On Tuesday, the White House announced an “action plan” to reduce congestion at U.S. ports and inland waterways, with the aim of mitigating the supply chain issues that are slowing down the delivery of goods across the country.
Administration officials have indicated that much of the plan will be funded by the $17 billion in ports funding that is included in the newly-passed bipartisan infrastructure bill, even though President Joe Biden has not yet officially signed the bill into law. Leftover funds from previous Department of Transportation (DOT) grants will also be used to clear overflowed ports of entry.
Biden will likely discuss portions of the plan on Wednesday during a scheduled visit to the Port of Baltimore.
According to a fact sheet provided by the Biden administration, the federal government will “increase federal flexibilities for port grants; accelerate port infrastructure grant awards; announce new construction projects for coastal navigation, inland waterways, and land ports of entry; and launch the first round of expanded port infrastructure grants funded through the Bipartisan Infrastructure Deal.”
Officials are highlighting specific actions planned for the Port of Savannah, which is especially backlogged. Around $8 million of federal spending will be dedicated to that port, creating five inland lots that will help absorb shipping containers that are clogging the docks. On average, containers have been sitting at the Port of Savannah for about 8.5 days at a time, more than twice the amount of time the port typically aims to have containers remain in one place.
That project and others at the Port of Savannah will provide “immediate relief” before the holiday season, within the next 30 to 45 days, the administration said.
Beyond slowing down the delivery of a number of goods, the supply chain issue has led to higher costs across the country. According to economist Mahir Rasheed of Oxford Economics, around 60 percent of the recent increase in the prices of consumer goods can be attributed to the slowing down of the nation’s supply chain.
Overall, consumer prices increased by 6.2 percent compared to this time last year. Such increases began in April, when the country started to reopen and demand for products went up, while supply for products remained unchanged.
Imbalances between supply and demand “continue to drive inflation metrics” to this day, said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.
The government plays a minimal role in the supply chain issue, as private companies handle most of the work at ports of entry. But as worries about inflation and the state of the U.S. economy increase, Biden appears to be facing political backlash from voters over the crisis.
An Economist/YouGov poll conducted on November 6-9 found that Biden’s approval rating is currently at 42 percent, down by 9 points compared to his polling in early July. Only 39 percent approve of Biden’s handling of the economy, also down 9 points from where he stood in the July poll.
A plurality of respondents (38 percent) rated the U.S. economy overall as “poor” while just 32 percent said it was “fair.” Only 25 percent said it was “good” or “excellent.”