Thinking Citizen Blog — Is California the Supply Chain’s Weakest Link? Can Xmas Be Saved? What’s the Real Problem?

Thinking Citizen Blog — Tuesday is Economics, Finance, and Business Day

Today’s Topic: Is California the Supply Chain’s Weakest Link? Can Xmas Be Saved? What’s the Real Problem?

Is the real problem just too much pent-up demand? Too much pandemic savings and too much eagerness to spend, spend, spend? Or is it the failure of businesses to correctly predict the speed and magnitude of the resurgence in demand? Or is it the difficulty of finding workers to do the work? Or is it too many regulations? Today, the summary of an article by Allysia Finley in the Wall Street Journal that focuses on California’s contribution. Two California ports (Long Beach and Los Angeles) account for 40% of containers entering the US. Experts — please chime in. Correct, elaborate, elucidate.

WHY ARE FLORIDA’S PORTS FUNCTIONING BETTER THAN CALIFORNIA’S? AB5 FOR STARTERS

1. “One barrier is a law known as AB5. Before its enactment in 2019, tens of thousands of truck drivers worked as independent contractors, which gave them more autonomy and flexibility than if they were employees. As contractors, truck drivers can work for multiple companies, which allows them to nimbly respond to surges in demand.”

2. “The International Brotherhood of Teamsters, however, has long wanted to organize truck drivers, including those serving California’s ports. Since the National Labor Relations Act prevents unions from organizing independent contractors, Democrats passed AB5, sponsored by Assemblywoman Lorena Gonzalez, a Teamsters member.”

3. “Trucking companies warned that the law could put small carriers out of business and cause drivers to leave the state. They want the U.S. Supreme Court to review a legal challenge to AB5, but many are complying after defeats in lower courts. It’s hard to quantify how much AB5 has contributed to the shortage of truck drivers. But there’s little doubt the law hinders efficiency and productivity.”

A SECOND FACTOR — LACK OF STORAGE SPACE

1. “There is absolutely no available capacity in the warehousing sector due to the difficulty in developing any new capacity.”

2. “The vacancy rate for warehouses near the Los Angeles and Long Beach ports was a mere 1%, compared with 3.6% nationwide.”

3. “If warehouses don’t have space in their facilities or parking lots to unload goods, drivers can’t make deliveries.”

NB: “Some truck drivers are leaving container boxes along with the chassis outside storage facilities and are picking them up later, but that results in a shortage of chassis at the ports. (About half of chassis are leased to truckers from a common pool supplied by private companies.)

SO WHY IS THERE A LACK OF STORAGE SPACE?

1. “In California warehouse growth ignited opposition from environmental groups, which complain of pollution and noise. Many cities have limited new logistics facilities. Colton, in San Bernardino County, has imposed a moratorium on new warehouses and truck facilities through early May 2022.”

2. “One trucking company this year withdrew a plan for a 54,000-square-foot warehouse and parking facility for 475 trucks and containers atop a former landfill in Carson amid political opposition. Some cities have limited the hours when trucks can unload containers at stores, which makes it harder to free up warehouse space — another reason Mr. Biden’s 24/7 call has had little effect.”

3. “State officials have also pressed localities to attach green mandates to permits for new warehouses, which can be poison pills. Former Attorney General Xavier Becerra issued guidance with a long list of “best practices and mitigation measures” for warehouses to comply with the California Environmental Quality Act.”

NB: “Among them: “prohibiting off-road diesel-powered equipment from being in the ‘on’ position for more than 10 hours per day,” “forbidding idling of heavy equipment for more than two minutes,” “requiring on-site equipment, such as forklifts and yard trucks, to be electric with the necessary electrical charging stations provided,” and “constructing electric truck charging stations proportional to the number of dock doors at the project.”

The Absolute Simplest Explanation for America’s Supply Chain Woes

Opinion | California Is the Supply Chain’s Weakest Link

2021 global supply chain crisis — Wikipedia

A LINK TO THE LAST FOUR YEARS OF POSTS ORGANIZED BY THEME:

PDF with headlines — Google Drive

YOUR TURN — Please share:

a.) the coolest thing you learned this week related to business, economics, finance.

b.) the coolest thing you learned in your life related to business, economics, finance.

c.) anything at all related to business, economics, finance.

d.) anything at all

--

Passionate about education, thinking citizenship, art, and passing bits on of wisdom of a long lifetime.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
John Muresianu

Passionate about education, thinking citizenship, art, and passing bits on of wisdom of a long lifetime.