For now, policymakers should be vigilant about avoiding well-meaning but counterproductive policy responses and, instead, work to improve long-run supply chain resilience by jettisoning existing harmful government policies.
"Snarled supply chains are a major economic and news story, with dramatic photos of dozens of container ships waiting offshore for weeks at a time for the opportunity to unload their cargoes at overflowing West Coast ports. In a sign of the times, the Ports of Long Beach and Los Angeles became so congested that some ships could not even approach shallower depths to anchor, forcing them to drift 20 miles offshore. But it’s not just the ports; every hub and spoke of the logistics chain is at capacity. And unfortunately for pundits and politicians in Washington, D.C., there are no policy levers to pull to quickly and easily resolve these issues.
"To be sure, certain government policies have made this situation worse than it otherwise would be. These policies include the failure to adopt international best practices and technologies at U.S. ports due to intransigent labor unions and their allied politicians, the duties on Chinese truck chassis that have tripled their price in recent years under the Trump and Biden administrations, and unprecedented federal COVID-19 relief, stimulus and unemployment money going to many households, which contributed to spending. However, while policy reforms could help improve the long-run resilience of the supply chain, the main source of these problems is unusual short-run consumer demand that public policy is ill-suited to address.". . . Marc Scribner Senior Transportation Policy Analyst
Greta Tagliavia