PHILADELPHIA (KYW Newsradio) — American consumers have been paying more for a lot of things — if they can even find those things on store shelves. President Joe Biden is meeting Wednesday with industry leaders to discuss how to address the supply chain bottlenecks that are to blame.
The White House says there has been about an 18% increase in volume at ports around the country this year.
Sean Mahoney with the Port of Philadelphia, says every part of the supply chain is stressed. Port officials say there was a 28% increase in the month of July alone. In August, the port had a record month: 70,000 containers coming through.
This year, they are expecting around 740,000 containers, which is a 16% increase compared to last year.
To deal with all this, Mahoney says they bought more equipment to handle the cargo, they extended the hours that trucks can go in and out. And they’ve been working to get more of the goods out by rail.
"We have close to 100 ships that are docked outside the Ports of Los Angeles and Long Beach, waiting to unload goods, and our supply chains are very stressed," Treasury Secretary Janet Yellen said on the CBS Evening News.
The Biden administration says, as the country recovers from the pandemic, demand has really shot up, stressing the supply chain at a time when workers are scarce.
To help tackle the bottlenecks, the White House said Wednesday it has helped broker an agreement for the Port of Los Angeles to become a 24-hour, seven-days-a-week operation. The Biden administration announced it received commitments from the port, the union that represents the port workers, and companies including Walmart, UPS and FedEx to move to around-the-clock efforts to move cargo off docks so more ships can get in and out faster.
Ports in Los Angeles and Long Beach, California, account for 40% of all shipping containers entering the United States. As of Monday, there were 62 ships berthed at the two ports and 81 waiting to dock and unload, according to the Marine Exchange of Southern California.
The Long Beach port has been operating 24 hours daily for seven days for roughly the past three weeks.
Biden was scheduled to hold a virtual roundtable with the heads of Walmart, FedEx Logistics, UPS, Target, Samsung Electronics North America, the Teamsters Union and the U.S. Chamber of Commerce, among other groups.
There won’t be a flip of the switch to fix these issues, especially with the increased demand of the holiday season fast approaching. Moody’s Analytics, in a report on Monday, said the disruptions "will get worse before they get better."
Related
Others, including Yellen, are more optimistic.
"We have an economy that’s recovering, so there may be isolated shortages of goods and services in the coming months, but there is an ample supply of goods, and I think there’s no reason for consumers to panic about the absence of goods that they’re gonna want to acquire at Christmas."
Related
Republican lawmakers say Biden's $1.9 trillion coronavirus relief package has fueled higher prices. A recent analysis issued by the investment bank Goldman Sachs estimates that “supply-constrained goods” account for 80% of this year’s inflation overshoot, yet the political criticism continues to sting as housing and oil prices add to inflationary pressures.
Senate Republican leader Mitch McConnell of Kentucky has made inflation one of his central charges against Biden, a sign that getting prices under control could be essential for Democrats trying to hold onto congressional seats in next year's elections.
“The Democrats’ inflation is so bad that even though the average American worker has gotten a multiple-percentage-point pay raise over the last year, their actual purchasing power has been cut,” McConnell said in a Senate speech last week. "Even dollar stores are having to raise their prices. Just ask any American family about their last few trips to the supermarket, the gas station or the toy store. Heaven forbid if they’ve had to participate in the housing market or the auto market anytime lately."
The Biden administration has argued that higher inflation is temporary. Yet the supply chain issues have persisted months after the economy began to reopen and recover as vaccines lessened many of the risks from the pandemic.
Related
Consumer prices climbed 5.4% from a year ago, the Bureau of Labor Statistics reported Wednesday. That is significantly above the Federal Reserve's 2% target. Higher energy, food and shelter costs were prime drivers of price increases in September. Used car and truck prices fell for the second straight month, but vehicle shortages and cost increases in prior months mean that prices are still 24.4% higher from a year ago.
Inflation's persistence has created a divide in how to describe the phenomenon.
Atlanta Fed president Raphael Bostic said Tuesday that he no longer calls inflation “transitory” and expects this current “episode” of inflation could last into 2022 or longer. Treasury Secretary Janet Yellen, the former Fed chair, insisted to CBS News that the higher prices are “transitory” because once “we get the pandemic under control, the global economy comes back, these pressures will mitigate and I believe will go back to normal levels.”