Business & Lobbying

Industry groups warn vaccine mandate could worsen holiday supply chain issues

Cargo ship at sea

Industry groups are warning President Biden that his COVID-19 vaccine mandate for federal contractors will exacerbate the nation’s supply chain issues, potentially leading to depleted shelves this holiday season. 

In a letter to the White House, the National Association of Wholesaler-Distributors (NAW) this week said that distribution companies — many of which are federal contractors — will not be able to vaccinate all of their workers by the Dec. 8 deadline, despite offering numerous incentives to encourage them to get the shot. 

“Come December, many companies will be unable to keep products moving through their warehouses and distribution centers to satisfy growing consumer demand if forced to terminate these essential workers,” the group wrote. 

It urged Biden to delay implementation of the vaccine requirement until supply chain issues are sorted out and called for alternatives such as frequent COVID-19 testing. 

Manufacturers, suppliers and distributors, who laid off workers and slowed operations at the onset of the pandemic, are now struggling to meet the dramatic rebound in demand, which has caused massive bottlenecks at ports and other parts of the supply chain. They’re worried they could lose employees who refuse to get vaccinated, worsening the existing worker shortage. 

“If many NAW members and other federal contractors should choose to cancel their contracts rather than terminate employees, federal agencies may find their supplies of essential goods disrupted,” the distributors’ group added in its letter to Biden. 

The Cargo Airline Association, which represents companies such as FedEx and UPS, also expressed concerns about the mandate’s impact on supply chains this week. In a letter to the Office of Management and Budget, the group called for the rule’s implementation to be delayed until the first half of 2022.

Unlike the Biden administration’s impending vaccine-or-test rule for private companies with 100 or more workers, the federal contractor requirement doesn’t have a testing alternative.

This week, the White House softened its tone on the federal contractor mandate, indicating that it will not terminate federal workers who don’t comply until after they go through a process of “education and counseling.” Contractors will be tasked with enforcing the same rules.

“It’s important to remember that this is a process, and the point here is to get people vaccinated, not to punish them,” Jeff Zients, the White House COVID-19 task force coordinator, told reporters Wednesday.

Southwest Airlines and American Airlines, both federal contractors, said this week that they will not fire workers who don’t comply by Dec. 8.

“We’re not going to fire anybody who doesn’t get vaccinated,” Southwest CEO Gary Kelly said during an earnings call. “How we work through the people that don’t get vaccinated or don’t seek an accommodation, we’re going to have to figure out and we’re working with the government on that.”

Tags American Airlines Coronavirus coronavirus pandemic coronavirus vaccine COVID-19 COVID-19 vaccine fedex Jeff Zients Joe Biden mandate National Association of Wholesaler-Distributors NAW southwest airlines Supply chain Vaccine vaccine mandate
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