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IN THIS ISSUE – “Maybe They’re Worn Out After the Recall”
POLICY & POLITICS
- Legislature Votes on Do-Or-Die Measures Monday; Progressives Warn Single-Payer Healthcare Foes
- Newsom’s Recall Landslide & Bankroll Discourage Republicans in November
- Ballot Initiative Lineup Changes
- High-Speed Internet Weakens Civic Participation, British Study Finds
ENERGY
- Dem Power Brokers Clash Over Retraining Oil Workers
- CPUC Proposed Solar Rate Changes Spark “Nasty Fight”
CARGO CRUSH
- Import Traffic Tumbles as Ship Traffic Jam Continues – Cargo Vessels Head to East Coast
Capital News & Notes (CN&N) harvests California policy, legislative and regulatory insights from dozens of media and official sources for the past week. Please feel free to forward this unique service.
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FOR THE WEEK ENDING JAN. 28, 2022
Legislature Votes on Do-Or-Die Measures Monday; Progressives Warn Single-Payer Healthcare Foes
CalMatters
Grab some popcorn — you’ll need it Monday, when the state Assembly takes do-or-die votes on a slew of ambitious and controversial bills after declining to act on them Thursday.
Why are the votes do-or-die? Because the bills, which failed to pass the Assembly last year, face a Jan. 31 deadline to clear their house of origin and stay alive.
Among the proposals we’re watching: one that would create a state-funded single-payer health care system; one that would launch a state-appointed council to negotiate wages, hours and work conditions for the entire fast food industry; and another that would force property owners in rent-controlled jurisdictions to hold onto their buildings for at least five years before invoking the Ellis Act, which gives them a path to exit the rental market and evict tenants.
Leaving the vote until Monday gives lawmakers more time to rustle up support for their bills — a more challenging proposition than usual given that four Democratic Assembly seats are currently vacant.
And the stakes are high, especially in an election year: The California Democratic Party’s progressive caucus warned Thursday that it will seek to block party endorsements for any assemblymember who votes against the single-payer proposal.
Another sign that legislators may be trying to make their proposals more amenable: last-minute amendments introduced Thursday.
The fast-food bill no longer grants the state-appointed council subpoena authority. (However, the state Department of Industrial Relations, which would oversee the council, has its own subpoena power.)
And small landlords are now exempted from the restrictions outlined in the Ellis Act bill.
Newsom’s Recall Landslide & Bankroll Discourage Republicans in November
Politico
Five months after California Gov. Gavin Newsom crushed the recall, the GOP field for a 2022 rematch is frozen in suspended animation. Republican candidates and donors still reeling from Newsom’s 24-point blowout are assessing whether they have the will for another round.
So far, the answer is a resounding no.
“I haven’t even paid much attention to it,” perennial California Republican donor Susan Groff said. “Actually, I haven’t paid any attention to it.
“I think maybe they’re worn out after the recall,” added Groff, who contributed to Faulconer before the recall coalesced and then spent $60,000 to help trigger the recall election. “I think it cost everyone so much money on the recall and nothing happened.”
Recall momentum last year came out of nowhere in this bluest of blue states — and vanished just as quickly. Two months from the candidate filing deadline for the 2022 gubernatorial race, no major Republican has launched a campaign to deny Newsom a second term.
That’s not to say Newsom is invulnerable. Homelessness remains an intractable challenge and crime has affected so many residents that San Francisco Mayor London Breed said recently she cannot stand “the bullshit that has destroyed our city.” The governor on Thursday helped clean up a Los Angeles rail yard where thieves had strewn trash after raiding cargo trains, leading to viral images that Newsom said “looked like a Third World country.”
But conventional wisdom says the recall inoculated Newsom for his reelect year.
“If the recall was defeated by an overwhelming margin, you ran the risk of really being so close to the 2022 election that it would be very tough for a Republican to make the case to run against Gov. Newsom in 2022,” said Tim Rosales, a Republican consultant who worked for multiple recall candidates.
