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California lawmakers seek supply chain ‘state of emergency’

Letter to Gov. Newsom warns of ‘massive crisis with no signs of slowing’

Gov. Newsom (right) touring Port of Los Angeles on Wednesday. (Photo: California Governors Office)

Federal lawmakers from California are pressuring Gov. Gavin Newsom to declare a state of emergency and suspend or eliminate regulations to deal with a supply chain crisis they say has no letup in sight.

In a letter sent Wednesday to Newsom, a Democrat, eight U.S. representatives — all Republican — said that while President Joe Biden’s recent call for 24/7 operations at California ports is a “step in the right direction,” more than 100 ships are still anchored off the ports of Los Angeles and Long Beach.

“These containers are full of essential goods like medical supplies, auto parts, and other basic everyday necessities,” the letter states. “We are still faced with a massive crisis, with no sign of slowing. As Members of Congress, representing millions of Californians, we urge you to declare a State of Emergency at our ports and across the goods transportation and storage distribution chain.”

U.S. Rep. Michelle Steel, one of the eight who signed the letter, submitted it into the record of a hearing on Wednesday hosted by the House Transportation and Infrastructure Committee on supply chain disruption.

“We have a crisis happening at our ports, with hundreds of thousands of shipping containers sitting off the coast of California,” Steel said. “Congress cannot double down on failing economic policies that make life for American businesses and workers harder and more expensive.”

The letter calls on Newsom to suspend or eliminate rules and regulations that the lawmakers say are keeping cargo containers from moving out of the ports. Among them are AB5, the state law that restricts carriers from using independent contractors and is under review by the U.S. Supreme Court. The law “creates a chilling effect” and has led to independent contractor drivers who otherwise could be helping move cargo to leave the state, signers of the letter claim. “Without enough truckers to come and unload, this cargo will continue to sit on these ships, just waiting to be delivered.”

The lawmakers also want Newsom to suspend the state’s recent Warehouse Indirect Source rule implemented by the South Coast Air Quality Management District, which oversees the port area. This rule, along with the Warehouse Actions and Investments to Reduce Emissions Program, “places massive costs on local warehouses in potential mitigation fees and restricts the number of truck trips to and from warehouse facilities,” according to the letter.

The lawmakers pointed to state estimates that facilities that fail to meet the trucking requirements in these regulations must pay mitigation fees that could cost California warehouse operators up to $1 billion per year.”

“Restricting the number of trucks traveling to and from warehouses, and increasing the cost of doing so, only makes supply chain delays worse. It is time to waive these rules to help get essential and lifesaving supplies to those who need it.”

Newsom, who toured the San Pedro Bay port area in Los Angeles on Wednesday, was not immediately available to comment on the lawmakers’ request.

“California has taken swift action across the board to address congestion and increase our capacity to move goods quickly,” Newsom said at press conference during his tour. “I am grateful for the cooperation of both the public and private sectors – from the federal government to the ports, the workforce, the retailers and the shipping lines – for the additional commitments they’ve made to tackle the backlog.”

Asked during the hearing in Washington whether efforts initiated by the White House have been productive, including those from its Supply Chain Disruption Task Force, Mario Cordero, executive director, Port of Long Beach, said improvements have been noticeable.

“Within a very short period, we’ve been able to address the loaded imports that have been at the container yards for more than nine days, and reduce that amount by almost 30%,” he said. “That creates more capacity at our terminals.”

The hearing also featured a debate over the causes of a shortfall of available truck drivers — and whether there is a driver shortage at all.

Chris Spear, American Trucking Associations president and CEO, took issue with conclusions drawn from a study presented by David Correll, a research scientist at Massachusetts Institute of Technology, which found that roughly 40% of the country’s trucking capacity “is left on the table” every day by the current driver workforce because drivers are not able to fully use their full 11 hours of legal driving time due to excessive wait times at shippers and receivers.

The paper questioned, therefore, whether the industry is really short 80,000 drivers, as asserted by the ATA.

“There’s a difference between academia and reality,” Spear said when asked to respond to the report. “MIT is an outstanding school. But the people I deal with choose different lines of work within our industry, which is extraordinarily diverse. You have to dig deep into the various segments within our industry to understand what’s working and what’s not. I struggle to see how that can be captured in one report.”

Click for more FreightWaves articles by John Gallagher.


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John Gallagher

Based in Washington, D.C., John specializes in regulation and legislation affecting all sectors of freight transportation. He has covered rail, trucking and maritime issues since 1993 for a variety of publications based in the U.S. and the U.K. John began business reporting in 1993 at Broadcasting & Cable Magazine. He graduated from Florida State University majoring in English and business.