Congested ports, crippling the supply chain, need a fix now
California farmers lost an estimated $2.1 billion in export sales between May and September last year due to port congestions, according to a study by the University of California, Davis. Farmers across the state are experiencing fallout from congestion at the Ports of Los Angeles and Long Beach, threatening the state’s economic viability.
California’s agricultural production and processing industries generate nearly $50 billion for the state’s economy. This vital part of the economy may be in jeopardy.
That is why the upcoming Select Committee on Ports and Goods Movement hearing focusing on agriculture, coupled with the introduction of Assembly Bill 1679, is essential.
While short-term attempts have been made to ease the bottleneck, there are still 82 ships idling along Southern California’s coast.
With so many moving parts and entities involved, better collaboration and coordination must ensure the supply chain is functioning. Obstacles impacting the supply chain operations such as faulty regulations and poor decisions must be prevented.
Assembly Bill 1679 creates a high-level advisor to advocate, expedite and swiftly remove hurdles in the supply chain to ensure efficiency and address choke points. This individual will be tasked to make sure that long term solutions are implemented. The fact that there is not a supply chain advisor with expertise has allowed supply chain problems to intensify and worsen.
Farmers are struggling to sustain California’s robust agricultural sector as a global leader in the current congested ports environment.
Farmers are suffering as a result.
With deteriorating infrastructure and dated technology, the ports and the connecting entities of the supply chain cannot handle the increased demand of their services.
While short-term attempts have been made to ease the bottleneck, there are still 82 ships idling along Southern California’s coast. In normal times, less than 20 are at anchor. More than $400 billion of consumer goods move through the Ports of Los Angeles and Long Beach each year, accounting for 40% of all shipping containers entering the country.
Without additional investment and regulatory changes, farmers will lose businesses resulting in lost jobs for residents.
Growers have not been able to ship their products overseas as they have in the past.
The disruptions to the agricultural industry are more acute than others. Food has a shelf life. If left on a chassis for a prolonged period, they will decompose, rot and become worthless.
A loss to farmers is a blow to the state’s economy.
Over 400,000 Californians are employed by agriculture, and the agriculture value chain accounts for nearly three million jobs in the state. The state’s production of fruits, vegetables, dairy and every product in between are not being exported at their typical rate. In fact, California farmers are seeing an estimated 20% reduction in their export opportunities due to a lack of reliability of ships and bottleneck traffic at the ports.
California ports are responsible for moving over 75 percent of U.S. exports. The lack of truckers, chassis, and warehouse space has slowed the supply chain to a crawl.
Without additional investment to solve the disruptions in the supply chain, California farmers will lose access to international markets. California agricultural exports totaled $21.7 billion in 2019, nearly 16 percent of the total U.S. agricultural exports.
The supply chain crisis affects not only the nation’s imports, but the critical agricultural exports produced by Californians. Solving the supply chain’s woes is key to the economy’s long-term health, especially for California’s farmers.
Editor’s Note: Assemblyman Vince Fong, a Bakersfield Republican, represents the 34th District.
Want to see more stories like this? Sign up for The Roundup, the free daily newsletter about California politics from the editors of Capitol Weekly. Stay up to date on the news you need to know.
Sign up below, then look for a confirmation email in your inbox.