White House: Walmart, Target, Home Depot to Work Off-Peak to Ease Supply Chain Holdup Ahead of Holidays
Walmart, Target, The Home Depot, FedEx, UPS, and Samsung will commit to working during off-peak hours to address supply chain bottlenecks.
The White House announced the news ahead of President Joe Biden hosting a meeting on Wednesday to discuss the challenges at ports across the country and actions to address the delays and congestion across the transportation supply chain.
The commitments are expected to move more goods faster, by moving towards 24/7 operations at the Ports of Los Angeles and Long Beach in California. The Port of Los Angeles is announcing 24/7 service and the The Port of Long Beach expanded operations in mid-September.
“The supply chain is essentially in the hands of the private sector, so we need the private sector to up to help solve these problems,” a senior administration official told reporters ahead of the meeting.
“Just UPS and FedEx alone, combined, shipped 40% of American packages by volume in 2020,” the official noted. “By taking these steps, they’re saying to the rest of the supply chain, ‘You need to move, too. Let’s step it up.’ Their efforts and the efforts of others — Target, Samsung, and Home Depot, among others — will help us to start address the — start addressing the backlog. And they pave the way for smaller retailers to also get their goods from a 24/7 model.”
[See also: Target, Levi’s, Walmart and More Battle Supply Chain Disruptions]
The commitments being announced, according to The White House, include:
- The nation’s largest retailer, Walmart, is committing to increase its use of night-time hours significantly and projects they could increase throughput by as much as 50% over the next several weeks.
- The Home Depot is committing to move up to 10% additional containers per week during the newly available off-peak port hours at the Ports of L.A. and Long Beach.
- Target, which is currently moving about 50% of its containers at night, has committed to increasing that amount by 10% during the next 90 days to help ease congestion at the ports.
- UPS is committing to an increased use of 24/7 operations and enhanced data sharing with the ports, which could allow it to move up to 20% more containers from the ports.
- FedEx is committing to work to combine an increase in nighttime hours with changes to trucking and rail use to increase the volume of containers it will move from the ports. Once these changes are in place, they could double the volume of cargo they can move out of the ports at night.
- Samsung is committing to move nearly 60% more containers out of these ports by operating 24/7 through the next 90 days. 72% of U.S. homes have at least one Samsung product, from appliances to consumer electronics.
More than 3,500 additional containers per week will move at night through the end of the year because of the commitments across these six companies, according to The White House.
“Those boxes contain toys, appliances, bicycles, and furniture that Americans purchased online or at their local small business, and pieces and parts that are sent to U.S. factories for our workers to assemble into products,” the fact sheet states. “And this is just a start — these commitments provide a clear market signal to the other businesses along the transportation supply chain — rails, trucks, and warehouses — that there is demand to move additional cargo at off-peak hours.”
Target, Walmart, The Home Depot have already moved to charter their own container ships to address supply chain issues ahead of the holiday season.
Walmart has chartered ships and diverted shipments through ports, as well as rerouted inland shipments, utilizing less conventional transportation methods to avoid rail delays, the retailer said last week.
Target revealed in September it had chartered its own container ship to regularly bring Target merchandise from overseas ports to the U.S., and noted “as co-managers of the ship, we can avoid delays from additional stops and steer clear of particularly backed-up ports.”
On Tuesday, Target said in a statement that it’s imports comprise less than 3% of container volume in the U.S., but it’s operating in ways that help reduce overall supply chain congestion.
“We’ve been running 24/7 supply chain operations for years, including at the ports, which allows us to pick up our containers in less than 24 hours, helping clear the way for other freight. And at our nation’s largest ports in Los Angeles and Long Beach, we’re currently moving about 50% of our containers at night, and we’re committed to increasing that amount by 10% over the next 90 days to help clear up the ports while making sure that our total supply chain continues running effectively.”
The Home Depot has also arranged for several container vessels for exclusive use, a move president & COO Ted Decker called “a creative solution to better serve our customers in this dynamic environment,” during a call with analysts.
