The Biden administration on Thursday outlined dozens of measures the federal government can take to strengthen freight transportation and infrastructure following almost two years of supply-chain turmoil that has frustrated American businesses and helped fuel inflation.
The recommendations from the U.S. Department of Transportation are included in one of seven reports published by government agencies today in response to an executive order President Biden signed in February 2021 to address supply-chain weaknesses, from shortfalls of critical components like semiconductors to port congestion that has delayed deliveries of billions of dollars’ worth of retail merchandise.
The administration has sought to intervene to help resolve some of the bottlenecks, particularly at a Southern California port complex swamped by sea containers amid a long queue of vessels waiting to unload imports. The congestion across the country has worsened as ports, railroads, trucking companies and warehouses have struggled to handle a 20% increase in inbound trade flows.
Bottlenecks have eased in some places in recent weeks, which logistics-sector officials say is possibly the result of a seasonal slowdown tied to the Lunar New Year holiday in Asia during which factory output subsides. The domestic supply chain remains fragile, executives at shipping companies say, with little sign that the import surge might wane before the second half of the year.
The administration report identifies near-, medium- and long-term policies aimed at improving the flow of goods from ports to distribution facilities and delivery to homes. They range from investing in port infrastructure and roads to working more closely with local governments and private companies such as shipping and logistics firms, importers and exporters.
Some of the goals require legislative changes, such as a proposal to eliminate a law that exempts trucking companies from paying overtime to drivers. Others require broad changes in the global maritime industry.
One proposal would study ways to increase domestic shipbuilding and another would explore changing the standard for shipping containers around the world to match the size used in U.S. domestic shipping operations.
“We need to have some ambition,” said a senior administration official.
The report notes the Covid-19 pandemic exposed long-standing weaknesses in the U.S. supply chain that will come under more strain in the coming years as government agencies forecast freight demand will increase 40% by 2045.
Transportation department officials said the nation’s reliance on a handful of ports to handle most U.S. imports and exports is a risk for future bottlenecks. They said alternative routes into and through the country will become more important as severe weather events caused by climate change become more frequent and threaten infrastructure and the flow of goods.