The NPR Politics Podcast - Transportation Secretary Pete Buttigieg Optimistic On Supply Chain Problems

Episode Date: October 13, 2021

Secretary of Transportation Pete Buttigieg tells NPR that the Biden administration is focused on resolving supply chain issues in time of the holiday shopping season. Also: what is a supply chain and why are they causing issues?This episode: White House correspondent Asma Khalid, and chief economics correspondent Scott Horsley.Connect:Subscribe to the NPR Politics Podcast here.Email the show at [e-mail] the NPR Politics Podcast Facebook Group.Listen to our playlist The NPR Politics Daily Workout.Subscribe to the NPR Politics Newsletter.Find and support your local public radio station.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

Hey there, it's the NPR Politics Podcast. I'm Asma Khalid. I cover the White House. And today on the show, we're going to talk about supply chains, which I know just saying that sounds a little bit wonky. So to help us make sense of it all, we have invited Scott Horsley, NPR's Chief Economics Correspondent, on to explain it all to us. Hey there, Scott. Hey, love talking about supply chains. So Scott, let's start with a pretty basic question here, which is, you know, what is a supply chain? I think, you know, some folks hearing that phrase may kind of gloss over it. It's a kind of a wonky term in itself. Sure. Well, at one end of the supply chain, you have a consumer who wants something, a box of cereal, a stereo, a new car, whatever it

might be. And the supply chain is all the people along the way that are involved in getting that product to the consumer. Whether it's the farmer that grows the wheat for the Wheaties or the auto company that builds the car and all the suppliers that go into that and the steel workers and all the component makers and that sort of thing. And generally speaking, it's a nice chain where when you pull on one end, all the different pieces come right along. And it works very efficiently to deliver an enormous amount of goods to people at low prices. Right now, though, there are a lot of kinks in that chain. So, Scott, you mentioned there are a lot of kinks in that chain. So, Scott, you mentioned there's a lot of kinks. People are not necessarily able to get the products that they are ordering on time, and that has led to frustration.

So walk me through that. What are the problems in the supply chain right now? That's right. Things are taking longer to get to the consumers, and they're costing more when they get there. Just this morning, we learned that inflation last month was 5.4%. That matches the highest it's been in 13 years. And supply chain hangups are a big factor of that. There's a number of things going on. One is people are just buying a whole lot more stuff. They haven't been able to eat out or travel or go to concerts as much as they usually would. So they're spending more on goods.

And a lot of those goods are coming from overseas, or maybe they're just coming from another part of the country. And that's really overtaxed the transportation system. It's like trying to squeeze six lanes of traffic through a four-lane tunnel. And so there's just been a lot of snarls there. Keep in mind, too, we're still in the midst of a pandemic. So a lot of factories are having trouble finding enough workers to make the things that people are ordering, and that's been a hang-up as well. And then as this has dragged on, some people have decided to take precautions. If they think it's going to take longer to get some product that they may want a month or two months from now, they might go ahead and order it now, and that just has meant there's even more demand. So all of this has led to hangups in what is normally a just-in-time, smoothly functioning supply chain. And, Scott, this is not an easy problem to solve.

And I should say it's actually a very tricky thing for the government to step in to solve because key parts of this supply chain are owned by private companies, right? You're talking about private retailers. Think of like Walmart and Home Depot have these, you know, container ships that they're ordering, but also the ports themselves. That's right. Almost all of the supply chain is owned by private companies, not by the government. It's not as if Amtrak is making these deliveries or the Air Force is ferrying goods around the country. So almost all the links in this chain are private, oftentimes competitors. And so there are some challenges in getting them all to line up and move as efficiently as they'd like. What the Biden administration has been trying to do is

tackle discrete parts of this. One of the sort of poster children of the supply chain hangups has been the semiconductor shortage that's been plaguing automakers and others. And the administration early on tried to address that. Today, they announced a big effort to try to tackle port congestion, in particular in Los Angeles, which is the nation's busiest cargo port. The administration and the port announced that L.A. will now start operating around the clock seven days a week to try to clear some of the backlog of cargo that's been stacking up there. So, Scott, even though, you know, as you were saying, key components of the supply chain are privately owned, as you mentioned, the Biden administration is stepping in, trying to resolve some of the kinks here. I spoke to the Transportation Secretary,

