Remarks on Efforts To Address Global Supply Chain Bottlenecks
Please, sit down. Thank you. Well, good afternoon, everyone.
I know you're hearing a lot about something called supply chains and how hard it is to get a range of things from a toaster to sneakers to a bicycle to bedroom furniture. And that's why, back in February, I signed a piece of legislation on supply chain—an Executive order on supply chains. And, well, we had to move on it.
And with the holidays coming up, you might be wondering if the gifts you planned to buy will arrive on time.
Well, let me explain: "Supply chains" essentially mean how we make things and how the material and parts get delivered to factory—a factory so we can manufacture things and manufacture them here; how we move things, how a finished product moves from a factory to a store to your home. And today we have an important announcement that will get things you buy to you, to the shelves faster. I'm joined by the executive directors of the Ports of Los Angeles and Long Beach, Gene Seroka and Mario Cordono [Cordero].* I missed—I apologize, Mario. That the—and the president of the International Longshoremen's Union, Willie Adams.
Los Angeles and Long Beach are home to two of the largest point—ports in America. And together, these ports are among the largest in the world. And the best way to make that point is that 40 percent—40 percent—of shipping containers that we import into this country come through these two ports. And today we have some good news: We're going to help speed up the delivery of goods all across America.
After weeks of negotiation and working with my team and with the major union and retailers and freight movers, the Ports of Los Angeles—the Port of Los Angeles announced today that it's going to be—begin operating 24 hours a day, 7 days a week. This follows the Port of Long Beach's commitment to 24/7 that it announced just weeks ago.
Twenty-four/seven system—what most of the leading countries in the world already operate on now, except us, until now. This is the first key step toward moving our entire freight transportation and logistical supply chain, nationwide, to a 24/7 system.
And here's why it matters: Traditionally, our ports have only been open during the week, Monday through Friday, and they're generally closed down at nights and on weekends. By staying open 7 days a week, through the night and on the weekends, the Port of Los Angeles will open—over 60 extra hours a week, it will be open. In total, that will almost double the number of hours that the port is open for business from earlier this year.
That means an increase in the hours for workers to be moving cargo off ships onto trucks and railcars to get to their destination. And more than that, the night hours are critical for increasing the movement of goods because highways—highways—are less crowded in the evening—at night. In fact, during off-peak hours in Los Angeles, cargo leaves the port at a 25-percent faster pace than during the day shift.
So, by increasing the number of late-night hours of operation and opening up for less crowded hours when the goods can move faster, today's announcement has the potential to be a game-changer. I say "potential," because all of these goods won't move by themselves. For the positive impact to be felt all across the country and by all of you at home, we need major retailers who ordered the goods and the freight movers who take the goods from the ships to factories and to stores to step up as well. These private sector companies are the ones that hire the trucks and railcars and move the goods.
On this score, we have some good news to report as well. Today Walmart, our Nation's largest retailer, is committing to go all in on moving this product—its products 24/7 from the ports to their stores nationwide. Specifically, Walmart is committing as much as a 50-percent increase in the use of off-peak hours over the next several weeks.
Additionally, FedEx and UPS, two of our Nation's biggest freight movers, are committing today to significantly increase the amount of goods they are moving at night. FedEx and UPS are the shippers for some of our Nation's largest stores, but they also ship for tens of thousands of small businesses all across America. Their commitment to go all in on 24/7 operations means that businesses of all sizes will get their goods on shelves faster and more reliably. Accordingly—according to one estimate: Together, FedEx and UPS alone move up to 40 percent of packages in America—up to 40 percent.
And other companies are stepping up as well. They include Target, Home Depot, and Samsung that have all committed to ramp up their activities to utilize off-peak hours at the ports. So the commitments being made today are a sign of major progress in moving goods from manufacturers to a store or to your front door.
I want to thank my Supply Chain Disruptions Task Force, which we set up in June, led by Secretaries Buttigieg, Raimondo, and Vilsack, and by my Director of National Economic Council, Brian Deese. I want to thank them for their leadership. And I especially want to thank Joe [John]* Porcari. And I think Joe [John] has done one heck of job—my special Envoy, specifically on ports, who has been working this issue with all of the stakeholders for the past several weeks.
