Supply chain experts look at the causes and solutions for the delay
America is experiencing a supply chain backlog that has left dozens of ships anchored in the Pacific Ocean and store shelves across the country empty, and experts say every step of the supply chain knows its own challenges, brought on by labor shortages and a pandemic-induced online shopping spree.
White House Chief of Staff Ron Klain and Transport Secretary Pete Buttigieg have come under fire for their comments on the supply chain crisis, with Buttigieg claiming the shortage came from President Biden who managed to pull the economy “out of the teeth of a terrifying recession.”
But experts say the causes and solutions to the supply chain crisis are manifold and date back further than Joe biden presidency.
Association of American Railroads (AAR) senior vice president of politics and economics John Gray told Fox News Digital that the crisis began in mid-summer last year “when the economy took the big leap that we saw in April and May “.
The crisis is now affecting all industries in the supply chain, and each is taking action to clear the backlog.
Ports have been at the center of discussions over supply chain backlogs, where dozens of ships are off the coast of California waiting to unload their cargo at ports in Long Beach and Los Angeles.
While many ports experience this congestion, this is not the case everywhere. governor of florida Ron DeSantis announced that his state’s seaports are “open and ready to meet vacation demand.”
Robert Bernardo of the Port of Oakland also said they are not experiencing congestion and are ready to take more business.
Solving the problem, however, is not as easy as redirecting congested traffic from Los Angeles to Oakland. “Seaports are a very complex network, it’s like a domino effect,” Bernardo said.
Bernardo noted that commodities and consumer spending are at the root of the products leaving container ships at ports and that the “root cause” of the backlog in the supply chain is an increase in demand. e-commerce. The pandemic, he said, “has transformed” the way Americans shop.
Online holiday shopping this year is expected to hit a record $ 207 billion, according to Adobe’s Digital Economy Index.
Many products that enter U.S. ports are transported across the country by rail, and AAR’s Gray said backlogs in other areas of the supply chain have had a negative impact on the ability to ship. its industry to deliver products.
Gray cited an “unprecedented” volume of products moving through the supply chain, along with labor shortages, creating a backlog and preventing products from reaching their destination.
“You can’t just add 10, 15, 20% capacity overnight,” Gray said, noting that the rail industry has struggled to keep up with the increased demand, but the influx of products put a strain on all levels of supply. chain.
The solution, he said, will take time, and there is “no magic”.
“The administration will not be able to write an executive decree that can clarify this,” he said. “It’s one of those things that the buying frenzy is going to have to work its way through the system.”
However, having 24 hour operations throughout the supply chain will be essential.
“Our systems have to operate 24/7,” he said. “They always have.”
The labor shortage that plagues almost every industry in the United States has resulted in a shortage of 80,000 truck drivers, according to the American Trucking Association.
This, along with labor shortages along the supply chain, created the “perfect storm,” California Trucking Association CEO Shawn Yadon told FOX Business’s Maria Bartiromo.
Like other industry leaders, Yadon said there are no quick fixes to clearing the backlog. “The overall solution must come from all stakeholders in the supply chain,” he said, noting that every industry must be “in sync”.
“If you look at every step or link in this supply chain, each of us has to be part of the solution. ”
CALIFORNIA TRUCKING INDUSTRY LEADER WARNS WORKERS ‘SHORTAGE
Eric Hoplin though the National Association of Wholesaler-Distributors has said his industry makes up one-third of the US economy, but like many others is facing serious staff shortages that could be made worse by Biden’s vaccination mandate.
“Everyone struggles to find a lot of people to work with, and everyone has retention issues.,Hoplin told Fox News Digital.
Biden’s vaccine mandate, which requires federal contractors to be vaccinated or terminated, could force companies to lay off tens of thousands of workers a few weeks before Christmas, Hoplin said.
“If the president doesn’t act, Joe Biden will truly be the Grinch who stole Christmas,” he said.
“Imagine what will happen a few weeks before Christmas when the supply chain gets even worse. American families will not be able to get the gifts they hope to receive under the tree.”
Hoplin noted that his industry is striving to increase staff and keep store shelves well stocked, but they expect supply chain challenges through 2022.
For many exporters, the inability to source domestically also means difficulty getting products out of the country, according to California Business Roundtable President Rob Lapsley.
He called the export “the other half of the crisis” and noted that agricultural exporters are “almost in panic”.
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“Agriculture depends only on being able to move its goods … in a timely manner so that they do not spoil, so that they reach their markets in the right months for when they are consumed, especially to China, Japan and Asia -Pacific countries. ”
“They have nothing in terms of relief,” he said. “So being able to transform those exports is going to be critical now … throughout 2022.”
Fox News’ Daniella Genovese contributed to this report.