The current situation facing US importers awaiting deliveries and consumers facing shortages on their Xmas gift-list, the government has tried to step up to the occasion and save the day. Will they make it on time, or have they missed the boat?
What’s going on with US imports?
The Corona crisis turned the trade industry on its head. Shut-downs in China and other big manufacturing hubs brought production to its knees and snowballed throughout the supply chain.
Despite recuperation attempts, the holidays are imminent, ports are clogged, there are huge truck and warehouse space shortages, workers are in short supply and underpaid, offloaded merchandise is not reaching destinations – both retailers and end-customers. Importers both big and small have met CBP requirements, such as completing their ISF filing and submitting their CBP form 7501. However, the large brands are renting planes and using their own shipping fleets to ensure delivery. Small to medium-sized importers don’t have this option.
Can the government help? If yes, now is the moment of truth.
Politics in play
President Joe Biden has been trying to confront the supply-chain crisis to avoid a holiday season of delays and shortages. However, stakeholders and officials say the bottlenecks extend well beyond the White House’s reach and with the holiday season so close, his options are limited.
Nevertheless, with the aforementioned economically-impacting issues, logjammed ports, containers piling up on docks, potentially empty shelves etc., Biden’s administration has ramped up efforts to find solutions. Even earlier in the year, in February, there were efforts to find knots in the supply chain. However, these were focused on boosting supplies of critical merchandise during the epidemic, like COVID vaccines.
In June, a task force was created to synchronize policies to deal with supply chain transport issues – from logistics to railroads, ports, trucking companies, fulfillment and warehouses centers. The problem is that US supply chain is comprised of private-sector systems, mostly global, and who don’t always coordinate with one another. As such, administration’s direct influence is further limited.
Then there were discussions with labor unions and six firms, including UPS Inc. and FedEx Corp. committed to expanding their delivery schedules.
Last month, Biden announced that the LA Port would begin operating 24/7 and big retailers have promised to bolsters efforts to move their goods and at night. However, extending port hours is not the only problem. Delays are also linked to a backlog in demand from COVID, a reduced workforce, and problems throughout the shipping process, not just port-side.
Nevertheless, Biden said at the White House that: “this is a big first step and it’s feeding at the movement of materials and goods through our supply chain. But now we need the rest of the private sector chain to step up as well. And if the private sector doesn’t step up, we’re going to call them out.”
Analysts still expect extensive shortages, less variety and higher prices for many popular holiday gifts such as toys, gaming consoles, TVs, and sneakers.
When all is said and done, time will tell.
