Can Biden and Newsom fix supply chain issues for the holidays?


Container trucks line up to enter AMP terminals at the Port of Los Angeles. Gov. Gavin Newsom on Wednesday issued an order to alleviate bottlenecks at the Los Angeles and Long Beach ports that have spilled into neighborhoods where freight trucks clog residential streets. (AP Photo / Ringo HW Chiu)


Don’t count on Gov. Gavin Newsom or President Joe Biden to solve supply chain issues this holiday season.

“In the short term there’s not much politicians can do,” said Sam Abuelsamid, senior research analyst at Global Insights, a market consulting firm.

The two Democrats have announced in recent weeks plans to speed up the movement of goods through the ports of Calfiornia.

Newsom last month issued a detailed executive decree aimed at decongesting ports and reviving supplies. Biden also acted last month to keep the ports operating 24 hours a day. The pair have taken steps to get different government agencies to take new approaches to reducing the backlog.

This week, the number of vessels waiting at the ports of Los Angeles and Long Beach, which handle 40% of the country’s imports, remains high. Truckers continue to cite labor and storage issues.

The underlying issues causing supply chain disruptions, such as labor shortages and high shipping container costs, cannot be addressed by an executive order, said Sanjay Varshney, professor of finance at California State University, Sacramento.

“It could just be to make sure that as the head of the bigger state… they probably want to make sure they’re at the table somewhere,” Varshney said, describing Newsom’s recent decree.

Key solutions will take time. One of the more ambitious programs is for the state and federal governments to implement a plan for Washington to provide California with low-interest loans that could serve a wide variety of purposes. .

Alex Stack, a spokesperson for Newsom, cited gradual progress that should help this holiday season.

“The state is doing all it can and it makes a real difference, but there is no overnight solution,” he said.

In the short term, traders fear one-time shortages of popular products will emerge throughout the holiday season. This will likely be a major topic on Wednesday when the Legislative Assembly’s Ports and Freight Committees hold a hearing.

What can Newsom do?

One of the main reasons executives can’t quickly make supply chains run smoothly is that there is no easy fix to a mess that took months to develop.

Even though ships can be unloaded faster, goods still have to reach consumers and stores.

Newsom acknowledged the challenges of his decree, asking several state agencies to develop short-term and long-term plans. His administration launched a supply chain task force in March 2020, the month COVID-19 began to spread. Some of Newsom’s actions in the past month have accelerated their recommendations.

He called on transport agencies to work with industry officials to identify freight routes by the end of the month that may require temporary exemption from weight limits in order to move goods more freely.

Newsom also ordered its Office of Economic and Business Development to find sites that can be used for short-term storage needs. He asked the Department of General Services to complete a review of state-owned properties near ports that can handle storage by Dec. 15.

After Newsom’s order, the city of Long Beach took steps to alleviate the shortages by allowing more stacking of shipping containers, a way to address the issue of their storage.

Clogged supply chains

Biden’s Oct. 13 order focused on ports, describing a new effort to keep them running around the clock. Companies such as WalMart, Target, UPS and FedEx have pledged to cooperate,

But the ships continue to wait. On Monday, Captain Kip Louttit, executive director of the Marine Exchange of Southern California, reported a total of 159 ships in port at anchor or “lounging” in Los Angeles and Long Beach, six more than Friday. Of the 159, 102 were container ships. Vagrant ships are those waiting nearby to dock.

And once unloaded, there were problems getting their goods to stores and customers. As of Monday, the ports of Los Angeles and Long Beach began fining shipping companies if they take too long to move containers.

“You need more people to drive the trucks, to work on the docks,” said Tim Murphy, general manager of the Sacramento Regional Builders Exchange. “It’s more complicated than just hiring people.

Drivers must obtain a license. They may need sophisticated training. They may want more money than the employer is willing to pay. Ports have to get rid of empty containers that are taking up space.

“Ideally, additional dock space should allow the terminals to accommodate voids to free up the frames for further import movements out of the dock,” said Matt Schrap, Managing Director of the Harbor Trucking Association. The chassis is the metal frame that truckers use to transport a container to the shipper.

The other complication concerns the problems of raw materials and components. The shipping containers are full of finished products. But to make these products, companies need computer chips and other materials whose production is scattered across different countries, often countries where COVID-19 has forced cuts.

American politicians cannot just build a chip facility overnight. “It can cost billions and take two to four years,” Abuelsamid said. “There is nothing you can do to speed up this process. “

Sophia Bollag of the Sacramento Bee contributed to this story

This story was originally published November 3, 2021 5:25 am.

David Lightman is McClatchy’s chief congressional correspondent. He has been writing, editing and teaching for nearly 50 years, with stops in Hagerstown, Riverside, California, Annapolis, Baltimore and since 1981, Washington.

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