This article appears in The American Prospect magazine’s February 2022 special issue, “How We Broke the Supply Chain.” Subscribe here.
In July 2015, the Federal Maritime Commission, a federal agency with little name recognition and even less influence, released a report sounding the alarm about the state of America’s ports. A congestion crisis had been building for years and was fast becoming untenable; even the country’s relatively tepid economic-growth rate was straining against decades of disinvestment at its most critical trading hubs. Chassis weren’t available, trucks couldn’t get in or out, and terminals stayed perpetually clogged.
That crisis had “resulted from events that have developed or emerged over a considerable period of time and from within the system itself, rather than being the result of external shocks, such as unanticipated surges in container volumes or management-labor issues,” the report surmised. “Many seem to think it is inevitable that embracing ‘business as usual’ will lead to significant further declines in the performance of the U.S. intermodal transportation system.”
And then, of course, business went on as usual. Almost five years passed before the coronavirus announced itself on American shores, and another year after that before the disease gave an already fissured supply chain the nudge it needed to fully rupture. And while the circumstances of a global pandemic, its shutdowns and labor shortages, seemed exceptional, it was something as routine as a double-digit import growth, feared specifically by the FMC since at least 2006, that sent shipping container volume skyrocketing and brought the system to a grinding halt. A prophecy that few heard and no one heeded had finally come true.
Before the Biden administration was even sworn in, the ports were already in a state of chaos. It got worse throughout the year, and by the time the administration appointed its ports czar John Porcari and began looking toward emergency intervention, only minor measures were even available to remedy decades of bipartisan mismanagement.
Today, congestion at the twin ports of Los Angeles and Long Beach, collectively the nation’s largest, is “at historic high levels,” as the shipping giant Maersk announced in a customer advisory in late December. Reporting indicated that there were 133 vessels en route to San Pedro Bay, with delays stretching upward of 41 days. One ship in particular had left Busan, South Korea, on November 17 and was not scheduled to dock until January 2, a 47-day duration for a routine voyage that should take, at most, half that time. “It took Columbus less time to cross the Atlantic,” said Sal Mercogliano, an associate professor and maritime historian at Campbell University.
Despite problems in manufacturing, shipping, trucking, and warehousing, it’s been ports that have taken the brunt of the criticism for their role in a breakdown that has seen everything from stranded Halloween costumes to rapidly rising prices. Ports sit in the middle of a tangled nest of unwise policy choices made over the past half-century, having to deal with the consequences despite a lack of investment and manpower to handle the ever-burgeoning flood of cargo.
As the country’s most cynical economists and credulous news anchors would tell it, the breaking of the ports was the natural result of lavishing stimulus checks upon lower-income Americans, who nearly ruined Christmas with their indomitable desire for foldable furniture and Tickle Me Elmo. In reality, it’s the combination of some of the worst sins in economic policy: privatization, deregulation, cartelization, with some parasitic private equity sprinkled in too, all of which sacrificed resiliency, long-term planning, and even the country’s aptitude for economic growth in favor of corporate profits.
LIKE SO MANY OF THE COUNTRY’S late-breaking societal failures, the story of America’s modern ports began in the 1980s. First under the Reagan administration and later until Bill Clinton, the U.S. radically deregulated the ocean shipping industry. Out went the public-utility model, with prices overseen by a robust Federal Maritime Commission that helped offset that natural monopoly status that ruled the industry; in came the cartelized free-market system that has ruled ever since. (Incidentally, one of the early heads of the enervated FMC under Reagan was none other than Elaine Chao, the scion of a family shipping business, eventual wife of Mitch McConnell, and transportation secretary under Trump.)
Shipping deregulation quickly led to a cartelized private sector trudging ever-larger container vessels across the oceans. This intersected with a host of other trends in the economy: the outsourcing wave of the 1980s, the deregulation of the trucking and rail industries, the weakening of unions, and the desire among businesses to efficiently speed to retail stores only what consumers needed in the moment, just in time. Ports were the intersection point of all of these trends, and as the trade imbalance grew, the critical choke point for U.S. commerce.
For many years, the system succeeded in reducing prices and upping profits to the companies involved. “For a really long time, it was really cheap,” said Mercogliano. “That deregulation was what everybody loved.” But the price of cheapness was consolidation. As containers and ships got bigger, the ports had to get bigger as well. Ports dredged furiously to stay passable for increasingly deep-riding ships—the Port of Los Angeles isn’t even a deep bay by nature—and strained to clear out other obstacles like bridges, which had to be raised, to accommodate ships carrying as many as 16,000 containers each. On the West Coast, this meant that smaller ports like San Diego, which lacked the rail infrastructure to get cargo eastward, and Oakland, with its famously bridged bay, were passed over. (Vancouver boasts a sizable port with the cranes needed to offload large ships, but it was taken offline for weeks in 2021 due to flooding and torrential rains, adding to the supply chain crunch.)
Ports sit in the middle of a tangled nest of unwise policy choices made over the past half-century.
By 2014, the top three ports—L.A., Long Beach, and New York/New Jersey—brought in nearly half of all containerized imports, and the top 11 brought in over 85 percent. Concentration in other elements of global shipping led to concentration at the ports. That would magnify future disruptions.
As the American economy became increasingly reliant on goods made in East Asia, so too did it rely on the only port that could readily receive them, L.A./Long Beach, which strained against its own limitations. The expansive nearby population of Southern California, once seen as an asset to finding cheap and ample labor to unload containers and drive trucks and staff warehouses, soon became a hindrance to expansion, as land around the ports was ringed with housing, making growth impossible. Instead, the ports began expanding out into the sea, with major terraforming initiat
