Uber Freight boss warns US is entering shipping ‘Armageddon’

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Uber Freight boss warns US is entering shipping ‘Armageddon’
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The supply chain bottlenecks that have become so disruptive as to merit presidential attention are either a systemic problem that will requires significant changes in how the shipping industry works or a political cudgel that can be weaponised against the Biden administration and its’ legislative agenda.

Which one is it? That depends on who you ask.

At the Ports of Los Angeles and Long Beach, a combined 83 cargo ships were awaiting an opportunity to dock and offload nearly half a million standard-sized shipping containers, according to the Maritime Exchange of Southern California.

The behemoth of a big boat backlog, experts say, is to blame on changes in American consumers’ habits, labour shortages brought about by the ongoing Covid-19 pandemic, an increase in the size of container ships, and other pandemic-driven shipping problems. More purchases of products that are shipped from overseas brings about more demand for inventory, which requires more shipments, which must be unloaded at ports and transported across the country to their destinations.

According to a report from the Organisation for Economic Cooperation and Development’s International Transport Forum, the average container ship has doubled in size over the past decade. These so-called megaships take longshoremen in Los Angeles and Long Beach — from which more than 40 per cent of container cargo enters the United States — an average of a day longer to unload.

Yet Americans’ buying habits and shipping practices have caused more and more ships to appear on the horizon as the economy has ramped up over the course of 2021. And with fewer truckers on the roads due to the ongoing effects of the pandemic, the cargo continues to pile up while store shelves remain empty.

Lior Ron, the head of Uber’s freight operation, calls the cumulative result of the trucking shortage and shipping bottlenecks “shipping Armageddon”.

In an interview with CNBC, the Uber Freight boss said the shortage of drivers is entire logistics sector needs to step up.

“It really requires the entire industry because we are facing just unprecedented times,” he said. “We’re ordering more and more packages that we love to consume to our doorstep, but the supply chain is completely imbalanced ... the entire network is different.”

Republican activists and officeholders, on the other hand, see the delays that stem from the effects of a once-in-a-century pandemic on the global supply chain not as a consequence of a long chain of events, but as a crisis touched off by President Joe Biden’s policies, such as his administration’s Covid-19 vaccine mandate and the extension of unemployment benefits under the American Rescue Plan Act, the Covid relief bill he signed in March.

Senator Marsha Blackburn, a member of the Senate Commerce Committee, seized on news that Secretary of Transportation Pete Buttigieg had taken time off from work to care for his newborn twin son and daughter to attack him for “sitting at home” despite the fact that he was at the White House on Wednesday, when Mr Biden announced that a number of major shipping operators and the Port of Los Angeles would begin operating 24 hours a day to clear the container backlog.

‘We’re in the middle of a transportation crisis, and Pete Buttigieg is sitting at home. Meanwhile, cargo boats are unable to dock and shelves are sitting empty. Pete needs to either get back to work or leave the Department of Transportation. It’s time to put American families first,’ Ms Blackburn told the “alt-right” news outlet Breitbart News.

Another GOP senator, Arkansas’s Tom Cotton, took to Twitter to say that Mr Buttigieg, who was confirmed by the Senate by a vote of 86-13, was “totally unqualified”. Representatives for Mr Cotton did not respond to a query from The Independent about the qualifications of Mr Buttigieg’s deputy, former Undersecretary of Transportation for Policy and ex-New York City Department of Transportation Commissioner Polly Trottenberg, who has been handling the issue day-to-day.

Other Republicans, including former President Trump’s son Donald Trump Jr, looked to cast blame on Mr Biden via social media, where he was one of many MAGAworld influencers pushing the hashtag #EmptyShelvesJoe on Twitter this week.

For his part, Mr Biden has responded to the so-called everything shortage by bringing stakeholders such as port operators, retailers, and shipping companies together to announce that FedEx, UPS, Wal-Mart, and other major logistical players would join the ports of Los Angeles and Long Beach in shifting to all-day, all-night operations.

Speaking at the White House on Wednesday, Mr Biden said such commitments are “a sign of major progress in moving goods from manufacturers to a store or to your front door,” but called on other players in the supply chain to step up their game to clear the backlog and ensure a successful holiday season for retailers and consumers.

“This is a big first step in speeding up the movement of materials and goods, through our supply chain, but now we need the rest of the private sector chain to step up as well. This is not called a supply chain for nothing,” he said.

“This means the terminal operators, railways, trucking companies, shippers and other retailers as well,” the president continued. “Strengthening our supply chain will continue to be my team’s focus. If federal support is needed. I’ll direct all appropriate action, and if the private sector doesn’t step up, we’re going to call them out and ask them to act, because our goal is not only to get through this immediate bottleneck, but to address the long standing weaknesses in our transportation supply chain, that this pandemic has exposed”.

Yet despite Mr Biden’s efforts to bring key stakeholders together for a solution, Republican complaints that Mr Biden’s policies are to blame for issues — such as the worker shortages that have contributed to the current supply chain bottlenecks — are unlikely to subside, particularly with 2022 primary elections growing closer and closer.

But while Republicans sought to place blame for driver shortages on the Biden administration’s previous Covid relief efforts and the forthcoming vaccine mandates, Mr Ron had a different explanation.

The Uber executive said that the reason fewer long-haul drivers are available to transport freight from ports to cities is that the pandemic has made long-haul trucking far less appealing a job than using the same skills for a last-mile delivery position closer to home.

“It’s harder for them to be on the road and there is a better alternative in driving closer to home and doing last-mile delivery. We ask them to do more and more and maybe they don’t want to even have to go on the road because they have to be stuck in facilities or have health concerns,” he said.

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