Opening ports 24/7 only relieves one bottleneck: Transfix CEO

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CNBC Television published this video item, entitled “Opening ports 24/7 only relieves one bottleneck: Transfix CEO” – below is their description.

Lily Shen, the CEO of Transfix, joins The Exchange to discuss supply chain shortages and President Biden’s plan to open California ports for 24 hours a day, seven days a week. The ports are just one bottleneck, she tells Kelly Evans, but truck driver shortages and freight issues are still causing delays. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi

As supply chain bottlenecks around the world threaten to hobble the U.S. holiday shopping season, President Joe Biden will unveil a plan Wednesday to try to ease West Coast delays at the ports of Long Beach, California, and Los Angeles by expanding round-the-clock operations.

Central to this plan are commitments by some of the nation’s leading retailers and shippers to ramp up overnight and off-hours operations at Long Beach and Los Angeles.

FedEx, UPS, Walmart and Home Depot will announce their expanded-hours operation plans during a virtual meeting Wednesday with Biden, according to senior administration officials who briefed reporters Tuesday night.

The officials were granted anonymity in order to discuss private sector commitments that had yet to be made public.

The Port of Los Angeles will announce Wednesday that it is shifting to 24/7 operations, following a similar transition by the Port of Long Beach in September of this year, the official said.

Together, the ports of Long Beach and Los Angeles account for approximately 40% of the shipping containers entering the United States.

Another key stakeholder in the plan is the powerful International Longshore and Warehouse Union, which represents thousands of workers at the ports. The ILWU has previously said its members would be willing to work these extra shifts.

White House officials said “port operators” will be responsible for paying the longshoremen and actually keeping the ports open longer hours.

For the Biden administration, ramping up nighttime operations at West Coast ports, as well as along freight railroads, in warehouses and shipping hubs represents the fastest and most effective way to move goods off of the waiting container ships and ease pressure on the entire supply chain.

But merely unloading more cargo at the ports will do little to solve the problems plaguing the U.S. supply chain once goods travel further inland. The United States is currently in the midst of a trucking crisis, with a shortage of long-haul truck drivers so severe that some companies are looking for truckers abroad.

The situation at the California ports is dire.

On Oct. 7, there were reportedly around 60 container ships waiting in open water outside Los Angeles and Long Beach for berths to dock in and unload their goods. Before the coronavirus pandemic, it was unusual to see even one vessel waiting for a slip.

“Ordinary people and businesses are feeling the effects of these delays and bottlenecks. It makes it challenging to get products on the shelves, and for goods to be delivered to the doorstep,” the administration official said.

Experts say the massive bottleneck at the California port complex is the result of a combination of factors, both domestic and global.

Among them, a pandemic-related surge in demand for durable goods in the United States, an outdated domestic freight and rail system, factory shutdowns in places like China and Vietnam, and a shortage of skilled longshoremen on the West Coast.

Bottlenecks at the ports have created a domino effect within the larger economy.

Consumers are being advised to buy Christmas presents in October, for example, if they want to be sure to get a particular item.

Among retailers, both large and small companies are having an extremely difficult time securing cargo containers to transport goods to the United States from Asia, where the lion’s share of consumer products are manufactured.

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