Supply Chain Surprise!

I’m sure I’m not the only person who thought that our supply chain problem, with hundreds of ships waiting outside of ports across the country, was being driven by an 80,000-truck driver shortage. In the Port of Long Beach that may not be the problem. Ryan Peterson of Flexport decided to investigate why the port has come to a standstill and his discovery is shocking. It turns out that the main problem isn’t a lack of truck drivers or space for containers but a local zoning regulation. Yup. Long Beach prohibits the port from stacking the containers more than two high.  Huh? Whereas in most international ports these containers can be stacked hundreds of feet, here in “highly regulated and zoned” California you can only go 40’ high. Our supply chain issues are being driven by our unusually high demand for goods from abroad. The cash from our government stimulus has translated into more demand for capital goods like computers and industrial supplies and is showing up in our trade deficit, which widened in September to a record $80.9B. You can read more about that here;  the video of ships waiting to unload is precious.