Why the US Supply Chain Crisis Is Intractable and Will Get Worse

Readers bwilli123 and Carolinian flagged a must read post by Ryan Johnson, I’m A Twenty Year Truck Driver, I Will Tell You Why America’s “Shipping Crisis” Will Not End. You really really really need to consume it in its entirely. It makes a detailed, cogent case as to why the America’s ports are a mess and why there is no simple and even not so simple way out. No wonder Pete Buttigieg is in hiding, um, on paternity leave, rather than putting his hands on the supply chain tar baby.

I am going to run the risk of oversimpification to pull a few key points out of his compact and well argued post. They serve to reinforce his contention that Americans are royally fucked via where trucking industry deregulation (the first big deregulation initiative, thank you Jimmy Carter) has been amplified by neoliberalism: too many interconnected actors, so diffuse responsibility with contacts creating rigidity and incentives to do nothing, and cowards in government. I’ll argue that there are some steps that could theoretically be taken to get a little more flow through the stuck ports, but even those moves would be seen as too interventionist despite the high and rising cost of standing pat.

The severity of the supply chain crisis combined with the near-certainty that the only actor that could partially (stress partially) clear this logjam is the Feds. They are guaranteed not to do enough even if they understood how the moving parts interconnect.

So it is now a safe bet that the Democrats will suffer a wipeout in the midterms, even if Biden gets his big bills passed (some stimulus!) and there is no Covid surge. Worsening supply shortfalls, particularly of drugs and medical staples, will make the bad press of the Iran hostage crisis look tame.

Johnson describes two shortages: driver and equipment. From the driver standpoint, it sounds as if a crisis was bound to happen at some point, that there was a chronic shortfall of drivers that has tipped into a crisis. As he describes it, many trucking companies won’t even entertain port business because even an unusually speedy trip in and out of a port is still very time consuming. Drivers have to queue three times: at the entrance, for the container pickup, and the exit. These lines are typically bad because ports can’t be bothered to have enough staff.

Bad and now absolutely Gawd-awful waits results in drivers quitting or at least not signing up for port duty because most are paid by job, not by the hour (the exception are drivers who are Teamsters). This is their deal:

Most port drivers are ‘independent contractors’, leased onto a carrier who is paying them by the load. Whether their load takes two hours, fourteen hours, or three days to complete, they get paid the same, and they have to pay 90% of their truck operating expenses (the carrier might pay the other 10%, but usually less.) The rates paid to non-union drivers for shipping container transport are usually extremely low. In a majority of cases, these drivers don’t come close to my union wages. They pay for all their own repairs and fuel, and all truck related expenses. I honestly don’t understand how many of them can even afford to show up for work. There’s no guarantee of ANY wage (not even minimum wage), and in many cases, these drivers make far below minimum wage. In some cases they work 70 hour weeks and still end up owing money to their carrier.

So when the coastal ports started getting clogged up last spring due to the impacts of COVID on business everywhere, drivers started refusing to show up. Congestion got so bad that instead of being able to do three loads a day, they could only do one. They took a 2/3 pay cut and most of these drivers were working 12 hours a day or more. While carriers were charging increased pandemic shipping rates, none of those rate increases went to the driver wages. Many drivers simply quit. However, while the pickup rate for containers severely decreased, they were still being offloaded from the boats.

I am sure there are other equipment shortages, but the one Johnson focuses on is a dearth of chassis, as in the trailer that goes behind the cab. The container companies are supposed to supply the chassis (only a minority of trucking companies own their chassis), but in some over-my-pay-grade process, the containers get matched up to the chassis in port (Lambert had an article in Water Cooler than indicated that unlike rail cars, where railroads pull railcars of other railroads and settle up later, it seems as if these chassis are not fungible. If that’s the case, the need to get a chassis that is owned by or can be charged to the right container company would introduce another big layer of complexity).

So can any knowledgeable readers fill in details? When a truck comes into port, is it only working with one container company, so it *only* needs to dump the container it hauled and then find another (or a particular?) outbound container from the same container company? How does this get booked and how are the chassis managed? Or alternatively, does the driver drop off his container and chassis (as in unhook his truck from the chassis and not worry about the unloading) and then drive his naked cab around the port to where his new chassis and container are supposed to be?

Another way to free up a chassis is NOT to put a container on it to go to a final destination, but to move containers to a warehouse. As an alternative distribution process, this could actually make sense, move the stuff out of where the traffic jam is worst, then shift more of the distribution to final destinations from the warehouses. If done in a deliberate manner, some chassis would be shuttling containers to warehouses in a systematic fashion.

But resorting to warehouses isn’t done in a terribly organized manner, it’s just an expedient. The truck and driver and chassis are again tied up at the warehouse for Lord only knows how long. Johnson reports that former 20 to 30 minute pickups now often take 3 to 4 hours. That chassis has to go somewhere, usually with a container just unloaded back to the port. So the warehouses near ports are getting choked too:

Containers are being pulled out of the port and dropped anywhere the drivers can find because the trucking company lots are full. Ports are desperate to get containers out so they can unload the new containers coming in by boat. When this happens there is no plan to deliver this freight yet, they are literally just making room for the next ship at the port. This won’t last long, as this just compounds the shortage of chassis. Ports will eventually find themselves unable to move containers out of the port until sitting containers are delivered, emptied, returned, or taken to a storage lot (either loaded or empty) and taken off the chassis there so the chassis can be put back into use. The priority is not delivery, the priority is just to clear the port enough to unload the next boat.

What happens when a container does get to a warehouse?

A large portion of international containers must be hand unloaded because the products are not on pallets. It takes a working crew a considerable amount of time to do this, and warehouse work is usually low wage. A lot of it is actually only temp staffed. Many full time warehouse workers got laid off when the pandemic started, and didn’t come back. So warehouses, like everybody else, are chronically short staffed.

When the port trucker gets to the warehouse, they have to wait for a door…the driver gets a door and drops the container — but now often has to pick up an empty, and goes back to the port to wait in line all over again to drop off the empty.

At the warehouse, the delivered freight is unloaded, and it is usually separated and bound to pallets, then shipped out in much smaller quantities to final destination. A container that had a couple dozen pallets of goods on it will go out on multiple trailers to multiple different destinations a few pallets at a time.

Oh, and on top everything else, there’s a pallet shortage too.

Johnson explains why no one has any incentive to fix anything. Desperate shippers will pay premium rates. This may move them further up in the queue but does nothing to improve throughput. The intermediaries like the ports and the warehouses and the port trucking companies will make out like bandits. But they won’t pay workers more so nothing will get better.

Trucking companies that don’t now do ports won’t start doing ports to try to capture a windfall. Johnson explained:

Outside of dedicated port trucking companies, most trucking companies won’t touch shipping containers…There are also restrictions on which trucks can go into a port. They have to be approved, have RFID tags, port registered, and the drivers have to have at least a TWIC card (Transportation Worker Identification Credential from the federal Transportation Security Administration). Some ports have additional requirements.

Johnson pooh-poohs the Biden scheme:

The ‘experts’ want to say we can do things like open the ports 24/7, and this problem will be over in a couple weeks…But every truck driver in America can’t operate 24/7, even if the government suspends Hours Of Service Regulations (federal regulations determining how many hours a week we can work/drive), we still need to sleep sometime….. What we have is a system with a limited amount of trucks and qualified drivers, many of whom are already working 14 hours a day (legally, the maximum they can), and now the supposed fix is to have them work 24 hours a day, every day, and not stop until the backlog is cleared. It’s not going to happen. It is not physically possible. There is no “cavalry” coming. No trucking companies are going to pay to register their trucks to haul containers for something that is supposedly so “short term,” because these same companies can get higher rate loads outside the ports. There is no extra capacity to be had, and it makes NO difference anyway, because If you can’t get a container unloaded at a warehouse, having drivers work 24/7/365 solves nothing.

Having said all of this, Johnson actually provides evidence that there could be a way to alleviate the port mess. Given the shortages of chassis and pallets, it would only increase throughput somewhat, but that’s better than nothing. But I can’t see the Biden Administration having the guts and imagination to implement it (among other things, it would require comprehending that this situation really is dire and set to get worse and radical measures are justified).

Johnson has told us there are manpower shortage: the port truckers, at the ports, and in the port warehouses. The port truckers are the ones with special skills and credentials.

Johnson also said many quit because the delays made working a losing proposition given how their pay is structured.

