California's unionized ports are part of the country's supply chain problem

As supply chain issues continue to make news, there has been a lot of focus on the lack of sufficient truck drivers as one reason for the so-called “everything shortage.” The American Trucking Associations says they were short about 60,000 truckers before the pandemic and that shortage has grown to 80,000 over the past 18 months. And that means a lot of cargo that can’t get where it’s going.

This comes at a time when US ports are backlogged — primarily because there are few trucks and drivers to pick up cargo — creating a supply chain slowdown. President Biden directed the Ports of Los Angeles and Long Beach to move to 24/7 operations. However, the ports can’t yet work round the clock because importers don’t have enough drivers to move their cargo at all hours.

Will Biden’s order to keep those two major ports open 24/7 make a difference? The Washington Post reported last week there’s doubt it’s going to accomplish much at all:

Only one of the Long Beach port’s six container terminals works 24 hours a day, and it does so only Monday through Thursday, according to Noel Hacegaba, the port’s deputy executive director of administration and operations.

Biden said the L.A. port, which is adjacent to the Long Beach facility, would be open for 60 additional hours each week. But Phillip Sanfield, a port spokesman, said he could not say how many L.A. terminals will now begin operating around-the-clock. And Gene Seroka, executive director of the L.A. port, said on Twitter that “operational details are being discussed and worked out with the supply chain stakeholders.”

Some industry executives described the administration’s latest initiative, which the White House billed as “nearly doubling” the port’s cargo-handling hours, as incomplete. Matt Schrap, chief executive of the Harbor Trucking Association, whose members service the ports, said the measure will make a “big difference” only if terminals abandon requirements for truckers to return a specific type of empty shipping container before collecting a full one.

And Craig Grossgart, senior vice president for global ocean at SEKO Logistics, said: “It will accomplish zero. It’s just window dressing.”

While the lack of truck drivers is getting most of the attention, the Washington Examiner published a story last week in which the truck drivers who are picking up cargo at the ports blamed the longshoremen, i.e. the union workers to move containers off ships and onto trucks. Crane operators at these ports can make $250,000 per year but drivers say they’ve been working at a glacial pace and punishing anyone who complains.

“In 15 years of doing this job, I’ve never seen them work slower,” said Antonio, who has spent hours waiting at Los Angeles County ports for cargo to be loaded. “The crane operators take their time, like three to four hours to get just one container. You can’t say anything to them, or they will just go [help] someone else.”…

“They’ll go get the police and kick you out and tell you to leave,” said trucker Chris. “Then, you get banned from coming back in there.”

Or sometimes, the crane operator will mete out punishment by skipping the trucker and working on someone else, exacerbating the wait…

Truckers unlucky enough to be waiting around lunchtime will watch as the entire crane crew stops work, instead of staggering their hours.

“They leave for two hours, and you are stuck with no one there,” trucker Brian said.

Obviously if you can’t increase the number of drivers available to haul away cargo containers, the other option is to decrease the cycle time. Instead of having drivers sit idle while union members take a 2-hour lunch break, you could organize things such that the same number of drivers are able to make more runs per day. But it sounds like that’s not on the agenda of the union workforce. Instead they use their positions to punish anyone who complains by making sure they wait longer or get kicked out entirely.

There’s more than just anecdotal evidence these two major US ports aren’t run very well. Yesterday, Reuters reported that out of 351 container cargo ports around the world, the ports of Long Beach and Los Angeles ranked near the bottom in terms of efficiency:

Southern California’s Los Angeles and Long Beach ports handle the most ocean cargo of any ports in the United States, but are some of the least efficient in the world, according to a ranking by the World Bank and IHS Markit.

In a review of 351 container ports around the globe, Los Angeles was ranked 328, behind Tanzania’s Dar es Salaam and Alaska’s Dutch Harbor. The adjacent port of Long Beach came in even lower, at 333, behind Turkey’s Nemrut Bay and Kenya’s Mombasa, the groups said in their inaugural Container Port Performance Index published in May.

Finally, there’s another part of the problem that needs to be mentioned. It’s not just that we’ve fallen behind in moving cargo, it’s that there really is more cargo coming to these ports than there was before. Americans are buying more stuff than they did last year or the year before, probably thanks in part to all of those trillions of dollars Washington has been sending out in stimulus checks.

In the first nine months of 2021, retail sales were up 14.5% over the same period in 2020 – a year in which retail sales jumped 8% over 2019. The NRF expected to end the year with sales up 10.5% to 13.5%. Lots of imports and even more spending have driven the inventory to sales ratio down because businesses imported a lot of stuff, and then Americans bought it.

Still, when you have a record of 100 ships anchored in the water near the port (one of which may have caused that recent oil spill by dragging an underwater pipeline with its anchor) you need to find a way to get the job done. Maybe that means declaring a state of emergency until the backlog is cleared.

One thing that would help is pressing union workers at the nation’s largest ports to move a little more quickly and maybe cut their lunch break down to an hour per day. This seems like a place where the president’s bully pulpit could come in handy. Unfortunately, Joe Biden is the president who held an electric vehicle summit at the White House but didn’t invite Tesla because they aren’t a union shop. He’s not the guy who is going to get critical of unions’ workplace culture (pacing yourself and taking long lunches) even if that’s clearly part of the problem.