The COVID-19 pandemic revealed how vulnerable the global supply chain is to demand surges and disruptions. Though record volumes are flowing through the ports, the lack of coordination among segments of the supply chain and inefficient use of infrastructure capacity have created choke points and price distortions.
Early in the pandemic, the Port of Oakland experienced a temporary shortage of longshore workers due to the sudden surge of volume. The International Longshore and Warehouse Union (ILWU) and Pacific Maritime Association (PMA) agreed a larger labor pool was needed to move more cargo. Hundreds of workers were trained to fill skilled positions, and the port now has sufficient labor to handle more ships.
And yet, some shipping lines began to skip Oakland in their customary Los Angeles/Long Beach–Oakland–Asia rotations to accelerate their ships’ return to Asia to maximize cargo imports. This resulted in a reduction in volume and capacity to spare in Oakland right before the holiday season.
Though direct sailings to Oakland have begun and some rotational services have been restored, many cargo owners that regularly move cargo through the port had to scramble and pay unreasonably high prices to haul containers to and from Southern California. More importantly, agricultural exports — a vital part of US international trade — have lost revenue and market share due to lack of service and shipping costs that were distorted by the import surge.
To achieve resiliency, the supply chain needs state and national freight policies that provide, incentivize, and mandate where appropriate investment in trade corridor and port infrastructure, investment in clean energy and high-efficiency equipment, workforce development, transparency of information and coordination among freight segments, optimal usage of port capacity to minimize congestion at highly impacted ports, and exporter access to shipping services at reasonable prices that are not distorted by import surges.