Fine. Fix the pay. We did the PPP and this is operationally easier.

Have the Administration use its emergency powers (hopefully they can find them in its DoD authorizations; if nothing else, medical supplies and chips are critical for defense personnel and there are plenty of them in the US) to pay all port drivers 4x the Teamsters’ hourly rate if they drive a minimum of 50 hours a week for 10 out of the next 12 weeks. Give 2 weeks in advance as a loan for those that want/need it up front to rearrange their lives. Give trucking companies a 10% bonus for any of their former truckers (who worked for them in the last past year) who haven’t worked in the last two months who come back, paid in arrears, if they work 10 weeks or longer.

Teamsters get a stipend to bring their regular rate up to the same 4x.

This program lasts for a minimum of six months up though the earlier of when port backlogs are cleared (need some metric) or January 10, 2023.

This program would have the advantage (if it lasts long enough) of undermining the old job based pay for most port drivers. It could also pull in some drivers if it does not take too long to get the needed credentials.

Force the ports to hire more people to prevent/greatly reduce queuing at the entrance and exit. Here the Feds could use a combination of carrots and sticks, some subsidies for additional hires and pay increases (designed to be short term) and huge fines if they have preventable queues (longer than X minutes on average for entrance and exit; the Feds can install monitoring equipment; not sure how culpable they are for queues for loading and unloading containers but if they are largely culpable, fines for that too). The fines stay in place after the crisis has passed. The biggest ports need to run a tighter ship.

Force port warehouses to get faster throughput or face big fines. They could also get some incentives in terms of short-term stipends to raise hourly pay levels, synched to timing of the trucker programs. This is where the National Guard could deployed if needed until new hires are put in place.1 If we lived in a different world, the president would demand the heads of the port warehouses make an appearance, and tell them if they didn’t get their acts in gear, they would be nationalized.

Now the labor shortages are only one part of the problem, but the point is that this is more addressable than Johnson suggests if you assume a muscular government. That alternative likely did not occur to Johnson since it has been absent during his professional life, except to save the banking system during the financial crisis and mainly the well off in March 2020. It might take six weeks to two months to see across the board improvements in manning levels, while doing nothing assures more trucker attrition.

In other words, we can’t tell how much these measure would improve matters, but they would help. And they would also increase utilization of chassis and pallets. Again far far from ideal but better than where we are mow. And when as much has been accomplished as can be by addressing the worker end, the officialdom in a better managed world could see what needed to done about chassis and pallets.

But we don’t live in a world like that because markets.


1 The idea of having National Guardsmen drive port trucks (save the handful who might have done that once) is a non-starter. Not only does that require skill (just like forklift operators and think what happens when you use newbies there), but the trucks and chassis almost certainly have insurance policies that require properly credentialed drivers. And they are likely financed, and the loan agreements would presumably have similar provisions.

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  1. vlade

    Re the insurance policies on chassis/trucks – well, Feds could underwrite those for any trucks driven by NG.

    Of course, that doesn’t solve the skill/knowledge issue.

    1. Yves Smith Post author

      Yes, I did think of that when drafting but regardless of the possible legal fixes, truck owners, whether owner operators (not many these days) or owners to lease are na ga let the National Guard drive them. Period. So then we get into requisitioning and 5th Amendment issues.

  2. AlexanderTheMeh

    Part of the log jam is the ports themselves: after the completion of the Panama Canal Expansion, ships got bigger, requiring more draft. The US basically refused to upgrade most of their ports, instead doing a limited number of ports in typical LEAN style. So instead of being able to redirect ships that have been waiting for months to neighboring costal states that might have slack, they built new anchorages. Just another example of how eliminating redundancy for profit delivers a poorer product. Stepping over a dollar to get to a dime is the American Way.

    1. IMOR

      ‘Upgrade’ as in dredging deeper or even additional ship channels? How much would be required, Alexander? Don’t know about other locations, but in SF/OAK and Seattle the materials disposal and free pollution decisions of the 1890-1980 period might make that a very dicey proposition species, wetlands, and fishing preservation-wise.

      1. mascotca

        Your mention of dredging reminded me of Season 2 of The Wire wherein a stevedore union official at the Baltimore port tries desperately to get local pols to attract more shipping business via upgrading the infrastructure through things like dredging in order to accommodate larger ships.

        He gets absolutely nowhere trying to dragoon the powers that be into doing what you’d think was their job and then resorts to interactions with the mob that end tragically.

    2. Procopius

      I’ve seen many recommendations in comment threads to “just redirect the ships [currently in the Pacific] to Galveston and Charleston and Gulf and East Coast ports.” Based on this that wouldn’t work, if the ports aren’t deep enough, and it ignores the fact that all these ships queued outside the Pacific ports would just go into a queue waiting to go through the Panama Canal, which I think is operating at capacity already. It’s fascinating to see the collapse of neoliberalism.

  3. DJG, Reality Czar

    Pete Buttigieg? His purpose was to throw the Iowa primary, as we all know. Now we see what being an empty suit and a symbol amounts to. (Empty suit and symbolism, and what they amount to, also explain Hillary Clinton and Kyrsten Sinema. Shhhh, don’t tell the local liberals that categories don’t count as competence.)

    But I digress by expecting competence. The original post by Ryan Johnson is definitely worth a read–if only for Johnson’s piling on of one eye-popping mismanagement disaster after another.

    It occurs to me that this supply-chain problem won’t be resolved in the U.S.A. also because the managerial class and members of Congress don’t have any kind of technical backgrounds. They don’t understand creating a product and getting it into a warehouse. They are detached from the physical world and its unrelenting, logistical, and necessary problems. Just as Pete Buttigieg is detached, so is his symbolic counterpart, the egregious Tom Cotton. It’s bipartisan!

    We are a long way from the kind of people who worked for the New Deal, people who hadn’t spent their earlier careers as symbolic manipulators, marketing assistants, and management consultants. Heck, even Dwight Eisenhower would have had much more insight into this problem, given that he had to move armies across Europe.

    The root problem, too, has already been mentioned here at Naked Capitalism. Supply lines are too long and too flimsy. Too much has been outsourced by so-called managers. The impetus to cut the wages of those who do the work has not been checked by either the feds or by state regulators. I had an inkling of how bad, and almost absurd, this process had become years ago, when I saw net bags of six or so neatly aligned heads of garlic–from China. And I was in a grocery store in Chicago.

    Who even imports garlic?

    And here we are.

    1. Amfortas the hippie

      “Who even imports garlic?”

      and literally everyone i talk to…from rancher neighbor to feedstore to woman behind counter at beer/cig store to walmart stocker to nurses….has come to realise that sending production overseas was a mistake.

      this excludes the overt partisans/teamred/teamblue people…stuck as they are in one of the 2 competing frameworks.
      aside from those folks, the revelation appears pretty universal.
      only took 50 years.

      and to think that even 2 years ago i was routinely met with glassy eyed bewilderment whenever i’d talk about fragile supply chains and the need for autarky.

        1. Pate

          Ive just started Hudson’s Super Imperialism and find myself wondering if globalization (offshoring and supply chains etc) are a loop in the dollar as reserve currency arrangement that gives us a free ride or put another way an explanation for why we have abandoned autarky

      1. Cat Burglar

        When I talk with Trump supporters, I find that production offshoring is a great lever for getting the conversation out of propaganda slogan terrain and into talking about real issues, because neither major party will directly address it, but everyone has their own personal experience with it. And the jokes are great, too, since everyone has some absurd experience to tell.

        1. drumlin woodchuckles

          We need a Protectionist Movement which can support a Protectionist Party. No Free Traders allowed in the Protectionist Party.

    2. KLG

      “Heck, even Dwight Eisenhower would have had much more insight into this problem, given that he had to move armies across Europe.”

      Yes, indeed. And the result is The Eisenhower Interstate Highway System. I have read that Ike was thoroughly impressed by the Germans’ capacity to move materiel along their autobahn. Whether this was a good idea in our continental-sized nation is another thing altogether…but there you go.

        1. Tankster

          One of every 5 miles of Interstate was constructed to be straight in case our nuclear bombers had to land on them, which I found out, after typing and before posting… is false,


          “If interstate highways were to be used as airplane runways, no doubt they would have been used as such on September 11, 2001. As it became clear that the U.S. was under attack, the government had an urgent need to get every airborne plane on the ground immediately. Yet there were still no planes landing on our highways…”

      1. Cat Burglar

        The large regulated unionized interstate truck lines of the mid-20th century grew from the need to rapidly transport product needed during WWII, predating the interstate system, whose construction increased the speed and flow of trucks. As Yves points out, that was taken apart by the mid-70s deregulation of interstate and intrastate trucking.

