A shortage of containers, port congestion and high demand for goods has the global shipping industry on its knees. For the U.S., though, there is support for a solution: President Biden’s massive bipartisan infrastructure bill.
In a strongly worded letter late Thursday, the American Apparel & Footwear Association (AAFA) urged policymakers to support the bill and address an ongoing shipping crisis that has caused “a destructive cycle of lengthening delays and rocketing costs.”
Amid inflationary prices across different product categories, the shipping crisis is one of several challenges facing apparel, footwear and retail companies. Even if ports are cleared, there’s a shortage of truck drivers to deliver containers to warehouses and distribution centers. According to data from the Bureau of Labor Statistics (BLS), there are about 35,000 fewer drivers now as compared to the pre-pandemic period.
But that’s not all. Retailers have been rocked by their own labor shortage as the industry heads into the critical back-to-school and holiday shopping season. A perfect storm caused by the pandemic along with explosive e-commerce growth and uncompetitive wages is contributing to retailers finding themselves shorthanded in stores as well as fulfillment and service call centers.
[See related story: What’s Causing the Great Retail Worker Shortage?]
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Regarding the shipping crisis, AAFA leadership sent a letter to President Joseph Biden praising the infrastructure bill as well as a June 9 executive order “that directs the Federal Maritime Commission to consider additional rules to counter unfair detention and demurrage costs.” Stephen Lamar, president and chief executive officer of the AAFA, said in a statement that “American businesses need assistance now.”
The infrastructure bill is also seen as a salve to address growing inflation. “The next several months are critical to the American retail industry, as we prepare for back-to-school and holiday shopping. If action is not taken, we risk empty shelves that would trip up our nation’s economic recovery,” Lamar said. “This week’s inflation news shows that this is already having an effect on consumers. While there are many medium and long-term actions that must be taken, the President can have an immediate impact on American small businesses and American consumers by ending the previous administration’s punitive Section 301 tariffs that continue to hamstring our industry.”
In the letter to President Biden, Lamar said he was writing to “express strong support for swift action on the bipartisan infrastructure package, which will make much-needed investments in ports, rail, and roads to ensure that the American economy of tomorrow will continue to move and grow.”
“The investments in the bi-partisan infrastructure package fix critical problems that, if not addressed, would eventually bring the American economy to a standstill,” he wrote. “Further, the package is forward-looking, by preventing future bottlenecks that could threaten our economic growth. Your leadership has brought the bi-partisan infrastructure package to this point. We look forward to working with you to bring the package over the finish line.”
But Lamar also used the letter to reiterate calls for addressing other trade-related issues. In its statement, the AAFA asked for the removal of Section 301 tariffs and the renewal of the Generalized System of Preferences and Miscellaneous Tariff Bill.
Lamar wrote that with costs “spiraling out of control, companies, particularly small businesses, need help now. I urge you to take strides to offset these costs by immediately removing the biggest single cost on our industry – tariffs, including by ending the U.S. government’s punitive Section 301 tariffs on China and renewing the Generalized System of Preferences (GSP) program and the Miscellaneous Tariff Bill (MTB).”
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