Unraveling the supply chain mess
Gas prices are the highest they’ve been in more than seven years, and American families are about to gather for the most expensive Thanksgiving in history. As we speak, more than 200,000 shipping containers are sitting off the coast of California full of Christmas toys, auto parts, and basic everyday necessities just waiting to be unloaded. Last week a record number of cargo ships — more than 170 — were idling and anchored off the coast, contributing to the paralyzing bottleneck that seems to grow more dire by the day. This backlog also led to an environmental catastrophe off our coast, as a ship anchor is suspected to be to blame for a ruptured pipeline and a massive 25,000-gallon oil leak that plagued the waters, wildlife and shores off of Orange County for days—the biggest spill our shores have seen in three decades.
The ripple effect of these events is hitting American families in their wallets, as inflation continues its grip on our nation. Inflation hit a 30-year-high earlier this month, and everything from grocery store trips to buying a new car has become more expensive. Gas prices in California broke the state record of $4.69 this week.
How did we get here? The problems are a perfect storm of events and bad policy decisions from Democrat leaders in Washington and in my home state of California. The first is the ongoing reckless and mistargeted spending of taxpayer dollars, including the $1.9 trillion coronavirus relief package known as the American Rescue Plan. Economists warned early on overspending, when there was still $1 trillion of unspent COVID-19 relief funds from legislation passed in 2020, could “overheat” the economy and lead to inflation.
The supply chain crisis has been decades in the making, the pandemic merely exposed the fault lines. Much of the port congestion can be attributed to the massive truck driver shortage of more than 60,000 qualified drivers nationally, coupled with a projected need to hire 1.1 million new drivers over the next decade to keep up with increasing freight demand and workforce retirements. Without enough drivers to unload the cargo, the backlog will only get worse.
Hiring more drivers isn’t easy in California, which has been far from friendly to the truck-driving industry. The driver shortage is thanks to recent Democrat-led initiatives, including Assembly Bill 5 (AB 5), which determines whether a worker is an independent contractor or an employee through an “ABC test.” The law affects many transportation businesses and consumers in California and makes it impossible for truck drivers, a large number of which are owner operators, to be independent contractors because they inevitably work in the same line as the companies with which they contract. Fortunately, California is currently blocked by injunction from enforcing AB 5 against motor carriers. Otherwise, the supply chain strains would be exponentially worse. But the mere threat of AB 5 has caused many of our independent contractors to move to more business-friendly states where they can work without restriction (not to mention lower taxes).
Then there are severe California environmental regulations that have been imposed on the trucking industry to meet current clean air regulations, the state Department of Motor Vehicles blocks new registrations of any oversized vehicles older than 2011 — or those with engines manufactured before 2010. By 2023, nearly all trucks and buses will be required to have 2010 or newer engines.
It’s time to fix this self-imposed mess and clear up the congestion on our shoreline to restore the flow of goods and prevent the next environmental disaster. Last week I sent a letter to Gov. Gavin Newsom to request he declare a State of Emergency at our ports and suspend the burdensome policies that have contributed to the supply chain crisis. It is California’s own burdensome laws and regulations that have restricted goods from moving to consumers that need them most.
I also recently introduced the Stopping Hazardous Incidents in the Pacific Act of 2021 (The SHIP Act), which would ban cargo idling or anchoring 24 nautical miles off the Orange County coast. This ban would take effect immediately for up to 180 days, or until the president declares the backlog in the ports is over. I was glad to see this month, the Ports of Long Beach and Los Angeles announced a new queuing system that mirrors this legislation. It’s time to get the ports working again and get these ships moving and out of our waters.
We must repeal AB 5 and end the harm to the trucker independent contractors and the entrepreneurs, and small businesses in California. It negatively impacts scores of jobs throughout the state and takes away workers’ flexibility to do their jobs. Now, more than ever, people need that flexibility and independence to work in the capacity they see fit — not less.
Finally, we must end the Washington practice of treating American paychecks like a limitless piggy bank to fund multi-trillion-dollar spending sprees. Washington Democrats have signed tax increases into law that will only hurt American families and businesses working to rebuild from the pandemic.
As the holiday season approaches, the crisis happening at our ports will only worsen. Now is not the time to double down on reckless spending and failed policies that created these problems. It is time to remove the regulatory barriers that are keeping a stranglehold on the supply chain and our economy.
Representative Michelle Steel represents California’s 48th District.