Posted on 10/23/2021 10:32:33 PM PDT by SoConPubbie
This is a follow-up to the original explanation of the epicenter of the supply chain backlog issue, ie “The Clog“. {GO DEEP} You need to review the years-long and building background issue to understand the fubar that Joe Biden has just made worse.
From the White House perspective, the problem at the California ports, specifically the Port of Los Angeles (POLA) and the Port of Long Beach (POLB), was visible due to hundreds of container ships sitting in a queue off the coast of Los Angeles awaiting their opportunity to offload their cargo. The media was reporting on the backlog of ships and Joe Biden was under fire.
The team behind Joe Biden wanted the optics removed asap. Hence, the White House meeting with the heads of the Ports of Los Angeles and Long Beach, Gene Seroka and Mario Cordero, respectively.
The continuing supply chain crisis of empty store shelves, missing parts and component goods that are backlogged at the California ports may be politically represented by the optic of those floating vessels. However, that’s not the problem.
The problem is a shortage of CA emission compliant internal transportation trucks to move the containers out of the port and into the U.S. mainland.
As a result… the politically expedient goal to get rid of the optical problem (the ships) by offloading containers into a California port system, that is already overwhelmed with tens-of-thousands of containers, is only making the original issue exponentially worse.
With hundreds more containers being offloaded hourly, the port infrastructure needed to load trucks long-sitting in the queue to pick up containers that arrived weeks ago is collapsing.
Truckers are waiting for over 8 hours to pick up their freight because the yards are swamped with containers. As each hour passes, more containers are offloaded into the port that can no longer deal with the scale of the problem. Each individual container is now buried in an avalanche of more containers, and that is making the limited compliant trucking resources even more problematic….. “containergeddon“.
Long before the ships started lining up offshore, many massive multinational corporations could foresee what was happening. They diverted their contracted freight into alternative ports (outside California) and began setting up new transportation arrangements. Two things happened:
(1) The alternative ports started getting backed up due to the redirected cargo arriving; and
(2) The shifted Trucking and Railroad system priority now meant resources were pulled from California.
With trucking companies redirecting resources away from California, this exacerbates the California backlog. Suppliers and retailers then enter a bidding war for priority distribution to get their stuff and avoid the clogs. This is a perfect storm of disruption in the supply chain aptly called “containergeddon.” However, not all ports can offload ships with thousands of containers. Not all ports have massive gantry cranes that can efficiently offload the cargo.
Back in California (where POLA and POLB do have the gantry cranes), now you have Los Angeles port workers saying we are offloading ships at maximum productivity, and truck drivers saying they’ve been sitting around for hours, some even days, waiting to pick up their containers. Meanwhile, other ports outside California are under pressure from the rerouted backlog of container vessels, and a limited amount of resources, trucks and railroad shipments to clear their arrivals.
Port workers are saying it’s not their lack of offloading that creates the problem, and the truckers are saying it ain’t us… “we’re sitting here waiting”.
♦ Few people are paying attention to what actually created the crisis in the first place.
The backlog all comes from California West Coast ports. It’s the issues with the new California emission regulations {Go Deep} that created the regional bottleneck in the distribution pipeline. The growing issue started becoming visible several months/years ago when the California Air Resource Board (CARB) announced the new environmental regulations.
As a direct result, several massive multinational corporations, with specifically concerned supply chain and logical operations specialists, immediately recognized the issue they would face if 50+ percent of the diesel fleet (writ large) would be blocked from entering California ports. That’s why months ago massive corporations began exclusive shipping contracts to avoid the California created crisis:
REUTERS – […] “The dry bulk cargo ship has been drafted into the service of retail giant Walmart, which is chartering its own vessels in an effort to beat the global supply chain disruptions that threaten to torpedo the retail industry’s make-or-break holiday season.
[…] Other big retail players, such as Target, Home Depot , Costco and Dollar Tree, have said they are chartering ships to deal with the … slowdown of sea networks that handle 90% of the world’s trade.” (link)
It costs more money, a lot more money, to move an entire supply chain for billions of tons of goods coming. The increases in shipping costs are passed along to the consumer.
Hence, we see prices climbing as a result of increased transportation costs being factored in to the new logistics. Did you hear about massive increases in container shipment prices? Well, THAT’S WHY.
The entire supply chain from Asia to the United States was being modified from the closest port (California), which was cost effective, to the ports where internal transportation would not be an issue.
Ships from China and SE Asia were being diverted away from California, some through the Gulf of Mexico into Texas, Louisiana, Alabama ports or inland waterways. Some even headed to the East Coast. However, any shipment diverting from the West Coast has to go through the Panama Canal into the Gulf of Mexico. It takes twice as long and costs twice as much, if not more. Hence, massive shipping price increases per container.
