Excerpted from Daily Breeze
April 26, 2022
By Assemblyman Vince Fong and Lance Hastings
Early this year, ships the size of three football fields containing billions of dollars of merchandise sat idle for weeks in the Ports of Los Angeles and Long Beach. Together, these two ports account for 40% of all shipping containers entering the country moving more than $400 billion of consumer goods each year.
The pandemic and increased consumer spending habits have snarled the supply chain, forcing companies – big and small – to scramble to meet current demand.
Regulatory relief provided by the state to increase truck weight limits has been helpful to get more product on the road. But more must be done for the 30,000 manufacturers in California.
Manufacturing is an integral part of the economy; many are small businesses that support high paying jobs. This industry generates over $315 billion each year for the economy, and its exports represent $120 billion in goods. Over 20% of all manufacturing workers in California directly depend on exports for their jobs. The Milken Institute estimates that for every job created in manufacturing, 2.5 jobs are created in other sectors.
Manufacturers are now hit with considerable market uncertainty and disruptions in their operations. They are forced to wait for raw materials that could once again sit idle at the ports.
Products cannot be completed without parts. A U.S. based company, for example, designs a product and will turn it over to a foreign manufacturers for raw materials and components to reduce the cost of building and delivery, thereby, dropping the cost for consumers.
The state must take the helm and lead to support goods movement.
A supply chain must be both adaptable and flexible, and must consider input from those impacted including businesses and manufactures.
One way to fix the supply chain disruption is to rebuild the relationship between the state governing agencies and the state’s commerce, trade, manufacturing, and freight partners.
That can be achieved with a creation of a high level advisor who is a strong industry advocate and dedicated to expedite and swiftly remove hurdles in the supply chain to ensure efficiency and address choke points.
California businesses and industries are innovators. These entrepreneurs squeeze every last drop of logistical efficiency to maintain a market advantage to compete in the global market. They need to make sure state government is a partner in their efforts.
As illustrated during this pandemic, more domestically produced goods are needed to supply the nation’s essential necessities. The state could barely keep up with personal protection equipment needs for doctors, nurses and first responders.
Assembly Bill 1679 creates a high-level advisor to advocate, expedite and swiftly remove hurdles in the supply chain to ensure efficiency and address choke points at all levels of the supply chain including manufacturing and its 1.2 million workers.
The Legislature should pass AB 1679 to provide relief to the supply chain disruptions.
Too many jobs and livelihoods are at stake.
Lance Hastings is CEO of the California Manufacturers and Technology Association. Vince Fong represents the 34th Assembly District.