        1. Felix_47

          No Kidding…..I was thinking about it the other day and as a Union Teamster in the New York area in 1968 I was making as high as 120 per day. As I recall 80 was closer to average. 44 bucks to take the trailer off the lot and the rest in what I earned delivering. Pay was similiar at Sea Land services at the Port of Newark and that was the beginning of containers. There was an hourly wage but to make us hustle we made more with productivity. So I plugged it into google…….$120 in 1967 is equivalent in purchasing power to about $985.54 today, an increase of $865.54 over 54 years. The dollar had an average inflation rate of 3.98% per year between 1967 and today, producing a cumulative price increase of 721.29%. So Yves mentioning of a 4x multiplier seems to take the drivers to about where we were in 1967.

    3. Eclair

      RE: Importing garlic. Back when we lived in Long Beach, CA (we moved east in 2007,) the grocery stores were stocking garlic imported from China. And, right up the coast was Gilroy, “Garlic Capitol of the World!” So garlicky you could smell it as you biked into town. I thought at the time, ‘what the hell!’

      1. drumlin woodchuckles

        That’s the whole point and purpose of Free Trade. The end goal is to exterminate garlic growing around the Greater Gilroy area, if possible.

    4. lance ringquist

      this is not a trick question, whats more efficient for americans and the environment, making a product in chicago and shipping it to minneapolis using high paid skilled american labor and far less fossil fuels, or making it in a communist dictatorship that uses sweatshop, forced or slave labor, putting high paid americans out of a job, and using massive amounts of fossil fuels shipping it from china to chicago?

      this is all the results of the idiotic nafta billy clinton and his other idiotic policies.

      FDR and Truman would have driven idiots like carter and nafta billy clinton under the rocks that they called home.

  4. thirdwave

    I’m curious to see what the environmental costs of this backlog end up being. There has already been an oil spill in Orange County that was quite possibly caused by a container ship dragging anchor while looking for parking outside the Port of Long Beach. What else breaks as we try to squeeze through these interlocking bottlenecks?

  5. The Rev Kev

    I wouldn’t wait for a solution from Buttigieg. He was being interviewed by Fox News’ Chris Wallace and asked about how the ships are still stacking up and Wall Street saying that the problems will not ease until the second half of next year. So Buttigig was saying the the problems will go away with the pandemic when it ends and that was what getting vaccinated was all about. He was also saying that it was really up to the producers, the shippers and the retailers to solve all these problems-


    Didn’t take Buttigieg long to reach his Peter principle level.

    1. Yves Smith Post author

      Wowsers. So Buttigieg said a pressing transportation problem is not on his desk. Has anyone told Biden that Buttigieg has effectively resigned? Or did Buttigieg think his job consisted solely of being a (barely) pretty face?

      1. Cocomaan

        It goes to show what priority the Biden administration puts on these issues. You’d think import/export would be a matter of National security.

        Looks to me like the president doesn’t get daily briefings on this, it’s a non issue in their circles.

        Yet there are lives at stake. Medicines being held up, materials not available. DC is far away from those issues.

        It will bite them in the ass sooner rather than later. For now, selling vaccines appears to be the business of the day, rather than, you know, business

        1. Louis Fyne

          Your points lie squarely at the desk of the chief of staff.

          IMO, irrespective of one’s politics, the only path forward is for at least one party going “Full Whig” and imploding—-the rot is too deep to fix. and for the citizenry to pick up the pieces.

          POTUS (by not being at the helm) and his chief of staff (by incompetence) is making DC Dem implosion inevitable day by day

          1. jsn

            With the apparent total fail (or Lib Dem success, depending on your point of view) on the Progressive Agenda Biden campaigned on coinciding with the Virginia race fail which promises to be spectacular, the political tone will be set before the impacts of the shipping cluster**** and likely winter Covid wave start to weigh on D prospects.

            “Nothing will fundamentally change” is increasingly non-viable in the over-dynamic geo-political economy.

            2022 is going to make 2010 look like a major D Party win. How the citizenry can pick up the pieces remains a mystery to me. How any kind of positive collective action can be organized in the face of well funded disinformation and character assassination remains to be seen. In this

        2. Procopius

          Given the level of government secrecy for even the most trivial everyday things, we have no idea what the government security mavens are discussing. Considering their demonstrated competence over twenty years in Afghanistan you’re probably right, but there’s no way for us to know. Government opacity got much worse under Obama, in case you weren’t aware.

      2. Acacia

        Heh. Could get interesting for Buttigieg when the supply chain problem doesn’t go away and Biden needs a fall guy.

        1. lance ringquist

          heck of a job brownie:)

          always remember when people complain today about the shortages, say this is the direct results of the dim wit nafta billy clinton and his free trade policies.

        1. GF

          The problem didn’t start under Pete. It seems the Dems are forever trying to “fix” what the repubs have screwed up before they came to power. To bad the Dems didn’t pick a competent transportation secretary. No excuse for that.

      3. petal

        Saw that yesterday and thought “Holy sh-t, we’re really going to be in trouble-they’re not going to do anything.” It was surreal. Am going to make an announcement at lab meeting this week to prepare people and try to get out ahead of this worsening. Will try to prepare for worst case scenario now. It’s like they’re intentionally nuking themselves-and taking the country down with them. I imagine ex-mayor Pete will manage to fail upwards somehow into a nice corporate position and cash in, even though no one should touch him with a barge pole after this. People like that always seem to come out ahead. I hope I’m wrong.

        1. Dog Face

          People like Buttigieg know how to play the image game. That is what is important to others at his level. He will continue on his upward trajectory.

        2. Louis Fyne

          whether by intent or accident, Machiavelli would be proud…Pete positioned himself perfectly.

          Fire Pete, the Dem IDpol base goes ballistic and labels Biden as a mean old man picking on a new (gay) dad.

          Pete stays….he says, what can I do—it’s the fault of the unvaccinated deplorables.

        3. ambrit

          Before “announcing,” do test the waters and secure some support from co-workers for your position. If “Management” has fully withdrawn “into the bubble,” even if you are fully vindicated in your warnings by subsequent events, ‘Management’ will blame you, as being the tallest ‘nail’ standing in the “sea of shining faces” and thus the focus of their ire. If your managers are in any way similar to managers I have worked under in the past, they will willfully ignore reality and search dilligently, (using a commission or investigation of course,) for scapegoats.
          Don’t be the Scapegoat.
          If possible, set up a self regulating parrallel ‘institution’ within the laboratory to do your best to deal with the coming crisis. All this is moot if you can find a friendly, reality based manager with which to partner in your efforts.
          We wish you much luck. Don’t forget the religious advice: “..be wise as serpents and innocent as doves.”

          1. petal

            This kind of stuff(consumables) I do have control over and can prepare a little. The LN2, I don’t. That is out of my hands.

          2. Jen

            This being academia there’s a bit of a wrinkle: our institution garners significant revenue from NIH grants. If our researchers can’t do their work, they can’t generate results. No results, no papers. No papers, no funding. No funding no revenue. Consequences all the way up the food chain.

            If things are getting hard to find, there’s no benefit in shielding the faculty whose labs people like Petal keep running from reality.

            Might be good to start figuring out a plan for keeping that LN2 supply going during the holiday break, especially if Airgas isn’t able to deliver in bulk.

        4. jr

          I’ve now started rationing my mood stabilizers as well as my anti-psychotics. I’m feel certain most people are not. I’m going to start power walking to help burn off the jazziness. I’m lucky to be pretty low key, I’ve met some people who aren’t by a mile.

          These idiots don’t know what they are playing with.

      4. Glossolalia

        Can we please focus on what’s important with Mayo Pete, that he’s the first LGBTQ Transportation Secretary? THAT’s what we should be talking about and celebrating!

      5. NotTimothyGeithner

        I’m pretty certain it’s why he’s doing interviews despite being non existent for the previous Infrastructure Friedman Unit process. When he went on “parental leave”, they probably had enough. The White House won’t want to fire him because he was obviously an empty suit and brown noser before he was given a role. My guess is Biden liked the one young guy in his orbit but had people in his circle telling him what Pete was loudly enough even Biden understood.

        Didn’t Pete demand transportation?