Back in Washington DC, Joe Biden’s solution was to get rid of the ships floating off the coast of California by piling their cargo into Los Angeles ports that are already overwhelmed with cargo they are trying to organize. The emission compliant truck drivers are now charging the ports for their time sitting around waiting for the dock workers to locate their freight.
The more containers they pile into the port, the longer it takes a limited number of trucks to move them.
The California ports are running out of places to store containers full of goods that are getting off-loaded. Hundreds of thousands of them are piling up. The central issue is the inability of emission compliant heavy transportation in California to move those containers full of goods to manufacturing, warehouses and distribution points.
This California bottleneck has been building, and building and building for years, until now it has reached a crisis point.
FUBAR.
peter enjoys backlogs...
There’s a yard out in the boonies (IIRC, it is part of a long-since abandoned site of an industrial complex). Driving by over the years I noticed more and more empty (abandoned?) containers piling up. Acres and acres of them.
Made me wonder - if we’re importing more and more and exporting less and less - are they cheaper just to dump here than transport back?
Is that yard donkey in the picture Tier 4 final compliant? I don’t see a DPF on it.
The other thing Florida has going for it is the availability of trucks to go north from there.
A lot of freight goes into Florida.
Much more than comes back out.
Therefore, the rate/mile is much cheaper going north or west out of Florida than it is for any other southeast or south central state.
I suppose you’re down on him for taking parental leave during a transportation crisis so he could learn to breastfeed?
Did you hear Gov. Newsome's solution? Direct all off-loaded containers to especially prepared State owned properties.
My first reaction is that that is communism! ...or fascism if you prefer. The State takes control of all productive output and rations distribution to their favored consumers.
Secondly, that 'solution' does not solve the problem. When the governor said he had a proposal to resolve the problem, I naturally presumed he was going to ease the environmental restrictions on port trucking. But no! He immediately jumps to an answer that gives him complete control over all imported goods flowing through California ports.
Does that cause you to suspect that this crisis was all planned in advance? Never let a crisis go to waste!
Wall Street and K Street/DC have been selling out Main Street to China for over 30 years, and this is one of the results.
The port of Houston is open, reroute some of those ships to Houston.
This reminds me of that old Star Trek episode:
“The Trouble with Tribbles”
https://www.youtube.com/watch?v=p4wM5KvUGEc
“How about a one year waiver on the trucking industry to get as many haulers working the backlog.”
Good idea.
The problem with Joe’s liberal edicts is he magically wants enough emission compliant trucks to shiw up to haul off the goods. So he created this mess.
Each shipping company has a land captain at every port that buys all the stuff needed by a ship, including food. That stuff in then put onto a smaller supply vessel that takes it out to the ship. Oh there is also another vessel involve. A vessel that puts huge bumpers between the ship and the supply vessel so they don't bump (metal to metal) into one another. Been there, done that.
Let's save some credit for Newsom and the rest of the CA regulators. IIRC it was a state level decision to ban older trucks that weren't "clean idle" certified from the port.
The California ports are running out of places to store containers full of goods that are getting off-loaded. Hundreds of thousands of them are piling up. The central issue is the inability of emission compliant heavy transportation in California to move those containers full of goods to manufacturing, warehouses and distribution points.
—
California has finished passing laws to screw itself up and is now passing laws to screw up the whole country.
The other problem not mentioned is the elimination of owner operators due to CA AB5. This law eliminated 1099s in CA.
Great explanation of the container blockage.
You’re right, it had nothing to do with Biden. Thx for the correction!
The problems with the California ports were decades in the making and there is zero that the federal government can do to fix it in the short term, and not a lot they can do in the long run.
—
This is classic. Governments pass these virtue-signaling laws such as only allowing trucks that meet the most stringent current emission standards. The effect takes years as they slowly strangle the smaller trucking companies out of business. They might have been able to get away with this longer, but the pandemic and the lockdowns accelerated the damage destroying small shipping companies at an accelerated rate. You an’t un-die the horse and you can’t resurrect trucking companies that have been driven out of business.
Like the farmer who thought he could save money by feeding his horse less and less, it seems to work for awhile. Then the horse dies. Same with these idiot California trucking regulations.
We in Oregon are so far ahead of Cali, Our brilliant unions shut down our container ports years ago. We have been prepared for this for a long time. (It’s odd that no one has mentioned this elsewhere.)
The only silver lining is that at some point in the future containers may end up becoming dirt cheap.
Trump would have fixed this months ago
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.