Several of the Republicans who sought to oust Newsom in 2021 have already bowed out. Libertarian talk show host Larry Elder, who received the most votes by far of any recall replacement candidate, said this month he would not run. Assemblymember Kevin Kiley, who’s had more success expanding his social media following than getting bills through the Democratic-controlled Legislature, is taking a shot at Congress instead.
“I’ve never seen us be this close to an election and not have a candidate of stature being talked about or even exploring openly on the Republican side running for governor,” Rosales said.
The remaining contenders, most notably former San Diego Mayor Kevin Faulconer, are still sizing up their financial prospects. Businessman John Cox, who lost overwhelmingly to Newsom in the 2018 general election and placed fifth among recall candidates, said he was examining whether there is “a support base there and there’s an avenue to success.”
Faulconer has been reaching out to funders to see if another run is viable after he finished a distant third among recall replacement candidates, receiving only 590,000 votes compared with more than 3.5 million for Elder. (Nearly 8 million voted to keep Newsom in office.)
Faulconer may not decide until February — weeks before the March 11 deadline to file, his consultant Stephen Puetz said.
“That’s what Republican, pro-business, center-right donors have to come to grips with. Either they want to mount a real challenge to Newsom, and they’ll make that decision over the next couple of months, or they won’t,” Puetz said. “If [Faulconer] does not run it’s because he does not believe there will be tens of millions of dollars behind his campaign, and in that case there’s no point running.”
That calculation reflects the reality of Newsom’s enormous financial advantage. The incumbent governor doesn’t just benefit from California’s overwhelmingly Democratic electorate, which repudiated the recall by the same margin as Newsom’s 2018 landslide. He also has a massive monetary edge.
Newsom’s reelection committee had some $24.5 million on hand at the end of September and has since raised at least $500,000 more, including from prominent players like Google and Warner Bros. By contrast, Faulconer reported having about $120,000 in the bank. He has not reported a major donation to his 2022 account since July of last year.
Newsom’s advisers are telegraphing optimism but careful not to guarantee re-election. Campaign consultant Sean Clegg acknowledged Newsom was in “a very strong position” after repudiating the recall but said the governor’s team was “prepared to be surprised,” noting Elder was off their radar before he entered the recall and swiftly vaulted to the top of the Republican field.
“[Newsom] is extraordinarily well positioned, but he is going to sweat who’s running until filing day and he’s going to work his ass off for re-election,” Clegg said.
That state of affairs has driven the Republican primary “underground” as candidates probe their prospects, longtime California Republican activist Jon Fleischman said.
“Those people that are seriously looking at it instead of declaring are taking lots of quiet meetings with prospective donors and analyzing if this is something they can actually get done,” Fleischman said. “The serious Republicans are trying to figure out if there’s a financial appetite.”
Republican donors and fundraisers described a dearth of activity. “We just had an election and people do get burned out,” Republican donor and Faulconer supporter Gerald Marcil said.
Many California Republicans see more promise elsewhere on the ballot in 2022. California will host several competitive House races that could tilt the balance in Washington. Campaigns for state attorney general and state controller offer the possibility of Republicans breaking Democrats’ monopoly on statewide offices.
“Who can deliver that win, if not on the gubernatorial level, on the statewide level, with some of these candidates running for attorney general and state controller?” said Jennilee Brown, communications director for the Lincoln Club of Orange County, noting people were “absolutely” looking beyond the governor’s race. “The checks and balances on Newsom do motivate people.”
At the same time, Newsom’s unambiguous win may deepen a sense of resignation among California Republicans who have been locked out of statewide office and relegated to a legislative supermajority. Every disappointing election makes it harder to rally wealthy California conservatives.
“A lot of Republicans have given up on California and they put their money into the national scene,” Marcil said.
