Dive Brief:
- Walmart has seen a 51% increase in throughput at the congested San Pedro Bay ports in the past month after shifting to 24/7 shipping, CEO Doug McMillon said during a White House meeting with business leaders on Cyber Monday.
- The country's largest retailer has moved cargo 26% faster nationally "in terms of getting containers through ports" over the last four weeks, McMillon told President Joe Biden via video call at the hybrid roundtable, which eight other CEOs attended in person.
- Biden said the shift to round-the-clock operations at the Los Angeles and Long Beach ports has resulted in a 40% drop in the number of containers sitting on docks for more than eight days. "We keep building on that progress," he said.
Dive Insight:
Retailers brought a holiday wish list of additional supply chain actions to the White House meeting. The Retail Industry Leaders Association – whose members include attendees Walmart, Best Buy, CVS, Food Lion and Kroger – offered short- and long-term recommendations in an open letter to Biden Monday.
In the short term, the association requested "addressing restrictive appointment system requirements that disadvantage frontline truckers and contribute to chassis and container dislocation, increasing the ability for the efficient return of empty containers with unrestricted acceptance of empties, requiring ocean carriers to accelerate evacuation of the tens of thousands of empty containers clogging the ports, and finally, helping ports address the root causes of import container dwell."
Longer term supply chain solutions require targeted investment for infrastructure modernization, addressing systemic operational challenges in major U.S. ports, and enabling data sharing and interoperability for end-to-end visibility, the group said.
Biden's infrastructure deal contains $5.2 billion in direct funding for ports, according to the American Association of Port Authorities. The retailer association urged the president to allow shippers, whom it referred to as "primary users of ports and freight infrastructure," to play a role in helping determine "effective targeting of funds."
Biden boasted a 20% drop in container ships spending more than nine days at the California ports in a speech last month after appointing John Porcari as port envoy and brokering a shift to shipping during off-peak hours. The president's planned remarks after Monday's briefing were rescheduled to Wednesday.
Walmart was one of six companies the White House said had committed to using off-peak hours at the West Coast ports. The company projected it "could increase throughput by as much as 50% over the next several weeks," according to a White House fact sheet in October.
Walmart reached that goal, and the increased throughput – and two-thirds of Walmart's goods being made or grown in the U.S. – helped the retailer boost its inventory levels 10% YoY in preparation for a busy holiday season, McMillon said.
"We have more inventory than we did a year ago and have the inventory that we need to be able to support the business," he said. "And we are seeing progress. The port and transit delays are improving."
