The global supply chain crisis worsens: Chip shortages, port congestion, truckers
WASHINGTON: The chip shortage, auto parts shortage, and California shipping port congestion are all part of the same supply chain issue. This is all a nightmare that will not end soon.
As this nightmare at the California ports continues to persist, Gov. Gavin Newsom issued an executive order on Oct. 20 to alleviate the crisis that worsens the problem. The executive order aims to find state-owned land and other areas for temporarily storing goods. It also removes weight limits on trucking freight routes to transport more goods.
President Joe Biden says that the Los Angeles and Long Beach ports in California will be required to stay open 24/7. He is imploring them to fight the growing supply chain problems experienced throughout the country.
But, so far, it is not working.
None of this is going to resolve the problem, which is much deeper than California’s ports.
The supply chain issue is a critical part of our local, state, and national economies. It will affect every aspect of our lives. So why is this bottleneck happening? First, let’s take a closer look. As of today, over 160 ships are waiting to dock and unload at the port. The Long Shoremen’s union off-loads the ships and loads them onto trucks, transporting the goods around the country.
And here is where the slowdown happens.
The Longshoremen Union does not want to work 24 hours a day, even though the White House states otherwise. There needs to be an update to the automation to make this job more efficient. But no one wants to spend money on updates.
Then there is a shortage of trucks.
Last year, legislators in the state of California passed Assembly Bill 5, or AB5. AB5, known as the “gig worker bill,” requires independent contractors, including owner-operated trucking, as employees and treat them as such.
The bill’s purpose was to protect cab drivers (union) who did not want competition from car services, such as Uber or Lyft. But the bill has had a wide-reaching impact on contractors, including yoga instructors, masseuses, hair cutters, and more.
How Does AB5 Affect Truck Drivers?
The Port of Los Angeles and Long Beach is the entrance point for 40 percent of all the containers coming into the United States.
Many truckers are independent contractors, and AB5 only allows union truckers to pick up at the ports. So refusing owner-operator trucks reduces the number of trucks that can clear the backlog. Or keep it from happening in the first place. And this is a massive part of the issue.
The result of California Democrat’s ill-conceived AB5 bill, designed to protect union jobs and quelch independent workers,
As a result, AB5 forces many truckers to change the way they do business. Many have lost jobs and/or companies because unions fear competition. AB5 fits hand-in-glove with the Biden initiative to unionize all jobs in America, destroying the small business and entrepreneur economic engine that fuels America.
Most motor carriers don’t own trucks or employ drivers. Instead, they work with owner-operator truck drivers. These drivers have traditionally been independent contractors. But, unfortunately, the state is blocking these drivers from working.
AB5 could also complicate trucking that crosses state lines.
Motor carriers must reconfigure routes or work with owner-operators to transfer their shipments to trucking companies that employ drivers. This whole process could be costly for the carriers and the owner-operators. Meaning consumers will pay more for goods at the retail level. (Shipping cost surge raises retail price pressures and inflation risks)
As a result of fewer truck drivers, containers sit for 7-8 weeks instead of days, leading to a 22 weeks delay of chips to car manufacturers, among other goods.
The result of the delay is surging inflation and the cost of everything, including cars. Moreover, there is no sign of the shipping crisis subsiding soon.
A new issue to add to this mess is that empty containers are filling the ports leading to some companies dropping these large metal containers on local residential streets. Without the ability to move the containers to the secondary market, where they transform into housing, construction offices, kiosks, and more,
Finally, a labor shortage means not enough workers to load and unload the trucks.
California needs to lessen its restrictions as a result of AB5. The bill, to benefit the unions, puts the nation’s supply chain into further chaos. The impact on the economy is massive and causes economic scarcity. The chips and components are stuck on these ships, as well as repair and replacement parts for your vehicles.
This supply chain issue results from too much control, too many regulations, and too much government. Here’s another solution, buy what’s made in our country, buy locally and from small businesses when you can. From energy independence to goods we use not only in our cars but also in the stores, Donald Trump promoted “Buy American” as a solution to higher costs and shipping overloads. It is time for Biden to return to those America First policies.
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