The disruptions that are currently snarling supply chains across the globe and the United States will “certainly” continue into next year, U.S. Transportation Secretary Pete Buttigieg said on Oct. 17.
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 up 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 mayor of South Bend, Indiana, also was asked on Oct. 17 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.
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 Oct. 14. “If you cannot get labor, you cannot get trucks, you cannot get the merchandise out.”
Steven Ricchiuto, a 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 on the docks due to delayed pickups, from chassis shortages and a lack of space in railyards and warehouses, officials told the news outlet. And that’s 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.