The delusional claims about the container crisis
The current dominant narrative claims about the current containers crisis in the port of Los Angeles, and other ports, may not give you the full picture, the problem from this is the ones that do, will prepare beforehand, whereas you, due to the ignorance of the real triggers, the crisis will hit you harder sooner or later.
Real reason we have a containers crisis
A deep review shown the main reason the port of Los Angeles has a lack of human power is mainly because of the current environmental regulations taking place in California.
Since 2008, new environmental regulations were pushed by different agencies and institutions within California, such as the Environmental Protection Agency (EPA).
The target from these regulations were heavy- transportation trucks in poor conditions contributing to pollution.
At first, the regulation was flexible, providing a wide range of truck models acceptable, however new updates restricted more and more until it was calculated that up to 50% of trucks at this moment, don’t comply the current regulations.
The trucks may be missing filter particles, or new equipment or accessories. Therefore, even when there are indeed many trucks and human power available, because of this regulation cannot operate in California.
Severe fines were imposed to those that didn’t comply, affecting also other fields, such as owners of motorcycle shops.
Big companies prepared in advance
The regulation wasn’t approved in a day, several years took place in order to get the regulation that is currently operating in California, however, big companies such as Amazon, Walmart, Costo, since day one.
They started new strategies to not only avoid the upcoming problems happening in California due to the regulations.
They also created new strategies to beat the competitors with new shipping routes.
Big companies decided to shift to the east, crossing the Panama Canal, all through the Gulf of Mexico, to the ports nearby, such as the one in New York. Amazon even started to build new distribution centers to speed up the process.
Whereas the rest of the owners, companies, failed to understand the problem coming to California ports in the future.
Real reason shipping containers is so expensive
The regulations prevented the ports from full functionality and if we add more variables happening: Many workers decided to retire during the COVID 19, some got their health affected because of COVID, workers quit due to poor working conditions, regulation is very strict.
In other words, collapsing the efficiency from the port, leading other companies to choose the same route from big companies.
However, most of east ports, do not have the capacity neither the technology for the amount of charters or cargos arriving.
All this process makes the shipping to take a route almost the double, and more time than the original route to Los Angeles.
Thus, the shipping containers rates increased considerably.
Even when Joe Biden ordered to extend the working hours and workers, it won’t solve a thing, because the very same regulation is preventing the 50% of the trucks to operate.
This will get worse
The working conditions are already poor, but it may happen that more and more regulations will take place, preventing more and more workers to work.
It seems the new regulations addressing the environmental problems are actually imposed to people, even Youtube months ago decided to ban advertisement that denied Climate Change.
On the surface it looks very positive, yet, in reality, it is clear, at least in California, a poor damage control or future planning.
If we consider only big companies prepared for this situation, it is expected that many small and medium companies, especially in retail, may go bankrupt.
Nonetheless, according to two articles, by NY times and Harvard (read here and here), small and medium companies should exploit their small size, as an advantage to have better products catalog and better customer service, a problem that remains in big companies due to the size and complex structured.
What is the media saying about this now?
This article was written on October 20th from 2021, and a review of the most important sources even small ones, shown the following claims:
- The problem is happening because of American consumption
- The problem is happening due to covid related struggles
- The problem is happening due to a lack of workers
However, the given information clearly shows the main reason comes from a lack of implementing the regulations, poor planning or ignorance from authorities in California.
In the other hand, a similar problem happened in the UK and authorities claimed also the problem was due to a lack of workers, thus, not a problem concentrated in the poor planning of California authorities.
There is a strong narrative that is pushing people to buy Christmas gifts now, similar to black Friday, therefore, if you are conducting ecommerce, or any kind of business, try to monetize the existing problem. It is expected that the media will continue pushing their misleading conclusions.
And finally, for the average person, it is compulsory to understand what it is really happening, basically, an intention to empty your pockets.
Don’t drive yourself in an emotional way, analyze the general situation and do the conclusions by yourself.
These are the sources used for this article, which you can examine in detail if you like:
The California Version of The Green New Deal and an October 16, 2020, EPA Settlement With Transportation is What’s Creating The Container Shipping Backlog – Working CA Ports 24/7 Will Not Help, Here’s Why
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