The White House has appointed a former Department of Transportation official to coordinate federal efforts to address worsening congestion at U.S. ports.
According to a White House fact sheet, disruptions in global shipping and rapid shifts in demand have led the cost of shipping containers between China and the West Coast to grow more than 90 percent compared to 2019. Congestion is being felt particularly acutely at the ports of Los Angeles and Long Beach, where containerized cargo volumes rose 40 percent year-over-year in the first half of 2021. However, COVID-related labor shortages at port terminals, trucking lines, warehouses, and other components of the supply chain have limited the ability to handle this increase. The result has been backlogs of containers, delays in deliveries, and shortages of products, including inputs for domestic manufacturers.
There has been a flurry of action in recent weeks as federal officials seek ways to ameliorate the problem. A U.S. shipper filed a complaint with the Federal Maritime Commission alleging that surging cargo rates are being caused by unlawful ocean carrier actions, and one FMC commissioner said the agency should make it easier to file more such cases. In the meantime the FMC has targeted carriers with a new audit program and a demand for answers about surcharges they impose on shippers. In Congress, lawmakers introduced the first major update to U.S. shipping laws in nearly a quarter-century.
The Biden administration joined the effort in June by announcing a broad effort to strengthen supply chain resilience and revitalize domestic competitiveness. This included establishing a task force to lead efforts to alleviate bottlenecks and supply constraints in key supply chains.
The administration has now announced the appointment of John Porcari as ports envoy to this task force. Porcari served as deputy transportation secretary from 2009 to 2014, where he was directly involved in overseeing port, intermodal, maritime policy, and maritime-related competitive grant programs throughout the U.S. Earlier in his career he served twice as secretary of transportation for the state of Maryland and chairman of the Maryland Port Commission, where his efforts helped the port of Baltimore grow into the nation’s largest roll on/roll off port and one of the top ten in terms of dollar value and tonnage.
The White House said Porcari will work with the Department of Transportation and the National Economic Council to address port congestion but gave little detail about how this will be accomplished.
While this and the other efforts referenced above are positive, a multi-faceted solution is needed to both provide immediate relief and address the longer-term implications of the current situation. To that end, Sandler, Travis & Rosenberg is offering clients the opportunity to participate in a grassroots advocacy campaign that will (1) advocate with the FMC to devise policies that will provide real benefits to traders, (2) lobby Congress to encourage legislation or regulation against exorbitant detention and demurrage fees, and (3) identify other solutions that ensure availability and access to instruments of international commerce, including shipping containers.
For more information on participating in this campaign, please contact Ned Steiner at (202) 730-4970 or via email.
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