U.S. President Joe Biden said Wednesday his administration has helped broker an agreement for the Port of Los Angeles to become a 24-hour, seven-days-a-week operation, part of an effort to relieve supply chain bottlenecks and move stranded container ships that are driving prices higher for U.S. consumers.
Watch Biden’s remarks in the player above.
The supply chain problem is tightly linked with the broader challenge of inflation confronting Biden, as higher prices are creating both economic and political risks.
Ports in Los Angeles and Long Beach, California, account for 40 percent 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.
Biden called the commitment to become a 24/7 operation “a big first step in speeding up the movement of materials and goods through our supply chain.”
But he said the “rest of the private sector chain” now needs to step up, as well, to help goods move faster. Biden said some companies, such as Walmart at UPS, are already pledging to help relieve the supply chain issues. And he called on others to do the same.
“Our goal is not only to get through this immediate bottleneck, but to address the long standing weaknesses in our transportation supply chain that this pandemic has exposed,” Biden said.
A recent analysis issued by the investment bank Goldman Sachs estimates that “supply-constrained goods” account for 80 percent of this year’s inflation overshoot.
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 percent 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.
Consumer prices climbed 5.4 percent from a year ago, the Bureau of Labor Statistics reported Wednesday. That is significantly above the Federal Reserve’s 2 percent 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 percent 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.”