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Biden hopes fines for delayed cargo ships will reduce congestion at major US ports

WASHINGTON – The Biden administration hopes new fines imposed on carriers at the busiest port complex in the country will reduce the increasing jamming of cargo ships.

Twin ports Los Angeles and Long Beach announced on Monday that containers transported by trucks will have nine days before fines begin to accumulate, and containers transported by rail will have three days.

In accordance with these deadlines, from November 1, carriers will pay $ 100 for each remaining container per day.

“The terminals are running out of space and this will make room for containers at anchor,” explained Long Beach Port Executive Director Mario Cordero. in a statement declaring a measure.

Container ships are waiting at the ports of Los Angeles and Long Beach, awaiting unloading on October 13, 2021.

Caroline Cole | Los Angeles Times | Getty Images

White House spokeswoman Jen Psaki told reporters on Tuesday that the administration continues to “push for ways to tackle supply chain problems,” adding that Biden plans to discuss global trade with leaders at the G-20 meeting this weekend.

“Both ports carry 19% more containers than at the same time in 2018, which was the previous record, and the ports are still on track to surpass the previous record of 17.5 million containers handled in 2018.” explained Psaki.

Earlier this month, the Biden administration unveiled a plan to operate around the clock at the ports of Los Angeles and Long Beach, which account for 40% of sea freight arriving in the United States, in an effort to eliminate bottlenecks.

As far as the eye can see, trucks are lining up in long lines to enter the Port of Los Angeles, as the port is due to start operating around the clock on Wednesday, October 13, 2021 in San Pedro, California.

Jason Armond | Los Angeles Times | Getty Images

And while 24/7 operation in California’s twin ports is expected to close the gap with container ships, it is far from addressing the complex issues affecting the global supply chain.

“This is not just a port renovation, it is part of a very long supply chain,” explained Avi Federgruen, an expert in production and supply chain management and professor at Columbia University Business School in New York.

“Increasing the working hours of ports in California by about 60 hours, followed by a 25% reduction in unloading time, will not save the whole problem. There are several factors that exacerbate each other, ”said Federgruen, head of solutions, risk and operations at Columbia Business School, told CNBC.

The country’s tangled supply chain bears the brunt of rising consumer demand, high transportation costs, labor shortages, delays in overseas production, trade policy and inflation.

What’s more, the approaching holiday season has made matters worse, as a weakening of public health measures and vaccinations against the coronavirus point to broader celebrations this year compared to 2020.

“We haven’t seen anything like it for several years,” added Federgrün. “The individual consumer will feel huge inflation and will not be able to buy goods if this continues,” he added.


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