White House continues to take an active role in shaping supply chain recovery efforts

The White House is continuing to take steps to get involved in helping to remedy the myriad domestic supply chain issues over the last several months.

In late October, President Joe Biden held a “Summit on Global Supply Chain Resilience” with the European Union and 14 other nations “to foster greater international cooperation on near-term supply chain disruptions and chart a course to strengthen and diversify the entire supply chain ecosystem over the long term—from raw materials, intermediate and finished goods, manufacturing, to shipping, logistics, warehousing, and distribution.”

This comes on the heels of a previous announcement made by The White House focused on expanding United States West Coast port operating hours, as well as rolling out an Early Warning System for potential disruptions in semiconductor manufacturing, including Asia, and also leveraging aspects of the Executive Order issued in February, focused on building resilient supply chains.

Themes that were addressed at the summit included “how to tackle the immediate supply chain challenges from this unprecedented economic recovery and build long-term supply chain reliance for the future.”

And President Biden also laid out a few different paths for the U.S. to take with a focus on supply chain resilience, including:

• issuing an Executive Order to streamline U.S. stockpiling efforts by delegating authority to the Department of Defense to make material releases from the National Defense Stockpile and allow a speedier response to material shortfalls within the defense industrial base;
• increase funding to promote international supply chain resilience among U.S. partners and allies by having the State Department allot funding to provide technical assistance to Mexico and Central America to alleviate supply chain disruptions and bottlenecks and also announcing millions in funding for new U.S.-ASEAN initiatives, including funding to augment customs and clearance procedures, reducing delays and encouraging sustainable and efficient supply chains; and
• plans to hold a multi-stakeholder summit in 2022 hosted by Secretary of State Anthony Blinken and Secretary of State Gina Raimondo focused on establishing next steps among supply chain stakeholders and other countries to build greater global supply chain resilience

“Many of our supply chains are almost entirely owned and operated by the private sector,” President Biden said on October 31. “But government can play a key role identifying supply chain risks and bringing the different pieces and actors together to address these vulnerabilities. In the United States, my administration has focused on this from our earliest days of the administration, which is not that long ago — just January 20th of this year.  In February, we began directing new investments to strengthen supply chains at home and to work with partners to bolster supply chains around the world.”

Biden also noted that the best way to reduce current delays and build in greater resilience for the future is to work together across the entire supply chain, from raw materials to warehousing and distribution. 

“Our supply chain should be: one, diversified, so that we’re not dependent on any one single source that might cause a failure; secure—secure against natural and manmade threats, including cyber and criminal attacks, like ransomware; and transparent so that both government and the private sector can better anticipate and respond to shortages that may be coming down the pike; and sustainable, to ensure our supply chains are free from forced and child labor, supporting the dignity and the voice of workers and are in line with our climate goals,” he said.

On a separate but related basis, the White House also announced this week that, effective November 3, it will begin publishing a twice monthly dashboard comprised of metrics tracking progress at the Port of Los Angeles and the Port of Long Beach, as well as the general economy.

Among the metrics being measured are: ships at anchor outside the ports, with the current high number of ships at anchor being partly driven by consumer demand for goods and pandemic-related port and factory shutdowns in Asia; cumulative import volume, with a focus on the number of imported containers processed through year-end; retail inventories; and in-stock indicators.

“We will continue to track cumulative container imports, retail inventory levels, and in-stock indicators, to help us monitor the ability of this historically high volume of goods to make their way to warehouses and store shelves, comparing inventory levels to the pre-pandemic period,” said U.S. Port Envoy John Porcari, Deputy Director of the National Economic Council Sameera Fazili, and Special Assistant to the President for Manufacturing and Economic Development Liz Reynolds in a blog post. “Throughout this work, we will remain focused on increasing velocity and fluidity along the goods movement supply chain, working in close partnership with the private sector. Our commitment to tackle bottlenecks and inefficiencies is aimed at helping to get goods to the families and businesses that need them as our economy continues to recover from the pandemic. We will also continue to closely watch the rotation from goods to services consumption, as we expect that rotation to ease pressures on the goods movement supply chain.”

Adam Compain, SVP for Product Marketing, at Chicago-based project44 welcomed the news that the White House is taking action to make supply chains more resilient in the face of disruption.

“Smooth, functional supply chains are taken for granted, and recent events have brought to light the fragility of the supply chain,” he said. “Therefore, companies are wise to invest now in their digital supply chain infrastructure to ready themselves for the next disruptive event. You cannot fix what you cannot measure, and high-quality supply chain data is available allowing companies to plan and dynamically respond to today’s exceptions and delays. Yes, information sharing between parties in the supply chain is crucial, but high-quality, reliable data is the foundation of frictionless trading across the supply chain.” 

But Ted Prince, Chief Strategy Officer and Co-Founder of Tiger Cool Express, had a decidedly different take on the White House’s approach to fixing the supply chain issues.

Using the recently-announced 24x7 operations at POLA and POLB, Prince explained that, in his opinion, it is not realistic to think it will alleviate the myriad ongoing issues.

“It is meaningless,” he said. “Nobody in Washington understands the difference between a port and a marine terminal, and that is a pretty big problem. It is not POLA and POLB, it is 13 marine terminals in San Pedro Bay. They all operate differently and have different rules and contracts, too. In addition, you have the problems with the trucks and warehouses and a system that is congested. So, if you operate 24x7, but there are not enough truckers and not enough warehouse space, all you are really doing is rearranging the deck chairs on the Titanic and it is a fundamental system failure.”

Addressing the White House’s supply chain dashboard, Prince said something like port dwell times could be measured, while something like time spent by a vessel in line cannot.

“There are some ways to do it, but it is not easy,” he said. “How are you going to measure dwell or warehouse space. You look at all the levers in the constraints. I have not seen any rational thing on what will be measured and how you are going to measure it.”