The White House’s Envoy on What They’re Doing To Fix the Ports

Joe Weisenthal (0:10)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:16)

And I'm Tracy Alloway.

Joe Weisenthal (0:19)

Tracy, by this point, I think, are any Odd Lots listener, really anyone in the world, is totally familiar with the supply chain disruptions in the bottlenecks, particularly at the ports, and particularly at the Port of Los Angeles.

Tracy Alloway (0:33)

Wait, there's supply chain disruptions?

Joe Weisenthal (0:35)

Have you not heard about that?

Tracy Alloway (0:36)

I haven't. I haven't spent hours of my life this year talking about supply chain disruptions. No, you're absolutely correct.

There are all sorts of superlatives that you could throw around, but we know that there are dozens and dozens of ships, for instance, waiting off the coast of the Port of LA, trying to dock. We know that this has become a big, big issue for the Biden administration as well.

Joe Weisenthal (0:59)

Yeah, exactly. I mean, obviously bottlenecks perhaps contribute to inflation. It creates anxiety around the holidays because people worry about gifts getting shipped.

And of course, you know, it's not great for the economy overall. So we have a very special guest today and I wanna jump right into our episode to discuss it. We're gonna be speaking to John Porcari. He's a former deputy secretary of transportation during the Obama administration. And he is currently serving as port envoy to the White House Supply Chain Disruptions Task Force. So he has been tasked by the Biden administration to fix the port situation or to help fix it.

John, thank you so much for coming on Odd Lots.

John Porcari (1:42)

It's my pleasure.

Joe Weisenthal (1:43)

So I wanna start with the actually sort of theoretical question, which is what is it that a overseer representing the government can do in theory to help coordinate a solution to these bottlenecks that some of the private and public actors currently involved couldn't do previously without some kind of oversight?

John Porcari (2:06)

Well, first and foremost, the role is an honest broker role. It's to get the parties together. And if you think of the whole supply chain, these are parts of the supply chain that typically in the past have not talked to each other much, certainly have not exchanged data.

So that honest broker role is a crucial one in unlocking underlying operational issues and pushing hard for the kind of collaboration that you're actually seeing at the ports of Los Angeles and Long Beach right now, where goods movement is much more fluid than it was six or eight weeks ago.

Tracy Alloway (2:39)

So presumably as part of this role, you have been spending a lot of time at the ports talking to various parties. I'm curious what you're learning there. Is there anything that surprised you and what have you sort of pinpointed as the major issues here?

John Porcari (2:56)

It's very interesting. I thought I knew the industry pretty well having run the port of Baltimore in the past, but the scale and scope of the two ports, which are really one large port complex, Los Angeles and Long Beach, is just amazing. So 40% of the container imports coming into the country are coming through those ports.

And the pandemic really changed everything in terms of trade as well. So during the pandemic, we switched our buying patterns from restaurants and theaters to buying things.

The pandemic laid bare an underlying reality, which was the goods movement chain was creaking along, showing its seams before the pandemic. But what we ended up with during the pandemic with those change buying patterns was really gridlock at those two ports. Congestion on the container movements at other ports, but gridlock at those two.

Joe Weisenthal (3:49)

Can you give an example, you mentioned that what your role is an honest broker, get people communicating directly or communicating in a way they weren't before. Can you give a clear example of a situation that was arising because the communication wasn't happening and how opening up that lines has helped improve or can improve container throughput?

John Porcari (4:11)

Yeah, there are actually multiple examples of that. So if you just take it sequentially from the ocean carriers to the terminal operators, to the cargo owners, the beneficial cargo owners at the other end of the goods movement stream, there were clear examples where the ocean carriers and the terminal operators weren't communicating with each other on things as basic as throughput and the cargo owners who owned the contents of those boxes in many cases had no intention or no need to take those boxes off the docks immediately. They were essentially using them for free storage.