Eye on Retail: Watching the ports

Three of the nation’s largest goods carriers pledged to increase their efforts to address supply chain problems that are already causing some bare shelves across stores.

The Biden Administration announced Wednesday that Walmart, FedEx and UPS will expand their efforts to help with ongoing supply chain bottlenecks and shortages resulting from the pandemic. Other companies, including The Home Depot and Target, also joined the effort. The move comes as 500,000 containers are waiting to be offloaded from cargo ships at the clogged ports of Los Angeles and Long Beach.

President Biden met with leaders from the Port of Los Angeles, the Port of Long Beach and the International Longshore and Warehouse Union to discuss supply issues at the two ports. The White House said that the Port of Los Angeles will join the Port of Long Beach in stepping up its round-the-clock operations, with members of the union willing to work the extra shifts in order to keep operations open nonstop.

“With the holidays coming up, you might be wondering if the gifts you plan to buy will arrive on time,” Biden said, speaking from the White House. “Today, we have an important announcement that will get things you buy to you and to the shelves faster.”

Walmart will increase its use of night-time hours significantly. The retail giant projects it could increase throughput by as much as 50% during the next several weeks. 

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The Home Depot will move up to 10% additional containers per week during the newly available off-peak port hours at the Ports of L.A. and Long Beach. And Target, which is currently moving about 50% of its containers at night, is increasing that amount by 10% during the next 90 days to help ease congestion at the ports.

In other commitments to help ease congestion:

• UPS will increase its use of 24/7 operations and enhanced data sharing with the ports, which could allow it to move up to 20% more containers from the ports.
• FedEx is committing to work to combine an increase in night time hours with changes to trucking and rail use to increase the volume of containers it will move from the ports. Once these changes are in place, the company could double the volume of cargo it can move out of the ports at night.
• Samsung will move nearly 60% more containers out of the ports by operating 24/7 through the next 90 days. (72% of U.S. homes have at least one Samsung product, from appliances to consumer electronics.)

Across these six companies, more than 3,500 additional containers per week will move at night through the end of the year.

“And this is just a start—these commitments provide a clear market signal to the other businesses along the transportation supply chain—rails, trucks, and warehouses—that there is demand to move additional cargo at off-peak hours,” according to a fact sheet from the White House.

“We thank President Biden, Vice President Harris, Secretary Buttigieg, Director Deese and Port Envoy John Porcari for their leadership to address the ongoing global supply chain disruption,” said Matthew Shay, president and CEO, National Retail Federation. “It is critically important that we all come together – business, labor and government – to address the current issue regarding port congestion, and the long-term need to create a more reliable supply chain globally and within the United States. NRF has been urging more focus and resources to address supply chain failures for many years, and we look forward to continued efforts that result in sustainable solutions for this growing problem.”

In June, the White House announced it would launch the Supply Chain Disruption Task Force to address the supply chain challenges caused by the pandemic.

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This article originally appeared in HBSDealer's sister publication Chain Store Age.