How California plans to unclog the state's shipping ports

One of the biggest issues plaguing the supply chain is port congestion. There are plenty of products available for purchase, but due to a lack of space and containers to place goods in — the supply chain is in a bit of a holding pattern. To right the ship at shipping ports, the state of California is rolling out a series of executive orders that the governor's office believes will diminish the backlog so merchandise can get to its proper destinations.

The nine-point executive order lists a variety of steps designed to free up capacity."

Signed by Governor Gavin Newsom, the nine-point executive order lists a variety of strategies, goals and steps that are designed to free up capacity — both in the short-term as well as the long-term. For example, in the short-term, the Governor's Office of Business and Economic Development will "identify non-state sites — including private locally owned and federally owned parcels — that could be available to address short-term storage needs," the executive order stated. Over the long-term, California will devote $250 million toward helping ports offset losses stemming from the COVID-19 crisis, $280 toward port infrastructure projects at the port of Oakland and more than $1 billion toward the purchase of zero emission trucks. The $1.3 billion is slated to be spent over three years and the state will also purchase zero-emission transit buses, school buses and deploy more than 1,000 zero-emission port drayage trucks.

Ports are 'flooded with freight'
Currently, the short-term storage needs are the most pressing and seem to be what's driving the persistent backlog. Justin Barnes of TOC Logistics International told Business Insider there's no place to put all the products that keep coming in and need to be delivered to their destinations by truck drivers.

"Really the whole market is flooded with freight," Barnes explained. "That backlog just continues to build and build, so one container comes in, and then 10 more come on top of it, and it's hard to get that one moving."

Backlog is preventing imports from reaching their potential
According to the National Retail Federation, retail imports over the past several months would likely have been even greater, but the congestion at the ports is preventing products from being offloaded more quickly. Dozens of ships are stuck at sea, particularly at the nation's two largest trading ports in Los Angeles and Long Beach.

Shawn Yadon, CEO for the California Trucking Association, noted in a press release that he's grateful for Governor Newsom's executive order and is confident that the plan will yield results if stakeholders work together and stay in constant communication.

"We commend the Newsom Administration for focusing on freeing up state land to store empty containers and encourage the equipment providers and local governments to work with the governor to get empty containers off of chassis," Yadon said.

He cautioned, however, that more work needs to be done for the supply chain to get back to normal, urging the governor to minimize some of the regulatory scrutiny that is preventing truckers from navigating the series of backlogs more effectively.