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For months, the news cycles and industry blogs have been filled with stories involving worldwide supply chain issues. Now it seems that for the first time in a while, we are seeing some progress being made and it’s coming from a predictably progressive source: California.
With just two California ports handling roughly 40% of all containers in the United States, it’s not entirely unexpected to have bottleneck and delay issues. However, these problems have compounded and grown to an unmanageable point, causing both the state and federal governments to take action.
Last month, in response to the backlog of cargo ships and container processing, Governor Gavin Newsome issued an executive order attempting to get things moving more swiftly and free up space at the ports. State and local agencies were directed to find alternatives for short-term container storage, temporary permits have been issued to allow more weight on loads traveling on state highways and interstate routes, commercial driving test centers and hours have expanded to potentially double the number of tests per month, and fines have been threatened for containers left for too long at the port.
All of this, combined with federal assistance that includes an agreement with the ILWU to run port operations 24/7 and negotiations with major retailers to move goods out of the ports in off-hours for the holiday season, seems to be getting results.
Since the decree in October, there has been a 32% decrease of containers sitting on the docks for 9 days or more. In addition, carriers have cleared more than 60,000 empty containers and are committing to the removal of nearly 30,000 more. These containers are not only taking up precious space, but many of them are sitting on chassis, which are needed for transporting loads and are in extremely short supply. By removing the empties, they are also returning thousands of chassis back into the distribution chain.
While all of this is extremely promising, there are still major issues to tackle. Some that will take significantly more time and strategy, such as addressing the nationwide driver shortage, and some that may prove to be impossible, like the fact that only 16 companies control 80% of the world’s liner shipping, container production and box-leasing (1). The work being done in California will absolutely alleviate part of the burden in the supply-chain, but exactly how much and how quickly remains to be seen.