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Newsom signs executive order to address supply chain disruptions

California Governor Gavin Newsom at a news conference at Cal State Logn Beach in Long Beach Wednesday, March 3, 2021.Photo by Thomas R. Cordova.

Amid ongoing and unprecedented congestion at the San Pedro Bay ports, Gov. Gavin Newsom Wednesday signed an executive order directing state agencies to continue identifying ways to alleviate bottlenecks.

For months, port staff have worked in partnership with other supply chain stakeholders to process record-breaking cargo volumes but have been unable to keep up with high demand for a litany of reasons, including worker and equipment shortages. The surge in cargo, which began in the summer of 2020, has shed light on longtime supply chain shortfalls, according to the executive directors of the ports of Long Beach and LA.

“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 in the announcement. “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.”

Combined, the ports of Long Beach and LA bring in 40% of the United States’ imports. Congestion at the ports is likely to have a noticeable impact on holiday shopping as items are stuck in transit along various points of the supply chain.

Newsom’s executive order directs state agencies to continue coordination with the Biden administration’s efforts to address the supply chain challenges. The issues have been on the Biden administration’s radar for months, resulting in a Feb. 24 executive order creating the Supply Chain Disruptions Task Force.

The California Department of Finance has been directed to work with state agencies to develop “longer-term solutions that support port operations and goods movement” for consideration in Newsom’s Jan. 10 budget, according to the announcement. Solutions could include infrastructure improvements, electrification of goods movement systems and workforce development.

State agencies also have been charged with identifying state-owned properties and other locations to address short-term storage needs, a move the San Pedro Bay ports have already begun within the LA County complex. Certain priority freight routes will also be considered for temporary gross vehicle limit exemptions, allowing trucks to carry additional goods, according to the announcement.

The executive order also calls for the creation of workforce training and education programs, along with expediting Assembly Bill 639. Signed by Newsom in September 2020, AB 639 requires the Labor and Workforce Development Agency and the California Workforce Development Board to oversee the development of recommendations on how best to mitigate automation’s impact on employment at the San Pedro Bay ports.

“California always leads the way in innovation and discovering solutions to problems,” Port of Long Beach Executive Director Mario Cordero said in an email following the announcement. “The ideas laid out today by Gov. Gavin Newsom will go a long way toward delivering immediate and long-term solutions to address the unprecedented disruptions we are experiencing within the national supply chain and furthers President Biden’s call for 24/7 operations within the San Pedro Bay ports complex.”

Last week, President Joe Biden announced the ports of Long Beach and LA would begin moving toward 24/7 operations. Biden’s comments came weeks after the ports themselves publicly announced the move and the Port of Long Beach established a pilot program expanding one container terminal to operate 24 hours a day, four days a week.

Editor’s note: This story has been updated with comment from Mario Cordero.

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