LAX opens new refrigerated warehouse
Southern California has long been one of the kings of the maritime trade industry. Now, the region is investing in a new cold warehouse near Los Angeles International Airport (LAX) to better compete in the perishable air freight market.
Miami has long been the leader in that market, importing 73 percent of the United States’ 181,000 tons of fruit and vegetable imports last year. According to a report in the Los Angeles Times, that meant many of the South American perishables imported into the U.S. in Los Angeles stores were first transported cross-country on a three-day trucking journey.
Not exactly what you’d call fresh.
“There is ample room for Los Angeles to grow in moving perishables,” David A. Herbst, executive vice president of Mercury Air Group Inc., told the LA Times. The company unveiled the 16,000-square-foot warehouse Monday, where Herbst also said that the facility “can handle 100 tons a day and bring in $90 million annually in revenues.”
PLANE SPOTTING AT LAX
That could be a huge boost to the Southern California logistics market, which has a stranglehold on West Coast maritime shipping. The region handles 40 percent of U.S. imports from Asia, which helps employ 500,000 people in the Southland.
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Perishable air freight has been an entirely different animal, however. While much of California’s produce is grown in-state, Southern California is so far behind in the refrigerated import sector that the Mercury Air’s new cold warehouse increased cold storage capacity around LAX by 35.5 percent.
Increased capacity should help Los Angeles import more fruit and vegetables. LAX came in third in that market, earning less than 5 percent of the total share.
Los Angeles isn’t the only airport trying to steal a share of Miami’s perishable air freight dominance, either.
“A number of airports are trying to take some of this business away from Miami,” international trade advisor for Beacon Economics Jock O'Connell told the Times. “New Orleans has been making a grab. So have Atlanta and Phoenix. This is something that Los Angeles has got to do if it wants to attract this kind of business.”
Biden establishes Supply Chain Disruptions Task Force
The US government is to establish a new body with the express purpose of addressing imbalances and other supply chain concerns highlighted in a review of the sector, ordered by President Joe Biden shortly after his inauguration.
The Supply Chain Disruptions Task Force will “focus on areas where a mismatch between supply and demand has been evident,” the White House said. The division will be headed up by the Secretaries of Commerce, Transportation, and Agriculture, and will focus on housing construction, transportation, agriculture and food, and semiconductors - a drastic shortage of which has hit some of the US economy’s biggest industries in consumer technology and vehicle manufacturing.
“The Task Force will bring the full capacity of the federal government to address near-term supply/demand mismatches. It will convene stakeholders to diagnose problems and surface solutions - large and small, public or private - that could help alleviate bottlenecks and supply constraints,” the White House said.
In late February, President Biden ordered a 100 day review of the supply chain across the key areas of medicine, raw materials and agriculture, the findings of which were released this week. While the COVID-19 health crisis had a deleterious effect on the nation’s supply chain, the published assessment of findings says the root cause runs much deeper. The review concludes that “decades of underinvestment”, alongside public policy choices that favour quarterly results and short-term solutions, have left the system “fragile”.
In response, the administration aims to address four key issues head on, strengthening its position in health and medicine, sustainable and alternative energy, critical mineral mining and processing, and computer chips.
Support domestic production of critical medicines
- A syndicate of public and private entities will jointly work towards manufacturing and onshoring of essential medical suppliers, beginning with a list of 50-100 “critical drugs” defined by the Food and Drug Administration.
- The consortium will be led by the Department of Health and Human Services, which will commit an initial $60m towards the development of a “novel platform technologies to increase domestic manufacturing capacity for API”.
- The aim is to increase domestic production and reduce the reliance upon global supply chains, particularly with regards to medications in short supply.
Secure an end-to-end domestic supply chain for advanced batteries
- The Department of Energy will publish a ‘National Blueprint for Lithium Batteries’, beginning a 10 year plan to "develop a domestic lithium battery supply chain that combats the climate crisis by creating good-paying clean energy jobs across America”.
- The effort will leverage billions in funding “to finance key strategic areas of development and fill deficits in the domestic supply chain capacity”.
Invest in sustainable domestic and international production and processing of critical minerals
- An interdepartmental group will be established by the Department of Interior to identify sites where critical minerals can be produced and processed within US borders. It will collaborate with businesses, states, tribal nations and stockholders to “expand sustainable, responsible critical minerals production and processing in the United States”.
- The group will also identify where regulations may need to be updated to ensure new mining and processing “meets strong standards”.
Partner with industry, allies, and partners to address semiconductor shortages
- The Department of Commerce will increase its partnership with industry to support further investment in R&D and production of semiconductor chips. The White House says its aim will be to “facilitate information flow between semiconductor producers and suppliers and end-users”, improving transparency and data sharing.
- Enhanced relationships with foreign allies, including Japan and South Korea will also be strengthened with the express proposed of increasing chip output, promoting further investment in the sector and “to promote fair semiconductor chip allocations”.