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Owner-operators are actually not completely allowed in California. And trucks for the most part must be very new to comply with California emissions requirements. The "labor shortage" is in part aggravated by these regulations.

>Danielle Inman, a spokesperson for the National Retail Foundation, which has lobbied for California to overturn AB 5, told PolitiFact that the state’s regulations on trucking impact the availability of drivers and trucks

>(AB 5) makes it nearly impossible for truck drivers to be independent contractors

>At the time AB 5 passed, industry experts said that some owner-operators sought work elsewhere. Some fleets, too, chose to stop doing business with owner-operators in California.

And

>To meet the current clean air regulations, the state Department of Motor Vehicles blocks new registrations of any oversized vehicles older than 2011 — or those with engines manufactured before 2010.

>Some trucking companies have used the regulations to pressure drivers to buy newer rigs, and some in the industry have claimed that, while not necessarily the cause of the backlog, this kind of policy doesn't help.

> Owner-operators are actually not completely allowed in California. And trucks for the most part must be very new to comply with California emissions requirements. The "labor shortage" is in part aggravated by these regulations. ...

Both of these claims have been disputed by fact checking organizations: https://www.politifact.com/factchecks/2021/oct/19/facebook-p...

Because we all know how those don't need to be fact checked.

My quotes are from the very article you linked, man.

This is one of those nonsense fact checks that they roll out when something is true but people who love government interventionism wish wasn't. Their conclusions don't make any sense.

They have two points: The contractor ban is currently under injunction in court so why would that affect anyone's behavior. Well, but people do change their behavior when something becomes a legal grey area. And being an owner-operator in CA is not clearly legal anymore, so why risk it? If you're a company that wants to do shipping in CA, does your plan include using owner-operators now? It takes a high level of asinine pollyanna-ism to not be able to think for one second why this might have a substantial effect on shippers.

The second point, that the "truck ban" is not at fault is also total nonsense. First they say "oh the law has been in effect since 2008" well according to their own link, [1] it is loaded with ramp-ups in the emmissions requirements. As time passes the requirements increase. As of now nearly all of the most stringent requirements are in place.

So besides citing the law which doesnt make much of a case for their argument, they then quote a partisan who loves the law to say there's no evidence that this law is affecting anything.

And then they take this pile of nonsense to claim it is mostly false, ending with this non-sequitur: "The COVID-19 pandemic has caused widespread layoffs and factory closures that haven’t yet bounced back to meet the surging consumer demand. "

The ports are full of fucking containers you fucking nitwits! Full of containers filled by workers working at factories! How could this have any bearing on the port issue?

Politifact is a total joke. They're clearly being paid to give cover to whatever their paymasters want.

[1] https://www.buswestpreowned.com/carb-truck-bus-rule#:~:text=....

I agree with everything you said except the unsubstantiated quid pro quo argument. In politics people seem very quick to, “ follow the money", but people have political bias he's outside of this and agendas.

Does “Very New” match with “10 years old”? 10 years is the average or target lifespan of a tractor-trailer and you can still drive them up to 2023.

AB 5 might have a bigger impact though

>Does “Very New” match with “10 years old”? 10 years is the average or target lifespan of a tractor-trailer

If 10 years is the average then you are eliminating 50% of trucks on the road. Do you think that could have an impact?

10 years is the average or target lifespan of a truck, not necessarily the average age. I’m not sure what the average age or distribution for trucks serving California ports are

Similarly, human life expectancy is 80 years in the US, but the average age is 38.

The same fact check says that 96% of vehicles are compliant, and order vehicles can be made compliant by replacing the engine.

Either way, a lack of trucks is not the issue, it’s the lack of drivers (because pay and conditions are poor) and the bottleneck at the yards where they can’t exchange empty containers for full containers

> made compliant by replacing the engine

This costs $20-40k [0] not including the down time and lost revenue from the overhaul. So that’s not a simple cost for owner operators.

[0] https://cagtruckcapital.com/truck-engine-overhaul-tips/

> Why don't you have enough trucks?

