The current administration made an announcement recently that the Port of Los Angeles would now be operating 24 hours a day and 7 days a week. This is to help alleviate the pressure taking place at the port while shipping containers sit in the Pacific Ocean without being unloaded. What is now being called, the new maritime parking lot.
This effort does help, but it does not come with much relief for the ports. There are still not enough workers to unload the ships as quickly as they need to be. In fact, the estimated impact of this round-the-clock venture will be around 3,500 additional containers unloaded in Long Beach, while the total number of containers unloaded in August was 950,000.
Michael Tran, managing director for digital intelligence strategy at RBC Capital Markets says, The expansion of hours at Port of Los Angeles should help ease container handling, it’s just one piece of the puzzle though.
“If you go further downstream, beyond just what’s happening at the shipping port, there are labor shortages that resonate throughout the rest of the supply chain, like trucking, warehousing,” Tran said. “From that angle, today’s headline goes to try to rectify the first step, the first step of many in a convoluted supply chain.”
Some of the nation’s other large ports are expanding hours. Florida is putting out the word to shipping companies that ports in the Sunshine State are open and ready for business. All things that will help, but they are only a step in the right direction.
The other major trend causing great impacts on the shortage of goods in America is the shortage of trucks. Why is there a trucking shortage?
To simply say, the pandemic is easy, but it is not the real reason behind the supply chain disruptions we are seeing. Looking deeper, we can see the pandemic was just the icing on the cake that exposed the truth about the global supply chain.
The largest concern is the world’s dependence on China. This position has to change and manufacturing has to be brought back to America. Inadvertently, California may have helped make that change start moving forward faster.
California recently implemented new regulations on trucking, which include actively enforcing heavy-duty diesel vehicle regulations in support of its clean air goals. Diesel-fueled trucks transporting cargo destined for or coming from California’s ports and intermodal rail yards (including bobtails and transporting chassis) must be registered in the statewide Drayage Truck Registry prior to entry. Drayage fleets must comply with requirements by operating only vehicles with 2007 MY engines or newer.
By January 1, 2023, all class 7 and 8 diesel-fueled drayage trucks must have 2010 or newer engines. Trucks with 2010 or newer engines are fully compliant with both the Truck and Bus and Drayage regulations. The exchange of marine or rail cargo (e.g. containers) between compliant and noncompliant drayage trucks is not allowed anywhere in California.
With these new regulations, truckers are hanging up their hats in the industry creating an even greater shortage. Have California’s regulations inadvertently increased the need to reshore America? With increased costs everywhere we look, lack of workers, California implementing regulations that stop trucks from entering the state, the answer is yes.