Excerpted from Bakersfield.com
Jan 23, 2022
By Assemblyman Vince Fong and Rob Lapsley
Much attention has been on the congestion at California’s San Pedro Bay ports that is plaguing our nation’s — and the global — supply chain. An intricate and intertwined system moves goods and products around the world through the ports, shipped via rail and truck to warehouse facilities ultimately arriving at stores and homes. The chokepoints we are seeing throughout the supply chain are being felt by local stores, farmers, manufacturers and restaurants in Kern County and throughout California now and into the future.
Currently, 98 ships in the ports of Los Angeles and Long Beach are waiting to be unloaded. Before the pandemic, about 17 ships would be anchored at any given time. Together, these two ports account for 40 percent of all shipping containers entering the United States moving more than $400 billion of consumer goods each year. Billions of dollars in goods and merchandise are stuck on these ships.
Stores and retailers are struggling to obtain everyday items to stock their shelves. Manufacturers who rely on parts to be delivered on time are being disrupted because of inventory delays. Every item you can imagine moves through the supply chain.
Exports are also affected, and California’s farmers are experiencing the fallout. The state’s production of fruits and vegetables from almonds to pistachios to apples and every crop in between are not being exported at their typical rate. In fact, California farmers are seeing an estimated 20 percent reduction in their export opportunities due to a lack of reliability of ships and bottleneck traffic at our ports.
The disruption in the supply chain caused by the crowded ports is complicated.
There are no easy answers, but there are answers. Until more manufacturing of goods can be returned to California, which is necessary, both short- and long-term solutions must be discussed.
There is no doubt that Americans have shifted their purchasing habits. But to say that the crisis was just caused by purchasing habits during COVID fails to address the entirety of the crisis. Simply focusing on one aspect will lead to patchwork solutions resulting in another crisis.
In the short term, the focus must be on moving goods quickly and efficiently. Empty containers are clogging the ports; they must be moved immediately to open up needed space and free truck chassis. The hours of operation at the distribution centers must align with the ports for the smooth movement of goods. Owner-operator truck drivers continue to be in legal limbo as the fate of legal challenges hangs over their heads.
In the long term, sustainable investments must be made in the state’s commerce infrastructure to increase the capability to efficiently move even more merchandise across the country. Without viable investments, the ports will lose businesses to other states resulting in the loss of well-paying jobs. The state must also dedicate resources so that the manufacturing of goods can be returned to California.
Like all California businesses, the entities in the supply chain including the ports, rail, trucking, and warehouse operations endure layers and layers of state and local laws that have complicated their operations. An evaluation and examination of these regulations is necessary to determine their impact on the goods movement crisis.
The current situation is dire.
There must be a sense of urgency to tackle this national and global crisis that is rippling every aspect of the economy. Quick thinking and bold action is necessary to not only reduce supply chain bottlenecks but to strengthen our economic future.
Assemblyman Vince Fong, R-Bakersfield, represents the 34th Assembly District in the California Legislature. Rob Lapsley is president of the California Business Roundtable.