While some might think that after the holiday rush the persistent backlog and issues at the Los Angeles and Long Beach ports might dissipate, the director of the Los Angeles port, Gene Seroka, says these issues are likely to persist through the end of 2022. This means it's not just the holiday rush, but systemic issues that have led to the backlog, and these issues must be addressed to ensure the resiliency of our supply chain.
Thankfully, Governor Gavin Newsom and the Department of General Services recently announced that six state-owned sites will be available to store up to 20,000 shipping containers to help alleviate port congestion in the state. This is critical given that these ports handle 40 percent of the country’s container imports and lack of space was the primary driver of bottlenecks. This announcement comes on the heels of Newsom’s recent executive order directing various state agencies to identify new solutions, and recommending a record $2.3 billion investment in California ports in his budget proposal.
Oftentimes the ports are used as temporary warehouse space as some businesses organize transportation and space to store their newly shipped products. So when extra space is scarce and port officials are working overtime to unload new ships, containers can stack up quickly and slow down the entire system. While the recent action by California officials to use state property as storage space is a major step toward solving logjams off the California coast, we need lawmakers and regulators to continue their efforts to secure more land to store the containers in addition to addressing other regulations that interrupt the supply chain.
One such regulation that should be looked at is a local zoning regulation at the Long Beach port that prohibits stacking off-loaded containers more than two containers high. One might assume this regulation would be for safety purposes, but in fact, it is only for aesthetic reasons because the elected officials of Long Beach decided that stacks more than eight feet high were “too ugly to tolerate.” Limiting container stacks to only two adds to the critical spacing shortage. While this regulation has been temporarily amended to allow for stacks of four containers, a more permanent solution is needed to ensure long-term supply chain reliability.
Regulations have also prioritized pushing container ships hundreds of miles offshore to limit emissions, reduce the risk of environmental disasters, and maintain safe distances between ships. While this policy will lead to cleaner and clearer skies for Californians, it doesn’t alleviate the root cause of newfound ocean shipping emissions. Container ships are still forced to wait for long periods of time offshore, thus perpetuating a constant stream of emissions from idling ships that would otherwise be offloaded and en route to a new destination.
Americans are looking to the Biden administration and state officials to come together and advance tangible solutions with the urgency this situation demands. This means taking a hard look at CEQA and other regulations that are worsening our supply chain issues by not addressing the root causes of the bottleneck.
Bill Peterson is Managing Director of Denmar US.