Walmart Inc (NYSE:WMT), FedEx Corporation (NYSE:FDX), and United Parcel Service Inc (NYSE:UPS) are set to join forces to alleviate global supply chain constraints ahead of the holiday shopping season, the White House will announce Wednesday.
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Discussing Supply Bottlenecks
The biggest goods carriers in the U.S. “will make commitments towards moving to 24/7 working during off-peak hours,” according to senior administration officials quoted on NBC News.
Also, Walmart, UPS, and Home Depot Inc (NYSE:HD) executives will meet with White House representatives to discuss possible solutions to the current supply chain issues.
Officials said, “The federal government will be a strong and willing partner in this effort in the near term but also in rebuilding a better system for the 21st century.”
“We'll be working with stakeholders across the supply chain for a 90-day sprint to the end of the year to troubleshoot and alleviate many of the bottlenecks we can quickly address.”
President Joe Biden is also said to address the ports congestion issue during a meeting Wednesday with representatives of the Port of Los Angeles, the Port of Long Beach, California, and the International Longshore and Warehouse Union.
Shipping delivery times from the Asian market to the U.S. have almost doubled due to container backups at shipping ports. Critical labor shortage and Covid restrictions caused by ongoing outbreaks have played a major role.
Amid the logistics bottlenecks and faced with month-long delays, retailers have responded with alternative solutions such as renting private cargo vessels to get around the clog-ups that threaten the holiday shopping season.
According to U.S. officials, UPS and FedEx joined forces last year to move 40% of packages by volume, and by doing so “they're telling the rest of the supply chain you need to move it, to let's step it up.”
According to a recent study by Salesforce (NYSE:CRM), digital sales will soar to $1 trillion globally amid a 20% rise in costs for consumers. Manufacturing capacity, logistics costs, and labor shortage will mean that the U.S. retail industry could report up to $223 billion in extra costs.
Walmart, FedEx, and Salesforce are part of the Entrepreneur Index, which tracks 60 of the largest publicly traded companies managed by their founders or their founders’ families.