The U.S. government's port envoy says container backlog is being cleared
NOEL KING, HOST:
President Biden, you will recall, started a task force to address supply chain disruptions. Some of the biggest bottlenecks have been at ports. The White House named John Porcari as its port envoy to that task force, and he talked to Steve.
STEVE INSKEEP, HOST:
The president said this week that we're heading into a holiday season in very strong shape, which is a claim, of course, that's going to be tested over the next few weeks. What does it mean to be in strong shape?
JOHN PORCARI: Well, it means that the goods movement chain has met the challenge of the pandemic and gone beyond that to move record volumes of goods through the ports, through the middle mile, to stores and to your doorstep. We're hearing from the CEOs, for example, that - Walmart says their inventories are up 11% over last year. Etsy, who specializes in small business partners - they said they're less concerned about their supply chain challenges than they were last year.
INSKEEP: Well, what has changed because we had Danny Wan on the program last month - president of the California Association of Port Authorities, runs the Port of Oakland - November 11, and he said the current disruption is not going to resolve itself by Christmas? Has it somehow resolved itself?
PORCARI: Well, first, 40% of our container imports come in through one port complex, the combined Ports of Los Angeles and Long Beach, and they had experienced unprecedented congestion, which backed up the goods chain all the way to the Midwest - throughout the country as well. And we've been working as an honest broker with all of the parties in this private sector supply chain to get them talking to each other and working with each other. And the imposition of a $100 per container fee for containers that are sitting on docks for nine days or more has been one mechanism that's really cleared out the backlog in containers. This is a proposed penalty for keeping containers on-site too long.
INSKEEP: The fact that a threat of a fee would be a factor here is interesting because it implies that there were companies that had a choice to leave their containers at the port site. Was that really happening, that it wasn't a matter of desperate need or lack of trucks, that companies were making an active choice to leave containers there?
PORCARI: Well, the early days of the pandemic induced all kinds of dislocations in the system, and one of them was people ordering more and ordering earlier. And to some extent, our system nationally has gone from just in time to just in case, making sure that there's extra goods available when needed. And many of them were stored at the ports, in some cases for 30, 45 days before they were moved out.
INSKEEP: So there were companies that were using the ports as a free warehouse.
PORCARI: Yes. That has now changed. They're highly incentivized to keep those containers moving quickly, and you can see the on-the-ground difference at the Ports of Los Angeles and Long Beach right now.
INSKEEP: Have other chokepoints eased up? Are there enough trucks on the roads? Are there enough trains on the tracks?
PORCARI: There's definitely adequate rail capacity from the West Coast to the Midwest and the heartland. There are continuing truck driver shortages. That's something that the administration has been working hard on by, for example, having paid apprenticeship programs to address the ongoing driver shortage. And that's different from the industry norm, where you need to train at your own expense to get your commercial driver's license.
INSKEEP: Having had a few months to work on the port system here, did you come away feeling that you faced a short-term problem that you now feel you have your hands around, or that there are serious long-term supply issues that need to be addressed over time?
PORCARI: Yeah, Steve, there are longer term structural problems that need to be addressed. The pandemic laid bare what was a system that was creaking along in the best of circumstances, and we have an unprecedented opportunity here with the bipartisan infrastructure law and with Build Back Better to build a goods movement system that will serve our children and grandchildren well. We really need to make some long-term structural changes, and we need to have a more resilient and more capacity in the goods movement system than we have. In the future, we're either going to have a natural disaster or a foreign economic upset - something, probably multiple things, that will impact the goods movement chain, and it shouldn't be this brittle.
INSKEEP: John Porcari is the port envoy for the Biden-Harris Administration Supply Chain Disruptions Task Force. Thanks so much.
PORCARI: My pleasure, Steve.
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