The picture will come into sharper focus after the March filing deadline. Republican consultant Anne Dunsmore, who oversaw one of the pro-Newsom recall committees, said she believed there is “an ethical obligation on the part of a solid Republican to run against Gavin Newsom, just to keep him on point.”
But she acknowledged the obvious.
“Everyone is exhausted,” Dunsmore said. “We really just did a run for governor.”
Ballot Initiatives Lineup is Changing
CalMatters & Secretary of State
Just as some proposed 2022 ballot measures bite the dust, others enter the fray. Billionaire venture capitalist Tim Draper revealed Tuesday that he’s ending his campaign to qualify an initiative that would outlaw public-sector unions in California: “We are going to wait and see whether the unions improve education and government service without it,” he told journalist Theodore Schleifer.
Also scrapped Tuesday: A proposal to increase taxes on corporate income over $20 million to fund programs combatting climate change — but a measure that would raise income taxes on people earning more than $2 million for the same purpose is still in play.
Other proposed ballot measures that recently came to a halt: One that would enshrine in the California Constitution the right to a quality education, and another that would create education savings accounts so parents could bypass public schools in favor of private campuses or other programs (though a second, similar proposal remains alive).
Newly introduced: A coalition of business, labor and environmental groups — including gig-economy giant Lyft, a state firefighters’ union and California Environmental Voters — announced plans Monday to qualify a ballot measurethat would raise the state income tax by 1.75% on those earning more than $2 million annually to fund wildfire prevention, expand electric vehicle infrastructure and make zero-emission cars more affordable. (Incidentally, state law requires Lyft and Uber drivers to log 90% of California miles in electric vehicles by 2030.)
What’s the status of other ballot measures? Check out this running list from the California Secretary of State.
Secretary of State ballot measures info:
https://www.sos.ca.gov/elections/ballot-measures/initiative-and-referendum-status
High-Speed Internet Weakens Civic Participation, British Study Finds
The Guardian
Faster internet access has significantly weakened civic participation in Britain, according to a study that found involvement in political parties, trade unions and volunteering fell as web speeds rose.
Volunteering in social care fell by more than 10% when people lived closer to local telecoms exchange hubs and so enjoyed faster web access. Involvement in political parties fell by 19% with every 1.8km increase in proximity to a hub. By contrast, the arrival of fast internet had no significant impact on interactions with family and friends.
The analysis of behaviour among hundreds of thousands of people led by academics from Cardiff University and Sapienza University of Rome found faster connection speeds may have reduced the likelihood of civic engagement among close to 450,000 people – more than double the estimated membership of the Conservative party. They found that as internet speeds rose between 2005 and 2018, time online “crowded out” other forms of civic engagement.
The study’s authors have also speculated that the phenomenon may have helped fuel populism as people’s involvement with initiatives for “the common good”, which they say are effectively “schools of democracy” where people learn the benefit of cooperation, has declined.
Other studies have shown that social media engagement has strengthened other kinds of civic engagement, for example by helping to organise protestsand fuelling an interest in politics, even if it does not manifest in traditional forms of participation.
However, politics conducted online has been found to be more susceptible to “filter bubbles”, which limit participants’ exposure to opposing views and so foster polarisation.
“We observed that civic participation and the form of engagement in the activities of voluntary organisations and political participation declined with proximity to the network,” said Fabio Sabatini, a co-author of the study. “Fast internet seems to crowd out this kind of social engagement.”
Face-to-face volunteering in the UK has been in decline for substantial periods in recent history. It fell from 2005 to 2011 and again in 2020 as Covid-19 hit, according to separate analysis by the National Council for Voluntary Organizations.
The new study, published in the Journal of Public Economics, gathered information from the communications regulator Ofcom about the location of local internet cabling exchanges, which during the period studied were a key determinant of data speeds. It then cross-referenced this with residents’ survey responses from the British Household Panel Survey and the UK Household Longitudinal Study about their engagement with social organizations.
