White House Blog Post: ‘Improving and Tracking Supply Chains Link by Link’

White House blog post “Improving and Tracking Supply Chains Link by Link” tries to shed light on supply chain problems and solutions.

The White House says it will begin publishing a dashboard to help track key metrics in the supply chain, a term the Administration notes was once reserved for business logistics teams but has now become a household phrase.

In a blog post published Wednesday, the White House details how the Biden-Harris Supply Chain Disruptions Task Force is measuring and monitoring some of “the leading drivers of disruptions in our transportation and logistics supply chain, and the steps we are taking to ensure that goods continue to reach the households and businesses who depend on them.”

Economic recovery from the COVID-19 pandemic has exacerbated issues in the supply chain and contributed to disruptions in delivering goods from ships to store shelves. Overall, consumer spending is rebounding faster than previous economic recoveries and is almost back its pre-pandemic trend. But it’s “the composition of that spending” that has changed most drastically. Spending on consumer goods is far outpacing pre-pandemic trends, forcing the supply chains to move record volumes of goods, while spending on services is lagging.

“As the pandemic recedes, spending on goods is expected to decline and spending on services to rise. We are already seeing that with spending on goods in September well below its April 2021 peak, but we still have a ways to go,” the post says.

“The reshuffling of spending from services to goods as the public health situation improves will be critical for reducing disruptions.”

To track some of the disruptions, the White House will begin publishing a twice-monthly dashboard of metrics to track progress at both the ports of Los Angeles and Long Beach, as well as the economy at large. The blog post touches on three metrics that will be tracked; ships at Anchor outside the ports of Los Angeles and Long Beach, cumulative import volumes, and retail inventories.

As the blog post points out, ships at anchor outside the San Pedro Bay Port Complex (home to ports of LA and LB, which handle approx. 40% of the country’s import containers) has been “one of the most visible and widely reported-on indicators” of unusually high demand for goods.

This higher-than-normal demand is driving record import volumes through the ports of Los Angeles and Long Beach, highlighting the fact that “more—not less—goods are moving through our transportation and logistics supply chain, across our ports, warehouses, and stores.”

The Biden-Harris Administration will be closely tracking the cumulative number of imported containers processed and will be sharing the data twice per month. “Preliminary data for the first half of October indicates that the ports imported nearly 380,0000 loaded containers for a cumulative 8.1 million containers imported this year. That suggests the ports remain significantly ahead of where they were at the same point in 2018 and are on pace to break new records by year’s end,” the blog post says.

To see that goods are delivered to store shelves, the Administration will monitoring inflation-adjusted retail inventories, excluding autos, which at the end of September were 4% higher than a year ago and actually above pre-pandemic levels, suggesting that the supply chain is in fact succeeding in keeping store shelves stocked, the blog post says. The IRI Supply Index “similarly shows that retail stores’ rates of keeping goods in-stock is 89 percent, near the pre-COVID level of 91 percent.”

“We will continue to track cumulative container imports, retail inventory levels, and in-stock indicators, to help us monitor the ability of this historically high volume of goods to make their way to warehouses and store shelves, comparing inventory levels to the pre-pandemic period.”

As U.S. consumer demand continues nearly unabated, the post points out that “decades of neglect and underinvestment in our infrastructure have left the links in our goods movement supply chains struggling to keep up with the rapid and persistent increase in goods movement that the pandemic has generated.”

The post continues by highlighting commitments by ports, labor unions, state and federal governments, and private industry to speed the flow of cargo through ports, with particular focus on the ports of Los Angeles and Long Beach, starting with President Biden’s call to action to address the bottlenecks by enlisting private sector help and efforts to move towards 24/7 operations.

“Since then, others have also joined in. The state of California stepped up, issuing an executive order to identify state-owned sites to serve as temporary warehouses and allow trucks to carry more goods. The City of Long Beach next helped create more storage space through a temporary zoning change to facilitate container storage. Just in the last week, Union Pacific, one of the two major railroads responsible for moving goods out of the port, announced it would operate its station near the ports 24/7 and offer discounts to customers for each container they moved by rail. In addition, the U.S. Department of Transportation (USDOT) and the State of California announced a $5 billion partnership to modernize California’s goods movement chain, strengthening the capacity and resiliency of the nation’s key import and export hub. The result of these combined efforts will be more space available to store containers and faster paths for containers to exit and enter the ports.”

“These “pull” strategies are important first steps, and we will continue to do more to energize the private companies that drive the goods movement chain,” the post states, and notably “This includes supporting the ports’ decision to fine containers that stay on the docks too long,” referring to the controversial dwell time charges on import containers that the Los Angeles and Long Beach will begin assessing ocean carriers.

The blog post concludes with the Administration’s plan for “Moving Forward”:

“This is precisely what the Biden-Harris Supply Chain Disruptions Task Force has been set up to do: act as an honest broker to encourage companies, workers, and others to stop finger-pointing and start collaborating. Many have responded to this call, recognizing that a once-in-a-century pandemic requires us all to do our part to support our nation’s economic recovery. Moving all links in the supply chain simultaneously doesn’t happen overnight, but the actions being taken by every link in the chain are making a difference. These actions are starting to clear the backlogs and break down the barriers that have made it hard to move this unprecedented volume of goods.

“We will also continue to track how well our nation’s transportation and logistics supply chain is handling this increased flow. We will report cumulative imports through Los Angeles and Long Beach, retail inventories, and the number of ships at anchor at the two ports on a twice-a-month basis through at least the end of the year.

“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, we can make the fundamental changes that are long overdue for our ports, rail and roads. This is how we build back better, with government bringing workers and businesses together to leverage American ingenuity to tackle the challenges brought on by a global pandemic.”

You can read the full blog post here: Improving and Tracking Supply Chains Link by Link