Although most small businesses have not yet felt the impact of supply chain disruptions occurring at California ports, it’s only a matter of time before they do, according to a leading small business organization.
“Sadly, we'll be witnessing many, if not most, small employers facing a lack of imported and transported products to their businesses where they rely on the ports to make those deliveries,” said John Kabateck, state director for the National Federation of Independent Business (NFIB) California. “The next ripple effect will be another slew of layoffs or an inability to hire or pay their bills on time.”
Supply chains are backlogged from nationwide effects of COVID-19, as well as a shortage of truck drivers due in part to onerous regulations in California. Approximately 100 cargo ships are waiting to unload at the Los Angeles port in San Pedro Bay.
“This whole supply chain starts and stops with the ability to satisfy the consumer and if small business owners don't have a reliable and sustainable inventory, the rest of the small business machine falls apart,” Kabateck told Southern California Record. “We hope it doesn't happen but we fear that will be the next step.”
The NFIB was among the business associations that signed off on a letter that was sent to Gov. Gavin Newsom last week asking him to implement a comprehensive plan to relieve congestion at ports.
“While we agree that some of the port congestion is driven by pent-up demand and the ongoing impact of COVID-19, the supply chain crisis at the ports is the inevitable culmination of a lack of coordinated focus to invest and improve this important sector and a series of state, regional and local mandates forced upon every aspect of the goods movement economy,” the Oct. 19 letter states.
The CalAsian Chamber of Commerce, Western Growers, California Trucking Association, and the California Retailers Association are among the organizations that endorsed the message.
“We've not heard much from the governor’s team on this front,” Kabateck said. “Hopefully, the legislature and others will convene a special session or important informational hearings very soon to address this terrible crisis.”
The measures the coalition is asking the governor to enact include the following.
Declare a state of emergency at the ports and the associated transportation links to enable quick action to resolve bottlenecks as they arrive.
“Perhaps that results in more members of the National Guard being deployed to help deliver and clear the pathway and also to help unload, deliver, and process the goods as it gets to our ports,” Kabateck said. “It could very well include calling on our law enforcement officers to help prevent looting and prevent backlogs with homeless encampments that have been a problem at the ports.”
Suspend the implementation of AB 701 until the supply chain has normalized and goods movement has been restored.
“Pushing the pause button on AB 701 is going to make sure that our warehouses and the people who work there do have legitimate, safe, and healthy workplaces but that we are not so overly restrictive that our warehouses are not so ironclad with restrictions and rules that we can't get product in and out quickly,” Kabateck said.
Suspend AB 5 and allow independent truckers to operate in and through California until the supply chain has normalized.
“Suspending AB 5 right now during this crisis is especially critical for not only the truck drivers and the companies who manage them but for California's consumer community and small businesses,” Kabateck added. “AB 5 is so restrictive and such a mess still. The best thing we can do right now is give truck drivers, truck companies and transportation companies more flexibility to get product to and from where they need to be.”