Walmart and Target are making moves to help alleviate impact from the snarled supply chain.
In a meeting with major retailers, port leaders, and union leaders on Wednesday, President Biden will address the impact of pandemic-related bottlenecks at the Ports of Los Angeles and Long Beach. These leaders, including Target and Walmart, will announce a variety of commitments to ease congestion and support supply chain movement.
Walmart and Target will both announce new commitments to expanding night time hours in order to help process the influx of containers at the Ports of Los Angeles and Long Beach. Walmart says the expansion of its overnight hours could help it increase the number of processed containers by up to 50% over the next few weeks, allowing for cargo to be moved off docks in a quicker fashion. Target said it will increase the number of containers it moves at night by 10% over the next 90 days. The retailer currently processes about half of its product overnight.
Supply chain issues and port congestion were major themes in last quarter’s retail earnings season. Target and Walmart both said in Q2 that they were working on solutions to mitigate the impact of slowdowns. Both retailers maintained confidence in their abilities to manage stock and meet demand during the upcoming holiday season.
In Q2, Target executives said the company was expediting orders and pivoting to larger quantities upfront in advance of a season to allow for more time for freight to get to stores. Walmart leaders said it was securing supply early and chartering vessels to prepare for Q3 and Q4.
40% of containers to the U.S. enter through the Ports of Los Angeles and Long Beach. In the last few months, a record number of container ships have been stuck outside these ports.
To clear the backlog, the Port of Los Angeles has committed to expanding to 24/7 operation with new night time shifts and weekend hours, following a move from the Port of Long Beach in September to expand hours in pursuit of a 24/7 model. The move doubles the amount of cargo that the Port of Los Angeles can process.
Port congestion problems have previously inspired legislative change. In June, President Biden launched the Supply Chain Disruptions Task Force, which addresses transportation and logistics bottlenecks. Last week, U.S. Senators Jacky Rosen (D-NV) and Dr. Bill Cassidy (R-LA) introduced an act to strengthen the domestic supply chain for medical supplies during shortages.