 24-hour, seven-day-a-week model as part of a broader effort to bridge the gap between excess demand and lagging supply.

Corporate America’s steps were unveiled at a White House conference hosted by Biden, who met with business leaders, port and freight officials, and union officials to discuss the crisis in the global supply chain.

“I know you’re hearing a lot about something called the supply chain and how hard it is to find different things from toasters, sneakers, bicycles to bedroom furniture,” Biden said after the event. “Today’s announcement is likely to be a game-changer.”

Senior officials in the Biden administration noted that UPS and FedEx together sent 400 percent of the American package in 2020 and that their move would inspire others to do the same. They have also teamed up with Target, Home Depot and Samsung to take steps to move more containers outside the port.

The Biden administration is pressuring rail freighters, trucking groups and ports to increase their own capacity to meet growing demand. Many have struggled to find adequate staff, and the lack of warehouse space near the port has exacerbated the barriers.

A senior administration official said Port of Long Beach, California, moved to work on the 2/7 schedule about three weeks ago, when neighboring port Los Angeles decided to join it with critical support from the International Lancer and Warehouse Union.

“It is up to the terminal operators to actually book cargo movements between those open and closed periods, so Labor has promised that they will be there. We know they are committed to it, ”the official said.

The move by the White House to increase the bell and capacity of corporate America more aggressively has come amid growing concern that the economic recovery will stall for a long period of supply chain constraints that could also contribute to rising inflationary pressures.

In an interview with CBS on Tuesday, U.S. Treasury Secretary Janet Yellen said supply chains were “very under pressure”, noting that “about 100 ships” were docked outside the ports of Los Angeles and Long Beach “awaiting shipment.” But he was also confident that the problems would be solved.

“There could be isolated shortages of goods and services in the coming months. But there is ample supply of goods. And I think consumers have no reason to panic at the absence of the things they want to buy at Christmas, ”Yellen said.

Some analysts warned that the measures announced on Wednesday would not be enough. Gartner research analyst Brian Whitlock, who specializes in chemistry, said it would be too late for retailers to alleviate the holiday season worries.

“It’s taking 60 days to get out of what’s sitting in the ports today, so Christmas is gone,” he said. “Sure, each helps a little but in terms of what needs to be done it’s a drop in the ocean.”

IHS market data measures how fast port process containers show North American ports are one-third as efficient as Asian ports.

“Because of this coveted lockdown, you have a highly efficient port to send these large ships into the waves,” he said. “They are unloading these huge ships. . . One-third of those ports are efficient. At the end of the day they need to do a better job of unloading the container from the port. ”

According to a fact sheet distributed by the White House, Walmart specifically promises to increase its nighttime hours “significantly”, its “throughput” – or capacity – by “50%” over the next few weeks.

UPS has promised to work around the clock and share more data with the port. FedEx said it would change rather than double the amount of cargo out of port at night.

Biden’s attention has intensified over the years as it has become a source of weakness for the otherwise strong, stimulus-fueled U.S. economic recovery and a potential point of political weakness for Democrats ahead of next year’s midterm elections.

In June, the president created a task force to tackle supply chain problems between semiconductors to rare earths and pharmaceutical ingredients. But the supply chain crisis has now escalated to more basic consumer goods, putting additional pressure on corporate America to help clear backlogs.

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