4 minute read
The shift to 24/7 supply chains
by iThink Media
An import surge throughout the pandemic laid bare the structural issues that have plagued businesses transporting products into and across the US for years.
While under the spotlight, ports have engaged with dozens of stakeholders to try to improve operations, resulting in a series of commitments from the private sector, as well as regulatory tweaks.
The White House laid out plans for 24/7 operations to help alleviate snarled supply chains, speeding up the delivery of goods in the US. The initiative focused on the Ports of Los Angeles and Long Beach – where ships sit at anchor for days or even weeks waiting to enter the port for cargo unloading – but may also include some of the nation’s largest transportation and logistics providers. Together, the Ports of Los Angeles and Long Beach handle 40 per cent of containerised imports entering the country.
In a recent briefing, President Biden said it took weeks of negotiation with a union, retailers and freight movers to get the ports to begin operating 24 hours a day, seven days a week. He said, “This is the first key step toward(s) moving our entire freight transportation and logistical supply chain, nationwide, to a 24/7 system.”
Usually open during the week and then closed at nights and on weekends, these two important ports are now open more than 60 additional hours every week. This will nearly double the amount of time that the port is usually open during more ‘normal’ operating circumstances.
Biden added, “The night hours are critical for increasing the movement of goods because highways are less crowded at night. In fact, during off-peak hours in Los Angeles, cargo leaves the port at a 25 per cent faster pace than during the day shift.”
To create a truly 24/7 supply chain that helps alleviate or at least relieve the current supply chain snarls, Biden is also calling on large retailers and transportation companies to rethink the way they hire trucks and railcars to move their goods. He said Walmart has committed to moving products 24/7 from ports to its stores across the nation, and that the large retailer is upping its use of off-peak hours by 50 per cent in the coming weeks.
Target, Home Depot and Samsung have committed to ramping up their activities to utilise more off-peak hours at the nation’s ports. FedEx and UPS are also onboard with the idea, having said they will significantly increase the amount of goods they move at night, and with the goal of getting goods onto store shelves faster. Combined, these
two carriers move about 40 per cent of the nation’s packages.
Biden characterises this willingness to ramp up operations to ease supply chain shortages as a positive move. He said, “This is a big first step in speeding up the movement of materials and goods through our supply chain.”
The Port of Los Angeles has already made progress since adopting the around-the-clock supply chain strategy. On implementation, the port’s executive director said, “We had 25 per cent of all cargo on our dock sitting here for 13 days or longer and that’s been cut in just about half over the last week.”
The hope is that these results will energise more private companies that drive the goods movement chain. This is not something that will happen overnight, but the
PRESIDENT BIDEN
actions being taken by every link in the chain are making a difference by clearing the backlogs and breaking down the barriers that have made it hard to move the unprecedented volume of goods.
By focusing on building the resilience of the nation’s supply chain, with a movement chain that is more fluid and can operate at a higher velocity, fundamental changes can be made, bringing workers and businesses together to confront the challenges brought on by the pandemic. By tackling the bottlenecks and supply chain inefficiencies, goods can be distributed quicker to the families and businesses that need them. This, in turn, will work towards helping the economy recover from what has been a challenging couple of years.