      6. thewokendead


        That’s if you also consider Alfred E. Newman as “a (barely) pretty face”.

        Talk about incompetent competence…

        About the only thing Peter-Principled Buttigieg can successfully “transport” anywhere is himself far, far away from any real responsibility in doing whatever task or job he’s managed to hustle himself into – with the exception of perhaps his congenital sycophancy – which is about the only thing that he spectacularly excels at .

      1. MonkeyBusiness

        The task force will earn more money doing nothing just like the entrenched players in our current supply chain.

    2. flora

      I still remember the Dem estab really really wanting Buttigig to win the Iowa Dem primary. They really seemed to want him as the 2020 pres candidate.

      1. Felix_47

        According to saagar and krystal today he is the preferred choice over Kamala. But I think a Kamala Buttigieg ticket is the real deal.

          1. Felix_47

            They said Bernie is running ahead of Buttigieg significantly in surveys and Bernie said he is not going to run. I have no idea who could be another Bernie. He would have to remember what the New Deal was about and have been awake in the 1950s. The South Carolina primary proved to me the election was not a reflection of the peoples will. So we will get another empty suit…..male or female…..POC empty suit perhaps.

        1. Jeff

          That’s a lot of incompetence and virtue signaling. Since both Pete and Kam easily fall in line with the check writers, the DNC will love them.

  6. Poorly Paid Minion

    Its not just the ports. “Trains” magazine has an interview with some intrrmodal guys with BNSF. Evidently, the driver/warehouse worker problem extends through the entire system.

    The intermodal terminals are getting overstuffed as well. Seems that the end users arent picking up their containers eother

  7. cnchal

    Forget about reading between the lines, just read the lines themselves.

    My prediction is that nothing is going to change and the shipping crisis is only going to get worse. Nobody in the supply chain wants to pay to solve the problem. They literally just won’t pay to solve the problem. At the point we are at now, things are so backed up that the backups THEMSELVES are causing container companies, ports, warehouses, and trucking companies to charge massive rate increases for doing literally NOTHING. Container companies have already decreased the maximum allowable times before containers have to be back to the port, and if the congestion is so bad that you can’t get the container back into the port when it is due, the container company can charge massive late fees. The ports themselves will start charging massive storage fees for not getting containers out on time — storage charges alone can run into thousands of dollars a day. Warehouses can charge massive premiums for their services, and so can trucking companies. Chronic understaffing has led to this problem, but it is allowing these same companies to charge ten times more for regular services. Since they’re not paying the workers any more than they did last year or five years ago, the whole industry sits back and cashes in on the mess it created. In fact, the more things are backed up, the more every point of the supply chain cashes in. There is literally NO incentive to change, even if it means consumers have to do holiday shopping in July and pay triple for shipping.

    The shittier the jawb they do, the moar money owners of logistics companies make.

    There is also a potential problem with the cargo in the containers, which have been on the water for months getting sprayed with salt water. Those containers are not waterproof so there is likely to be lots of spoilage of container contents due to water intrusion into the containers, particularly the ones on the outsides of the stacks, but that won’t be discovered until unloading at the warehouse months away.

    The Chinese are forward looking are they not? Shutting down crapola production due to power shortages at the same time that logistics in America hits stall speed is just coincidental, eh?

    1. Susan the other

      China. That’s exactly what I was thinking. Just wondering, how many ports are this backed-up along the east coast. Boston; NYC; NJ; the Chesapeake, etc. And what about the Great Lakes? What is getting through there OK? Obviously just stuff coming from eastern sources. Do the Carolinas, Georgia and Florida have any deep water ports? So next question: What sorts of imports are coming through the east coast? Drugs from India? Semiconductors? Certainly they are, but in what amounts? This is more like a divorce from China than any comparison I can think of. It could easily have been started by the spat over Taiwan – our biggest supplier of semiconductors. And we could bring much of China’s manufacturing to a stop on all the other retail crap we import because 80% of it comes for the Christmas season. What good timing, no? It really is just a little too coincidental. Because we can’t, under global trade regulations, boycott China. Fun-nee. But we can say Oh shucks! – our west coast ports are so old and inefficient we just can’t handle it any more… And the image of Pete Buttigieg on “paternity leave” is most amusing – he’s trying to invoke a self image of Mother Mary so as not to be disparaged.

      1. Adam1

        From this NYTs article it looks like the problem is growing on the east coast now as well… 3rd largest port, Savanah GA, is running out of room and has 50% more empty containers than usual.


        It also looks like the port of NY/NJ has actually been a key safety valve so far. They’re processing a record volume of containers including setting a record for empty containers loaded in the spring. If they and Savannah run into the empty container problem we really will be screwed.

      2. lance ringquist

        that was my thought when Xi began to tighten the screws on his own economy. china may have had enough of us. china stripped america bare of its technology and innovations, they no longer need us. time to let the idiots flounder.
        besides Xi knew the free trading idiots found out there was something wrong under empty suit hollowman obama, that was what the pivot was all about.
        the free trader dim wits were going to unleash nafta hillary clinton onto them because the dim wits said hey, they are not acting like our colony.
        so demonizing the deplorable for causing this, and demonizing china for causing this, russia and china has seen this story before, and Xi plotted a decoupling.
        i wonder when the next time nafta nancy pelosi will stand up and brag in front of america that the democrat party is dedicated to free trade to their soul!
        nafta billy clintons polices will be considered the largest policy blunders in american history.

    2. QuicksilverMessenger

      And don’t forget another very lucrative non-incentive to change, one of which my business has been caught up in for most of the year: shipping company demurrage and detention charges. These are the charges, paid by the consignee, for not returning containers within the ”free window’. The free window is usually about 4 days. After that, they begin to charge you for having the containers ‘over time’. The penalty scale changes somewhat, and I think it’s different for different lines and ports, but we’ve had containers delayed for well over a month. AFTER they have been unloaded. So all this time the shipping company is ringing up nice fees, even up to 50% of the actual cost of the load, while containers sit waiting for chassis (and in our case, the loads are very heavy so require the less common super chassis), drivers, loading, dray, inspections, etc.

    3. ChrisPacific

      Yes, this was buried at the end but it’s the most important part of the whole thing. If it’s accurate, it means the logistics companies are operating as a rent extracting cartel (possibly even an effective or actual monopoly at certain points in the chain).

      If the Biden administration plans to sit back, blame it all on the pandemic, and wait for the magic of the free market to fix everything (and indeed that sounds like the plan, from the Buttigieg quotes above) then I agree with the conclusion that this is likely to get a lot worse before it gets better.

      1. John

        So the people staring at the computer screens and clicking away have the illusion that they are actually doing something and may just be in charge because one way or another money keeps rolling in. Meanwhile out there is the messy real world everything is grinding to a halt and cannot me made to start up again by clever computer manipulation, but they do not or do not want to know that yet and anyway the fall guy has not been selected just yet.

        Nothing will happen to even begin to fix this mess until it becomes catastrophic … as with climate change. I would guess that some of the moves that are considered politically and/or economically impossible are going to become possible and profit be damned. This is beyond politics as usual and one more demonstration of the bankruptcy, immorality, and predatory instincts of “neo-liberal” economics

  8. Adam1

    At least for the west coast ports, opening them 24/7 effectively does nothing. According to the tweets article Lambert posted last week the ports effectively have extremely limited space to offload cargo containers because they are drowning in empty containers. Johnson’s article implies this issue could be impacting every port and would partially explain the shortage of chassis as I’d suspect many are tied up holding empty containers that aren’t being offloaded as all normal storage locations seem to be full or almost full. While it was suggested to haul the west coast ones off to an airfield, I was thinking it might be faster and easier to haul them off to the scrap shredders. Then there is no need to worry about what to do with them once the ports are operating closer to normal. And with our trade deficit so massively large I’d suspect we’re in a position where this glut of empty containers is not going to easily go away. Now as Yves said, this would require a big act of government as you’d effectively be nationalizing those containers (owners are going to want to get reimbursed) and then you’d need to incent rail and trucking to take those empty containers in a massive way to the scrap yards.

    1. anon y'mouse

      every trendy magazine is going to undergo another cycle of how fabulous living in a shipping tin is. they’ll be selling them as garden sheds, playhouses, and chicken coops soon.

      it’s not fabulous. one construction guy i found on youtube made a hunting cabin out of one, and it essentially needs excessive modification both inside and out to even begin to be a structure capable of housing anyone. even the plastic trailers that Buffet sells (“modular homes”) might be better as a house, but for their offgassing VOCs.

      this doesn’t stop every man around me from wanting one, though. maybe now they’ll get their wish.

