TRADE IS CHOKING AT U.S. PORTS
Container ships carrying critical goods are backed up in California, with no quick answers in sight
FREDERIC J. BROWN • AFP • GETTY IMAGES • TNS Shipping containers were stacked high at the Port of Los Angeles in April, where records continue to be set for incoming cargo at the nation’s No. 1 container port.
The Biden administration is struggling to ease congestion in the nation’s freight system as mounting backlogs threaten to dash the president’s hopes for a smooth economic recovery with higher prices and spot product shortages.
The worst choke point is in Southern California at the ports of Los Angeles and Long Beach, where 62 container ships carrying toys, electronics, furniture and other goods lie at anchor waiting for an unloading berth. The floating queue, virtually unknown before the coronavirus pandemic upended global supply chains, has doubled since mid-August.
Onshore, docks and railroad terminals are jammed with shipping containers amid an epic buying spree by companies racing to keep pace with consumer demand. Trucking companies and warehouses complain they can’t find enough workers to keep freight moving, leaving Americans waiting for products such as Honda auto parts, Lands’ End clothing, Fancy Feast cat food and Peloton exercise gear.
To unscramble the cargo mess, the White House last month named as its “ports envoy” John Porcari, a former Obama administration transportation official. Last week, he helped push the Southern California port complex, the nation’s top import gateway, to add night and weekend hours for trucks to collect shipping containers.
Porcari told reporters recently that the move was a key step toward 24/7 operations along the entire freight pipeline. But getting terminals, truckers, railroads and warehouses all to operate on that schedule will not be easy.
Porcari, former chair of the Maryland Port Commission, spoke days after Wall Street economists warned that the supply troubles are escalating. Analysts and industry executives said there is little chance the federal government can untangle the cargo snarl before the financially critical holiday shopping season.
“It takes time to unwind that kind of congestion and we don’t have time. These are the kind of actions that should have been taken months ago,” said Stephen Lamar, president of the American Apparel and Footwear Association. “This needs to be treated as the crisis that it is.”
Companies are struggling to bring products into the country and face soaring freight costs when they can, Lamar said. His group has called on the president to authorize the use of U.S. Navy facilities to unload commercial cargo and to provide financial relief by canceling tariffs on Chinese products.
The mismatch between surging import volumes and an overwhelmed transport network is dogging the recovery. Citing supply chain issues, Goldman Sachs this month cut its fourth-quarter economic growth forecast from 6.5 to 5.5 %. Retailers’ inventories are near a 30-year low and toymakers are urging consumers to shop months early for holiday gifts.
Sluggish freight channels also are fueling inflation, now at an annual rate of 5.3%. Federal Reserve Chair Jerome Powell said last week that widespread supply problems, particularly in the auto industry, which lacks enough imported semiconductors, have been “larger and longer lasting than anticipated,” forcing the Fed to raise its estimate of future price gains.
“We are seeing upward pressure on prices particularly because supply bottlenecks in some sectors have limited how quickly production can respond in the near term,” Powell told reporters.
Porcari told reporters he aims for “measurable specific results” in improving cargo flows and overhauling an outdated government regulatory setup.
“We’re pushing very hard for improvements,” he said.
Still, many of the measures that Porcari is promoting — such as the enhanced use of data to optimize cargo movements — will take time to implement. Some infrastructure projects will take years to pay off.
Even the longer operating hours in L.A. and Long Beach have received mixed reviews. Truckers did not take full advantage of the previous shorter schedule, leaving almost one-third of the L.A. port’s nighttime appointments unused, according to Gene Seroka, executive director of the port. Filling those slots would mean an additional 1,800 trucks going in and out of the port each night, he said.
The worst choke point is in Southern California at the ports of Los Angeles and Long Beach, where 62 container ships carrying toys, electronics, furniture and other goods lie at anchor waiting for an unloading berth. The floating queue, virtually unknown before the coronavirus pandemic upended global supply chains, has doubled since mid-August.
Onshore, docks and railroad terminals are jammed with shipping containers amid an epic buying spree by companies racing to keep pace with consumer demand. Trucking companies and warehouses complain they can’t find enough workers to keep freight moving, leaving Americans waiting for products such as Honda auto parts, Lands’ End clothing, Fancy Feast cat food and Peloton exercise gear.
To unscramble the cargo mess, the White House last month named as its “ports envoy” John Porcari, a former Obama administration transportation official. Last week, he helped push the Southern California port complex, the nation’s top import gateway, to add night and weekend hours for trucks to collect shipping containers.
Porcari told reporters recently that the move was a key step toward 24/7 operations along the entire freight pipeline. But getting terminals, truckers, railroads and warehouses all to operate on that schedule will not be easy.
Porcari, former chair of the Maryland Port Commission, spoke days after Wall Street economists warned that the supply troubles are escalating. Analysts and industry executives said there is little chance the federal government can untangle the cargo snarl before the financially critical holiday shopping season.
“It takes time to unwind that kind of congestion and we don’t have time. These are the kind of actions that should have been taken months ago,” said Stephen Lamar, president of the American Apparel and Footwear Association. “This needs to be treated as the crisis that it is.”
Companies are struggling to bring products into the country and face soaring freight costs when they can, Lamar said. His group has called on the president to authorize the use of U.S. Navy facilities to unload commercial cargo and to provide financial relief by canceling tariffs on Chinese products.
The mismatch between surging import volumes and an overwhelmed transport network is dogging the recovery. Citing supply chain issues, Goldman Sachs this month cut its fourth-quarter economic growth forecast from 6.5 to 5.5 %. Retailers’ inventories are near a 30-year low and toymakers are urging consumers to shop months early for holiday gifts.
Sluggish freight channels also are fueling inflation, now at an annual rate of 5.3%. Federal Reserve Chair Jerome Powell said last week that widespread supply problems, particularly in the auto industry, which lacks enough imported semiconductors, have been “larger and longer lasting than anticipated,” forcing the Fed to raise its estimate of future price gains.
“We are seeing upward pressure on prices particularly because supply bottlenecks in some sectors have limited how quickly production can respond in the near term,” Powell told reporters.
Porcari told reporters he aims for “measurable specific results” in improving cargo flows and overhauling an outdated government regulatory setup.
“We’re pushing very hard for improvements,” he said.
Still, many of the measures that Porcari is promoting — such as the enhanced use of data to optimize cargo movements — will take time to implement. Some infrastructure projects will take years to pay off.
Even the longer operating hours in L.A. and Long Beach have received mixed reviews. Truckers did not take full advantage of the previous shorter schedule, leaving almost one-third of the L.A. port’s nighttime appointments unused, according to Gene Seroka, executive director of the port. Filling those slots would mean an additional 1,800 trucks going in and out of the port each night, he said.