Pete Buttigieg, today about all of this. I started by asking him about the news today that the Port of Los Angeles is now going to operate 24-7, which it had not been doing to date. So the best way to think about it is that it's necessary but not sufficient to help reduce some of these bottlenecks. These ports, LA and Long Beach, just the two of them represent about 40% of containers coming into this country. So them going to 24-7 is a big deal. But you can think of that as basically opening the gates. Next, we've got to make sure that we have all of the other players going through those gates, getting the containers off of the ship so that there's room for the next ship, getting those containers out to where they need

to be. That involves trains, that involves trucks, so many steps between the ship and the shelf. And part of what we've been doing, including our convening at the White House today with everybody from retailers to shippers to the port leaders, is to get all of those players into the same conversation. Because even though they're all part of the same supply chain, they don't always talk to each other. At the same time, though, I did hear yesterday from White House officials that to some degree, the supply chain is essentially in the hands of the private sector, which really does make me wonder essentially what the government can do. What levers do you all have beyond what you're doing at this point? Well, we as a federal government don't own and operate most of the supply chain. These are private sector systems, and they're global ones at that. But that's where we can come in as an

honest broker and secure commitments like the ones that have been announced today. Not only LA and Long Beach, the ports go into those 24-7 operations, but some of the companies representing the most shipments in this country agreeing to do the same. We have commitments from FedEx and UPS to expand their off-peak hours. We have commitments from Walmart, Target, Home Depot to take steps that will move goods more efficiently and more quickly. Again, there are so many different pieces to this puzzle. And it's a classic collective action problem where everybody's better off if everybody acts, but no one player can do it alone. Now you, our listeners, I'm sure are wondering what this all means for getting holiday presents.

We are, after all, inching closer and closer to the biggest shopping season of the year. Well, we're going to take a quick break. And when we get back, I ask Secretary Buttigieg when all of the kinks in the supply chain could be ironed out. And we're back. Now, the administration says the supply chain is essentially in the hands of the private sector. But that doesn't mean that it isn't a potential political problem for the Biden administration. And now the White House is starting to try to intervene and help. So I asked Secretary Buttigieg if this puts them in a tricky position, trying to fix a problem that they can't actually entirely fix.

I think anything that matters to the American people matters to the president. And Americans are feeling the effects of these supply chain issues. But let me say something else. These short-term issues are certainly a long time in the making and have a lot of different parts, some of which we can shape and some of which we can't. But the bigger picture here is that we're putting a record amount of shipping been working on, in addition to these immediate supply chain issues, we're just upgrading and modernizing our infrastructure. You know, the bipartisan infrastructure framework has $17 billion for importance. That's a scale of level that we've not seen before. And it's important and needed if we're going to be able to not just respond to a current crunch or a recent crisis, but really, as the president often says, win the 21st century.

When can folks begin to see some of the improvements in the steps that are being taken today, right? So if you, for example, were hoping to get certain gifts by the holiday season, are delays going to be sorted out by then? I'm just wondering what that timeline looks like for the steps that are being taken today and how much of an improvement people can anticipate seeing by the holiday season. Could you help us understand what that may look like? Well, we've already seen some encouraging developments. Long Beach, for example, announcing a reduction in the dwell time of containers waiting to get loaded onto rails. Other things are going to take longer, and we're in the middle