The combined effect on engagement with organizations such as political parties, unions and professional associations was a 6% reduction in participation from 2010 to 2017 for each 1.8km closer to the local exchange someone lived.
The biggest impact was on political party involvement, while the impact on trade unions was far smaller – a 3.6% reduction. That chimes with estimates of declining membership of the main UK parties over the period studied, with the exception of a spike caused by a surge in Labour membership before Jeremy Corbyn’s election as party leader in 2015.
The decline in political parties’ appeal when internet speeds rise compared with unions may be because “political parties only indirectly safeguard their supporters’ particular interests [while] trade unions have a stronger and more explicit commitment to advocate for … their members,” the study suggested.
The effect on volunteering with organizations that deliver social care and environmental improvements as well as the Scouts, which have been defined by sociologists as instilling “habits of cooperation, solidarity, and public-spiritedness”, was measured at a 7.8% reduction.
“These kinds of organizations have been defined as ‘schools of democracy’ where people learn the benefit of cooperation” Sabatini said, adding that involvement with such organizations also helped people to trust strangers.
“The rise of populism has been linked to a decline in interest in public affairs and we thought that, being less politically and socially active, people may be less capable of interpreting political phenomena and understanding the complexity of the management of public affairs,” Sabatini said.
“While bonding social capital [family and friends] seems resilient to technological change, bridging social capital [politics, volunteering, unions] proves fragile and vulnerable to the pressure of technology,” the study concluded.
“This result is disturbing as it suggests that progress in information and communications technology can undermine an essential factor of economic activity and the functioning of democratic institutions.”
Dem Power Brokers Clash Over Retraining Oil Workers
CalMatters
The clash that can emerge between two key Democratic constituencies — organized labor and environmental groups — was on clear display Tuesday.
That’s when a legislative committee investigating October’s oil spill near Huntington Beach held a hearing about decommissioning offshore oil production in California. One key issue: As the state transitions away from fossil fuels, what happens to oil and gas workers?
Erin Lehane, legislative director for the State Building and Construction Trades Council: “This talk about job retraining, it’s almost a classist sense that these … men and women will take whatever job is handed to them. Well, that’s just not true. They want to do the job they were trained to do, and they want to do the job that they’re proud to do. … This is their chosen profession. This is who they are and this is how they identify themselves. … That’s why we’re not interested collectively in the sense, of, you know, the quote-unquote ‘just transition.’”
That could pose challenges for Gov. Gavin Newsom and Democratic lawmakers, who are not only confronting a disappearing workforce but also pouring billions of dollars into programs to “create sustainable jobs in emerging and green and just transition kinds of sectors,” in the words of Dee Dee Myers, Newsom’s senior advisor and director of the Governor’s Office of Business and Economic Development.
Assemblymember Mike Gipson, a Carson Democrat: “Do we save the tree or the person under the tree? … It’s just something I have to come to grips with based on where I represent. I represent people, and those people need to have jobs.”
Assemblymember Richard Bloom of Santa Monica: “We have to save the tree and the person under the tree. … You’re not saving a human if you don’t save the trees.”
It’s not that organized labor is opposed to green jobs: Lehane implored lawmakers to cut “red tape” and streamline projects relating to carbon capture, hydrogen fuels and offshore wind, noting that California is far from meeting its ambitious climate goals.
Lehane: “We need to get going yesterday. … We need to get these new facilities online and we need to get our members working on these new facilities.”
A similar issue to watch: The powerful Building and Trades Council last week expressed strong opposition to a Democratic-led bill that would codify Newsom’s goal of banning in-state sales of new gas-powered cars by 2035.
CPUC Proposed Solar Rate Changes Spark “Nasty Fight”
NY Times
California has led the nation in setting ambitious climate change goals and policies. But the state’s progress is threatened by a nasty fight between rival camps in the energy industry that both consider themselves proponents of renewable energy.
