Transportation Secretary: Supply Chain Crisis ‘Will Continue Into Next Year’

Jack Phillips
By Jack Phillips
October 17, 2021Businessshare
Transportation Secretary: Supply Chain Crisis ‘Will Continue Into Next Year’
Secretary of Transportation Pete Buttigieg speaks during a press conference to announce the "Gateway Turnaround" Hudson Tunnel project at Penn Station in Midtown Manhattan in New York City on June 28, 2021. (Michael M. Santiago/Getty Images)

The disruptions that are currently snarling supply chains across the globe and the United States will “certainly” continue into next year, said Transportation Secretary Pete Buttigieg on Sunday.

Last week, some industry groups and companies said that the White House won’t be able to alleviate supply shortages and bottlenecks before Christmas arrives, potentially causing more political damage to President Joe Biden amid shortages and a spike in inflation. Meanwhile, images of dozens of cargo container ships seen waiting outside two California ports drew headlines, as the ships are expected to be stuck there for months before they can unload.

“Certainly a lot of the challenges that we’ve been experiencing this year will continue into next year. But there are both short-term and long-term steps that we can take to do something about it,” Buttigieg told CNN, adding that “part of what’s happening isn’t just the supply side, it’s the demand side. Demand is off the charts.”

Suggesting Congress needs to act quickly and with no immediate solution in sight, Buttigieg said the bottlenecks are “why we need to pass the infrastructure bill” worth $1.2 trillion.

“There are $17 billion in the President’s infrastructure plan for ports alone and we need to deal with these long-term issues that have made us vulnerable to these kinds of bottlenecks when there are demand fluctuations, shocks, and disruptions like the ones that have been caused by the pandemic,” he said.

The infrastructure bill is currently being held in the House as some progressive Democrats said it will only be passed if the Senate approves the $3.5 trillion social and climate spending bill.

The former South Bend, Indiana, mayor was also asked a question on Sunday about whether it would be prudent for Americans to get their Christmas shopping done early.

“Obviously, every family makes its own preparations for Christmas or the other holidays,” Buttigieg said, without directly answering the question.

port Los Angeles
Shipping containers are unloaded from ships at a container terminal at the Port of Long Beach-Port of Los Angeles complex in Los Angeles, Calif., on April 7, 2021. (Lucy Nicholson/Reuters)

The comments come after the Biden administration announced that the Port of Los Angeles will remain open for 60 extra hours per week to deal with the backlog of shipments. Biden also secured commitments from UPS, FedEx, Walmart, and other companies to dedicate more shifts to ship goods.

But some executives have said the White House’s plan is too late.

“Whether the ports are open 24 hours a day or 48 hours a day, you cannot get labor,” MGA Entertainment CEO Isaac Larian said in a Fox News interview on Thursday. “If you cannot get labor, you cannot get trucks, you cannot get the merchandise out.”

And Steven Ricchiuto, U.S. chief economist at Mizuho Securities said the White House’s plan won’t likely be able to deal with the root causes of the problem.

“What the president’s doing isn’t going to really hurt. But at the end of the day, it doesn’t solve the problem,” he told Reuters.

About 250,000 containers of goods are currently stacked up on the docks due to delayed pickups, from chassis shortages and a lack of space in rail yards and warehouses, officials told the news outlet. And that is causing dozens of ships to back up at anchor outside the port.

“The analogy would be the boa constrictor that ate the mouse. There’s a lump in it and the lump is the constraint in the throughput of the supply chain, and it moves along each time you solve for a constraint,” said Joe Dunlap, the global head of the supply chain advisory team at CBRE Group.

From The Epoch Times

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