LOS ANGELES — President Biden will use the Port of Los Angeles as a backdrop on Friday to highlight his fight against inflation by delivering a speech on his administration’s efforts to accelerate the delivery of goods disrupted by the coronavirus. pandemic.
White House officials said Mr. Biden would argue that large price increases in the United States were part of a broader, global problem with inflation and that Americans were better off than their counterparts elsewhere due to a strong job market and falling debt.
But the visit to the country’s busiest entry point for goods comes as he struggles to show progress in solving global supply chain problems that are fueling inflation across the country.
Russia’s war in Ukraine has disrupted food, fuel and mineral flows, exacerbating pandemic-related shortages and delays in global supply systems, and pushing inflation to decades ago. Data released Friday morning shows that inflation is picking up again, rising 1 percent from the previous month. Compared to a year ago, consumer prices rose 8.6 percent, the largest annual increase since 1981.
Mr Biden is right that rising inflation is a global problem. In a note to customers on Friday, Deutsche Bank Research said the United States ranks 48th for inflation on a list of 111 countries, just above the middle of the pack. But that’s little consolation to American households struggling with rising costs.
Sustained inflation has become a major political responsibility for Mr. Biden, and the White House hoped that performances like the one in the harbor will shed some constructive light on the administration. But while some supply chain blockages appear to be disappearing, analysts say the trend could stagnate — or even reverse — in the coming months.
The US logistics industry is entering its busier fall season as retailers bring in products for back-to-school shopping and the holiday season. Chinese exports are also increasing as an extended coronavirus lockdown is lifted in Shanghai.
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Most importantly, West Coast dockers are currently renegotiating a labor contract with port terminal operators that will expire at the end of this month. If they fail to reach an agreement, ports on the west coast could experience delays or closures next month, which would delay deliveries and lead to a deadlock in the supply chain.
Over the past two decades, labor negotiations have resulted in at least three such delays or stoppages leading to congestion and delays. In recent weeks, some companies that typically ship to the West Coast have begun routing some goods to the East or Gulf Coasts to try to avoid any blockages.
Gene Seroka, the executive director of the Port of Los Angeles, said he expected labor talks to extend beyond the contract’s July 1 expiration date, but downplayed the risks to trade.
“It’s important to know that, with all this cargo on the way, ordinary dockers will be working every day,” he said.
“And the employers know they have to bring these products to the market,” he added. “So we’re going to give these people some space. Let them negotiate in their space, and the rest of us will work to keep the cargo and the economy moving.”
Mr Biden has maintained close relations with unions and may be hesitant to put pressure on dock workers to complete any negotiations. But a work delay or strike would be bad news for the administration, which is often attacked by rising prices.
According to some statistics, the pressure on supply chains has eased in recent weeks. The average world price for shipping a 40-foot container of goods dropped to $7,370 on June 3, down from a peak of more than $11,000 in September, although that was still five times higher than before the pandemic began, according to the report. the Freightos Baltic Table of Contents.
Data published by Flexport shows that sea delivery times to ship products from China to Europe and the United States have also fallen in the past month, although they remain twice as high as before the coronavirus appeared.
But analysts say it’s hard to say whether these declines reflect a normal seasonal slowdown in shipping as retailers prepare for a busier fall season, or a bigger change for the US economy. Economists expect consumer demand for imported products to decline at some point as the Federal Reserve raises interest rates to try to cool the economy. But so far, demand for home appliances, gardening tools, televisions and other goods has remained fairly resilient.
“We’re getting into the Christmas shopping and back into the school season, and retail demand is still relatively strong,” said Jonathan Gold, the vice president of supply chain and customs policy at the National Retail Federation. “There is clearly concern about the impact that inflation could have, but at this point we haven’t seen that blow.”
Phil Levy, the chief economist at Flexport, said shipping times and prices had fallen slightly and U.S. companies were accumulating larger inventories of goods that had been scarce during the pandemic. But it wasn’t clear what caused the change, he said.
“Is this because people are careful?” he said. “Is it seasonal? Is it a slowdown in consumer demand? You are put in the unsatisfactory position of saying, ‘I need to see more data.’”
Mr. Seroka of the Port of Los Angeles insists he has not seen consumer demand fall yet. The port had its busiest first quarter in history this year and the second busiest in April. On Friday, it is set to release new figures on the cargo it handled in the month of May, which Mr Seroka said would be “sensational.”
The port was expecting an “earlier than normal peak season,” said Mr. Seroka, as volumes from China increase as lockdowns increase, and as retailers bring fall produce earlier to avoid supply chain delays.
“As inventory levels improve for appliances, furniture and maybe fixtures, you might see a little softening in those segments,” he said. “But the retail items we buy in the big boxes, the hardware store, even our convenience stores, are holding up exceptionally well.”
A delay “didn’t happen in my neck of the woods,” he said.