The dispute is about who will get to build the green energy economy — utilities or smaller companies that install solar panels and batteries at homes — and reap billions of dollars in profits from those investments. At stake is whether the state can reach its goal of 100 percent clean energy by 2045.
For years, the rooftop solar business was ascendant in California, growing as much as 62 percent a year. That angered utilities and their labor unions, which long controlled the production, sale and distribution of electricity, and they lobbied state leaders to rein in the rooftop solar business — an effort that is on the cusp of success.
The infighting couldn’t come at a worse time, some energy experts said. President Biden’s main legislative effort to move the country toward clean energy and electric cars has stalled in Congress even as natural disasters and heat waves linked to a warming planet are becoming more common. U.S. greenhouse gas emissions, which fell sharply in 2020 because of the pandemic, jumped 6.2 percent last year.
In addition to having about 12 percent of the U.S. population, California is widely considered a leader in energy and climate policy. Its decisions matter far beyond its territory because other states and the federal government often copy them.
The California Public Utilities Commission plans to vote in the next few weeks to reduce the growth of solar energy in the state, which has added more of it than any other. The commission has proposed slashing the incentives homeowners receive to install rooftop solar systems. Officials argue that the changes would help reduce utility bills for lower-income residents about $10 a month by forcing rooftop solar users to pay higher fees to support the electric grid.
Analysts with Bank of America Global Research say the proposal would lead to a 20 percent annual drop in new rooftop solar systems in California next year before they would begin to recover. Representatives of the solar business expect a decline of up to 80 percent.
The proposal would force California to rely more on large power installations, including solar and wind farms, and long-distance transmission lines operated by utilities like Pacific Gas & Electric and Southern California Edison. Every watt of electricity not produced on the rooftop of a home will be produced and transmitted by a utility or wholesale power companies.
“You can understand why utilities don’t like distributive resources,” said David Feldman, a senior energy analyst at the National Renewable Energy Laboratory, using an industry term for small energy systems. “The more electricity they sell, the more money they make.”
Some energy experts say utilities would not be able to produce or buy enough renewable energy to replace what would be lost from the decline in rooftop solar panels — which supplied 9 percent of the state’s electricity in 2020, more than nuclear and coal put together. California would need to set aside about a quarter of its land for renewable energy to meet its climate goals without expanding rooftop solar, said Mark Z. Jacobson, a professor of civil and environmental energy at Stanford. As a result, utilities would have to turn to natural gas and other fossil fuels.
“The only thing this is going to do is reduce rooftop solar,” Professor Jacobson said. “That will mean there will be more natural gas in the system. Every rooftop should have solar on it. You should be encouraging more of it.”
People who install solar panels on their roofs or property are still connected to the electrical grid, but they receive credit on their bills for power they produce beyond what they use. California’s proposal would cut the value of those credits, which are roughly equivalent to retail electricity rates, by about 87 percent. In addition, the measure would impose a new monthly fee on solar homeowners — about $56 for the typical rooftop system.
The monthly cost of solar and electricity for homeowners with an average rooftop system who are served by PG&E, the state’s largest utility, would jump to $215, from $133, according to the California Solar and Storage Association.
An intense campaign is underway to sway regulators. Rooftop solar companies, homeowners and activists on one side and utilities and the International Brotherhood of Electrical Workers on the other are lobbying Gov. Gavin Newsom to intervene. While the commission is independent of Mr. Newsom, he wields enormous influence. The governor recently told reporters that the regulators should change their proposal but didn’t specify how.
The electrical workers union, which did not respond to requests for comment, is playing a central role. It represents linemen, electricians and other utility employees, who usually earn more than the mostly nonunion workers who install rooftop systems. Many union members, an important constituency for Democrats, fear being left behind in the transition to green energy.
Other states are also targeting rooftop solar. Florida is considering legislation to roll back compensation to homeowners for the excess energy their panels produce, a benefit known as net energy metering.