This is addressed later in the thread. Normally, many trucks haul containers to their destination, unload the container, then return it empty to the port, pull it off the trailer, and haul away another loaded container. But the port is too full to accept empty containers, and zoning laws mean truck companies have already maxed out their own container holding areas. This leaves enormous numbers of truck trailers sitting idle, waiting for somewhere to put the empties they're holding before they can pick up more goods to haul.

I agree with you, some emergency zoning changes need to happen, but my inclination is still to think that'll end up being a short term bottleneck and it'll move further down the supply chain when/if that happens. Needs to be an all hands on deck (no pun intended) approach.

Absolutely, clearing a bottleneck shifts the bottleneck. Our options are 1) Do nothing and let the current situation continue to deteriorate 2) Clear the existing bottleneck and then clear the next one.

Would it make sense to clear the jam by scrapping some of empty containers for steel recycling?

No. Those containers are needed. Scrapping them would cause a shortage of containers bottleneck two weeks after clearing this bottleneck. We simply need to take the containers off the trucks, but are not allowed due to zoning.

Containers (8'x40' single-trip) were selling at auction over the last few years for $4000-5500. At auction in the last month I have seen the same item sell for $10000-14000.

Accepting scrap prices for a good container is a losing deal right now when the market obviously has room for them at a much higher price.

Empty containers are worth a lot in East Asia right now, just not in US ports or distributor points. It’s a misallocation, not a global oversupply problem

If they’re so valuable to people in East Asia right now, then people in East Asia have an incentive to take a more active role in getting them back.

How much is a train ride up to the Port of Oakland? Less than $5k per rail car? Probably a lot less. So some enterprising person in Asia could organize that and get them on a ship heading back faster than their competitors, reducing their cost and gaining a competitive advantage at the same time. So why isn’t that happening?

How would you load them on rail car? If there was a working railroad system connected to the docks maybe. A working railroad system would solve a lot of issues in the US. But it is impossible to get a discussion on infrastructure as it gets abused by both sides only for political reasons.

Wait, are there not rail heads at shipping ports? As a complete layperson, I would have assumed that’s like the one thing a shipping port needs, right?

Indeed, rail lines seem like they would help. But then I think of the Teamsters and Longshoreman unions, and I expect the status quo favors trucks.

“more active role” More than what? Do you have any evidence the relevant actors are not trying to source containers any way they can?

Right now empty containers are 5x-10x their pre-COVID cost in Chinese ports. That’s how prices work in a market system. Perhaps there are non-market forces at work or perhaps the scale of the problem just requires more incentive before it becomes worth while to charter an expensive ship to bring containers back to China.

Erm, then pay some truckers to haul empty containers to some space in the middle of Arizona, Nevada, Texas, Idaho, Iowa, etc.?

If the problem is empties clogging things up, move the empties. America isn't exactly short of empty space without zoning restrictions. In a week, the yards will be empty.

This seems like a problem that money can solve. The fact that money isn't solving it is extremely suspicious.

Either it means that we don't have enough truckers because they're treated and paid like shit or it means that somebody is making money on things being clogged.

Why are the capitalists all running to the government to break regulations instead of throwing money around? Things that make you go "Hmmmmm."

>Erm, then pay some truckers to haul empty containers to some space in the middle of Arizona, Nevada, Texas, Idaho, Iowa, etc.?

Would that just cause a container shortage at the other end of the supply chain?

There needs to be more buffer real estate for containers. One of the thread creator’s reccs was to do this using cargo trains.

But you are right as well. We need to send more containers back to East Asian ports where they are most commonly filled. The problem is that ship owners make more profit by sending back container ships immediately without waiting for them to be restocked with empty containers.

There needs to be a legal or contractual requirement for shippers to lose some economic opportunity cost to help rebalance the supply and demand of containers.

> Erm, then pay some truckers to haul empty containers to some space in the middle of Arizona, Nevada, Texas, Idaho, Iowa, etc.?

