U.S. ports slowed by pandemic-induced labor and equipment shortages cannot keep up with Americans’ demand for imported goods, resulting in cargo ship backups on both coasts. But social media posts, without citing evidence, falsely claim the Biden administration is purposely “orchestrating” product shortages.
Cargo ships are backed up in record numbers at U.S. ports, as Americans’ demand for imported goods runs up against the ability of shippers and transporters to unload those goods and transport them to warehouses and consumers.
But some social media posts claim, without citing evidence, that the Biden administration is keeping the ships backed up on purpose. They misleadingly imply the cargo backup is part of a plan to create shortages and later inflate fourth-quarter data to take credit for a strengthening economy.
One Facebook post says the Biden administration is “orchestrating” product shortages by denying foreign ships’ entry into ports around the U.S. Comments on the post picked up on that unfounded claim, sensing a coordinated plan behind a map of offshore ships. “Welcome. To. Communist. America. Where. The. Government. Creates. Shortages. To. Go. Along. With. Their. Covid. Hysteria. And. Mandate. After. Mandate,” one said.
Another post links to the same image, which it says is a screenshot from a tracking app. “If you want to put a sinister twist on this, imagine a government putting a choke hold on goods entering the U.S.,” the post says. “Then, releasing everything in October they brag about the surge in 4th quarter spending and the robust economy they’ve created.”
In fact, cargo traffic has been rising since the pandemic took hold, as homebound Americans began ordering goods online, with a record number of ships waiting to enter ports at Los Angeles and Long Beach. Marine terminals and trucking companies have been unable to keep up with the volume, resulting in bottlenecks at ports and rail yards from California to New York.
Consumer Demand for Imported Products
“It’s a pandemic-driven buying surge unlike one that we’ve ever seen from the American consumer,” Gene Seroka, executive director of the Port of Los Angeles, said at a press conference in February. Meanwhile, COVID-19 has kept many workers away from their jobs, and rail, truck, terminal and vessel operators are struggling to keep up, Seroka said.
The pandemic has exacerbated a situation that’s been building for years, as growing consumer demand for imported products comes up against an aging supply chain, John McLaurin, president of the Pacific Merchant Shipping Association, said in an interview with FactCheck.org.
“We’ve never seen this amount of cargo,” McLaurin said. “At some point, you can’t violate the laws of physics. You can only move it so fast; you can only pile it so high, and then you just run out of space. We’re at that point, and we have been for a while.”
Industry officials and observers dismissed the idea that the Biden administration is deliberately causing the logjam. “That’s not something anyone in the industry is talking about,” McLaurin said. “I just don’t see that.”
The problem isn’t unique to the U.S., he noted. “It’s happening all over the world. There’s congestion throughout the supply chain.”
The pandemic has exacerbated that congestion, as consumers shifted spending to goods and away from travel and entertainment, overwhelming the supply chain, the Washington Post reported.
“Because of the pandemic, there was a huge spike in demand, and obviously that increased U.S. imports from Asia,” Saravanan Kuppusamy, assistant professor at Rowan University’s Rohrer College of Business, told us in a joint phone interview with a colleague, Qazi Shaheen Kabir.
West Coast ports, which handle the bulk of U.S. imports from Asia, are feeling much of the strain, Kuppusamy said.
The Port of Los Angeles saw near-record traffic in August, and expects “significant volume headed our way throughout this year and into 2022,” Seroka said at a press briefing in September.
Limited Infrastructure and Shortage of Labor
Ports and warehouses are overwhelmed with cargo containers that have nowhere to go. A shortage of chassis — the platforms used to transport containers once they are unloaded from ships — is contributing to the backup, as vessels arriving at ports can’t offload their cargo, Kuppusamy said.
“If you have a system that has limited capacity across the board and a spike in demand, most parts of the supply chain system will not be able to function fully,” Kuppusamy explained. “That will create this cumulative effect of reduced product flow throughout the supply chain.”