No government, though, has adopted as big a change as California has proposed. The Solar Energy Industries Association said that if regulators approved the measure, the state would slide to last place for rooftop solar incentives from near the top of the group’s rankings.
“The design of this proposal has been, ‘Let’s get solar out of the way,’” said Vikram Aggarwal, the founder and chief executive of EnergySage, a rooftop-solar comparison shopping site. “This proposal just doesn’t feel fair from any perspective.”
Fairness has been at the heart of California’s solar debate.
Since Gov. Arnold Schwarzenegger, a Republican, kicked off the state’s “Million Solar Roofs” initiative in 2006, regulators have struggled to find a balance between encouraging rooftop solar and keeping electrical rates affordable. The dispute boils down to two big questions: How much should homeowners be paid for the excess power their solar panels send to the grid, and how much should rooftop solar users pay toward running the grid.
Utilities, their labor unions and some environmental and consumer groups say rooftop solar owners are being paid too much because utilities can produce electricity or buy it on the wholesale market at a much lower cost.
Lower-income customers who cannot afford solar panels are effectively subsidizing affluent homeowners, said Matthew Freedman, a staff lawyer for The Utility Reform Network, which represents ratepayers in California. “We have a crisis of affordability.”
Ari Vanrenen, a spokeswoman for PG&E, said: “Sensible reform is necessary to support customer equity and help continue California’s success toward a clean energy future.”
During a virtual public hearing this month, Al Fortier, a leader in the electrical workers union, said well-paying union jobs at utilities were under threat from the growth of rooftop solar. “Net metering is making it worse,” he said.
Unions representing coal miners, electricians and other workers have expressed similar concerns that the transition to renewable energy will depress wages. Companies in that business have generally opposed organizing efforts and usually pay less than old-line energy businesses. Utility linemen in California earned an average salary of $94,000 in 2020, while solar panel installers made about $50,000, according to government data.
The solar industry argues that it provides various jobs, many that pay as well as comparable utility positions. Solar employs about 69,000 workers in California, including 25,000 residential installers, compared with the 38,000 who work for the state’s three large investor-owned utilities.
Mary Powell, a former Vermont utility executive who last year became chief executive of Sunrun, the country’s largest residential solar company, said the energy transition offered many opportunities for her company and utilities.
“This should not be a fight,” Ms. Powell said at a rally this month in Los Angeles. “If the utilities are enlightened, what do they do? They embrace what we do.”
Mr. Feldman of the National Renewable Energy Laboratory, a division of the U.S. Energy Department, said the campaign to limit rooftop solar often ignores its benefits. Rooftop panels reduce the amount of power the grid needs to deliver, making the system more efficient.
“If you insulate your roof, buy energy-efficient appliances,” Mr. Feldman said, “that’s not any different from the grid perspective of a solar system.”
The utility commission’s proposal may not limit the use of rooftop solar by affluent people, but it would discourage others, said Bernadette Del Chiaro, the executive director of the California Solar and Storage Association. About 12 percent of California’s rooftop solar users, or 150,000 homes, have incomes low enough to qualify for discounted electricity — $34,840 a year or less for individuals and up to $62,080 for families of five. That’s more than all of the 107,000 rooftop solar homes in Florida.
“All the rhetoric of only rich people adopting rooftop solar is patently false,” Ms. Del Chiaro said.
Ralph Baca, a retired warehouse worker for the federal government, said the proposed changes would probably have made his rooftop solar system unaffordable.
Because he has a low, fixed income, he receives a 30 to 35 percent discount on his electric bill. Mr. Baca, who is 68 and lives in Barstow, two hours outside Los Angeles, typically paid $100 a month for electricity and up to $150 in the summer, forcing him to cut back on other necessities. After he bought solar panels about a month ago, his electricity costs are fixed at $94 a month — $84 goes to Sunrun and $10 to Southern California Edison.
“I’m not wealthy,” Mr. Baca said. “I was raised to turn everything off or we’d get a whipping.”
