Supply Chains Continue To Be Backed Up
As we move further into November we are continuing to see inflated prices for different consumer goods all across the country. As of right now: milk at the grocery store is up $0.23, beef is up $0.66, gas on average is up $1.23 per gallon, and car values are up 26%.
As we can see by these prices, the supply chain issue has not slowed down and ships are still waiting off of the coast waiting to unload despite efforts from both state lawmakers and the president. Those efforts have continued, with the White House announcing another plan to try and fix the issue before the holidays.
First let’s look at the plan that the President announced back in October. In his first plan, President Biden wanted to make the port in Los Angeles a 24-hour 7 days a week operation. He also wanted to keep the port at Long Beach open 24/7. These ports are absolutely vital, as 40% of supplies coming into the US comes from those ports. The President hoped that this overnight operation would increase the speed at which these ships were being unloaded, thereby allowing the supply chain to flow more freely. The President also secured a guarantee from International Longshore Warehouse and Union to help staff that operation.
President Biden also made efforts to get the private sector into the mix. Walmart, Target, Home Depot, Samsung, UPS, FedEx and others all agreed to expand their round-the-clock operations to help move these goods.
So what is being done now?
The White House is now pointing to the $17 billion earmarked in the Bipartisan infrastructure bill set to be signed by the President on Monday, which will improve the infrastructure at coastal ports. However, it is going to take a while for that money to begin flowing.
In the meantime, the White House announced several measures to help with the problem. There will be $243 million given in grant funding in the next 45 days for port infrastructure improvements. Also, over the next 60 days, $4 billion will be identified in consumer construction projects at coastal ports and waterways for the Army Corps of Engineers to tackle.
There will be $3.4 billion in investments to upgrade obsolete inspection facilities that have key points of entry in the next 90 days. And finally, they will begin the Department of Transportation competition for the first round of port and waterway infrastructure projects in the next 90 days.
The other problem here is the fact that the ports, trucks, trains and terminals that allow the country’s supply pipeline to flow are mostly run by private companies. The truth is, the supply chain issue is one that has been building for a while, and Covid-19 has done anything but help the situation. Then you add on the fact that the nation’s ports, trucks and trains are taking on a record number of goods due to consumer demands.
As mentioned before, this congestion and soaring freight costs are driving prices up for consumer goods for consumer goods and services all across the country. The problem doesn’t seem to be getting any better either, as a new labor statistic has shown that prices for goods in October were about 9% higher than a year ago.
Beyond the cost of goods being up, travel costs are also becoming more expensive than before. It is expected that flying for Thanksgiving is going to cost at least $300 each way. Christmas is also going to be more expensive, with flights expected to cost about $250 each way. Experts are saying that the longer you wait to book your flight, the more expensive it will be.