For Economic Recovery, Protecting Our Ports is Essential

Shawn Yadon and John McLaurin
Shawn Yadon is the Chief Executive Officer for the California Trucking Association and John McLaurin is the President of Pacific Merchant Shipping Association.

“Essential” is a very important word in public policy these days.

“Essential” signifies a job or industry sector that must continue despite health and safety risks. Essential workers impact every resident in some manner: the health care worker that serves the community, the police and firefighters that continue to keep neighborhoods safe, and the truck driver and longshore worker that unload and deliver necessary products to the residents of California.

Most Californians have never given much thought to where and how items arrive at their local stores or their front door. Because of COVID-19, people are now interested in knowing when paper goods, disinfectants, food and other essential items are going to be delivered.  The COVID-19 pandemic affords people a unique view in to the critical work of the goods movement industry and its impact on California’s role in the global economy and in our local communities. .

As the Governor’s Task Force on Business and Jobs Recovery begins to address the state’s economic recovery, its members must also consider the economic and job challenges facing our ports and supply chain. California’s supply chain is a critical employment and economy driver: goods movement accounts for one out of every five jobs in Long Beach and one out of every nine jobs in Los Angeles, and 16 million jobs nationwide. The sector contributes $780 billion to the U.S. Gross National Product and generates approximately $210 billion in local, state, and federal tax revenues.

Yet California was suffering a well-documented loss of port market share prior to the COVID-19 crisis.

This is not a local issue.  Jobs are directly related to the volume of trade that flows through California and when fewer containers arrive, fewer workers are needed. And, state and local revenue is tied directly to the volume of containers – when California loses container traffic to out of state ports, we also lose tax revenue. And the recent slowdown of imported and exported goods related to COVID exacerbates this economic domino effect.

In his press release creating the Task Force, Governor Newsom stated: “The Task Force will not only focus on our immediate recovery, but on actions to support a cleaner, more equitable and prosperous future for all Californians.”  California’s supply chain workers need the Governor’s mission fulfilled for the goods movement sector. We need a plan for restoring market share, protecting jobs, and reinforcing the California gateway.

To achieve this goal, the Task Force and elected officials can take two immediate actions to support our logistics industry.

First, California ports need to be included in the recovery assistance funding. With the major reduction of retail items and other products, ports and the goods movement industry are facing major financial impacts, no different than airlines and other transportation industries.

Second, there is opportunity to create more high-quality logistics jobs and make California a preferred gateway for imported goods. That will require incentives to attract more trade volume to keep California ports competitive with ports on the East Coast. This investment will pay off through the protection of one of the most essential parts of our state as health, weather and population increases require the ports and the supply chain to operate regardless of the challenge.

The Task Force has a big job ahead, and an impressive lineup of talent to set a brave new course for the state. They have an opportunity and an obligation to enact policies that support our essential California ports to buoy our economy, both now and in the future. 

 

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