Forecast on U.S. Supply Chain Developments: 

Update from March 18, 2022

The White House launches a pilot program to make U.S. logistics and transport even more competitive

The U.S. government is taking steps to decongest the supply chains damaged by the pandemic. On March 15, the Biden administration announced a pilot program under which major logistics companies in the U.S. will be able to share their commercial data and speed up the movement of goods. The initiative, called Freight Logistics Optimization Works (FLOW), involves 18 companies including UPS, FedEx, the Port of Los Angeles, and many other transport companies.

These are the first steps of a growth strategy that should conclude with the renewal of key infrastructures for the U.S. logistics sector. After all, the wave of goods arriving in the U.S. market should continue at record pace for at least the next ten years: the U.S. must respond to this growth trend by building a supply chain that is up to the current situation.

In 2022, consumer spending in the U.S. will increase, with physical stores and e-commerce set to experience unprecedented growth. Additionally, U.S. ports will receive at least $17 billion in funding to resolve bottlenecks and structural problems at the sites.

Original Article from November 5, 2021

The Supply Chain Crisis: An Opportunity for Foreign Companies Exporting to the U.S.

President Biden Announces New National Measures to Create Resilience in the U.S. Supply Chain

The President’s Summit is Based on Recent Actions by the Biden-Harris Administration, Including Expanding the Operating Hours of U.S. West Coast Ports

The return to global supply chain efficiency has been the administration’s top priority from day one. 

Although supply chain disruptions remain the most significant side effect of the Covid pandemic, they also signal a rapid recovery in consumer demand in the U.S. after one of the deepest recessions ever recorded in America.

The U.S. Logistics Chain is Moving Record Volumes of Goods

As the pandemic eases, it is expected that U.S. consumers will reduce spending on goods and increase spending on services. This “reshuffling” of consumer spending in the U.S. will be crucial to restoring the efficiency of the supply chain to pre-pandemic levels. The U.S. has experienced a historically strong recovery. Here are some key recovery statistics from the U.S. [Source: White House]:

• +5 million jobs
• Unemployment rate <5%
• -2.5 million people requiring unemployment benefits
• Food insecurity down by about 40%

As a result of this recovery, American families have brought their overall spending in line with pre-pandemic trends. It is the composition of this spending that is very different from usual. Since the outbreak of the pandemic, U.S. consumer purchases of goods such as furniture, appliances, and food have surpassed any previous record, while spending on services (e.g., healthcare, holidays) has not yet returned to pre-Covid levels. As the pandemic eases, the first category will decrease while the second will increase, substantially reducing supply chain problems for goods.

According to data released by the White House Task Force, retail distribution warehouses in the U.S. are at pre-pandemic levels. This proves that the apocalyptic tones seen in the media are irrational: the negative impact on American consumers will be minimal.

While there is concern that the current bottleneck may persist, the reality is much less dramatic than it seems. The data from the U.S. Census Bureau suggests that despite the problems within the U.S. supply chain, U.S. operators are successfully keeping store shelves stocked, showing that the U.S. can handle even the most challenging crises.

The U.S. Logistic Sector Withstands the Difficulties

President Biden has made a call to action to encourage every link in the supply chain to keep the flow of goods moving toward the United States.

• In the past week, Union Pacific (one of the leading railway lines from the Port of Los Angeles) announced that it will operate its port station 24/7 and offer discounts to customers for each container moved by rail.
• The U.S. Department of Transportation (USDOT) and the state of California have announced a $5 billion partnership to modernize the goods handling chain and identify state sites that can be used as temporary warehouses, allowing trucks to carry more goods. This will strengthen the capacity and resilience of the U.S.’s main import/export hub.

The result of these combined efforts will be more storage space available and faster routes for moving containers in and out of ports. These strategies represent the first steps toward making the U.S. supply chain stronger than ever. With more railcars in operation, there will be greater capacity to move goods out of ports, clear backlogs, and break down the barriers that have made it difficult to move large volumes of goods in the U.S.

In This  Moment, There Are Great Opportunities for Foreign Companies Looking to Sell in the U.S.

Crises often give rise to the best opportunities. With imports from China becoming more expensive and shortages of electricity and other essential commodities, international companies really have the chance to carve out a new dimension in the American market with distributors, selling all those products that U.S. companies are experiencing a shortage of.

In short, internal problems in China are the root of this unique and highly favorable situation for companies specializing in certain sectors, primarily the mechanical sector: now is the time to convince the U.S. to change suppliers, and this window of opportunity won’t remain open for long.