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US supply chain woes to stretch into 2022, Biden admin warns

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The Port of Los Angeles in California has begun 24-hour operations as a way to help ease supply chain bottlenecks that are choking commerce and pushing up prices./AFP
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Oct 18, 2021 - 04:09 AM

WASHINGTON — The US transportation secretary on Sunday warned that America’s supply chain woes including clogged ports will drag into next year, potentially cramping the upcoming holiday shopping season in the world’s largest economy.

Pete Buttigieg did the rounds on US political talk shows to stress that President Joe Biden’s administration was doing everything it could to alleviate congestion at the country’s overloaded ports, railways and roads, and that the government will “re-evaluate all of our options” to relieve the bottlenecks.

But “a lot of the challenges that we have been experiencing this year will continue into next year,” the transport chief and former presidential candidate told CNN’s “State of the Union” show.

Buttigieg added that the supply side crunch was being exacerbated by extraordinary pent-up demand in the United States.

“Demand is off the charts, retail sales are through the roof,” he said, and the country’s transportation and shipping infrastructure has been unable to keep up.

With the Christmas holiday season gearing up as America’s coronavirus-battered economy rebounds, US retailers are taking unprecedented steps to try to navigate around myriad supply chain obstacles.

Biden recently announced a commitment by the Port of Los Angeles to begin 24-hour operations in an effort to ease congestion which has seen multiple cargo ships anchored off the coast awaiting opportunities to unload.

Analysts have pointed to knock-on effects through the US economy.

Allianz chief economic advisor Mohamed El-Erian, speaking to “Fox News Sunday” about the supply chain crunch, called it “the everything shortage.”

“Things will get worse before they get better,” he said. “So we’re going to have more shortages of goods, we’re going to have higher prices, inflation will remain in the four-to-five percent level. And it’s just going to take time to sort these things out.”

Congress meanwhile is grappling with passing two huge portions of Biden’s domestic agenda: a $1.2 trillion infrastructure bill to upgrade roads, bridges and ports, and his even bigger Build Back Better social spending program.

“We’ve got to get this done,” Buttigieg said on NBC’s “Meet the Press.”

The infrastructure bill has bipartisan support. But the massive package that expands the social safety net and addresses the climate crisis faces opposition from within the president’s own Democratic camp as well as from Republicans, pushing Biden to consider paring it back.

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