The San Pedro Port Complex handles 40% of containerized cargo that enters the United States. The Complex is also the primary gateway for all U.S. trade to Asia.
Disruptions in the global supply chain are driven by multiple factors. These include impacts of COVID-19 on the workforce and terminal operations, increased online shopping and more overseas purchases, lack of trucks and rail cars, lack of warehouse space to store containers, and a failure to implement modern port automation/efficiencies. So containers/cargo are piling up at California’s terminals, limiting supplies and increasing costs exponentially. For example, pre-pandemic, it cost around $2,000 to transport a 40-foot container from Asia to the U.S. That cost has skyrocketed to $25,000, and the time it takes to transfer a container from ship to truck has almost doubled.
To make matters worse, an injunction by the U.S. Supreme Court is in place while it considers an appeal by the California Trucking Association to block implementation of AB 5, preventing independent truckers from operating in California. AB5 was supported by the California legislative majority in 2020 which is hurting the trucking industry. A decision is pending and should the Supreme Court decide not to take the case, the injunction will be lifted and the truck shortage crisis could become a catastrophe.
So what can be done? On November 3rd the Senate and Assembly Select Committees on Ports and Goods Movement held a joint informational hearing to examine the scope of the crisis and recommend future state and federal action. Among proposed initiatives were extended gate hours at ports, encouraging land use and permit streamlining for container storage, lifting weight restrictions on priority routes, promoting temporary use of out-of-state trucks, evaluation of choke points, and long-term, encouraging automation upgrades.
This serious situation is critical for California and the entire national economy. Coordinated state and federal action is essential.