      1. DrSloperWazRobbed

        LOL. i wonder if there could be the rise of the millenial/Z’er trucking influencer too.

    2. Don

      Shouldn’t there be a point where the back up starts backing up to the exporters?

      Ships are sitting waiting to unload. Containers are sitting in the US whether full/empty at the port, full/empty at warehouses, or full on a ship and are not being sent back to be reloaded. So, if there are no containers, exporters can’t even get their goods out of their warehouses/factories to the port. Even if there are containers, ships are stuck waiting off the west coast and not getting back to the exporting port to be reloaded.

      I have no idea what happens when the back pressure reaches exporters and they have to reduce production. Do we get diplomatic incidents as the layoffs start? I guess at that point the realization that shifting so much production out of the US is a US problem is not the only realization. But, the realization that basing significant chunks of your economy on exporting to the US can be a problem as well.

      1. Adam1

        Actually just google it. You’ll find container prices are way up as well as transit times. There are dozens of articles about there being plenty of containers but their all in the wrong places. The crazy part is no one seems to have a plan of how to return the system to equilibrium – if that’s even possible or advisable. The powers to be seem set on just letting the market do it, but that assumes there is a path for the market to even do it. It looks more like an engine with a throttle stuck wide open – it keeps accelerating until the engine or some other critical part completely fails.

  9. Fazal Majid

    The ‘experts’ want to say we can do things like open the ports 24/7, and this problem will be over in a couple weeks. They are blowing smoke, and they know it.

    No, they don’t even know what they don’t know. As the old joke goes, what is the difference between a computer salesman and a used-car salesman? The used car salesman at least knows he is lying…

    1. tegnost

      No, they don’t even know what they don’t know

      Repeated for emphasis.
      They can never fail, only be failed…
      Back in my nursery days we partnered with a company importing bamboo fences.
      Twenty foot containers showed up packed to the gills, nothing on pallets, hand loaded and had to be hand unloaded.
      And since the big shots are making more dough there is no problem that more immigrants would not fix. (/s )
      It’s hard to know which straw will break the camels back…

  10. Watt4Bob

    What we are witnessing is peak American exceptionalism.

    The essential exception that sets the USA apart is the notion that it’s unnecessary to pay the true price for anything, but especially the price of the working man’s labor.

    This aversion led to the importation of slaves, and when slavery was abolished, it was replaced by Jim Crow, and when Jim Crow was almost abolished, and unions threatened to enforce fair wages, Taft Hartley was passed, and when that didn’t kill unions completely, Right to Work legislation was passed, and when that didn’t result in enough profit, production was shipped to low wage countries over seas.

    Since a lot of jobs can’t be off-shored, immigrants form poor countries were imported to work for wages so low that even the poorest Americans can’t accept, and see no sense in working for them.

    Off-shoring didn’t solve the problem for jobs that couldn’t be off-shored, and un-documented workers can’t do everything, so they invented the ‘independent contractor’, the ruse that the laborer doesn’t work for you, he works for himself.

    Rich and powerful Americans have grown so used to this exceptional situation that they cannot grasp the fact that there are limits to how low wages can go before people see no point in showing up to work.

    And as of yesterday, those rich and powerful Americans are still trying to shame the working class for not showing up to work for nothing.

    Over the last few election cycles we’ve heard a lot of criticism of folks who vote against their own self interest.

    How about some criticism of those so stupid they think people should work for nothing?

    1. Tom67

      Identity politics is the solution that the credentialed classes have come up with! Divide and rule. I had this epiphany the other day when I looked up Brandon videos on Youtube. The former number one “let´s go brandon” vid by a black guy called Bryson was blocked on Youtube. Bryson is a Christian so no cussing and the lyrics were smart. New number one on Youtube was an insufferable vid by white people who were borderline racist. Shitty music, shitty optics but identifiably very right wing. I don´t hink this is a coincidence at all. There´s a groundswell of anger in the US that seems to rise very fast. God forbid that people start to think about class instead of race. They will though … hopefully…

    2. XXYY

      there are limits to how low wages can go before people see no point in showing up to work.

      I’m guessing that a lot of what has happened during the COVID pandemic has been the mass realization that lots of low-paying jobs do not even pay the cost of having a job. Certainly having a job costs money. You have to have a clean wardrobe, a fixed address, a phone, childcare, a working car or a transit pass, a bank account, a way to have a decent night of sleep every night, and all the other things every working person can list. It’s easy to get to a point where it’s actually cheaper to be unemployed.

      Employers, spoiled by 40 years of neoliberalism and declining real wages, seem to be unable to come to terms with this.

      1. Watt4Bob

        Yes, think of the cost of child care alone, it in many cases completely wipes out the financial benefit of the job it enables, often leaving healthcare benefits as the only reason to keep the job.

        The neoliberal’s aversion to paying the laborer a fair, livable wage is as deeply held as any religious belief.

        1. John

          “The neoliberal’s aversion to paying the laborer a fair, livable wage is as deeply held as any religious belief.”

          Anyone for heresy?

      2. drumlin woodchuckles

        Let their businesses all go extinct, then. Every single one.

        Interesting that it took an enforced break from running in the hamster wheel for people to catch enough breath and regain enough personal energy to see this. Now that they have seen it, the employer class will not be able to make them unsee it.

        One wonders if the “tax on time and energy” part of Obamacare and other government initiatives for citizens to “take part” in are designed to keep people too time-short and energy-drained to notice things like this.

    3. CitizenSissy

      Bob, your summary of America’s root philosophy is brilliant; amazing how Americans tie themselves to ridiculous culture wars to avoid the real conversation about class. The myth dies hard that rugged individualist Americans are a lucky break away from untold riches. We’re well on the way to a smiley, cheerful feudalism.

      I suspect we’ll see lots of CRT and transphobia eruptions for the midterms.

    4. marym

      I would add only add to your excellent analysis the acceptance by neoconservative, conservative, liberal, etc. consumers of cheap products from big box stores. I know this was a blessing to lower income people trying to care for their families and enjoy a few pleasures, but people of all income levels and political positions literally “bought” into it, including blaming union workers for being too greedy and wanting too much healthcare/pensions. A serious component of the divide and conquer culture wars has been the anti-worker one.

      1. Jen

        I have friends who own million dollar homes and go to Amazon for batteries and such rather than the fabulous local hardware store because “it’s so much cheaper.”

        I don’t judge members of my family who shop at the dollar store because that’s what they can afford. But I judge the hell out of people who have more money than they will ever need, and buy crap from Amazon rather than support the local community.

      2. drumlin woodchuckles

        But when the cheap foreign goods came into the stores, the lower class had their income so much further lowered that the cheap foreign goods were no longer cheap from a lower class standpoint.

        All the cheap China plasticrap from Walmarts and wherever can perhaps foster an illusion of “wealth” by filling a cart up with plastic and air between the pieces of plastic. But how long will that illusion last?

  11. peon

    The irony of the 2 week long UN Climate Change conference Cop 26, happening at the same time as the shipping log jam is jarring. :Living in the rust belt with all the empty factories that used to make the stuff being shipped into these ports makes a mockery of all the “economic experts” who orchestrated this.
    After eliminating the domestic manufacturing they have moved on to agriculture. No small dairies in the Midwest anymore, they are all mega dairies with corporate owners. No small producers of fruit or veggies, just a mono-cultural landscape of corn and soy beans. After not being able to get our plastic Amazon junk soon we will not have food.

    1. drumlin woodchuckles

      Those who live in real houses with real yards around them may still have some food, if they can grow it themselves. And those who still have money and who make a point of buying local and hyperlocal food now instead of buying Walmarts food now . . . . may find that they have preserved their local and hyperlocal food growers for later when the long distance food supply chains all disappear.

  12. ChrisFromGeorgia

    Because markets

    … ^^ this.

    Note the parallels to COVID and the initial phase. We could have paid healthcare workers 4x salary or hourly wage, using a PPP-like scheme. Or given them bonus pay and per-diem to stay quarantined with seniors in assisted living facilities to stop the nosocomial spread. Hotels could have been commandeered and the owners compensated.

    But no … because markets we had to let people die.

    1. outside observer

      It is more important to not set a precedent for what is possible. Once you go there, it’s a slippery slope towards a better world!

