Publications disseminate baseless allegations of cause of cargo ship safeguards
A Facebook post says the Biden administration is “orchestrating” product shortages by denying entry of foreign ships into US ports. “Welcome. TO. Communist. America. Or. The. Government. Creates. Shortages. TO. Go. Along. With. Their. Covid. Hysteria. And. Mandate. After. Mandate, ”said one of them.
Another Publish links to the same image, which he says is a screenshot from a tracking app. “If you want to put a sinister twist on this, imagine a government putting a brake on goods entering the United States,” the post said. “Then, by releasing everything in October, they’re bragging about the increase in spending in Q4 and the strength of the economy they’ve created.”
In fact, cargo traffic has increased since the pandemic took hold, as Americans confined to their homes began ordering goods online, with a record number of ships waiting to enter the ports of Los Angeles and Long Beach. Marine terminals and trucking companies were unable to keep up with the volume, leading to bottlenecks at ports and rail yards from California to New York.
Consumer demand for imported products
“This is a buying surge due to a pandemic unlike anything we’ve ever seen among the American consumer,” Gene Seroka, executive director of the Port of Los Angeles, said at a press conference. in February. during this time, COVID-19 has taken many workers away from their jobs, and rail, truck, terminal and ship operators are struggling to keep up, Seroka said.
The pandemic has exacerbated a situation that has been building for years, as growing consumer demand for imported products collides with an aging supply chain, John McLaurin, president of the Pacific Merchant Shipping Association, said in an interview with FactCheck.org.
“We have never seen such a large amount of cargo,” McLaurin said. “At some point, you can’t break the laws of physics. You can only move it so fast; you can only stack it that high, and then you run out of space. We are at this point, and we have been for a while.
Industry officials and observers have dismissed the idea that the Biden administration was deliberately causing the standoff. “It’s not something everyone is talking about in the industry,” McLaurin said. “I just don’t see it.”
The problem is not unique to the United States, he noted. “It’s happening all over the world. There is congestion all along the supply chain.
The pandemic has exacerbated this congestion, as consumers shifted their spending towards goods and away from travel and entertainment, overwhelm the supply chain, the Washington post reported.
“Due to the pandemic, there has been a huge increase in demand, and obviously this has increased US imports from Asia,” Saravanan Kuppusamy, assistant professor at the University’s Rohrer College of Business, told us. Rowan, in a joint telephone interview with colleague Qazi Shaheen. Kabire.
West Coast ports, which handle most of America’s imports from Asia, are under much of the pressure, Kuppusamy said.
The Port of Los Angeles saw almost record traffic in August, and expects “significant volume to come to us throughout this year and into 2022,” Seroka said at a press briefing in September.
Limited infrastructure and labor shortage
Ports and warehouses are inundated with freight containers with nowhere to go. A shortage of chassis – the platforms used to transport containers once they are unloaded from ships – helps safeguard, as ships arriving at ports cannot unload their cargo, Kuppusamy said.
“If you have a system that has limited capacity in all areas and an increase in demand, most parts of the supply chain system will not be able to function fully,” Kuppusamy explained. “It will create this cumulative effect of reducing the flow of products throughout the supply chain.”
“The current administration has inherited this infrastructure with limited capacity,” said Kabir, also an assistant professor at Rowan. by Biden proposed infrastructure package includes billions of dollars in funding for port infrastructure, as well as money for rail, and the administration has formed a supply chain disruption task force and appointed a “Sent from the port” work to resolve congestion at US ports, Kabir noted.
“All of these things, collectively, probably significantly weaken the argument that the Biden administration is slowing things down, or they are not serious about this issue,” Kabir said.
“Aligning incentives”, such as offering bonuses to port workers linked to faster processing of goods, could improve the situation, Kabir added. “We often see that if your remuneration is fixed regardless of your production, you are not motivated.
There are still shortages of workers at the ports as well as shortages of truckers to move cargo from the ports, said Gad Allon, professor of operations, information and decisions at the Wharton School at the University of Pennsylvania. . This is true “in almost every port in the world,” he said.
Throughout the supply chain, “people are sitting on the sidelines to decide if they really want to go back to work,” Allon said. FedEx Corp., he noted, recently reduce growth projections and said the job market was partly responsible. “The shortage of drivers, trucks and port workers is a global phenomenon,” he said.
“No one wants to work under these conditions,” Allon continued. Companies offer incentives – like Amazon’s recent announcement tuition reimbursement – to make people work for them, he noted.
A coalition of shipping groups, including the International Chamber of Shipping, drafted a open letter to world leaders calling for an end to “fragmented” travel rules and seeking priority vaccination status for transport workers. “It is of great concern that we are also seeing worker shortages and that we expected more people to leave our industries due to the mistreatment they faced during the pandemic, putting the supply chain under pressure. great threat, ”the letter said.
“The problem with very congested systems is that any small disturbance multiplies and magnifies the wait time,” said Allon, comparing the port situation to backup traffic resulting from a lane closure.
“It’s a system that’s just completely submerged and drowned in cargo at this point,” McLaurin said. “Everyone is trying to do the best they can to get by. “
Editor’s Note: FactCheck.org is one of many organizations work with facebook to demystify the disinformation shared on social networks. Our previous stories can be found here.
Allon, Gad. Professor of Operations, Information and Decisions, Wharton School, University of Pennsylvania. Telephone interview with FactCheck.org. October 4, 2021.
Amazon.com. Press release, “Amazon will pay full tuition fees for frontline employees,” Sep 9, 2021.
Anguiano, Dany. “A record number of freighters are stranded outside LA. What is happening?” The Guardian. 23 Sep 2021.
Black, Thomas. “FedEx cuts its forecast, blaming labor shortages for rising costs.” Bloomberg. Sep 21, 2021.
International Chamber of Merchant Marine. Press release. “Joint Open Letter – Transport officials call on world leaders to secure global supply chains. »Sep 29, 2021.
Kabire, Qazi Shaheen. Assistant Professor, Rowan University Rohrer College of Business. Telephone interview with FactCheck.org, October 4, 2021
Kuppusamy, Saravanan. Assistant Professor, Rowan University Rohrer College of Business. Telephone interview with FactCheck.org, October 4, 2021.
Lynch, David J. “Inside America’s Broken Supply Chain. “Washington Post. September 30, 2021.
McLaurin, John. President, Pacific Merchant Marine Association. Telephone interview with FactCheck.org. Sep 30, 2021.
Port of Los Angeles. Press release. “The Port of Los Angeles cargo volume starts off strong in 2021.” February 17, 2021.
Port of Los Angeles. Press release. “August cargo volume exceeds 954,000 TEUs at the Port of Los Angeles.” Sep 15, 2021.
Towey, Hannah et al. “A historic record of 56 freighters is stranded off the coast of California, as shipping ports hit their 4th record save in three weeks.” Inside the business community. Sep 14, 2021.
White House fact sheet. “Historic agreement on bipartite infrastructure”.
White House press release. “The White House announces John D. Porcari as port envoy to the Biden-??Harris Administration Supply Chain Disruption Task Force. August 27, 2021.