Governor Gavin Newsom signed an Executive Order on Wednesday aimed at alleviating California’s massive cargo congestion situation by increasing cargo space, creating better flow and ease of movement for all steps of the unloading and trucking processes, and identifying the best routes for trucks to take.
The port congestion at both the Port of Los Angeles and the Port of Long Beach have been ongoing since 2020, but has been growing rapidly in the past several months. As of Wednesday, over 100 cargo ships are currently waiting to enter one of the two ports, with the average wait time from arrival to unloading being around 10 days. In total, over 200,000 containers are currently sitting on ships just offshore Los Angeles County, with the two ports routinely handling roughly 35% of all containers coming in and out of the US.
“It’s like taking 10 lanes of freeway traffic and moving them into five when the cargo gets here,” said the Executive Director of the Port of Los Angeles, Gene Seroka, at a recent press event. “We’re having difficulty absorbing all of that cargo into the American supply chain.”
The shipping gridlock has been caused by a multitude of factors such as a shortage of workers caused by the Great Resignation, lack of equipment, poor trucking regulations, outdated port rules and regulations, and lingering after effects of the COVID-19 pandemic. Another factor, the AB 5 trucking exemption, also threatens to make the problem worse should the U.S. Supreme Court either not hear or rule against an Appellate Court ruling on ending the trucking exemption.
The port problem has caused a chain reaction to North American supply chains. Retailers are not getting enough products to sell during the upcoming holiday season, with some factories also halted due to a lack of parts and components coming in. This has caused inflation to rise nationwide, with the effect most felt in already high-cost states such as California.
This influenced Newsom to sign his Executive Order on Wednesday. In the order, the Department of Finance will work with state agencies to develop more port operation and goods movement solutions by early January. This will likely include infrastructure improvements, a larger focus on attracting more workers, and a more efficient port to delivery system when offloading.
State agencies will also need to look for state-owned and non-state-owned locations to store cargo containers and goods for a short-term period to alleviate the cargo situation in Californian ports. Truckers will also be receiving new priority routes and a temporary weight limit exemption to better carry out cargo. Additional workforce training and education programs would also be expanded by the Labor Workforce and Development Agency to increase port workers and others in the supply chain, such as truck drivers, to help quicken the unloading pace.
“California’s ports are critical to our local, state and national economies and the state is taking action to support goods movement in the face of global disruptions,” said Governor Newsom on Wednesday. “My administration will continue to work with federal, state, labor and industry partners on innovative solutions to tackle immediate challenges while also bringing our distribution processes into the 21st century.”
Executive Order brings in measures wanted by shipping, trucking industries for years
Experts have said that while the Executive Order does address many of the issues in the current port and trucking crisis, they are largely measures that industry leaders have been warning about for years.
“Truckers have been telling the government at every level that the industry would be facing a major shortage for years,” said George Pinsky, a Cleveland based shipping consultant who has worked with trucking companies in LA County in the past. “Right now we’re around 80,000 truck drivers short. It will be double that by the end of the decade.”
“It took this huge shipping crisis for the government to do anything, and even with this Executive Order out in California, they have to compete for workers due to the worker shortage. Long-term we’re probably looking at driverless trucks, a more drone based delivery system for smaller packages, and a greater reliance on freight rail, but right now, truckers are the main issue. And out in California many are barely hanging on, because if the AB 5 exemption ends, which it is currently protected by appeal to a higher court, a lot more will be leaving.”
“As for ports, they have been in a need of upgrades nationwide for years. Not just LA and Long Beach, but Oakland, Houston, New York, Southern Louisiana, and yeah, even ones in the Great Lakes like Chicago and Cleveland. China has been building up ports worldwide for years now, and the U.S. needs to catch up.”
“The Executive Order is fine. You’re not going to see a lot of arguments against it because it is very much needed right now. The problem is that it was so long overdue.”
Newsom’s Executive Order went into place immediately after being signed on Wednesday.
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