The empty containers don't need to be trucked to Arizona, they need to be shipped back to China so that they can be filled with more goods and shipped back to LA. There are fewer goods flowing from the US to China though, so they are piling up in LA. Either the price of shipping from US to China has to fall so much that it becomes profitable to ship all these containers back completely empty, or the government has to subsidize the shipping cost - but then which government should even be responsible for paying for this?

Too bad they didn’t switch to collapsible containers: https://www.shiplilly.com/blog/collapsible-shipping-containe...

That would handle the trade imbalance by allowing more empties to fit on the way back.

Or the USA could actually make something worth shipping. But that’s probably a lot harder than replacing a worldwide fleet of existing non-collapsible containers.

Boeing aircaft and college educations, which are probably the two largest US exports to China, don't fit in shipping containers.

The US exports a lot of agricultural commodities to China. Those used to all be shipped in bulkers but now some are loaded into containers.

https://ustr.gov/countries-regions/china-mongolia-taiwan/peo...

> The top export categories (2-digit HS) in 2019 were: electrical machinery ($14 billion); machinery ($13 billion); aircraft ($10 billion); optical and medical instruments ($9.7 billion); and vehicles ($9.1 billion).

Love the ingenuity, but isn’t needing to develop new technologies to overcome a severe trade imbalance just ignoring the larger problem of why there is such lopsided trade? It can’t be healthy or long-term sustainable for the US to basically stop manufacturing, can it?

> Either the price of shipping from US to China has to fall so much that it becomes profitable to ship all these containers back completely empty, or the government has to subsidize the shipping cost

What's happening is that everybody is playing chicken waiting for somebody else to blink and foot the bill for the fact that everything is out of whack. Why should the government break this logjam instead of the companies that sucked up all the profits over decades from this arrangement?

Since nobody is going to risk spending money, breaking the logjam, and then having their competitor who isn't spending the money benefit, they would rather all hit the wall simultaneously. Fine. But don't come whining to the electorate and elected representatives to fix problems that corporations, themselves created when it bites them in the shorts.

Spend some of those record profits, assholes, and the problems will get fixed.

Socialism for the rich; capitalism for the poor. Same old, same old.

Did you not read the entire thread above your post?

The issue seems to be a combination of factors exacerbated by the state of california.

Existing regs restricting storage space. Existing regs restricting available trucking stuck holding containers Existing regs disincentivizing labor or new owner operators.

All this is compounded it seems, by existing contracts limiting pay wait time.

So when wait time increases, due to 1)no space, (2)no trucks, and (3) no labor... mostly due to circumstances directly attributable to the state then nothing moves.

Where are the corporations making money off this ? Can you name them?

The legal environment is not new to the companies operating in it. Nothing in that environment prevented them from preparing properly, yet they didn't.

Example for why your argument doesn't hold water: one of the issues mentioned in the thread is that trucking companies can only stack containers two high in their yards. Well, what do you think would have happened if that regulation had been changed to six high (one of the suggestions) 20 years ago? Trucking companies would now own or lease smaller yards!

GP is absolutely right that the capitalists need to foot the bill of clearing this mess.

It does seem to me that government should step in to resolve the Gordic knot of coordination problems discussed elsewhere in the thread, but the companies who screwed it up in the first place need to be stuck with the bill. That's part of the deal of capitalism: you get the chance of profits, but also the risk of losses.

This was already one Rx from the Twitter thread.

Also not all “capitalists” have aligned incentives. Everybody wants shipping to be efficient except those who profit from this inefficiency.

Specifically ship companies are making huge profits by racing to the big East Asian ports right now. So much profit that they don’t want their ships to wait in US ports for empty containers to reload. This asymmetry makes it even more profitable to rush back to those East Asian ports. Snowball of profits for them at the expense of everyone else.

This is a Tragedy of the Commons situation. It is a great purpose for government intervention.

Not at all Tragedy of the Commons.

In 40 days (one round trip from US to China), the system clogs and the boats can't go running off because they can't unload at all (happening now). At this point the system stabilizes. Sure, it's not a stable point that the shipping companies want, but it is stable.

