How to rescue Christmas from the supply chain Grinch

A single ship carrying 19,100 20-foot shipping containers can haul 156 million pairs of shoes or 300 million tablet computers or 900 million cans of baked beans. What the nearly half million containers worth of goods, waiting on ships outside the ports of Los Angeles and Long Beach, represent is difficult to even grasp.

With the holiday season here, as we work through the supply chain snags, short-term steps — including consumer incentives to shift spending, penalties for leaving shipping containers idle and redirection of vessels to Oakland — could help alleviate the Southern California backup.

Multiple causes have led us to this point. The pandemic changed the lifestyle of many Americans, who switched to hybrid work schedules and started spending more time at home. That fueled surging demand for items like office chairs, printers, gym equipment and home appliances.

As demand skyrocketed, COVID-19-related safety policies made it harder for suppliers to deliver stuff where it needed to go. Logistics experts have reported that extensive quarantine requirements and partial port closures in China, along with lockdowns at factories in Indonesia and Vietnam, significantly hampered production of goods for the U.S. market.

Meanwhile, container shortages in China sharply limited the amount of goods that can be shipped to the United States. When loaded containers arrive at the port, there is a shortage of chassis available for truckers to use to haul them away. And there is a shortage of warehouse space for storing goods that linger at U.S. ports.

In the United States particularly, where many self-interested players are involved and the government has no direct control over most of them, it will be a challenge to get everyone on board to solve the crisis. I suggest three short-term approaches:

First, when supply cannot be increased quickly, it makes sense to curb demand — to try to entice consumers to shift their spending from goods back to services. To achieve this goal, the Biden administration should push faster and harder with vaccination mandates. Safety is a must to get Americans back traveling, dining out and returning to movies, shows, concerts and the gym. Once the vaccinated population reaches a critical threshold, the government can incentivize businesses to get Americans out of these houses and back enjoying services again.

Second, many supply shortage issues are caused by a lack of coordination among supply chain participants — and some quick fixes can go a long way. Take warehouse capacity: California

Gov. Gavin Newsom signed an executive order on Oct. 21 calling for state agencies to identify land for storing containers now stuck at the ports. This is a good step forward.

The government should follow it up by imposing penalties on unclaimed containers, which often sit around because storage and demurrage fees at the yards are too low. As an initial step, the Los Angeles and Long Beach harbor commissions recently approved new fines for containers sitting at the port for more than nine days. The fines will begin at $100 per container, increasing by $100 per day, and provide incentives for retailers to claim containers quickly and get rid of the goods within them via fire sales.

Third, while the twin ports of Los Angeles and Long Beach and the ports of Seattle and Tacoma are highly congested, importers and exporters should not overlook the Port of Oakland. Despite being a smaller port, Oakland has spare capacity to process container ships more quickly. Also, the port has the requisite railyard infrastructure to transport containers quickly via a direct Union Pacific Railroad connection.

These fast and simple solutions could help ensure that merchandise such as toys, shoes, game consoles, and holiday decorations will arrive at stores sooner. However, even though temporary fixes might tie us over for this holiday season, we need to plan for the future. Any long-term supply chain solution must involve a thorough review of the entire physical and information infrastructure.