By Lauren Fix, The Car Coach
The chip shortage, auto parts shortage and California shipping port congestion is all part of the same supply chain issue. This is a nightmare that will not end soon.
California Governor Gavin Newsom issued an executive order on October 20 that was intended to alleviate the crisis, but made the problem worse. The executive order aimed to find state-owned land and various other areas to temporarily store goods once they were removed from the port. It also removed weight limits on trucking freight routes to transport more goods.
On Wednesday, President Joe Biden declared that the Los Angeles and Long Beach ports in California would be required to stay open 24/7 to fight the growing supply chain problems experienced throughout the country.
So far, it’s not working.
None of this will resolve the problem because it goes much deeper than California’s ports backlog. The supply chain issue is a critical part of our local, state and national economies. It will affect every aspect of our lives.
Let’s take a closer look.
As of today, there are over 160 ships waiting to dock and unload at the California ports. There are 106 ships off loading as of this report. The Long Shoremen’s union off-loads the ships and then loads goods onto the proper trucks. This is where the slow down happens.
Members of the Longshoremen Union do not want to work 24 hours a day, even though the White House stated otherwise. Automation would make this job more efficient.
There is a shortage of trucks–why?
Last year, legislators in the state of California passed Assembly Bill 5, or AB5, in an effort to protect workers who previously had been unfairly labeled independent contractors. AB5, commonly referred to as the “gig worker bill”, requires employers to reclassify these independent contractors as employees and treat them as such.
How Does AB5 Affect Truck Drivers?
The Port of Los Angeles and Long Beach is the entry point for 40 percent of all the containers coming into the United States.
Many truckers are employed as independent contractors, and AB5 only allows union truckers to pick up loads at the ports. So, owner operators who own their own trucks can no longer pick up goods at the ports and this is a huge part of the issue.
According to the lawsuit against the state, many workers have been forced to drastically change the way they do business and others have lost their jobs due to the changes in the law.
Most motor carriers don’t own trucks or employ drivers. Rather, they work with owner-operator truck drivers. These drivers have traditionally been hired as independent contractors. The majority of the work done by the carrying company is transporting goods; the state is blocking these drivers from working.
AB5 could also complicate trucking that crosses state lines. Motor carriers would be forced to reconfigure routes or work with owner-operators to transfer their shipments to trucking companies who employ drivers. This whole process could be quite costly for the carriers and the owner-operators. Which means you pay more for your goods whether they are automotive, food and everything else.
Here is the result of less truck drivers: containers sit for seven to eight weeks instead of days, which equals to 22 weeks delay of chips to car manufacturers and other goods you use daily.
The other result of the delay is surging inflation and the cost of everything, including cars, increasing as the supply shortage continues. There is no sign of this subsiding in the near future.
A new issue to add to this mess is that containers have filled the ports so some companies have dropped these large metal containers on local residential streets. The terminals in LA can’t bring any ships in because there’s no room to put any containers on the ground. Most are empty.
I have one solution for them–empty containers can be reused to build housing.
To add gasoline to the fire, there is a labor shortage to load and unload the trucks. As the back log doubles, the supply chain is impacted, which include food, auto parts and literally everything else.
The Bottom Line
California needs to lessen their restrictions. Enforcing AB5 throws the nation’s supply chain into further chaos and the impact to 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 is the result of too much control, too many regulations and too much government.
Here’s another solution, buy what’s made in our country, buy local and small business when you can.
Watch the video review. If you have additional questions, put them in the comments below and I’ll be happy to answer.
Lauren Fix, The Car Coach®, is a nationally recognized automotive expert, analyst, author, and television host. A trusted car expert, Lauren provides an insider’s perspective on a wide range of automotive topics and aspects, energy, industry, consumer news, and safety issues.
Lauren is the CEO of Automotive Aspects and the Editor-in-Chief of Car Coach Reports, a global automotive news outlet. She is an automotive contributor to national and local television news shows, including Fox News, Fox Business, CNN International, The Weather Channel, Inside Edition, Local Now News, Community Digital News, and more. Lauren also co-hosts a regular show on ABC.com with Paul Brian called “His Turn – Her Turn” and hosts regular radio segments on USA Radio – DayBreak.
Lauren is honored to be inducted into the Women’s Transportation Hall of Fame and a Board Member of the Buffalo Motorcar Museum, and Juror / President for the North American Car, Utility & Truck of the Year Awards.
Check her out on Twitter and Instagram @LaurenFix.
