Ineffective Government, Empty Shelves and Inflation

On January 11, 2022, U.S. Transportation Secretary Pete Buttigieg toured the southern California ports of Los Angeles and Long Beach. That the transportation secretary would visit these two ports is no surprise. They have special importance because they process 40% of the goods imported by Americans every year.

During his visit, Buttigieg praised the efforts by port officials to keep freight moving through the facilities:

“Not only is this about the presents under the tree, this is about essential goods like medical goods that are needed in this moment of continued public health challenge,” he said....

“One of the reasons why Christmas was not, in fact, canceled is that ports like L.A. and Long Beach moved record levels of goods, allowing an all-time record high in terms of retail sales this holiday season,” he said.

Buttigieg didn’t say how much of the record-high holiday retail sales could be attributed to inflation. It’s an awkward topic for him. That’s because Americans have been paying much more for imported goods because of shortages for these goods. Shortages were caused because the ports Buttigieg praised had failed to unload cargo ships fast enough for much of the prior year. Shortages that Buttigieg himself allowed to fester for months as massive container ships backed up in a huge traffic jam outside the ports he visited.

Speaking of which, on the day Buttigieg praised the ports’ performance, 105 container ships were waiting to dock and unload. Three months earlier, there were 111. That almost sounds praiseworthy.

But the Ports’ Backlog Isn’t Getting Better

One day after Buttigieg praised the ports’ performance, several logistics analysis firms monitoring their backlogs sent up warning flares. They confirmed the ports are taking longer to unload cargoes, not less. That means the supply chain backlog problem is getting worse, not better. Freightwaves summarized the message to businesses counting on moving imported goods through the ports.

Planning to import goods from Asia by ocean and sell them in America this summer? Better act fast. The trans-Pacific cargo move can now take over three months. According to multiple sources, average transit times have risen to double pre-COVID levels—and they’re still increasing.

Methodologies and data sources differ, so time estimates vary. But each dataset shows the same trend: With every passing month, more vessels, container equipment and goods inventories are getting waylaid in the Pacific.

One comment stood out, following a focused analysis of how fast the ports are processing cargoes:

Alan Murphy, CEO of Sea-Intelligence, warned this week: “It seems that there is no sign of imminent improvement. All available data shows that congestion and bottleneck problems are worsening.”

The analysis confirms the Biden administration’s October 2021 steps to fix the problems at the ports have been ineffective. The shortages American consumers and businesses are experiencing will continue. You can see it in the stores you visit because their empty shelves are not being restocked.

The Situation Will Get Worse

These failures will be made worse by the Omicron surge in COVID cases. The fast-spreading coronavirus variant will further slow port operations at Long Beach and Los Angeles.

The Omicron variant is threatening to make the historic backlog at the largest ports in the US even worse.

About 800 dockworkers were unable to work this week due to COVID-19 related issues, according to a report from The Wall Street Journal. The publication said the number represents about 1 in 10 of the two ports’ daily workforce and includes workers who have tested positive for coronavirus, as well as those who are quarantining or felt ill....

Infection rates at the ports are already stalling efforts to clear a backlog of over 100 cargo ships. On Monday, less workers meant that 13 fewer ships were unloaded and loaded at the twin ports, while other ships received less longshoremen, The Journal reported.

A similar COVID-related disruption is developing in China, where many container ships heading to U.S. ports originate. In the short term, that may help relieve pressure on U.S. ports. But that relief will come at a greater cost. The disruption will mean more empty store shelves and shortages of needed goods for American consumers and businesses. They will also mean higher prices on top of the inflation President Biden’s other ineffective policies have created.

Is it any wonder that ineffective government, empty shelves, and inflation are coming to define Joe Biden’s presidency?

Craig Eyermann is a Research Fellow at the Independent Institute.
Beacon Posts by Craig Eyermann | Full Biography and Publications
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