Terrie Prosper, a utility commission spokeswoman, said its proposal would save lower-income consumers $60 to $120 a year in 2030.
The proposal would raise monthly costs on people who already had solar panels in the 15th year after their system was connected to the grid. New solar users would pay higher fees right away.
Other states, like Nevada and Hawaii, cut solar incentives but reversed course after public outcry and when regulators reassessed their policies.
Leah Stokes, an associate professor of political science at the University of California, Santa Barbara, who specializes in energy and environmental policy, said the commission ought to have found a way to make electricity bills and rooftop solar more affordable — a goal of at least one bill in the Legislature.
“California has really led the nation in many ways, as well as helped bring down the costs,” she said. “So we don’t want to imperil that industry. But at the same time, electricity bills need to be affordable, particularly for low-income people.”
Import Traffic Tumbles as Ship Traffic Jam Continues – Cargo Vessels Head to East Coast
Wall Street Journal excerpt
Imports are tumbling at the nation’s busiest container port complex even as the backup of ships waiting to unload breaks records.
Combined inbound volume fell about 14% at the ports of Los Angeles and Long Beach, Calif., in December compared with a year ago, according to preliminary data from the ports. It was the fourth straight month of year-over-year declines.
That was even as the backlog of container ships off the coast of Southern California kept growing. The queue of vessels waiting to enter the port complex rose past 100 during December, according to the Marine Exchange of Southern California, and reached a record 109 ships in early January.
Shipping industry officials say the factors that triggered big bottlenecks earlier in 2021 persisted through December and have continued into 2022. Ships can’t unload quickly because terminals are full of containers. Truckers can’t pick up loads due to a shortage of drivers and the steel trailers used to pull boxes. Warehouses near the ports and at nearby logistics hubs are short workers and don’t have space for more deliveries.
The backlog pushed importers to search for alternate ocean gateways. FedEx Corp. recently launched a charter service carrying up to 300 containers to Port Hueneme, a small gateway 80 miles up the coast known mostly as an import hub for bananas.
John McCown, a shipping industry veteran and founder of Blue Alpha Capital, said import volumes at Gulf and East Coast ports rose during the second half of this year as West Coast volumes declined, suggesting a shift to less congested parts of the country. Now, container ships are starting to back up at those ports too.
Port congestion is a major worry for the Biden administration. The backups are exacerbating supply-chain delays and driving up shipping costs that are contributing to inflation reaching its highest level in decades.
A spokesman for the U.S. Department of Transportation said the ports have made progress in recent months in speeding up the movement of some import containers from terminals to truck yards and warehouses.
Rather than freeing up space, however, the boxes filling up the dockside terminals have been replaced with empty containers waiting for shipment back to Asia, said Jim McKenna, chief executive of the Pacific Maritime Association, which represents terminal operators.
Mr. McKenna said five to 10 of the roughly 35 ships at berths on a typical day aren’t being unloaded because terminals don’t have space to put the boxes. He said the congestion has gotten worse in recent weeks because of a surge of Covid-19 cases among longshore workers, truckers and warehouse staff.
So far this month, about 1,700 West Coast dock workers have tested positive for the virus. That is more longshore Covid cases than in all of 2021, Mr. McKenna said.
The slump in inbound volume in Southern California capped a year in which the port complex broke records with massive imports. In 2021, the two ports combined handled the equivalent of 10.1 million containers, according to port data, a 12% increase compared to the previous record set in 2018.
Some shipping industry specialists attribute the end-of-year declines, in part, to a supply-chain workforce that is worn out.
Jock O’Connell, an international trade adviser at research firm Beacon Economics, noted cargo volume at the complex surged in late summer of 2020 and remained high for the next year, peaking in May of 2021. “You’ve got a workforce that has been stressed out since the summer of 2020,” Mr. O’Connell said. “There is a point where there’s a natural limit in the number of containers you can continue to put through the supply chain.”