SACRAMENTO — California Gov. Gavin Newsom has signed an executive order directing state agencies to identify additional ways to alleviate congestion at California ports.
The executive order builds on earlier efforts this year by the Governor’s Office of Business and Economic Development (GO-Biz) to ease supply chain issues by “engaging the diverse network of stakeholders along the supply chain to discuss key challenges and identify short-term and long-term solutions,” according to a news release.
Record demand for imported goods combined with capacity issues across the entire supply chain have slowed distribution at ports on the California coast.
“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,” Newsom said. “My administration will continue to work with federal, state, labor and industry partners on innovative solutions to tackle immediate challenges while also bringing our distribution processes into the 21st century.”
The total customs value of the Port of Los Angeles’ containerized imports in 2020 was $211.9 billion. According to the publication American Shipper, given that imports totaled 4,827,040 TEUs, this equates to an average of $43,899 per import TEU. (Several other sources also estimated average cargo value at around $40,000 per TEU.)
“This suggests that the cargo currently waiting off the ports of Los Angeles and Long Beach is worth around $22 billion, roughly the equivalent of the annual revenues of McDonald’s or the GDP of Iceland,” American Shipper reported.
The executive order, signed on Thursday, 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.
The executive order also 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 Jan. 10 governor’s budget, which may include port and transportation infrastructure improvements, electrification of the goods movement system from port to delivery, and workforce development.
Additionally, the executive order directs state agencies 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. AB 639’s (Cervantes, 2020) implementation is also expedited through this executive order.
Earlier this year, GO-Biz launched the California Supply Chain Success Initiative, a partnership with the California State Transportation Agency, the Port of Long Beach, and the CSU Long Beach Center for International Trade and Transportation to engage the diverse network of stakeholders along the supply chain to discuss key challenges and identify creative solutions.
This effort, which brought together federal, state and local leaders, is focused on both short-term and long-term steps to address port congestion, including implementing a new 24/7 environment across the supply chain, a move the state worked with the Biden-Harris Administration on, improving collaboration, and exploring policies to remove obstacles and improve the movement of goods.
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