KEY POINTS

  • The U.S. is faced with a 'shipping Armageddon' just before the holiday season
  • Pete Buttigieg 's spin on the crisis: President Biden drove the economy out of a near recession
  • Supply side problems as well with driver shortages leading to bottlenecks: Uber executive

The United States, faced with an unprecedented supply chain crisis, has mandated 24/7 operations in ports on the West Coast, intended so that they are decongested and goods moved to destinations. In an interview with CNBC, Lior Ron, the head of Uber Freight, the logistics division of Uber Technologies, dubbed the present crisis a “shipping Armageddon," and rued that there was no single solution, and the problem could be solved only with industry wide and coordinated responses from all the stakeholders. Ron lamented that technology alone is not enough, given that the driver shortage, which compounded the problem, is human centered.

This human element behind the crisis has been cited by the Transportation Secretary Pete Buttigieg as a key reason to pass the bipartisan Infrastructure Bill, held up in a divided and gridlocked Congress. In an appearance on CNN's State of the Union, and cited by Fox Business, Buttigieg opined that the shipping crisis proved that the economy has emerged from the pandemic induced recession, with due credit to President Joe Biden's efforts towards the same. Indeed, taken together, Buttigieg's twin pitches sure looked as though he has spun the narrative around Biden and the Democrats and their perceived successes.

However, Buttigieg also pointed to the likelihood of the present supply chain crisis to be an extended one that would stretch into the next year. Separately, a press release from the White House quoted a senior official in the administration, who said they have speeded up the process of issuances of commercial driving licenses, intended to address the problem of the driver shortage. This was also addressed by Uber's Ron, who pointed to both the increased demand and the concomitant supply side problems, as having contributed to the delays in deliveries. Both Buttigieg and Ron appeared to be in agreement (though separately) about the twin demand and supply side factors.

Having said that, Buttigieg sidestepped questions on whether families with kids ought to order early to avoid delays in goods being delivered. As reported earlier, many leading retail chains such as Walmart, have advised consumers to order well before the holiday season started to avoid bottlenecks that can cause deliveries to be delayed. Moreover, with China in the grip of a power crisis caused by shortages of coal, factories have scaled down production, which is another reason for the present worldwide supply chain crunch.

A shortage of lorry drivers has compounded supply chain issues A shortage of lorry drivers has compounded supply chain issues Photo: AFP / Glyn KIRK