“The current administration has inherited that infrastructure with limited capacity,” said Kabir, also an assistant professor at Rowan. Biden’s proposed infrastructure package includes billions of dollars in funding for port infrastructure, as well as money for rail, and the administration has formed a task force on supply chain disruption and named a “port envoy” to work to resolve the congestion at U.S. ports, Kabir noted.
“All these things collectively probably weaken the argument significantly that the Biden administration is slowing things down, or they are not serious about this issue,” Kabir said.
“Incentive alignment,” such as offering port workers bonuses tied to faster processing of cargo, could help the situation, Kabir added. “We often see that if your payment is fixed irrespective of your output, you do not get motivation.”
There continue to be shortages of workers at ports as well as shortages of truckers to drive cargo from the ports, said Gad Allon, a professor of operations, information and decisions at the University of Pennsylvania’s Wharton School. That’s true “at almost every port around the world,” he said.
Across the supply chain, “people are waiting on the sidelines to decide whether they really want to go back to work,” Allon said. FedEx Corp., he noted, recently cut growth projections and said the labor market was partly responsible. “The shortage of drivers and trucks and port workers is a global phenomenon,” he said.
“No one wants to work in these conditions,” Allon continued. Companies are offering incentives – such as Amazon’s recent announcement of tuition reimbursement — to entice people to work for them, he noted.
A coalition of transport groups, including the International Chamber of Shipping, wrote an open letter to world leaders calling for an end to “fragmented” travel rules and seeking priority vaccination status for transport workers. “It is of great concern that we are also seeing shortages of workers and expect more to leave our industries as a result of the poor treatment they have faced during the pandemic, putting the supply chain under greater threat,” the letter said.
“The issue with systems that are highly congested is that any small disruption multiplies and amplifies the waiting time,” Allon said, comparing the port situation to a traffic backup resulting from a lane closure.
“It’s a system that is just completely overwhelmed and drowning in cargo at this point,” McLaurin said. “Everybody’s trying to do the best job they can to work their way through it.”
Allon, Gad. Professor of operations, information and decisions, Wharton School, University of Pennsylvania. Phone interview with FactCheck.org. 4 Oct 2021.
Amazon.com. Press release, “Amazon to pay full college tuition for front-line employees,” 9 Sep 2021.
Anguiano, Dani. “A Record Number of Cargo Ships Are Stuck Outside LA. What’s Happening?” The Guardian. 23 Sep 2021.
Black, Thomas. “FedEx Cuts Forecast, Blaming Labor Shortages for Rising Costs.” Bloomberg. 21 Sep 2021.
International Chamber of Shipping. Press release. “Joint open letter – Transport heads call on world leaders to secure global supply chains.” 29 Sep 2021.
Kabir, Qazi Shaheen. Assistant professor, Rowan University Rohrer College of Business. Phone interview with FactCheck.org, 4 Oct 2021
Kuppusamy, Saravanan. Assistant professor, Rowan University Rohrer College of Business. Phone interview with FactCheck.org, 4 Oct 2021.
Lynch, David J. “Inside America’s Broken Supply Chain.” Washington Post. 30 Sept 2021.
McLaurin, John. President, Pacific Merchant Shipping Association. Phone interview with FactCheck.org. 30 Sep 2021.
Port of Los Angeles. Press release. “Port of Los Angeles Cargo Volume Starts 2021 Strong.” 17 Feb 2021.
Port of Los Angeles. Press release. “August Cargo Volume Exceeds 954,000 TEUs at Port of Los Angeles.” 15 Sep 2021.
Towey, Hannah, et al. “An all-time high of 56 cargo ships are stuck waiting off the California coast, as shipping ports hit their 4th record backup in three weeks.” Business Insider. 14 Sep 2021.
White House fact sheet. “Historic Bipartisan Infrastructure Deal.”
White House press release. “White House Announces John D. Porcari as Port Envoy to the Biden-Harris Administration Supply Chain Disruptions Task Force.” 27 Aug 2021.