Clogged ports, empty truck cabs
Looking out at the Pacific this year, worried farmers see giant cargo ships turning around empty, leaving their wine, butter and almond cargoes on the docks and at least $1.5 billion in exports lost. Meanwhile, 80-ship pileups off the coast of Southern California mean weeks or even months of delays unloading industrial inputs and consumer goods; and with truckers and warehouse workers quitting their jobs at record rates, full containers are piling up in fields and parking lots.
The port problems are complicated and serious enough to worry even President Biden, who has given speeches and put out policies to head off complaints about everything from empty shelves during Christmas shopping weeks to lost farm exports and inflationary bottlenecks.
But they’re also the sort of problems administrations are happy to have. This is because they’re evidence of confident consumers, workers finding new opportunities, and a successful effort, at least so far, by the Biden administration’s work to create a strong economy that grows from the middle out.
Why, after all, are ports blocked up? Because families are flush with money after two years of savings and this spring’s American Rescue Plan, and enthusiastically buying TVs, clothes, cars and other goods.
Even before 2021, U.S. ports were too small, slow, and old for the country’s needs. The U.S. gets more container ship traffic than any other country but China, but no U.S. port ranks in the World Bank’s top 50 for efficiency. And this year has brought an extraordinary gush of ship arrivals and container transits. To put it in numbers, from January through September in the pre-COVID year 2019, the Port of Los Angeles — our largest container port — recorded 3.6 million arriving shipping containers. Over the same months in 2021, it took in 4.2 million — easily an all-time record and 2,000 more per day than in the pre-COVID economy. No wonder they’re clogged.
And why are there too few truckers and warehouse workers? Because lots of them quit their jobs this year, rightly confident they can find something better. From New Year’s through September, 1.4 million workers in the Bureau of Labor Statistics’ “transport, warehousing and utility” sector walked away, smashing the 1.1 million full-year record set in 2001. With nearly 10 million open jobs around the country and six million new hires each month, they have every reason to try.
Finally, why are shipping companies turning down American farm exporters? Because they’re making so much money from import containers. With fees as high as $15,000 per inbound container — up from $2,500 a year ago — they earn more from going back to Asia with a ship full of empties than waiting to stock up with U.S. exports. This has been particularly damaging to rural America, costing farmers as of mid-year an estimated $1.5 billion in lost exports.
These are, again, serious problems requiring responses from business, or government or both.
For farmers justifiably angry about shippers abandoning them at the docks, Reps. John Garamendi (D-Calif.) and Dusty Johnson (R-S.D.) have a bill which among much else requires shippers serving the U.S. to accept export cargoes for customers ready to pay. For worker shortages and bottlenecks between ports and buyers, businesses will need to offer jobs at better wages and improved quality of life.
For the inflationary bottlenecks that result, solutions are harder to find — but the administration has at least begun to unwind some of its predecessor’s contribution to inflation through deals with Europe, Vietnam and potentially Japan, to avert new tariffs and begin unwinding old ones. And for ports now too small to serve the country’s needs, the solution is to spend the money to build more efficient ones. And that is on the way, with Biden’s signature of this year’s bipartisan Infrastructure Investment and Jobs Act, with its $17 billion for American seaports and water transport.
But while the port problems are frustrating and sometimes alarming, they’re also problems to put in proper perspective.
On Inauguration Day, Biden looked out on a justifiably fearful country, with 10 million unemployed, COVID infections uncontrolled, and the economy in new need of federal support. Ten months later, the clogged ports and worker shortages are evidence of change for the better.
If we have more incoming containers than ports can handle, that is because — for the first time since the pandemic began — middle-class families are confident and ready to spend. And if workers are quitting jobs, it is because for the first time since the 1990s they are confident that something better is out there waiting for them. Those are challenges to manage with care and sometimes decisive action. But they’re the challenges that come with success.