Lots of ships at the ports in LA, Savannah.


Talked with my neighbor who drives big rigs.

The problem includes the warehouses.
Imagine picking up a load to deliver 3 hours away. You get there and there is a problem:

  1. The trailer was loaded poorly. Some of the stuff moved around. The driver has to repack the pallets. All other trucks have to wait.

  2. The delivery location is understaffed. It takes longer to unload. The driver sits around and waits.

  3. The trailer was loaded poorly. Something broke. The load is rejected. The driver has to take the entire load back to original warehouse.
    (The trailer was loaded poorly because the workers are all new and there are not enough of them.)

  4. The other trucks in front of this truck had a problem. Driver got to delivery early, then sat around waiting to be unloaded. But the load was bad, or broken. Or, the delivery warehouse has to close for the night. There is no second shift.
    There is no where to park the trailer. There is no security. Driver has to take load back. Has to drive back to original warehouse, perhaps unload and reload. Drive back again tomorrow, maybe a different driver.
    There are not enough drivers. There are not enough warehouse workers. Workers quit all the time. There are no efficiency wages.
    Workers get recruited away all the time.
    Workers who slack are not fired. Workers who are unreliable are not fired.
    Maybe 6+ years of tight immigration policy is catching up with us.
    Maybe the adjustment of relative prices is very sticky.
    Maybe inventories are poorly matched and final orders are waiting for that one last component to complete the order (microchips).

Appointing a supply chain "czar" is the least favorable solution. Centralizing the process presumes the information can be aggregated effectively. Not at all.

Militarizing the process would introduce corruption. (See Jane Jacob's "Systems of Survival")

Subsidizing particular choke points presumes that the correct choke point can be identified. Notice how many people are observing the ports, but miss the warehouses.

Subsidies invite rent seeking. They also require taxes to pay for them. You can't give money away:

Those interventions will just cause relative price frictions somewhere else.

Speeding up the ports won't resolve the problem. The rail yards are backed up with full containers, too.

The warehouse problems mean that the full containers in the yards don't get picked up, because there is no room at the warehouse, or no one there to unload it.

Container B could be picked up, but container A is in the way because of warehouse A.

Standardization at certain points could have positive network effects. That is something the involved industries could get together and figure out, or imitate other places that have figured parts of it out.

Different regulations in different states or regions make that hard.

Every regulation creates an incumbent special interest group, so it is hard to change, standardize, or repeal the regulations, though that is probably the best long term solution.

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