Capitalism has a way to deal with this. It's called "rising prices". However, business managers have gotten far too used to never suffering any consequences for their decisions. The moment actual responsibility comes down the pipe they all start whining and running home to Daddy (the government) for help.

Let the ships sit. When the shipping companies lose more money with a sitting ship that can't be unloaded than they gained racing back without empty containers, it will correct.

That’s idealistic.

Do you think people will just tolerate hyperinflation that would cause and sit quietly in line while waiting for overpriced food staples? Riots. Public disorder. Maybe even rebellion against the government.

Governments get involved because the individuals in that government fear what happens when we reach the tipping point where basic society breaks down.

I think we forget that 95% of all goods (or their inputs) are shipped and over 20% of GDP directly relies on shipping. That’s a massive gamble that the same people involved in the supply chain that is suffering from massive entropy can magically reduce that entropy after it snowballs.

I’m not sure if waging a siege on ourselves is a free market solution here.

Won't there be an equilibrium at some point? Empty ships rush back to Asia but can't load in Asia because all the containers are back in the US. Hence they will sit idle in Asia not earning any money and ships that do carry empty containers back will be rewarded because someone will pay to ensure trade is not blocked in Asia

in a closed system, at some point the containers stuck in the US would become valuable enough in china that the ships would prioritize shipping them back, yes. but it's not a closed system, the chinese are building new shipping containers as fast as they can, and every new container they build lessens the demand for those containers stuck in the US.

Why does the empty container have to be taken back to long Beach? Couldn't it be taken literally anywhere else?

Because the empty needs to be either filled and put back on a ship going back to Asia, or put back empty. Either way, all the containers that go from Asia to the US need to go back. And it makes sense for the port that unloads to also load.

Doesn't seem like it makes sense in this case, though, does it?

Geographically there is no viable other port. And if there was one, you’d need trucks to get the containers there anyways.

If they don't go back, how will China ship stuff to us?

Because the container isn't owned by the trucking company. If you have a contract to take the container to a particular place only, you risk breach doing otherwise; plus think about it, if you want the trucking company to rent or purchase more space to store the containers, that's a major cost increase you're putting on them and they'd have to modify a ton of contracts to get paid there

Apparently the containers are not fungible; maybe they should be.

its surprising. I thought that was a key point of them. Granted the standardized sizes and construction standards is probably the most important thing. But once you have that the next logical benefit is to treat them as fungible commodities, like digits in an account.

Perhaps in normal times they are, but when the flow equilibrium is disrupted suddenly the discretized reality pokes its head through.

The containers are sufficiently fungible for the purposes of mounting on trailers, stacking in lots, and stocking the ships.

The containers are not sufficiently fungible in the fact that they are owned by different entities which may not all want the containers to be shipped to just any place.

No, this is not the likely root cause for reasons another commenter notes.

But I want to point something out: ports and logistics infrastructure are the most unionized, protected industries that exist. The truckers may not be, but the rest of the value chain is, often resulting in huge inefficiencies.

You note something like truckers waiting in lines for hours but only getting paid when they move the goods. 1) they are waiting in line for hours because unions strictly control the amount of labor in ports (these manual labor jobs often pay low-mid six figures) and 2) driver’s simply factor these types of costs and many others into their prices. Owner operators aren’t paid hourly, like millions of other business owners.

This is absolutely not where the current issues lie.

I don't think this matches what the thread is saying. Longshoremen are highly unionized, but they are not the bottleneck -- they are blocked because they have nowhere to put the containers they unload.

Fixing the problem requires identifying somewhere to place the empty containers, and arranging transport to move those containers out as quickly as possible

I’m not saying it’s the problem now. I’m saying it’s been a problem in the last.

But the current problem is absolutely not due to truckers being non union.

Seems like your comment was just an attempt to dunk on a group of people you seem to believe are over paid. You have no real facts or information about how much port workers make and you present no evidence that rules that you may deem to be “inefficient” aren’t in place for safety reasons. You also seem to ignore the fact that most manual labor jobs have to provide enough income for a worker while they are able to physically engage in the work to provide for the significantly longer period of time their bodies won’t be able to do the work.