  13. Randy

    The midterms wipeout is going to be insane. The only response I’ve seen from team dems is ussr-style discipline in pretending the issue doesn’t exist. Even if the dems view their jobs as just being taxpayer-funded ego trips you would think they would do more to keep them. The lethargic, octogenarian dem leadership that only knows how to fundraise and pass the buck needs to go.

    1. Jeremy Grimm

      I can only speak from my own voting inclinations. I might have voted for a Republican twenty years ago when Republicans could still claim to be conservative. I am not sure how to characterize the Republicans of present times. Now, I could never vote for a Republican. I can no longer hold my nose and vote for Democrats. I am not sure how to characterize the Democrats of present times. The most striking feature of both parties seems to be technical and managerial corruption and incompetence. I am left not voting, voting for any other party than Democrat or Republican, and writing in names of living, dead, or imaginary heroes.

    2. Questa Nota

      On the sunny side of the street, the Bidet Admin managed to logisticize that 85 car motorcade, so there is that. /s

    3. flora

      The only response I’ve seen from team dems is ussr-style discipline in pretending the issue doesn’t exist.

      Same way they ignored the GFC bailout of the banks and Wall St., the fraudulent forclosures crisis they helped along to “foam the runway” to give the banks a “soft landing”, etc. O did what he campaigned on not doing. Then the Dem estab and MSM pretended that wasn’t a mistake, didn’t create a problem. Then we got… T.
      Then we replaced T with B. And now this debacle. The modern Dems have form, bad form.

      1. Petter

        Re USSR, it depends on which time period we’re talking about. Under Stalin, those responsible for logistics and supplies who couldn’t meet their quotas were accused of being saboteurs and were either executed or sent to the Gulag.

        1. John

          Seems extreme, but these are rapidly becoming extreme times and desperate people do desperate things.

    4. drumlin woodchuckles

      Those oldest DemParty officeholders are the ones with the most loyal fanbase voter bases. Feinstein, Pelosi, Hoyer, Clyburn, these are the old Dems who will never ever go till they die in office. They may be the last Dems standing. When they finally die, perhaps people can grow a legitimate political party-movement where the Dems used to be.

    1. Jeff

      California is startlingly mismanaged. The Dems who run the state have no interest in improving the state’s glaring problems like CalPers corruption, terrible schools, lighting tax revenue dollars on fire that was earmarked for homelessness, city council corruption, and on and on. The ports fall in line with the rest of the mismanagement of the state. California is a basket case.

  14. John

    I think Mayo Pete misunderstood regulatory capture. He thought the transportation lobbyists would do all the work and he would have to do nothing more than photo ops in a crisp suit and tie.

    1. Wukchumni

      One of the worst photo ops to come of the last President’s term was when he tried to play like he was a big rig driver on the WH driveway, it came off quite Dukakis’y.

      I would recommend Mayor Pete stick to orchestrated bike rides of slender distance, that’s his forte’. Maybe have one of those faux floral baskets in between the handlebars, ‘see, i’m here to solve the problem of transporting goods!’.

  15. harvey

    I grow a few hundred head of garlic each year, for family, for friends and myself. As long time grower (40+ years) I completely understand why garlic is imported from cheap labor countries. That’s because it’s hands on labor intensive through the entire growing cycle, from planting to harvesting to bring it to market.

    1. drumlin woodchuckles

      Is there a quality-difference between your garlic and China garlic? I would like to think there is, but if there really is not, perhaps I should be disabused of that romantic notion.

      1. Eclair

        Re: is there a difference between home-grown and China garlic?

        Chuckles, I grow garlic, although not on harvey’s scale, more like 50 heads per year. And, fresh garlic is so much better. It’s crisp, juicy, sweeter. Old garlic, from wherever, that has been picked months ago, shipped under less than optimal conditions, sat in heat and light in a store, is rubbery, dry and bitter.

        I also grow onions and leeks. And I have been slowly realizing why the alliums have been the favorites of peasants over the centuries. They are almost pest-free, the deer, rabbits and woodchucks (sorry, Chuckles) ignore them, and they store well, with a minimum amount of care and processing. They raise inexpensive staples such as beans and potatoes to Olympian heights: leek and potato soup anyone? Onions and leeks are vitamin rich, especially in vitamin C. A bonus: garlic repels vampires, we haven’t seen one in years.

  16. Expat2uruguay

    It would be helpful if this article contained a link to your previous article written by Lambert. I’d like to share this article with people, but I would like for readers to be able to find the previous article and read that as well.

    1. Yves Smith Post author

      It was not an article written by Lambert. The post says it was in Water Cooler, which means a quoted extract and a link the source. Yes, I could have linked to that Water Cooler but then the reader would have had to scroll through the post to find that entry.

  17. Mikel

    The only way to even begin to address a problem like this is to shrink the scope of the problem at first.

    The great majority of energy, time, resources, study, all if it should be laser focused on essential goods/necessities. Ex: furniture will sit longer than medical equipment.

    That is, of course, after finding institutions and players willing to address the problems.

  18. Glossolalia

    “But we don’t live in a world like that because markets.”

    Also because politics. If the administration tried to use any of the strong arm tactics described here the Republicans would cry bloody murder about government overreach, socialism, etc.

  19. LawnDart

    With G20 Leaders, Biden Steps To Ease Supply Chain Woes

    I mentioned the term “gaslighting” in a comment yesterday (the AP on LGB), so here’s another on-topic link that well-demonstrates the use of glittering generalities by masters of that tool– pretty neat how many words that they can use to provide calm and resolute (and also empty) assurances.


    Useful if perhaps spread around a bit to enrich the soil.

    1. Taurus

      Perhaps Biden can send Kamala Harris to the port of Los Angeles to warn off the big ships by crying into the distance “Don’t come-x!”

  20. Jason Boxman

    Silly question, but, has anyone asked the Chinese how they do it, given that they run the largest operation of this kind in the world? Might be some ideas to emulate there.

    1. Eclair

      I believe that most of what the US exports to China is raw materials and foodstuffs. Last spring, we watched a bulk container ship docked in Seattle, load up with grain. Freight train of hopper cars loaded with grain (from Western Washington?) moved up to the dock, big conveyer belts brought grain from train into hold of ship. No metal shipping containers involved. Assume same configuration, but in reverse, in China’s ports. But, I am no expert. And, I don’t know how the exported beef or pork is handled. (Didn’t China just complete the planet’s largest pig raising facility? Hmmmmm. )

      1. lance ringquist

        you just described the exports of a banana republic. nafta billy clintons disastrous polices reduced a first world nation, into a third world banana a republic.
        quite the feat you say!

    2. Felix_47

      This is a very good question. We might also consider it for other problems the politicians declare complex. I was thinking healthcare. How does the NHS do it on so much less money. It would do us well to copy their system and just fund it better. They have had 70 years to make all the mistakes first. Of course, the conservatives have been working to ruin the NHS for the last 30 years. Maybe they will bring it to US levels. And yes health care is unrelated but it is a complex service industry like the supply chains that need management.

  21. Jeremy Grimm

    I do not remember the year, some time around the Reagan years, the Federal government changed the licensing tests and requirements for long-haul truck drivers. I recall reading an article describing how driving truck had for years been one of the only reasonably paid jobs open to ex-cons, and the less well-educated, including those who could read but not well enough to get through the new written portions of the Federal driving test.

    I also remember Reagan raising the weight limits allowed on Federal highways, and the gradual appearance of trucks hauling double, even triple trailers. I still see doubles, but I have not seen any triples in decades. I also recall that the NAFTA agreement toyed with allowing Mexican and Canadian drivers to drive long haul on u.s. highways but had to drop that idea after meeting considerable resistance. I also recall independent drivers who owned their own rigs could once made good money. I vaguely recall many independents getting burned on the notes they carried to pay for their rigs as times changed — similar to the way smaller farms got burned on buying heavy equipment as encouraged by the u.s. Department of Agriculture under Earl Butz.

    Perhaps some other commenter, someone with more intimate knowledge of long-haul trucking than I can claim, might correct or corroborate my memories.

    I also recall one of my systems classes where the professor brought in an older guy to give a lecture. He was working at designing containerization systems back in the early 1970s. Based on my regard for the professor and the containerization expert he brought to our class, I very much doubt the present port flow and warehousing problems have arisen from design. I believe they are the product of exceptionally poor management. I believe the present profit opportunities are happy accidents rather than evidence of prescient management design.