I also want to thank the port directors. I want to thank Gene and Mario again and the mayors of Los Angeles and Long Beach, Mayor Garcetti and Mayor Garcia, for their leadership. And I think the private companies that are stepping up—I want to thank them. Thank them.
But I particularly want to thank labor: Willie Adams of the Longshoremen and Warehouses Union, who is here today; the Teamsters; the rail unions, from the Brotherhood of Railroad Signalmen and the International Association of Machinists, to the American Train Dispatchers Association, to Sheet Metal, Air, and Rail, and Transportation Workers Union, known as SMART.
I want to be clear: This is across-the-board commitment to going to 24/7. This is a big first step in speeding up 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. This is not called a "supply chain" for nothing. This means the terminal operators, railways, trucking companies, shippers, and other retailers as well.
Strengthening our supply chain will continue to be my team's focus. If Federal support is needed, I will direct all appropriate action. And if the private sector doesn't step up, we're going to call them out and ask them to act. Because our goal is not only to get through this immediate bottleneck, but to address the longstanding weaknesses in our transportation supply chain that this pandemic has exposed.
I might add, parenthetically: One of the reasons why I think it's very important that we get the infrastructure plan passed—my infrastructure plan—and that's the supply chain system is almost entirely in the hands of private business.
The world has changed. Prior to the crisis, we cheered, you know, the focus on lean, efficient supply chains, leaving no buffer or margin for error when it comes to certain parts arriving just in time, as needed to make a final product. And the—our administration—Barack's and ours—we—that's when it was—"just in time" was the focus. We didn't have a pandemic and other things at the time.
We need to take a longer view, though, that invests in building greater resilience to withstand the kinds of shocks we've seen over and over, year in and year out, whether it's the pandemic, extreme weather, climate change, cyber attacks, or other disruptions. In fact, research tells us that a company can expect to lose over 40 percent of 1 year's earnings every 10 years due to supply chain disruptions.
A longer term view means we invest in systems that have more time built in and in our ability to produce, innovate, and partner with our allies. It also means companies throughout the supply chain—like maritime, air freight, and trucking companies—reduce their carbon emissions and help to meet our climate change goals.
It also means creating and supporting good-paying jobs so folks want to stay in these jobs, so they can build the skills and careers and to make a decent living. It means more opportunities to join a union, especially for truckers. These steps are critical. They allow companies to pivot quickly when a disruption hits because they've invested in their workers, their workers' skills, and training upfront to be able to adapt.
We need to invest in making more of our products right here in the United States. Never again should our country and our economy be unable to make critical products we need because we don't have access to materials to make that product. Never again should we have to rely too heavily on one company or one country or one person in the world, particularly when countries don't share our values when it comes to labor and environmental standards.
I've said before: We're in the competition for the 21st century. We are America. We still have the most productive workers and the most innovative minds in the world. But the rest of the world is closing in, and we risk losing our edge if we don't step up. In order to be globally competitive, we need to improve our capacity to make things here in America while also moving finished products across the country and around the world.
We need to think big and bold. That's why I'm pushing for a once-in-a-generation investment in our infrastructure and our people with my infrastructure bill and my Build Back Better Act. These bills would transform our ports—there's millions—billions of dollars for ports—highways, rail systems that sorely need upgrading and would bring products faster and more efficiently from the factories to the store to your house.
Let me be clear: We're proposing to make the biggest investment in ports in our history. The bill would also make investments in our supply chains and manufacturing and strengthening our ability to make more goods, from the beginning to end, right here in America.
The bottom line: We've seen the cost of inaction in the pandemic in the delays and the congestion that affect every American. But it's fully within our capacity to act to make sure it never happens again—it's going to take a little time—and that we unlock the full might and dynamism of our economy and our people. That's what we're going to do.
God bless you all, and may God bless the longshoremen, rail workers, truckers, and all the workers who are keeping our economy going. And may God protect our troops.
Thank you all so very much.
NOTE: The President spoke at 2:58 p.m. in the East Room at the White House. In his remarks, he referred to John D. Porcari, Port Envoy to the White House Supply Chain Disruptions Task Force; Mayor Eric M. Garcetti of Los Angeles, CA; Mayor Robert Garcia of Long Beach, CA; and former President Barack Obama. He also referred to H.R. 3684.
* White House correction.
Joseph R. Biden, Remarks on Efforts To Address Global Supply Chain Bottlenecks Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/352957