California Governor signs Executive Order to tackle supply chain crunch

California Governor Gavin Newsom has signed an executive order directing state agencies to identify additional routes to alleviate congestion at California ports.

Record demand for imported goods combined with capacity issues across the inland supply chain have slowed distribution at ports on the California coast.

The order comes as vessel congestion outside the Ports of Los Angeles and Long Beach has worsened, with an even 100 vessels classified at anchor – a new record.

The order directs state agencies to continue coordinating with the Biden-Harris Administration Supply Chain Disruptions Task Force to address state, national and global supply chain challenges.

Additionally, the order directs the Department of Finance to work with state agencies to develop longer-term solutions that support port operations and goods movement for consideration in the 10 January Governor’s Budget – which could include port and transportation infrastructure improvements, electrification of the goods movement system from port to delivery, and workforce development.

State agencies have been directed to identify state-owned properties and other locations that could be available to address short-term storage needs once goods are unloaded from ships; to identify priority freight routes to be considered for a temporary exemption to current gross vehicle limits to allow for trucks to carry additional goods; and to create workforce training and education programs.

“California’s ports are critical to our local, state and national economies and the state is taking action to support goods movement in the face of global disruptions,” said Governor Newsom.

“My administration will continue to work with federal, state, labour and industry partners on innovative solutions to tackle immediate challenges while also bringing our distribution processes into the 21st century.”

Increasing call load sizes driven by e-commerce demand, combined with lack of capacity inland, has driven President Biden to meet with heads of the two major ports to expand gate timings to 24/7 operations.

Experts have forecasted Chinese Lunar New Year 2023 as a target for relief in ports from ongoing congestion.

In an update from shipping analyst Lars Jensen on 19 October, Jensen noted that the “gradual improvement” of reduction in container vessels waiting at anchor outside the San Pedro Bay has essentially been undone.