Supply Chain Bottlenecks at U.S. Ports

Supply Chain Bottlenecks at U.S. Ports

link to page 2

INSIGHTi

Supply Chain Bottlenecks at U.S. Ports
November 10, 2021
The Coronavirus Disease 2019 (COVID-19) pandemic has underscored the potential vulnerabilities of
global supply chains, which divide production processes (e.g., raw materials sourcing, parts assembly,
distribution) into discrete stages located in multiple countries to achieve efficient production. Companies
rely on a complex, global network of transportation services, primarily container shipping, to move
intermediate goods between multiple countries for processing before they are shipped globally as final
goods. The pandemic has disrupted regular trade flows when various Asian countries issued COVID-19
lockdowns at factories and ports and reopening at different times, congesting seaports globally when
goods eventually leave Asia.
In fall 2020, goods began backing up at U.S. seaports as the pandemic shifted U.S. consumers’ buying
habits from the service sector to the goods sector. From March through July 2021, retail sales (excluding
automobiles and gasoline) were 20% higher than for the same period in 2019. Many retail goods are
wholly or partially manufactured in Asia, leading to a surge in containerized cargo (Figure 1). Dozens of
ships are now at anchor waiting to dock at the Ports of Los Angeles and Long Beach. Usually there are
few or none. The back-up has caused shortages for retailers and factories. The delay in availability of
empty containers after unloading their imported goods has led to lost sales for U.S. exporters.
Congressional Research Service
https://crsreports.congress.gov
IN11800
CRS INSIGHT

Prepared for Members and
Committees of Congress

Congressional Research Service
2
Figure 1. Containerized Imports at U.S. Seaports

Source: CRS, U.S. Census.
Notes: Figures exclude imports from Canada and Mexico.
U.S. Customs Processes
Once goods arrive at seaports, they must be cleared by customs officials before they can be moved to
inland destinations. U.S. Customs and Border Protection (CBP) is responsible for enforcing U.S. trade
laws and facilitating legitimate trade, including consumer protection and duty collection, at ports of entry.
U.S. port operators have raised concerns over CBP’s ability to process the large volume of incoming
cargo, citing shortage of field officers as a cause of delays in cargo inspection. Congress has been
interested in CBP’s staffing challenges. Other stakeholders have commented on long-standing
inefficiencies in the customs process, including the use of paper-based trade documentation.
Recommendations by stakeholders include
 accepting electronic signatures and electronic bills of lading (shipment contracts, eBOLs)
and eBOLs storage in a digital system to improve visibility of the supply chain;
 increasing data collection and improving information sharing between CBP and partner
government agencies to improve trade facilitation; and
 streamlining border traffic and expanding the use of nonintrusive image technology to
improve efficiencies in processing and clearing goods.
CBP has taken steps began to mitigate pandemic disruptions to global supply chains, including
 reallocating field officers from passenger to cargo operations to increase trade-
enforcement activities;
 forming the COVID-19 Cargo Resolution Team to expedite clearance of personal
protective equipment across U.S. ports of entry, while collaborating with partner agencies
to ensure enforcement of trade laws and regulation; and

Congressional Research Service
3
 implementing a since-expired 90-day postponement (85 Federal Register 22349) of
certain duties, taxes, and fees for importers “experiencing a significant financial
hardship” due to COVID-19.
Port Inefficiencies
Port operations can encumber the onward movement of goods to inland destinations. While the private
sector largely controls these operations, Congress could engage with the Biden Administration to exert
pressure where disagreements among port stakeholders affect operations. Several federal studies have
analyzed port inefficiencies in detail prior to the current traffic surge. The problems identified are long-
standing and have caused less severe back-ups in the past.
The Federal Maritime Commission (FMC), the federal agency with jurisdiction over the nation’s
waterborne foreign commerce, published a 2015 study that analyzed delays related to port truck gates,
their operating hours, and the obstacles truckers face in picking up and dropping off containers. While
some ports encourage nighttime activity to reduce truck congestion, the report noted that wage rates for
dock workers are higher late at night, discouraging off-peak activity. Truckers considered it more
important for port gates to remain open during lunch hour and earlier in the morning rather than staying
open all night, according to the report. In 2016, the Government Accountability Office (GAO) issued a
report specific to congestion at West Coast ports that largely corroborated the FMC report.
Port truckers also seek easier interchange of container and chassis equipment amongst their different
owners. Chassis are the wheeled support frames used to move containers over the road. The 2015 FMC
study noted that poor chassis management was a source of delay for truckers. In March 2021, GAO issued
a report specific to the chassis problem, supporting the FMC’s recommendation for greater use of chassis
pool arrangements and more timely attention to chassis repair.
Similar to the customs cargo visibility recommendation, the FMC issued a 2017 report recommending a
port information portal to better inform shippers the real-time status of each container shipment. Such
information could reduce unproductive truck trips and improve the accuracy of daily fees for containers.
These fees are a point of contention between carriers and shippers that proposed legislation (H.R. 4996)
addresses.
A truck driver shortage is said to be contributing to current supply chain woes; claims of driver shortage
predate the pandemic. The Bureau of Labor Statistics has analyzed previous claims. Unpaid wait time can
reduce the attractiveness of the profession. Port truckers are often paid by the trip, so the long wait they
typically experience outside port gates reduces their earnings. Truckers often face long waits to deliver
loads at inland warehouses, where personnel are not ready to unload their trucks. This largely unpaid
“detention time” counts toward the maximum hours they can drive each day, reducing drivers’ income. A
2018 study by the Department of Transportation (DOT) Inspector General found that the Department’s
data collection effort with respect to detention time was inadequate for considering policy changes.
On September 16, 2021, DOT issued a notice (86 Federal Register 51719) seeking input from carriers
and shippers on how to alleviate “bottlenecks and supply constraints in the transportation sector.”
Comments have been filed (docket # DOT-OST-2021-0106) that reiterate the problems identified above.

Congressional Research Service
4
Author Information

John Frittelli
Liana Wong
Specialist in Transportation Policy
Analyst in International Trade and Finance

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff
to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of
Congress. Information in a CRS Report should not be relied upon for purposes other than public understanding of
information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role.
CRS Reports, as a work of the United States Government, are not subject to copyright protection in the United
States. Any CRS Report may be reproduced and distributed in its entirety without permission from CRS. However,
as a CRS Report may include copyrighted images or material from a third party, you may need to obtain the
permission of the copyright holder if you wish to copy or otherwise use copyrighted material.

IN11800 · VERSION 1 · NEW