Infrastructure Update: Governors Try to Unclog the Supply Chain

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Hello and welcome back to Route Fifty's Infrastructure Update, I'm Dan Vock. In case you missed it, I am covering transportation and infrastructure for Route Fifty full time now, so keep an eye out for even more infrastructure coverage from me.

Today we're going to look at supply chain issues and what more than a dozen Republican governors are trying to do about shipping delays. Of course, there's a political dimension to their coordinated effort, which they're calling, "Operation Open Roads." But is it all politics? Or can their states really make headway unclogging the pipeline for goods? We'll take a look.

What Are the Governors Doing?

Fifteen Republican governors announced in late November that they would take steps to alleviate the widespread supply chain disruptions that have grown in recent months. 

Much of what the governors proposed focuses on loosening trucking industry regulations, with the goal of getting freight moving more quickly. But they put forward some other measures as well. Overall, their actions have been fairly limited and many follow the authority specifically granted to states from the federal government, which takes the lead regulating interstate commerce.

"From coastal ports to inland ports to road and rail, our states can take action to address workforce shortages and prevent bottlenecks, logjams and other transportation issues," the governors wrote. "If we can get government out of the way, our trucking industry can safely do what it does best: move."

Among the steps the governors took:

• South Carolina Gov. Henry McMaster ordered state agencies to waive trucking restrictions whenever they're allowed to do so by the federal government. He also called on agencies to review their rules to find potential changes that would speed deliveries. And McMaster directed the state police to start enforcing a new law that penalizes motorists for driving slowly in the left lane of highways.
• Arizona Gov. Doug Ducey, who has long fought to make it easier to get professional licenses in his state, eased rules on commercial driver's licenses. For example, he extended the time a learner's permit lasts from six months to a year. Ducey also allowed CDL holders to keep their licenses through next February if their medical certification expired during the pandemic. Additionally, the governor temporarily reopened two rest stops that had been closed to give truck drivers a place to rest.
• Tennessee Gov. Bill Lee told state agencies to look for ways to encourage more people to get CDLs and remove regulations that get in the way.
• Iowa Gov. Kim Reynolds allowed trucks transporting corn, soybeans and other agricultural goods to be overweight (up to 90,000 pounds) without a permit. Ohio Gov. Mike DeWine also lifted weight limits.

Governors from states with coastal ports voiced support for operating the facilities at full capacity and for accepting ships waiting off the West Coast to dock, including those that could possibly pass through the Panama Canal and deliver in the eastern U.S.

States with governors that signed onto the supply chain initiative included: Arizona, Florida, Georgia, Idaho, Iowa, Maryland, Missouri, Montana, Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, Tennessee and Texas.

What Do the Republicans Want President Biden to Do?

The Republican governors blamed Biden for the supply chain disruptions, arguing that he had "dramatically increased regulations and rulemaking authority that prevent private sector growth." They also said that his administration's Covid-19 vaccine mandates were "putting more jobs in jeopardy."

"With 7.4 million people unemployed and 10.4 million job openings, we have a shortage of 80,000 truck drivers, an all-time high for the trucking industry," the governors asserted.

They want the Democratic president to lower the federal minimum age for CDL drivers from 21 to 18. They called on Biden to suspend national Covid-19 vaccine mandates. (Courts have blocked a federal requirement for workplaces with more than 100 employees and for federal contractors.)

The GOP governors also criticized domestic spending and tax proposals in budget legislation that Biden and Democrats are trying to pass in Congress, arguing that these plans would add to the national debt and contribute to inflation.

Will the Governors' Initiative Work?

Jason Miller, a professor of logistics at Michigan State University who has studied the supply chain disruptions, said the group of Republican governors won't be able to solve the backups. But they're not alone. "There's nothing that can be done in the short term," Miller said. "You can't fix any of the snarls we have right now."

He said the disruptions are actually breakdowns in different parts of the economy.

• The logjams at West Coast ports are the result of soaring consumer demand. During the pandemic, people have found they cannot spend as much money on services as they usually did, so they started buying more goods instead. The resulting increase in freight traffic has strained transportation systems. The number of loaded containers coming into Los Angeles is up 22% so far this year over last year, while across the bay in Long Beach, volume has increased 18%.
• The shortage of computer chips came after automakers decreased orders for semiconductors last year thinking, incorrectly, that consumer demand for new vehicles would drop. It didn't, but now automakers are "at the back of the line" for new chips, Miller said, and it takes chip makers more than a year to build plants to make more.
• The polar vortex that caused massive blackouts in Texas and parts of the Southeast last February disrupted the chemical industry, railroad operations, steel and auto production.
• The railroad industry decreased its workforce by 25% since 2019 in response to lackluster demand that year. But freight railroads haven't been able to ramp up their operations in time to meet the surging demand, putting more freight onto trucks instead of trains.

Some ideas floated by the Republican governors would be impractical, Miller also noted.

Take the idea of rerouting West Coast shipping traffic to East Coast ports. Walmart and Target use ports on both coasts (Walmart also uses Houston), because they want to get their merchandise close to its final destination. Bringing goods from China through the Panama Canal (which costs money), unloading at an Atlantic port and then shipping cargo back west would add costs but not save much time, Miller explained. Smaller East Coast ports might not be ready for the influx, either. 

"Do these other ports have the ability to handle very sustained volume increases? They don't have the infrastructure. They don't have the drayage driver capacity to handle a 15% to 20% increase in volume," he said.

Miller said the proposal to lower the CDL age would mainly benefit large trucking companies, because smaller companies tend to hire experienced drivers. He also said the truck driver shortage is probably closer to 11,000 people, not the 80,000 cited by the governors and the industry. Most of the difference between those estimates, he argued, is that many drivers have left large firms and struck out on their own, which often happens when freight volume booms and trucking rates increase. (The American Trucking Associations did not respond to a request for comment.)

That's it for this week's edition. If you haven't already, consider signing up here for Route Fifty Today, our daily newsletter, where you can stay up to date on the latest trends and best practices happening in state and local government nationwide. If you have news tips or feedback, if you want to share your community's story, or if you just want to say hello, please email me at dvock@govexec.com and follow me on Twitter at @danvock. Thanks for reading!