Supply chain logjam: Where logistics and politics collide

Expert sees 'no single point of failure.' GOP eagerly points at Biden

Shipping containers sit stacked in California last month. (Mario Tama/Getty Images)
Shipping containers sit stacked in California last month. (Mario Tama/Getty Images)
Posted November 16, 2021 at 1:52pm

When the House Transportation and Infrastructure Committee on Wednesday delves into the nation’s snarled supply chain, lawmakers are likely to be snarled themselves in fraught politics and complex logistics.

Republicans say the nation’s backed-up ports, delayed deliveries and resulting inflation reflect President Joe Biden’s policies, nicknaming the problem the “Biden Bottleneck.” The problem emerged right before and is likely to affect the holiday shipping season, making the GOP rhetoric more salient for voters.

Democrats, meanwhile, say the problem is an outgrowth of the pandemic, when many Americans opted to buy more when forced to stay home. The increased consumption, they argue, caused a backup that has yet to abate.

The administration, backed by Democratic lawmakers, has thrown a series of policy solutions at the problem, but none have effectively moved containers out of port terminals.

Industry leaders, meanwhile, disagree about whether the government can or should try to fix the problem.

It’s into that fray the committee steps, holding a 10:30 a.m. hearing Wednesday featuring witnesses from the American Association of Port Authorities, the American Trucking Associations, the Association of American Railroads and the Transportation Trades Department, AFL-CIO.

Those directly involved compare the problem to a line of dominoes falling, with the pandemic spurring a chain reaction of rampant consumer consumption, manufacturing and shipping shutdowns, exacerbated by a trucker shortage and lousy infrastructure.

“There’s no one single point of failure anyone can point to, because every step along the way there’s been a different challenge,” said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation.

Still, Republicans see the issue as rife with political potential. In October, more than 100 House Republicans sent Biden a letter urging him to discard his spending bill in favor of an agenda addressing the supply chain problem.

[In implementing infrastructure law, Biden turns to two former mayors for help]

“The policies of your Presidency and party’s leaders in Congress are exacerbating or simply ignoring the underlying supply chain crisis,” the group wrote, warning that Biden’s policies “weaken American competitiveness and shrink our economy, and they will certainly ensure that this Christmas will not be merry.”

Rep. Sam Graves, R-Mo., the ranking Republican on the House Transportation and Infrastructure Committee said among the policies that have contributed to the logjam are vaccine mandates, which he said drove some supply chain employees out of the workforce.

He said he was frustrated that the recently passed bipartisan infrastructure bill included money for ports designated for electrification and green projects “rather than dredging and making those ports accessible to many of our larger ships.”

Republicans are also calling for additional flexibility to allow 18-year-olds to drive commercial trucks and waiving regulations in order to ease the burden on the supply chain.

There is “not an easy silver bullet solution,” said Rep. David Rouzer, R-N.C., “but the federal government doesn’t need to be continuing to stay in the way.”

Administration’s response

Biden has taken steps aimed at alleviating the problem.

On Oct. 13, he announced plans to keep two of the nation’s busiest ports — the Port of Los Angeles and the Port of Long Beach — open 24 hours a day, seven days a week. The two California ports are the point of entry for 40 percent of the containers to the U.S. and have seen demand surge this year.

In November, the administration announced plans to increase flexibility for how ports can use federal port grants. In Savannah, for example, the administration allowed the Georgia Port Authority to reallocate more than $8 million to convert existing inland facilities into five pop-up container yards in Georgia and North Carolina.

It also announced plans to open competition for the first round of port infrastructure grants paid for by the bipartisan infrastructure deal within 90 days. That program would initially include more than $475 million in additional funding for port and marine highway infrastructure.

Those fluent in supply chain issues say the problem isn’t easy to fix.

Gold said while the pandemic exacerbated the problem, the issue predated it.

“Even prior to the pandemic, disruptions happened all the time,” he said. “But it was nothing to this extent.”

Chris Burroughs, vice president of government affairs for the Transportation Intermediaries Association, whose president and CEO will testify at the hearing Wednesday, said the pandemic highlighted the trucker shortage, a chassis shortage (chassis hold containers on trucks) and a lack of real estate to store incoming containers.

“You can see how it creates a death spiral of things going wrong,” he said.

He said even Biden’s attempts to open the ports 24 hours a day had little impact. “If you don’t have the drivers, don’t have the equipment, or real estate or warehouse space, it doesn’t matter how much ports are open,” he said. “If you’re lacking those four things, you’re going to have a problem.”

He said he worries a federal fix could backfire.

“Our guys worry that if the federal government gets too involved, it may have a devastating long-term effect on the supply chain in terms of over-government regulation,” he said.”

John Butler, president and CEO of the World Shipping Council, which represents international shipping, disputes the notion that a variety of factors contributed to the problem, pointing to the pandemic as the issue’s root cause.

Pre-pandemic, he said, there was “no backlog” of ships waiting to come into port. Now, he said, there are 75 ships anchored or waiting to come into Southern California.

“To be blunt, there’s not a lot that Congress or the administration can do except around the edges that’s going to have huge effectiveness,” he said. “The market participants really have to work this out.”