President Joe Biden has appointed former Deputy Transportation Secretary John Porcari as port envoy to assist the administration’s Supply Chain Disruptions Task Force and industry stakeholders address structural inefficiencies that are bottling up ocean shipments.
The task force, led by the secretaries of agriculture, commerce and transportation, was established in early June, to diagnose supply/demand problems and alleviate bottlenecks in the transportation, construction, semiconductor and food sectors.
“The strength of the U.S. economic recovery has tested the near-term capacity of our supply chains, and the administration is operating on all fronts to ease bottlenecks and facilitate the flow of goods across the country,” said National Economic Council Director Brian Deese. “Our country’s ports are the gateways for getting goods to market, which makes the appointment of John Porcari as Port Envoy an especially important step forward in alleviating these disruptions that are impacting consumers, workers and businesses alike.”
The damage to businesses that depend on import is highlighted by a Los Angeles Times report that described how the L.A. Opera is rushing to build a set for its Sept. 18 opener because a set shipped from Monaco is on a container ship floating in open water off the Port of Los Angeles for nearly two weeks waiting for a berth.
U.S. container imports are at all-time highs as consumers, flush with savings and federal stimulus money, continue to spend heavily on merchandise. The extraordinary demand coupled with COVID-related labor shortages has swamped the ability of ports to smoothly transfer cargo to trucking and railroad partners that are also maxed out. With boxes piling up, longshoremen are hard pressed to work the vessels in a timely manner. There are more than 40 container vessels outside the Los Angeles/Long Beach port complex, according to the Marine Exchange of Southern California. The twin ports processed 40% more volume in the first half of the year than during the same period in 2020.
All the congestion makes it difficult for carriers to reposition containers back to Asia, compounding the delays.
The trade system is so stretched that any hiccup, such as port closures in China because of COVID outbreaks, adds to the logjams. Shipping rates and surcharges are four to 10 times more expensive than normal, depending on factors such as port of entry, contract terms and shipment urgency.
“Retailers have faced a number of unprecedented challenges during the pandemic, and the supply chain disruptions that continue to evolve pose a threat to many American businesses. As consumer demand increases, the supply chain challenges and the costs associated with them remain significant,” the National Retail Federation said in response to the Porcari appointment.
“Imports at retail container ports have marked record highs recently as consumer demand continues to stretch supply chains and retailers shift to the peak shipping season for winter holiday merchandise. The bottlenecks and congestion we are seeing at our ports highlight the need for an improved and sophisticated supply chain that can handle these issues.
“NRF is encouraged by the Biden administration’s action on this critical issue. We look forward to working with Envoy Porcari, [Transportation] Secretary Buttigieg and the full Supply Chain Disruptions Task Force to mitigate these challenges, particularly in advance of the upcoming holiday season, so that retailers can ensure consumers can access the products they want and need in a timely manner.”
In June, the NRF submitted a letter to the White House outlining the numerous supply chain challenges retailers have faced throughout the pandemic and potential solutions to address current and future disruptions.
Buttigieg participated in a virtual roundtable in July with port industry representatives, part of a broad outreach effort. Porcari will work with Buttigieg and the National Economic Council to coordinate a public-private response, the White House said.
Ports would receive $17 billion for infrastructure upgrades aimed at reducing congestion and emissions under a $1 trillion infrastructure package negotiated with Congress.
The Biden administration and the Federal Maritime Commission are also investigating ocean carrier practices to determine if they are unfairly withholding containers from exporters, or charging shippers unreasonable rates and fees.
Who is Porcari?
Porcari served as deputy secretary of transportation during the Obama administration from 2009 to 2014. He had oversight of port, intermodal and maritime policy, as well as maritime-related competitive grant programs.
He also served twice as Maryland’s secretary of transportation and chairman of the Maryland Port Commission (1999-2003 and 2006-2009), initiating a strategic plan that helped revitalize the Port of Baltimore. Baltimore is now the largest auto/vehicle port in the nation and has been growing as a destination for containers.
Under Porcari’s leadership, the Port of Baltimore also entered into a public-private partnership to expand its Seagirt container terminal, adding a fourth, 50-foot container berth and ship-to-shore cranes to accommodate the newest super-post-Panamax container vessels. The 50-year, $1.3 billion concession became a model for other port projects around the country.
Porcari currently is managing partner for 3P Enterprises. He was president of U.S. advisory services for WSP USA for six years, during which time he served as interim executive director of the Gateway Development Corp., which oversees a comprehensive passenger rail investment program for the Northeast Corridor.