Why Is There a Shipping Backlog?
In the hope of controlling the weather and slowing “global warming” laws have been passed that have unintended consequences. California has passed many laws and regulations intended to “Save the earth” with little thought to the effects of these laws.
A number of years ago the California Air Resource Board (CARB) announced new environmental regulations. On October 16, 2020 the Environmental Protection Agency (EPA) reached a settlement agreement with the California Air Resource Board (CARB) to shut down semi-tractor rigs that were non-compliant with new California emission standards. Therefore, trucks older than 3 years old cannot pick up or deliver containers at the Port of Los Angeles and the Port of Long Beach. This agreement wiped out approximately half of the fleet trucks used to move containers in and out of the ports.
In 2020 the EPA announced settlements with three interstate trucking companies imposing $417,000 penalties for violating CARB’s federally enforceable Truck and Bus Regulation, Drayage Truck Regulation and Transport Refrigeration Unit Regulation.
The CARB agreement with the EPA essentially created an inability of half the nation’s truckers from picking up anything from the Port of LA or the Port of Long Beach. Basically, all private owner operator trucks and half of the fleet trucks that are used for moving containers across the nation were shut out.
Companies have started using compliant trucks (low emission) to take products to the California State line where they can be transferred to non-compliant trucks that cannot enter California. However, that adds to the bottleneck. Working 24/7 is not going to solve the problem.
The major corporations were able to forsee that the CARB ruling was going to cause major problems. Therefore, these corporations made plans to divert their goods to other ports. This expensive shift included Amazon, Walmart, UPS, FedEx, Samsung, The Home Depot and Target.
Prices are going up because ships from China and Southeast Asia are being diverted to the Gulf of Mexico or the East Coast which means ships have to go through the Panama Canal. That takes twice as long and costs twice as much. Of course, that cost is passed on to the consumer.