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Biden will announce expanded operations at Port of Los Angeles as supply chain crunch continues

Chris Megerian and Don Lee, Los Angeles Times on

Published in Political News

Since then, shortages and bottlenecks have proved more persistent and widespread than many people, including those in the administration, had expected. The problems pose a serious risk to the economy, adding to inflation and constraining spending, which is crucial for the recovery. With companies unable to get parts and supplies, many haven’t been able to produce enough goods to meet growing demand, resulting in lost sales and delays in hiring as firms can’t ramp up as quickly as they would like.

IHS Markit, an economic forecasting firm, sees the annual pace of U.S. economic growth slowing to just 1.4% in the third quarter, down from a 6.7% growth rate in the second quarter, in part because of supply chain problems. Fourth-quarter growth is looking weaker than previously expected as well.

“I don’t know if there’s anything that can be done at the White House. I think the underlying cause is COVID-19, and not just in the U.S.,” said Ben Herzon, an economist at IHS.

Ramping up operations at the ports will take time. The Port of Long Beach recently began a pilot program to go to 24 hours at one of its six terminals, but it could take weeks or months before the facility can operate around the clock at all of its terminals — and then only if other crucial links of the supply chain come together.

For months now, container ships from Asia have faced unusually long waits for berths and to unload because there are not enough warehouses or warehouse workers, or enough truck drivers to haul the containers.

As of Tuesday morning, there were 58 container ships anchored near the ports of Los Angeles and Long Beach, said Noel Hacegaba, deputy executive director at the Port of Long Beach. Although that’s down from a peak of 73 two weeks ago, in normal times there would be few, if any, waiting to dock.

To help ease the bottleneck, the Port of Long Beach recently made 65 acres of vacant land available to be used as a temporary storage site. But that’s not nearly enough to handle the massive volume, especially ahead of the holiday season.

“The situation we’re in, it’s a system, and every link has to align,” Hacegaba said.

 

Hacegaba said he doesn’t expect relief from the supply crunch until next summer. Other experts say it could be early 2023 before the bottlenecks are cleared.

The magnitude of the shortage of drivers and warehouse workers is unprecedented. Job openings in the transportation, warehousing and utilities sector have been steadily increasing this year and reached 537,000 in August, a 67% increase from February 2020 before the pandemic, according to the Labor Department.

The Biden administration said it was working with states to accelerate licensing of truck drivers, but the shortage has been building for years as older drivers have left the field and fewer younger people have come to replace them.

“As a country, we’ve convinced every young person that they need to go to college to be successful, and we just don’t think that’s the case,” said Mark Allen, president of the International Foodservice Distributors Association.

He said one way to address the shortage is to lower the minimum age for interstate commercial driver’s licenses from 21 to 18, but that would require legislation.

The U.S. can’t fix the problems on its own. For example, China operates seven of the 10 largest ports in the world, and it recently suspended operations at some. Coronavirus infections have also disrupted operations at overseas factories.

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