    1. Sierra7

      Jeremy Grimm:
      I too remember all the points you proffered.
      In addition I believe that our transportation of goods globally and internally has suffered a very large “supply shock” due to more than one or two factors; for example of course Covid.
      The other is the change in consumer habits. Millions (if not billions) of those “shoppers” have changed from local, regional suppliers to global ones. The whole industry was just not prepared.
      Globalization is just one road to “race to the bottom” whether it is in the manufacturing, transportation of goods or the labor that is used to function in the “marketplace”.
      But it is good to remind us of the path taken to where we are today.

    2. Cat Burglar

      Owner-operators could make good money once, but even in the 70s, one-third of California owner-operators went out of business every year (something my California PUC and ex-trucking company lawyer Dad told me back then, when the PUC was deregulating intrastate trucking).

      Aside from following the fall of the real trucker wage through news reports, a few years back my old car broke down near Spring Creek Oregon and had to be towed to a shop in Bend. The tow truck driver and I got to talking politics and work, and he was full of anger. Between tow truck. log truck, and other load driving, he was barely making costs, and considering selling his rigs and going fully into towing, a lower paid job. He had a place out in the second growth trees in north Klamath County, and the planning commission was making his life hell over some construction he wanted to do. He said he wanted some political “strong hand” to come and sweep all this BS away. This was five years before Trump appeared on the political horizon.

  22. The Rev Kev

    Thinking this through, it may be a very long time before the supply issues are resolved – as in years. Wall Street seems to think that these supply problems will extend into the second half of next year and Biden seems not too worried about the whole situation. Since so many people are profiting from all this, as made plain in this article, then there will be no urgency to resolve the structural issues behind these choke-points. So it will go on and even get worse.

    But in about a year’s time there will be the 2022 midterms and the signs are that it will be a massacre with the Republicans gaining control of the both the Senate and the House. At that point it will be game over for the Biden admin. The Republicans will see no reason to aid Biden in anything that he wants to get done or solve and this will include transport. For them, it will be better for everything to fester and get worse so that in exasperation, people will vote them in in the 2024 Federal elections. The Democrats may cry foul and talk about mean Republicans but people will see that it will be like Obama in his first term. The numbers were there but zilch got done to help people.

    1. Jen

      Rev, you’re making the good faith assumption that Biden actually wants to get anything done that benefits anyone other than the 1%. Biden will be perfectly fine with republicans controlling congress, just like Obama was, because the Dems won’t have to make up lame excuses like “the parlimentarian ate my homework” to stop any progressive legislation from passing.

      They can just fund raise over more empty promises to “fight for” “everyday Americans” while “reluctantly” agreeing to whatever odious legislation the republican majority passes in the name of bipartisanship.

      1. Mantid

        I feel voting is just about worthless. I can’t think of any actions by our ruling class that have changed, for the better of the common person, over the last 30 years. A bit on the identity front with some non white cabinet members, congress people, etc. But has anything really changed? Wars, still got them – in spades. Healthcare, rhymes with nowhere. Pay raises, empty hopes. New roads, infrastructure? Ahem. Theft of personal information to the benefit of government and corporations? Lot of nothing. But some positive sighs are: Wall St. is humming, Big Pharma profits way up, amazon, google, f’book and mac/microsoft are crushing the competition. Voting for change is pointless. The last 30+ years, all we’ve gotten is (spare) change.

          1. Expat2uruguay

            Even at the local level, I thought voting in Sacramento was completely worthless. The only thing that seem to matter was the ballot initiatives system that California has. At least there you could vote down terrible things.
            I well remember in the city of Sacramento we voted down a new arena for the Kings, but a couple years later they built that son-of-a-bitch anyway, but with more public money than before. So I hope people in other parts of the country have better luck with their local Democratic representation than we had in the great capital of the legendary blue State of California.

  23. Dan Lynch

    The author does not come out and say it, but the picture he paints is that of a monopolistic business that does not have normal competitive incentives. “Johnson explains why no one has any incentive to fix anything.”

    If ports were competitive, they’d have to get their act together or else you or I could enter the port business, open a new port next door, and get the job done faster and cheaper. But you and I can’t open a port next door because that’s constrained by geography.

    I’m guessing urban warehouse space is also somewhat monopolistic, because land is finite, and the warehouse needs to be close to the port, so that limits choices.

    Every undergraduate econ student knows that monopolies should either be broken up, regulated, or nationalized, but since both U.S. political parties work for big business, change won’t happen unless big business demands it. Maybe Apple and Walmart will get tired of not having product to sell and lean on Congress to do something? But then again, as Ian Welsh reminds us, as long as big business is making money they have no incentive to change things.

  24. IM Doc

    I am not sure what the requirements are on each state – but in the state where I now live – I have many many truckers as patients. They have to undergo at prescribed intervals a physical and evaluation. As a physician, I have to take special training and have valid certification to perform such tests.

    Basically it is vision, hearing, blood pressure, cardiac etc. Trying to minimize accidents and drivers passing out on the job.

    I was thinking about where have the truckers gone this weekend….and realized that something unusual was happening just in my cohort of patients…..I could not do the exact numbers until this AM….

    I got to the computer in the office this AM – in the year of 2019 I did 82 of these exams on 82 patients, In the entire year of 2020 – I did 68 of these exams on 68 different people. So far this year, with fully 10 months down, I have done a mere 17.

    Something interesting is going down. Not sure what and I have no explanation.

    1. Jeremy Grimm

      I am not sure where obtaining a medical clearance shows up in the chain of gates truck drivers must pass through to obtain approval to drive truck on the highways. I am not sure who pays for your physical and evaluation, now, and who might have before. As you appear to suggest, there seem to be more changes at play in the declines of the number of drivers.

      1. redleg

        USDOT requires the physical to drive a USDOT registered vehicle. This is above and beyond drivers licence class.

        1. Jeremy Grimm

          There is a chain of gates drivers must pass through to get their licenses. But where is or are the bottlenecks and blockages? I doubt getting a physical is the critical link in the chain.

    2. drumlin woodchuckles

      Would it make sense to ask what few test-getting trucker patients you still have about where all the other truckers have gone? They may have some ideas about that. Or even some informal network knowledge.

  25. Jeremy Grimm

    The u.s. supply chain problems are not intractable — not that I expect anything meaningful to be done about solving the problems. The u.s. supply chain problems are a Gordian Knot. There is a way to unravel a Gordian Knot, but we have no government that might wield the solution. I am increasingly troubled contemplating just who or what might appear to wield the solution to so many of the ‘intractable’ problems constructed at the High Altar to Profits. So far, the government seems most unlikely to conquer ‘intractable’ problems and past history suggests no pleasant alternatives. Time to move to higher ground, far far away from troubles to come.

  26. Oh

    Let’s get “the mustache of understanding” to fix this problem. He’s such an expert on supply chains, just in time etc. (his book ‘the world is flat” laid it all out). Maybe he can drive an 18 wheeler. /s

  27. rjs

    this is a Covid stimulus problem; when those checks went out, everyone went out and bought imported goods, depleting domestic inventories…in an attempt to re-stock, we’re trying to ram over 10% more goods through our ports than we did last year….if consumers let up on the buying, it should gradually return to normal…

      1. rjs

        i’m describing the problem, not prescribing the solution…retail sales are still up 19% from pre-pandemic levels; that strikes me as unsustainable..

      2. rjs

        imports of consumer goods were 15% higher in the first quarter of this year than the prior peak in the 3rd quarter of 2019….those are goods that already made it thru the ports, not counting ships offshore…it seems that’s where your supply chain problem started…

      1. rjs

        someone figured there was $26 billion worth of goods at anchor off the west coast…3rd quarter imports of consumer goods amounted to $747 billion…

  28. Anthony Stegman

    Hasn’t it been said many times over the years that the United States always does things the wrong way initially, and that eventually (usually after all hell breaks loose) it decides to do things the right way? I guess when it comes to supply chain issues all hell hasn’t yet broken loose. One can say the same regarding health care, housing, and education. Not to mention climate catastrophe.

    1. Procopius

      I think you may be thinking of something Winston Churchill said. I may be paraphrasing, but it was something like, “You can always count on the Americans to do the right thing, after they’ve tried everything else first.”

