Across California’s three major ports, comparing first quarter of 2020 to first quarter of 2021, there is an 80 percent increase in empty export containers departing the ports, which would typically serve as the containers for agricultural exports. At the Port of Los Angeles, nearly 75 percent of all exported containers left the port empty from January through July of 2021. Some ships are avoiding the Port of Oakland altogether — where many agricultural products move out of — to return to Asia more quickly and bring back more imports. In addition, access to export containers is even more limited given that costs are skyrocketing due to additional surcharges and fees. Given that agricultural exports are a critical driver of California’s economy, Ag Council is working with Governor Gavin Newsom’s administration and legislators to raise issues relating to goods movement, including obstacles facing exports, and our team is participating in conversations to develop solutions. Letter to Gov. Newsom Requesting Urgent Action Ag Council is part of a goods movement coalition with other associations and recently worked with partners in agriculture and business to send a letter to Governor Newsom asking him to declare a State of Emergency at the ports to facilitate supply chain movement and resolve bottlenecks. The letter garnered the attention of the Wall Street Journal in an article published on November 4 focusing on California’s barriers to goods movement, including trucking and warehouse regulations, which are leading to a more severe crisis in the state. The letter also asked Governor Newsom to review regulations hampering the movement of goods, including considering expediting CEQA permits and other permits for warehouses, rail lines and goods movement components, as well as looking at the potential suspension of rules preventing the unloading of goods at warehouses during
certain times of day. Even temporarily, such steps would help bring at least some relief amid extreme supply chain congestion. Select Committee on Ports & Goods Movement Hearing Prior to a legislative hearing on November 3, Ag Council worked with legislators to communicate the severity of the impacts on agriculture, including the fact that lost agricultural export costs are nearing $1.5 billion. Special thanks to Assemblywoman Aguiar-Curry (D-Winters) for assertively raising issues of concern to agriculture during the hearing. Short-Term Actions The hearing revealed a few short-term actions that would help alleviate port backlogs, including a huge need for chassis, sweeper ships, and warehouse space. Chassis California must work to free up more chassis, which are the wheels underneath containers, to assist in moving goods quicker. Due to a lack of warehouse space and vacant lots near the Southern California ports, some truck drivers are leaving containers with the chassis outside of storage areas to retrieve later. Additionally, major retailers are paying a premium for chassis at the ports. This is contributing to the shortage of chassis and adding to gridlock. Sweeper Ships Sweeper ships remove empty containers from the docks and create more room to move containers from ships and into warehouses. These ships are desperately needed, and we understand there is an effort to work with trade partners to send sweeper ships to California. Warehouses We must find more areas for warehouses to store containers near the ports and elsewhere in California. We have a tremendous number of containers and not enough places to store them. Our letter to Governor Newsom requests a review of the laws and regulations hindering the use and development of such facilities.
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