During the past few months, the United States has seen the biggest port backup since the longshore contract dispute of 2014-2015. This time the backup — like most problems these days — can be attributed in part to the COVID-19 pandemic. Outbreaks plus safety restrictions that have been put in place to prevent further spread of the virus — and a number of systemic problems — have created the perfect storm we face today.
Unfortunately, the result has caused knock-on effects further down the supply chain, impacting the delivery of essential personal protective equipment for American health care workers, food for American families and the seasonal products that stock many retailers’ shelves and which have a limited selling season.
While a lot of effort has been made to vaccinate the American public and prioritize essential workers and those most at risk, a key component of the nation’s economy – the import and export of goods – has not been prioritized enough.
The backup at the nation’s ports is a clear example of this, resulting not only in a slowdown of the nation’s economic recovery but also delays in the delivery of the products we need to fight the ongoing health emergency. To address these disruptions and maintain a steady flow of goods in and out of the United States, there are three actions that officials should make that would have an outsized impact.
First, we need to vaccinate the people who work in and service our ports. There are more than 642,000 dockside workers, 1.45 million truckers, and 1.42 million warehouse workers in the United States moving more than $2.5 trillion worth of product each year – including the materials we need to vaccinate and prevent the further spread of COVID-19. Ensuring that these individuals can go to work safely, and stay on the job, will not only affect them individually and the ports and companies that employ them, but will also help the thousands of American businesses that rely on smooth trade – businesses that employ exponentially more Americans throughout the 50 states.
Second, we urge the Federal Maritime Commission to increase its oversight activities to ensure shipping contracts are being fully honored and that its recently announced policies on detention and demurrage are being followed and enforced.
Currently, American companies are being hit three times over –
- By paying exorbitant costs to carriers to move their cargo,
- By bearing the costs of delays in shipments in lost sales and customer charges, and
- By facing demurrage/detention fees for being unable to move their product out of the ports due to events outside of their control.
Action by the FMC can help bring these costs under control before they do permanent damage to American companies and their workers.
Finally — beyond the immediate tasks of ensuring port workers are vaccinated and ensuring that cargo stakeholders are following the rules — the federal government has a long-term responsibility to address the fundamental issues that have led to this crisis. It’s time to craft and implement a bipartisan freight movement policy, recognizing the importance of port and cargo health to our economy. We need to bring together stakeholders to develop and implement new technologies and new efficiencies that will prevent such crises in the future.
Just as important, improving the nation’s freight infrastructure must be a critical component of the Biden administration’s plan to invest in the nation’s infrastructure to build back better. If we are to recover from the economic fallout of COVID-19, it is essential that the health of our ports be included in the conversation.
Nate Herman is senior vice president, policy at the American Apparel & Footwear Association, where he oversees the association’s lobbying, policy and regulatory affairs activities on corporate social responsibility, sustainability, transportation, logistics and customs issues.
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