  29. radical1

    I worked on the docks in LA/Long Beach for about thirty years. This isn’t the first time ships have stacked up at anchorage. For instance, when the employers locked out the dockworkers several years ago, dozens of ships piled up in the outer harbor waiting for a berth. Once a contract was signed, the backlog was cleared in several weeks. The main difference is that the terminals were much less clogged. But there are other differences.

    Changes in terminal operations have led to chassis and container shortages. (For a while, empty containers were so much in demand to expedite Asian exports that US exporters, such as farmers, couldn’t get containers to put their cargo in. This was the first phase of the current gridlock.) There is no doubt that the surge in consumer spending was unprecedented, beyond anything the ports were expected to handle.

    But the key to the whole mess is, as discussed, the driver shortage. This is happening all over the country, but has the most acute consequences in the ports. Most of the drivers there are immigrants, trying to survive in a rigged system of exploitation and debt peonage. In the current situation, they lose money almost every time they go to work. Raising their pay is, as suggested previously, a big key to resolving the port gridlock.

    Parenthetically, I want to preempt anti-immigrant narratives that sometimes arise regarding this situation. Some people call the non-union waterfront truckers “scabs” that pull down the wages of unionized drivers. What actually happened is a neoliberal lesson. The biggest waterfront trucking company in the LA/LB harbor offered to help Teamster drivers become private owner-operators.They bit. What with fuel prices and competing with each other, there was a race to the bottom. Things got cut-throat. The new owner-
    operators started hiring other drivers so that their rigs could run for two or more shifts. They gravitated towards low paid immigrant workers who they could make a buck off of. Eventually most of the owner operators aged out or gave up. But the immigrant workforce–an essential, exploited workforce–remained. They keep trying to unionize, but the waterfront trucking companies fight them tooth and nail.

  30. redleg

    I’m a former Army National Guard officer. Here are a few things to consider:

    There’s a large salary discrepancy between drivers and National Guard. Lower enlisted ranks in particular are not well compensated, even less than the non-union contract truckers. Who would keep the difference in pay? I think we can guess the answer.

    Further, Guardsmen are technically part time soldiers. Activation removes them from their full-time work, possibly exacerbating existing labor shortages, and creates child-care or elder-care problems.

    Finally, the National Guard is a resource of the State, not the Federal government. The Feds can activate reservists (with the same concerns as above), but activating the Guard by the Feds requires specific acts of Congress. These may currently exist, but it would have to be carefully checked. Activation for Federal service removes those units from possible State service (e.g. disaster response), changes the benefit categories (e.g. GI Bill, etc.) for the activated soldiers and airmen, and sets up a conflict between the State and Federal treasuries as to which pays for what part of the activation. See what happened to my National Guard unit during the Iraq surge- the Feds refused to add the surge time to Federal service, which screwed the soldiers out of a bunch of benefits and service awards. Al Franken had to get laws enacted to resolve the problems, and that took some years to finalize.

    National Guard activation, or any use of the military, shouldn’t even be considered for this situation.

  31. DMK

    As always, very informative Yves.

    What about the rail portion of the supply chain crunch at the ports? I thought that intermodal meant that the crates go directly from the ship to the freight train. Are there any stats on the breakdown offloading between trains and trucks?

  32. flora

    I read Ryan Johnson’s article twice. It sounds like there’s some real profiteering going on with various transportation owners. Aren’t there laws against profiteering? Or did those go away in the new neoliberal economy? I wonder if the owners couldn’t jack rates while keeping wages low and help minimal without being fined for profiteering, I wonder if that would have a “clarifying” effect on their business practices and loosen up one set of bottlenecks? Oh, silly me, Congress will not act to regulate new profiteering because “Markets”. (Congress used to regulate profiteering, once upon a time. Gas stations that jack up prices during disasters are still subject to existing profiteering laws. )

    1. John

      Profiteering? I am shocked! Shocked!

      Not that this mess can be untangled easily, but the most mentioned dangling thread seems to be driver pay. A sword cut the Gordian Knot. How about a Presidential National Emergency Declaration and Joe can pull the thread … unless he wants to deputize Mayo Pete to do it … as soon as his paternity leave ends.

  33. Risteard

    Isnt it all a bit interdigitating and solvable in one direction rather like subprime and those structured financial products were. And could that be because it’s also about using arbitrage which identifies profitable opportunities for business models.

    And it turned out that subprime was the beginning of a systemic debt crisis, not just a few insolvent persons sitting on their verandas with no funds. Lucky the world could drop interest rates and institute QE back then, essentially supporting the other parts of the system. Which is a solution to subprime we doubled down on in 2019 because Covid was a deflationary event. And now it turns out after more years of global stimulus that this supply-chain problem shows up the actual ‘other parts’.

    This cant be ‘solved’, as like the GFC it is caused by monetary and regulatory largesse. The global economy isn’t exactly broken and requiring a solution – it simply never was designed. It functioned only while it expanded, with every route to scraping a profit fully exploited at every step.

    Not just growth of, but in fact the very existence of, profit opportunities and the actual expansion of the economy were never the same thing. The underlying features of arbitrage and of its corollaries can’t be done away with in designing an economy. Fear, greed – arbitrage doesn’t do reverse gear even if its scared and greedy. Its a forward ratchet.

    To the extent that this is true, what we are looking at is a deflationary process that isnt corrected by stimulus. As in, controlled monetary inflation isn’t the opposite of or a corrective to consumer deflation, although each of them do cause quite different wheels to come off the economy.

    President Xi gets it I think. Our leaders… not sure

  34. Mike Elwin

    Unloading and reloading the ships must be another significant logistics problem, as well as moving containers around the yard. It’s all managed by software now, but how good is the software? The time lost in actually moving containers and their loads looks like delivering bottles of milk to my mother in the 1940s.

  35. JBird4049

    Thanks for this depressing, but interesting article. I do have to ask why the Feds would have any desire to fix shipping as they apparent do not have with Covid and the economy?

    Just as people working in government (I am thinking of Dr. Anthony Fauci here) as well as the greedheads in the medical industry – vaccine makers, hospitals, etc. are also all benefiting, from the Covid mess, many are also benefiting from the ports’ backup; I believe some (Tin-foilish I know) are using the government and the media to block efforts to deal with the emergency.

    I have have driven and walked along San Francisco’s Embarcadero and the past the ghostly piers hundreds, maybe thousands of time. The destruction of most, although not all, of the port use as a functioning port was partial self-inflicted by the state’s lack of port maintenance (as that use to be the state government’s job) and the union’s intransigence on the needed changes and lost of some jobs; San Francisco’s government (the ruling oligarchy like the Feinsteins and the Pelosis) took the chance to kill the port and the powerful unions and working class, then give much of the land to developers. When I was born, San Francisco had been a working class city. Now, not so much. But maybe like Robert Moses and New York City, they decided to “improve” the city their way. But I would like to see the tax returns of some people from 1960 to 1975.

    The more I look at the destruction of California’s industry and commerce under the aegis of the state’s ruling families and their allies, the more I realize they would happily destroy the ports for the money it would bring them. Or if not destroy them, hinder the efforts to fix the problem. Just another few years to get all that profitable fines, storage charges, and late fees. Like the Democratic and Republican Parties, California’s ruling elites are all corrupt, connected, and do each other favors all the time and it would not be hard to make it much harder to fix the ports.

    I just realized, emotionally, that I am writing how California’s Oligarchy could, and probably will, hinder any efforts to fix the ports and harm, maybe painfully or fatally, not only forty million Californians, but also hundreds of millions of Americans just for some extra wealth to pile on their already obscene wealth.

    I want to vomit.

  36. Tom Christoffel

    Reagan’s deregulation of shipping is the greater problem since all the big players are not US companies.

    That moving containers isn’t REAL trucking is a point in the letter people will miss.

    Containers can be too heavy for over-the-road, so there is a short-haul to a warehouse for breakdown. Permits are required for overweight.

    Only when container contents are warehouse-processed do items get into the real US trucking system.

    The backup is a moneymaker for the shipping companies which can’t be touched. Any fines get added to shipping costs for businesses which must be passed to customers.

    A middleman situation?

    What is Going on With Shipping? by Sal Mercoglian is a relatively new channel which is providing a wide view of this situation.

    It could hit the Democrats. Cato, however, favors more deregulation. There are many national security issues, but Feds aren’t in charge of anything significant. Study required.

  37. Taurus

    Perhaps Biden can send Kamala Harris to the port of Los Angeles to warn off the big ships by crying into the distance “Don’t come-x!”

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