The supply chain bottleneck at major U.S. ports has developed into a global crisis and Port of Long Beach executive director Mario Cordero blamed the rise in consumer demand and online sales on “Fox News Live.”
“One factor is e-commerce,” he said. “Americans have used e-commerce at a… 20% increase. So I think there’s a certain aspect to this that is consumer demand and that’s one of the many factors that’s causing the surge and disruptions of the supply chain.”
The White House announced its plan to resolve the issue by leaving ports in Los Angeles open 60 extra hours per week while other companies like UPS and Target are following suit. Long Beach has been operating on a 24/7 schedule for about a month but Cordero believes it’s going to take a lot more than just staying open.
“It’s going to take collaboration by everybody in the supply chain, it’s not just the marine terminal operators,” he said. “It’s going to take the truckers, the warehouses, the railroads. So I think a good spot that we’re in right now is that there’s been some strong commitment by key players to make this work.”
Cordero emphasized how the crisis has been elevated “pretty high” with regards to its impact on monetary policy and the overall economy as a $1 trillion industry. The director said even though mass labor shortage in trucking and other sectors as a consequence of the coronavirus pandemic has worsened supply chain backup, there’s no labor shortage at the ports.
The Port of Long Beach has been recorded as the second-busiest container port in the country and the twenty-first-busiest container cargo port in the world. The port takes up more than 575,000 jobs in the southern California region and generates about $100 billion in trade each year.
“Needless to say, we have to up our game in not only how we move containers but in terms of the hours that we operate,” he said. “Hence, the 24/7, while that’s not going to be the ultimate solution in terms of the only factor that’s going to solve this problem, it certainly takes a big step in terms of what we need to do on our end.”
Cordero predicted that Long Beach’s current 62 vessels at anchor should diminish by end of the year and normalcy in the supply chain could be re-established by mid-2022. For now, ahead of the holiday season, he advised consumers to shop early.