of a 90-day sprint, although you could call it a four-year sprint because this really began with the president signing an executive order in February, calling the whole government to work in a very urgent fashion on supply chain issues. But again, these are a long time in the making. You have a policy success, which is demand and income roaring back, meeting a huge challenge in terms of the resiliency of our supply chains. And this calls for long term as well as immediate action, which is exactly what the president and the administration have been doing. Secretary, do you anticipate then that people will have a pretty smooth holiday season in terms of like ordering gifts and being able to get them on time? And what do you tell people to expect or what should people expect? Well, look, it's always been the case that if you're, for example, like the last minute show up at the mall on Christmas Eve kind of shopper,

you're going to be less likely to find what you're after than if you get out ahead of things. I always tell myself I'm going to be in the category that is on top of it by Labor Day and then life happens. But what I can say is that, you know, we heard just this morning from the leadership of retailers like Walmart, Target, Home Depot, talking about their commitment to get the inventory to where it needs to be, even in the face of these headwinds. Before I let you go, you know, you are a new dad. So congratulations again. Have you had any issues getting any of those like standard baby gear items that you need, whether it's baby supplies, baby toys, baby bottles, baby formula, anything that you need?

How have things been? I'd say that the baby industrial complex has definitely found its way into our home. So no delays on that front. But yeah, it's a bewildering array of things that are out there that they tell you you need. You never know what's useful, but obviously the most useful and important thing has been just the support network that we're blessed to have with family and friends. Well, kudos and enjoy that. Enjoy all the help that you can get. That is the lesson learned that I've learned from the benefit of hindsight. Anybody who wants to make you dinner, take them up on that. Well, Secretary, thank you very much. We really appreciate you taking the time.

Thanks very much. Good speaking. So, Scott, we heard the Transportation Secretary there talk about a 90-day sprint, right? They are clearly on a mission to have some of these problems resolved before the holidays. But what do you think it means politically for this administration if some of the problems that you've outlined are not necessarily able to be resolved within that timeframe? Well, this is a tough challenge for the administration. And I know this is the politics podcast, not Supply Chain Weekly. But this is not really a political question. Getting products on store shelves is the similar challenge, whether you're shopping at Walmart or Whole Foods. As the Secretary pointed

out, all the players here have their own interest in making this work more smoothly. It's in no retailer's interest and no trucker's interest and no railroad's interest to have a bunch of cargo sitting stalled somewhere out in the countryside instead of being on a retail shelf when somebody and no trucker's interest and no railroad's interest to have a bunch of cargo sitting stalled somewhere out in the countryside instead of being on a retail shelf when somebody goes Christmas shopping. So everyone's interests here are aligned in tackling the problem, even if it might be difficult for them to work in a coordinated way. And the optimum hope here is that the administration can maybe smooth out some of those competitive instincts and get them all lined up and rowing in the same direction. So Scott, what signs should we be

looking for to understand if this supply chain situation is getting any better, if it's getting worse, if it's kind of just remaining stagnant? How will we know? Well, the obvious sign for American consumers is when you go to the store, are there the goods you want on the shelves? And what are the price tags attached to those goods say? The less obvious signs, because supply chains generally operate kind of in the background and invisibly, are, you know, what is happening all along the different links of the chain. And one thing that this effort by the administration and efforts by the news media have done in recent months is to sort of highlight this often invisible supply chain. We've all seen the pictures now of the containers stacked up like

Legos outside overcrowded ports. If those stacks start to get smaller, if the congestion on the railroad starts to ease, if wait times for new cars start to come down, that's when we'll know that the progress is being made. So there are lots of measures that will tell us how the supply chain is either getting straightened out or getting more kinked up. But the obvious sign for consumers will be, can they get the products that they want for prices that they are willing to pay? Well, Scott, thank you very much for helping us make sense of what could be a rather complicated and very difficult subject to make sense of.

Really appreciate it. Well, I hope everyone is more focused on the supply chain than they ever were before. All right. Well, that is a wrap for today. I'm Asma Khalid. I cover the White House. And thank you all so much, as always, for listening to the NPR Politics Podcast.