Everyone in this country seems to think they know exactly how much everyone else should make and surprisingly they always think others are over paid.

It’s especially comical when it’s coming from tech folks where an L7 sitting at FB can be pulling down seven figures and could sit in their aeron chairs working till they are 80, we should all recognize the privilege we have in that regard

I don't think FB will last that long. I believe they reached high tide, same as Google and probably Amazon...

> Seems like your comment was just an attempt to dunk on a group of people you seem to believe are over paid.

I was responding to a comment that argued they weren’t paid enough, and I was just making the counterpoint.

So no, if anyone has an axe to grind, it would be you.

Every system has a downside. Container freight is awesome, but it creates systems that have to constantly move. When the systems stop you get whiptail effects that can cascade.

Ports are natural chokepoints. Just like Apple or Google or Facebook extracts a toll, so too do the ports, longshoremen, port truckers, etc. Their rent seeking is baked into the system.

Doesn’t the thread say that there is nowhere to unload containers to, even if there was labor? That seems like what’s causing the truck shortage - it’s not a truck shortage, it’s an empty truck shortage.

I think that point in the thread was really about the lack of chassis on which to move the containers. That part I'm inclined to agree with to a certain extent, but then you're back to asking why there aren't enough chassis, and I'm back to asking why there are still full containers on the docks that can accept stacking empties higher than 2x.

It sounds like the chassis traditionally will arrive with an empty container, and then swap it for a full container. They can't do that now if here isn't a place to drop the container.

Temporarily lifting the zoning restrictions + employing chassis solely to move containers out of the yard (instead of swapping them for empties) seems like the fastest fix

This is my understanding. The ports are "backed up" in the biological sense.

Does "chassis" ~= "truck"? It seems like maybe a technical, specific term that I don't understand.

A chassis is the trailer to carry the container. The truck pulls the trailer/chassis.

Often chassis dont have cranes to (un)load containers themselves and therefore require cranes (capex heavy assets). Such cranes aren't everywhere/in surplus.

The truck driver is a part of the solution, but not to any of the primary issues right now.

Just saying “give truck drivers more compensation and better working conditions” doesn’t fix the fact that their destinations aren’t open 24/7 so keeping the ports open for an extra shift doesn’t do much right now.

It doesn’t fix the fact that the truck driver depends on someone else to take their container and/or chassis at the end of a delivery and many delivery depots can’t or won’t right now.

And the biggest asymmetry right now has nothing directly to do with truck drivers. There is a shortage of empty containers in East Asia and a glut in the US. Container ships aren’t waiting in the US ports to load up with empty containers, so thyme are exacerbating the issue.

> Why don't you have enough trucks?

Trucks are plentiful. Trailer empty chassis are not. Your assumption that truck labor is in short supply is a derivative of your misunderstanding of the difference between the trucks and the chassis.

The truck is the thing with the Diesel engine, the cab, and the truck driver. It can detach the trailer and pick up a new trailer.

The thread clearly identifies the “empty chassis” (the trailer with wheels that is capable of mounting a standard container on top) as one of the scarce items.

>we either don't have enough physical trucks (I doubt this)

There was a reddit thread in the truckers group around a year back which literally said this: there are not enough physical trucks since trucks have to been maintained and the spare parts for it are not making their way across border fast enough. This meant that owners have to buy new trucks to compensate for their broken down trucks and leading to escalation of costs which means they expect the same person to work 2x to make up for it.

It's in the Twitter thread, to do a port pickup you have to wait days at the port because they're so slow, (because of the traffic jam of containers), truckers are choosing to do pickups elsewhere that doesn't involve waiting for two days to get their load on.

They're paid by the load, so sitting idle is a non option.

Every available chassis and inch of yard space is filled with empty containers. Maybe the labor deficit is in the production of exportable goods that would turn the empty containers into full containers on their way out of the docks.

There's an ongoing world wide (minus some regions) container shortage going on at the same time.

Lots of (most?) places have permanent imbalances in # of full containers imported vs exported, it just means empty containers are shipped out or in.