November at-a-glance … supply chain

Companies, organizations, state and federal governments align to address supply chain challenges

In response to President Biden’s call to encourage every link in the goods movement supply chain to move to a 24/7 pace to increase volume, players all along the process have stepped up. For example:

  • The ports of Los Angeles and Long Beach and the International Longshore and Warehouse Union (ILWU) made one of the first commitments to work extra shifts.
  • Some of the largest companies in the U.S. – Walmart, Target, FedEx, UPS, Home Depot and Samsung – committed to spearheading innovative solutions like moving goods during off-peak hours.
  • California has identified state-owned sites to serve as temporary warehouses and will allow trucks to carry more goods.
  • Union Pacific moved to a 24/7 schedule for its terminal near the ports and announced discounts to customers moving containers by rail.
  • The U.S. Department of Transportation (DOT) announced $5 billion in loans to help modernize California’s ports.
  • California Governor Newsom ordered state agencies to develop longer-term proposals to support port operations for consideration in the January 2022 budget.

According to the White House, “We need to seize this moment to strengthen our country’s future competitiveness by focusing longer term on building the resilience of our nation’s supply chains. That includes a goods movement chain that is more resilient, fluid and can operate at a higher velocity. For too long, our country has underinvested in the roads, railways, ports and projects that propel goods movement. With the Infrastructure Investment and Jobs Act (see story in Regulations), we can make the fundamental changes that are long overdue for our ports, rail and roads.”

On NAFEM’s Nov. 4 Advocacy Update webinar, Jon Gold, vice president, customs policy, National Retail Federation (NRF), who also leads the Ocean Shipping Reform Act Coalition, concurred that the pandemic simply highlighted the supply chain infrastructure issues the U.S. has been facing for a long time. “There is not a single approach to fixing the issues because demand for goods, inputs and raw materials is outpacing the available supply of everything, including containers, vessels, ports, chassis and workers.” (See story below).

Shipping reform bill needs NAFEM members’ support

While the Biden Administration is encouraging U.S. supply chain players to collaborate and increase their pace to a 24/7 model to get goods off ships and to businesses and consumers, ocean carriers continue ignoring contractual commitments and force shippers to secure capacity at record rates.

“U.S. importers and exporters are paying the highest ocean shipping rates ever recorded for the worst service levels ever experienced,” according to Jon Gold, vice president, customs policy, National Retail Federation (NRF), who also leads the Ocean Shipping Reform Act Coalition.

A longer-term solution to this challenge was introduced in the bipartisan Ocean Shipping Reform Act of 2021 (OSRA 2021). The bill would increase the authority of the Federal Maritime Commission to:

  • Prohibit charges when containers are unavailable to shippers.
  • Require carriers to provide a notice of cargo availability, container return locations and adequate notice of dates when the export container must arrive at the terminal.
  • Prevent carriers from restricting access to containers, chassis or other equipment.

Although OSRA 2021 is widely supported by importers and exporters, the dray community, foreign ocean carriers and certain marine terminal interests oppose it. The bill, introduced in the House in August, has been referred to the Committee on Transportation and Infrastructure. NAFEM advocated for passage of the Act, along with 152 groups, including 59 companies and 93 trade associations. Members also are encouraged to reach out to their federal representatives to do so. The coalition provided a sample letter and informative fact sheet  to facilitate this important outreach.

Members with questions are encouraged to contact Charlie Souhrada, CFSP, vice president, regulatory and technical affairs.

New biweekly U.S. dashboard to track progress on supply chain disruptions

The Biden-Harris Supply Chain Disruption Task Force unveiled a biweekly dashboard it intends to provide to track ships at anchor outside the ports of Long Beach and Los Angeles. The dashboard also will monitor the dollar volume of imports, retail inventory levels and in-stock indicators. According to Task Force members, “Our commitment to tackle bottlenecks and inefficiencies is aimed at helping to get goods to the families and businesses that need them as our economy continues to recover from the pandemic.” The administration intends to provide this information at least through year-end. The Nov. 2 dashboard reported 75 ships waiting to dock at the two ports, as well as the following data: