Although the White House announced initiatives by ports and shipping companies to help repair the country’s frayed supply chain, experts say it will not be enough to fix the strain before Christmas.
The administration announced that the Port of Los Angeles, mired in delays and backlogs, will begin operating on a 24/7 basis in an attempt to have products move from overseas into the country more quickly. Several companies such as FedEx and UPS also announced they would scale up operations as the holiday season approaches.
Bobby Harris, founder and CEO of BlueGrace Logistics, told the Washington Examiner during a Thursday interview that while the country’s supply chains could “directionally” improve by the end of the year as a result of the actions, they “won’t sufficiently improve by that time.”
“It’s virtually impossible,” Harris remarked.
The White House itself has acknowledged not all packages and gifts people have ordered will arrive by Christmas.
“There will be things that people can’t get,” a senior White House official told Reuters. “At the same time, a lot of these goods are hopefully substitutable by other things … I don't think there’s any real reason to be panicked, but we all feel the frustration, and there's a certain need for patience to help get through a relatively short period of time."
Some of the concessions the White House obtained include Samsung operating 24/7 for the next 90 days, Walmart increasing off-hours operations, and Home Depot committing to move 10% additional containers per week on the Port of LA’s new off-hour schedule, among other commitments.
Harris said that while those actions are marginal compared to the massive backlogs and delays at U.S. ports and shipping facilities, “when it comes to supply chains, sometimes it takes just something marginal to make a difference.”
The Port of LA and the Port of Long Beach account for roughly 40% of U.S. imports. While the Port of Long Beach was already 24/7, opening the Port of LA to nonstop operations will help improve the current situation, according to Angeli Gianchandani, a professor of brand marketing at the University of New Haven.
“It’s [Biden’s] effort to keep things moving, and it will help at least prevent some of the surges in pricing and force on inflation,” she said. "But I do think we will still have an impact on retail because I think once you get around to Black Friday and Cyber Monday, supplies will be limited due to the supply chain challenges.”
Gianchandani told the Washington Examiner that despite customers being eager to shop amid pent-up pandemic demand, U.S. consumers should expect fewer deals and discounts than in the past because of the supply chain constraints.
She predicted it could take anywhere from six to eight months for the supply chain problems to abate fully — well past Christmas.
While supply is crunched, demand is surging.
Imports to the Port of LA are up 30% this year compared to last. Dozens of ships are consistently moored outside of the port waiting to be unloaded, and some 250,000 containers of shipments are sitting at the docks awaiting pickup, according to Reuters.
Earlier this week, about 60 container ships were reported offshore the dual California ports, down from a peak of 73 container ships roughly two weeks ago.
Experts say the supply chain crisis will also likely affect the way people shop during the holiday season.
U.S. consumers who intend to purchase items online should be wary of the expected delivery date, Harris said. The executive, who has decades of experience in the supply chain industry, said he advises people to manage their expectations because their goods could arrive much later than anticipated.
For those wishing to gift certain hot-ticket items, such as a popular pair of sneakers or large items, customers should consider gift cards instead, given the uncertainty of whether the product will arrive in time to wrap and give away on Christmas, Harris said.
The supply chain issues, which lead to higher costs and longer shipping times, may precipitate new patterns of gifting this holiday season.
Gianchandani predicted a rise in sustainable gift-giving and “upcycling” this year, which is the repurposing and regifting of items already preowned and at consumers’ disposal. She noted websites such as the Real Real and Rebag, luxury consignment sites where one can buy used designer clothing or bags that can be shipped domestically.
“Old is new again,” Gianchandani said.
Washington Examiner Videos
Original Author: Zachary Halaschak
Original Location: White House efforts won't save Christmas from supply chain problems